Gem Diamonds in $280 mln Lesotho expansion

March 22, 2012
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Raw diamonds being checked by a trader/AFP
JOHANNESBURG, Mar 22 – London-listed Gem Diamonds has begun a $280-million expansion to double production at its Letseng mine in Lesotho, including a cutting and polishing plant, Business Day reported Thursday.

The company plans to double output at Letseng by July 2014, and to cut and polish half the stones in Lesotho by 2017, CEO Clifford Elphick said, according to the South African paper. The mine produced 112,367 carats in 2011.

The new plant will use methods obtained when Gem bought a diamond-cutting technology business a few years ago, he said.

“We are building a cutting and polishing factory in Lesotho and it will use this technology. The (plant) will take about 18 months to complete,” he said.

Gem reported record results on Tuesday, with a 49 percent increase in revenue to $396 million and record new profit of $68 million.

Gem’s other major project, the Ghaghoo mine inside Botswana’s Central Kalahari Game Reserve, is set to begin production next year, the paper said. Gem is spending $85 million for the first phase of underground work.

That mine sits inside the world’s second-largest natural park, and has generated controversy because of the risks to the surrounding environment and accusations that ethnic minority San Bushmen were relocated to make way for the mine.

Botswana’s government has denied those claims, and insisted the mine will respect the highest environmental standards.

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