The management of Mothae Diamond Mine has confirmed that all employees will be retrenched effective August 31, 2025, following the company’s decision to transition into a care and maintenance programme.
In a circular issued to staff on Wednesday, 27 August 2025, the Mothae Board of Directors said the move was unavoidable due to “the persistent and current weak global diamond market conditions” which do not allow for “the commercially viable extraction of diamonds at Mothae.”
The mine, located in Mokhotlong, had already suspended operations in April this year. Management said “all possible alternatives were explored to avoid the transition,” but the market realities left no other option.
The care and maintenance programme, according to Mothae, will “ensure the safeguarding of Mothae’s assets and preserve the remaining resource for future profitable and responsible treatment.”
Among the immediate measures, the circular stated that: “All Mothae employees will be retrenched effective 31 August 2025. August 2025 salaries will still be paid at 50 percent of your normal salary.”
It added: “Accrued severance benefits will be settled in monthly instalments from September 2025. A team of about 40 employees will be rehired on fixed-term contracts to implement the care and maintenance programme.”
Mothae also assured workers that “Alliance Provident Fund deductions for July and August 2025 will be settled soonest” and applications for withdrawal of invested funds will be facilitated, although this process “will take approximately a month to complete.”
Looking ahead, management said it was exploring options “to retreat plant and recovery tailings, as well as to connect Mothae to the Lesotho electricity grid.” These plans, combined with a potential rebound in the global diamond market, could see the mine “recommence production in a meaningful and profitable manner.”
Reflecting on the challenges, Mothae management expressed gratitude to its workforce.
“We have been very fortunate to have earned our salaries and benefits since last year’s shareholder change and again extend our appreciation to Executive for the funding and support provided.”
Mothae was sold in 2024, with Lephema Executive Transport, owned by Minister of Local Government, Chieftainship, Home Affairs and Police, Lebona Lephema, acquiring a 70 percent stake. The Government of Lesotho retains the remaining 30 percent.
The acquisition sparked controversy, with critics raising concerns over potential conflicts of interest given Lephema’s ministerial role alongside government’s partial ownership of the mine.
The deal followed a conditional sales agreement announced in June 2024 between Lucapa Diamond Company – the previous majority owner – and Executive.
Finalised in August 2024 for a nominal fee of AUD 10,000 (about M122,000 or USD 6,660), Lucapa also received roughly USD 1 million in outstanding technical service payments. Under the agreement, Executive assumed all liabilities and obligations.
The mine’s closure comes at a time when Lesotho’s diamond industry is reeling from global demand shocks. In her 2025/26 budget speech earlier this year, Finance Minister Dr Retšelisitsoe Matlanyane reported that the mining sector had contracted by 5 percent in 2024/25, with Mothae, Kao, and Liqhobong mines all struggling with poor diamond sales.
Matlanyane further warned that the performance of both the mining and manufacturing sectors is expected to continue declining in the current financial year.
Summary
- The management of Mothae Diamond Mine has confirmed that all employees will be retrenched effective August 31, 2025, following the company’s decision to transition into a care and maintenance programme.
- In a circular issued to staff on Wednesday, 27 August 2025, the Mothae Board of Directors said the move was unavoidable due to “the persistent and current weak global diamond market conditions” which do not allow for “the commercially viable extraction of diamonds at Mothae.
- ” These plans, combined with a potential rebound in the global diamond market, could see the mine “recommence production in a meaningful and profitable manner.
Authored by our expert team of writers and editors, with thorough research.
