By Neo Kolane
A face-off appears to be on the horizon at Letṧeng Diamond Mine after it made overtures to lay off staff, if what a local trade union says is anything to go by.
The mine has introduced what it calls ‘a Labour Optimisation and Transition Intervention (LOTI) project’ as it prepares for a major shake-up that will affect its workforce.
The primary objective of the project, the mine says, is overall business optimisation and redesign of the structure to be fit-for-purpose in the context of the changing business and external environment in the interest of sustainability.
The chief executive officer of Letṧeng Diamond Mine, Kelebone Leisanyane, told theReporter that the company is currently consulting with its employees and contracting partners to mitigate against any job losses.
Leisanyane said the strategies include voluntary separation, re-deployment and preference given to affected employees within contracting partners structure. This would ensure the eventual number of employees who may be retrenched remains minimal.
He said that the process is running company-wide and it impacts not only Letṧeng but also the mines contracting partner companies, and across the whole value chain of its operations.
“The structure optimisation intervention which is currently underway will help the business to realise opportunities for employee development and training, employee promotional opportunities.
“The business will also realise opportunities for employees to gain new skills, to realise opportunities for efficiencies and productivity improvements and more importantly to manage the cost profile to bring it in line with the business’s revenue projections and trends,” he promised.
The rationalisation and optimisation process started in earnest in February this year when the Letšeng board of directors approved the process which is according to plan, is expected to be completed by the end of May 2023.
“The company has explored many mitigation options. It continues to implement a number of initiatives for optimisation of the business. Employees have also been engaged and consulted to consider and come up with options and initiatives that can be implemented to minimise the impact of the restructuring process.”
Leisanyane added: “Yes, it is the first time that Letšeng Diamond Mine implements a major restructuring and labour optimisation effort on this scale.
“The objective of the exercise is not to lose. With any initiative of this nature that is implemented, there is an implementation cost associated with it, and there may be unintended or temporary loss of institutional knowledge at certain levels of the organisation, but the business case is centred on positively impacting the business,” he noted.
Approached for comment, the secretary general of Construction and Mineworkers Association Union (CAMAU), Lehlohonolo Motlomelo, told theReporter that the management of the mine did not make any initiatives to meet with the union or any other labour unions.
Motlomelo said the decision was done internally.
He added that he heard of a restructuring and that there is a possibility that many workers are going to lose their jobs according to the business model they want to introduce.
He recalled that most of the workers from Letṧeng Diamond Mine chose to leave unions.
“Some of us saw the retrenchment coming and unfortunately it is going to happen between the workers and their employers without any mediation from another party.
“The ministry of labour decided to dissolve unions, especially ours which it does not want to see because apparently we know too much,” he said.
Motlomelo said the impact of the retrenchment is going to be worse because it is going to be a permanent loss comparing to Liqhobong Mine were it was temporary.
“We are going to write a letter to the ministries of labour and of mining to enquire as to how they will deal with the developments that will see job losses at Letṧeng Diamond Mine,” he noted.
He revealed that the previous governments ensured that the workers at the mine were prohibited from being unionised.
“They need us when it is convenient for them,” Motlomelo said.
Letšeng Diamond Mine is owned by Gem Diamonds (70 per cent) and the government of Lesotho (30 percent). At an elevation of 3,100 m above sea level, it is the world’s highest diamond mine.
According to experts, the mine is characterised by extremely low grade ore (less than 2 carats (400 mg)/hundred tons) and is known for producing huge diamonds, having the highest percentage of large diamonds (greater than 10 carats (2.0 g)). This gives it the highest dollar value per carat of any diamond mine.
Gem Diamonds is a British-based global diamond mining business. It is headquartered in England and is listed on the London Stock Exchange.
The company acquired Letšeng Diamond Mine in 2006. It has since found five of the 20 largest known white gem quality diamonds, elevating the mine to the highest dollar-per-carat kimberlite diamond operation in the world.
For example, in January 2018 Gem Diamonds announced the largest diamond yet discovered at Letšeng, a Type IIa D colour stone measured at 910 carats. It sold in March 2018 for $40 million. The same year a light brown diamond of 357.61 carats was discovered.
In 2021, Letšeng Diamond Mine announced an increase in royalties and selling costs by 17 percent to US$19.8 million against US$16.9 million in 2019.
This was in line with the increase in revenue and the increase in royalties from October 2019 from eight percent to 10 percent.
