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For sale: Diamond mine, hardly used

Lerala Mine is up for public auction
For a deposit of P5 million, ordinary members of the public can book a seat for an online auction to sell Lerala Diamond Mine, a first in the country's history.

The troubled mine, which has operated in fits and starts under different owners since 2008, will go under the hammer from May 24 at 5pm until May 30 at 2pm. The auction will be conducted online, with interested bidders registering in advance for a piece of an operation which, at one point, was targeting the production of 400,000 carats per tonne.

Going under the hammer later this month will be five kimberlite pipes ranging from 0.16 hectares to 2.35 hectares in area, mining rights, a 200 metric tonnes per hour processing plant, 4.2 megawatt diesel generator and other assets.

Lerala’s new owner will have access to five million tonnes of probable reserves at a grade of 31 carats per 100 tonnes and inferred resources of 10.3 million tonnes at a grade of 31 carats per 100 tonnes. Lerala has a troubled history, having shut down in February 2009 and July 2012. Originally opened in 2008 by Australian firm DiamonEx, Lerala battled cycles in the diamond market, being sold to UK junior, Mantle before passing to another

Australian firm, Kimberly Diamonds in 2013.

Kimberly squeezed 59,000 carats out of Lerala in the mine’s last year, before closing shop and filing for liquidation in May. The Tswapong area mine closed on May 29, 2017 throwing at least 130 workers out onto the streets, as its Australian owners cited weak diamond sales and high operating costs, particularly around the need to power the Mine through diesel generators. The Mine’s closure caused acrimony between government and unions, with the latter using the issue as a rallying call against alleged unfair labour practices and lack of protection of workers’ rights.

Liquidators appointed by the High Court into the closure, ran into problems after finding only P43,000 in the account and a range of suspicious transactions, including the flight of 53,000 carats to Belgium under a dubious sale. Government is presently suing for the return of the diamonds, which investigations suggest were sold far below value in a scheme to put the stones out of reach of other creditors with a claim on the estate.




Ke a phantsha

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