Letšeng-MMIC deal a bag of mixed feelings

This week we saw Letšeng Diamonds announcing was cutting ties with Prime Minister Sam Matekane’s Matekane Mining Investment Company (MMIC).

The premier’s company has been providing Letšeng Diamonds with loading, hauling, digging, drilling and haulage services since 2004.

Services between the two companies will discontinue almost 11 months ahead of the originally scheduled contractual end, November 2024.

Letšeng Diamonds announced in a press statement this week that it has cut ties with MGC because its director and chairperson (Matekane) is now active in politics.

Both Letšeng and MGC denied to disclose the value of equipment purchased by the mine from Matekane’s firm and the compensation paid for the premature termination of the contract, citing confidentiality clauses as is normal business practice in such transactions.

However, not everyone agrees with this line of reasoning. The government of Lesotho is a shareholder (30 percent) in the company. This means 30 percent of the mine belongs to Basotho.

This means government has no choice but demonstrate transparency by telling the rightful owners how much of their money was used to buy Matekane out of the mine. Government cannot go around using words like ‘confidentiality’ when it comes to Basotho’s money.

This means government has a responsibility to tell Basotho how the entire negotiation process was conducted and who acted on their behalf.

This means government must come clean and tell Basotho why news of the deal was not made public and why public opinion was sought.

Everything about this deal doesn’t look ok. It has ‘eyebrow-raising’ written all over it.