Lesotho’s diamond sector is bracing for an imminent blow as Storm Mountain Diamonds (SMD) has confirmed plans to temporarily close its Kao-based diamond mine from July 2026, a move that will trigger significant job losses to compound a growing unemployment challenge.
SMD board chairman Robert Cowley this week laid bare the scale of the crisis gripping its operations, citing sustained weakness in the global rough diamond market alongside rising operating costs.
He did not, however, specify how many employees face retrenchment from the mine’s 700-strong workforce.
In a memo issued to employees on April 22, 2026, Cowley said the mine has been going through a tough period over the last two years, when the rough diamond market went into a slump from which it never recovered.
The recent geo-political crisis sparked by the on-going war in the Middle East has not made matter any easier, with a surge in diesel prices and heavy price increases in the cost of consumables expected to follow.
Cowley said the mine came to the regrettable conclusion of temporarily suspending operations as it would not be able to fund them under the prevailing low revenue and increasing costs conditions.
“At a special meeting of the Board held today, it was decided that the best and most responsible way forward was to place the mine on care and maintenance,” he said.
In mining, care and maintenance refers to the temporary suspension of operations, keeping a mine safe and stable under the guidance of skeleton staff, while preparing for potential future reopening.
While SMD has indicated that the care and maintenance strategy is designed to preserve the mine for a future restart when market conditions improve, the indefinite timeline offers little immediate relief to affected workers and communities.
“As the period of care and maintenance will be for an indefinite period, SMD will unfortunately have to commence a retrenchment process. This is regretted. It was decided that the mine will continue with its current operations until the end of June 2026, and the care and maintenance programme will be implemented as from July, with activities on the mine diminishing until the care and maintenance plan is fully rolled out.”
He said the mine would seek alternative ways to minimise job losses and to alleviate the effects of possible retrenchments.
“The process will follow the requirements of the law and will be conducted in good faith. The process will commence by distributing notices to the affected, followed by consultations. During the consultation process we will be looking at all possible ways to avoid retrenchments, and I ask that employees participate meaningfully”
This development highlights mounting pressure for Lesotho, where unemployment rate, already among the highest in the region, could worsen as retrenchments take effect.
SMD is not the only Lesotho mine to suffer the effects of the weak performance of the global rough diamond market in recent times. Mothae diamond mine retrenched majority of its workforce last August after unleashing its own care and maintenance plan.
Letšeng diamond mine, perhaps the jewel of Lesotho’s diamond mining, has not escaped unscathed either, as it retrenched over 200 employees in late 2025.
Summary
- In a memo issued to employees on April 22, 2026, Cowley said the mine has been going through a tough period over the last two years, when the rough diamond market went into a slump from which it never recovered.
- The recent geo-political crisis sparked by the on-going war in the Middle East has not made matter any easier, with a surge in diesel prices and heavy price increases in the cost of consumables expected to follow.
- It was decided that the mine will continue with its current operations until the end of June 2026, and the care and maintenance programme will be implemented as from July, with activities on the mine diminishing until the care and maintenance plan is fully rolled out.
