Opposition blasts Matekane over diamond benefit pledge

…accuses PM of hypocrisy over stalled mining laws

Mohloai Mpesi

OPPOSITION leaders have sharply criticised Prime Minister Sam Matekane following his recent pledge in Botswana that Lesotho’s diamonds would benefit Basotho, accusing him of hypocrisy and of frustrating legislation aimed at achieving exactly that objective.

Leaders of the Democratic Congress (DC), Mathibeli Mokhothu, the Basotho Action Party (BAP), Professor Nqosa Mahao, and the Basotho National Party (BNP), Machesetsa Mofomobe, accused Mr Matekane’s government of shelving the VAT Amendment Bill and the Mines and Minerals (Amendment) Act 2022 laws they say were intended to unlock greater economic value from the country’s diamond resources.

Their criticism follows Mr Matekane’s official visit to Botswana last week, where he toured the Diamond Trading Company Botswana (DTCB) facility and declared that Lesotho’s diamonds should benefit ordinary citizens.

The visit also marked the launch of the inaugural Botswana-Lesotho Bi-National Commission, aimed at strengthening cooperation between the two countries, including in the mining sector.

The opposition argues that the government rhetoric does not match action.

Lesotho banned artisan and small-scale mining in 2005 due to safety concerns and the sector’s informal nature, which often resulted in injuries among miners.

The Mines and Minerals (Amendment) legislation was passed by the National Assembly in November 2021 but was delayed in the Senate, which demanded provisions reserving benefits for indigenous Basotho before the law was eventually enacted in June 2022.

Meanwhile, the VAT Amendment Bill 2021 — originally passed by the 10th Parliament and awaiting Royal Assent — lapsed together with other pending legislation and had to be revived in the 11th Parliament. Opposition parties claim their efforts to reintroduce the Bill were defeated by the current government, which commands a parliamentary majority.

The proposed VAT changes sought to charge tax on equipment imported by mines. This because mines currently enjoy zero rating on VAT. Therefore, the country is losing billions to the mines.

“Four years of inaction”

Mr Mokhothu accused Mr Matekane of failing to advance diamond beneficiation during his years in office.

“Our major campaign as DC was that diamonds should benefit Basotho through small-scale mining. But his party refused to put that into practice for four years. We passed the VAT Amendment Bill, but that law has never seen the light of day,” Mr Mokhothu said.

He further criticised Mr Matekane’s reported sale of heavy mining machinery to foreign interests instead of local entrepreneurs.

“It is like a child stealing sugar — when caught, they deny it, yet the evidence remains. He does not have love for this country,” Mr Mokhothu said.

Botswana model held up as example

Prof Mahao and Mr Mofomobe pointed to Botswana’s diamond industry as a model Lesotho should emulate.

The DTCB, established in 2008 as a 50/50 partnership between the government of Botswana and De Beers, has become one of the world’s largest rough diamond sorting and valuation centres.

Prof Mahao argued that Botswana’s approach demonstrates the value of domestic beneficiation.

“The Prime Minister saw that diamonds in Botswana benefit Batswana because they are cut and polished there. When such diamonds reach international markets, they fetch higher prices than rough stones. Lesotho’s diamonds should also be cut and polished locally so they create jobs and benefit Basotho,” he said.

Mr Mofomobe echoed the sentiment.

“Botswana negotiated stronger local participation in its diamond industry and created domestic cutting, polishing and auction facilities. For four years this man has never spoken about Lesotho securing a larger shareholding or opening an auction house. He is bluffing and playing to the gallery,” he said.

Bribery allegations over VAT Bill

Prof Mahao alleged that the VAT Amendment Bill faced resistance from mine owners before reaching Royal Assent.

“When this law was still under consideration, mine owners tried to lobby both houses of Parliament to block it. They attempted to bribe Members of Parliament. But Parliament passed the law and it reached the Palace — where the process stopped,” he alleged.

Mr Mofomobe said he witnessed similar efforts while serving on Cabinet’s Investment Committee.

“Dr (Moeketsi) Majoro was bold enough to pass that law. It is now dead. I tried to revive it, but they refused because mine owners opposed it — and their preferred candidate is now governing,” he said.

RFP’s origins questioned

Prof Mahao further alleged that after the introduction of the VAT Bill in the previous Parliament, mine owners allegedly supported the formation of the Revolution for Prosperity (RFP).

“RFP is not a party formed for Basotho. We believe wealthy foreign businessmen backed it to ensure that mining laws remained unchanged and diamonds were not cut and polished in Lesotho,” he alleged.

He challenged Mr Matekane to prove his commitment.

“If the Prime Minister is sincere and not being hypocritical, he should enact the VAT Amendment Bill immediately. That would transform Lesotho’s economy. If Saul has indeed become Paul, we will see it through action.”

Alleged breach of mining laws

Mr Mofomobe also accused Mr Matekane of breaching provisions of the Mines and Minerals Act 2005, arguing that Basotho service providers should receive priority in supplying mining operations.

He alleged that after becoming a politically exposed person, Mr Matekane should have divested mining-related assets in a manner that benefited Basotho.

“I asked in Parliament how much the equipment was sold for but no answer was provided. I later established through the Australian Stock Exchange that it was sold for M430 million. He is the custodian of the Mines and Minerals Act and yet breached its spirit,” Mr Mofomobe said.

Govt dismisses allegations

Mr Matekane declined to comment, saying he was in Cape Town at the time of inquiry.

He was attending the 9th Southern African Customs Union (SACU) Summit, which began yesterday and concludes today.

Responding on behalf of the government, Minister of Energy and Mining, Lejone Mpotjoane, dismissed the opposition’s allegations and said the government was developing a new Mining Bill intended to increase local benefits.

He said Lesotho was also in discussions with Botswana on cooperation around diamond sorting and valuation.

“Our technical mining teams are yet to meet so that we can sign agreements with Botswana and its sorting and evaluation institutions,” he said.

Mr Mpotjoane rejected claims that the VAT Amendment Bill was designed to promote beneficiation.

“That Bill dealt with taxation in the mining sector, not beneficiation. Beneficiation is already addressed under the Mining Act,” he said.

He argued that the proposed VAT measures would have imposed additional operating costs on mines.

“There were clauses that would tax machinery and increase costs. Mining operations in Lesotho are already expensive. If implemented, many mines could have closed.”

He said the government was instead reviewing mining legislation to balance investment and local participation.

Responding to Prof Mahao’s allegations about RFP’s formation, Mr Mpotjoane dismissed them as baseless.

“RFP was formed in this country. I cannot respond to such unfounded allegations,” he said.

He added that the VAT Bill stalled because of inadequate consultation.

“The Bill lacked proper preparation and consultation. Stakeholders warned that it would place an unsustainable burden on the mining industry.

“Mines are already closing because of high costs. If the government introduces laws that further increase operating expenses, more mines will shut down and Basotho will lose jobs,” he said.

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