GEM Diamonds has come to an agreement with Matekane Mining Investment Company (MMIC) to end their load and haul contract at the Letšeng Mine in Lesotho, effective December.

The decision was made after Letšeng's management reviewed their options regarding the contract due to the election of MMIC owner, Sam Matekane as Prime Minister of Lesotho in October 2022, which led to his classification as a politically exposed person.

The contract termination is 11 months ahead of its scheduled contractual end date.

The load and haul activities at Letšeng will now be handled internally by the mine, and they will obtain the mining equipment currently being used from MMIC.

Additionally, they will provide job opportunities to the MMIC employees who are currently dedicated to Letšeng, in accordance with operational needs. This transition will ensure a smooth continuation of Letšeng's mining operations.

"This transaction brings a long-standing and successful business relationship we have enjoyed with MMIC since 2005 to an end. The transaction resolves important issues relating to governance and conflicts and will lead to operational efficiencies and cost reductions being achieved," said Gem.

Speaking on behalf of MMIC, Retšepile Elias mentioned that Matekane Group of Companies (Pty) Ltd. reached a mutual agreement to separate from its longstanding partnership with Letšeng Diamonds.

“Letšeng Diamonds, in its pursuit to re-strategise and manage operational expenses proficiently, views this separation as a positive step towards achieving the sustainable economic viability of Letšeng Diamonds and the protection and sustenance of jobs at Letšeng,” he said.

He affirmed that this resolution emanates from a common vision to maintain transparency, ethical governance, and unwavering dedication to the welfare of the people of Lesotho by giving Letšeng Diamonds operational space to continue to operate profitably and maintain its contribution to taxes and employment in Lesotho.