MASERU-The Public Accounts Committee (PAC) has ordered the dissolution of the proposed purchase deal between Lucapa Diamonds and Lephema Executive Transport, in conflict that the transaction is not in the nation’s best interests.
The order arose during a committee session this week, where the Ministry of Natural Resources faced serious questions about the deal to transfer Mothae Diamond Mine from Lucapa to Lephema Executive Transport.
The PAC had last week ordered the Natural Resources Ministry to return to it with a full revelation of Lucapa’s debts to the government. This was after Auditor General, ‘Mathabo Makenete, observed in her report that M175 million was owned by Lucapa from their 2017 purchase of Mothae to the government.
Although Ministry argued that Lucapa had paid the money, PAC was not swayed and demanded proof, hence they reappeared before the committee again this week.
A note from the Ministry of Natural Resources, submitted to the PAC, exposed that Lucapa owes the government M31.6 million in royalties and M2.4 million in surface rental fees. A new development which had not revealed by the Ministry before.
Nevertheless, they presented proof that Lucapa paid the 175 million, the note stated, “Mothae has an outstanding amount of about M31, 658,881.75 in royalties and in royalties and M2, 492,335.02 in surface rental. Presently, Lucapa has come into a conditional compulsory sales and purchase agreement with Lephema Executive Transport for its 70 percent stake in Mothae.
For the Lucapa-Lephema deal to proceed, it must be approved by the Minister of Natural Resources, Mohlomi Moleko, following an assessment by the Mining Board. The board’s review includes evaluating the financial capacity of the candidate and the handling of existing liabilities.
“In a case like this that any amount owing is not settled before divestment, the treatment of such amounts shall have to be specified in the application for transfer of a mining lease from Lucapa to Executive (Lephema Executive Transport), added the note.
Last month Lucapa publicized plans to sell its stake to Lephema Executive Transport, a move that madesignificant argument, especially because Lephema Executive Transport is owned by the Minister of Local Government, Chieftainship, Home Affairs and Police, Lebona Lephema. Part of the deal is that Lephema Executive Transport would take over Lucapa’s unrevealed debts.
Principal Secretary of Natural Resources, Relebohile Lebeta, specified that Lucapa continued to be in charge of Mothae but was preparing to departure. She explained that the proposed deal would only succeedafter a thorough review by the Mining Board, particularly concerning how Lephema Executive Transport plans tomanage Lucapa liabilities.
“The mine is presently under Lucapa. Lucapa has entered into a conditional mining sales and purchaseagreement with Lephema Executive Transport for 70 percent shareholding. We have documented these royalties and surface rentals because the committee directed us to detail all unsettled payments. This transaction will only be successful after passing through the Mining Board”, said Lebeta.
She stated that, “These issues have not been completed, they are still in process and will beconcluded once they have passed all the stages,” Lebeta stated.
PAC Chairperson, ‘Machabana Lemphane-Letsie hotlyopposed the deal, quoting Lucapa’s failure to pay the M31.6 million in royalties and M2.4 million in surface rentals over the past eight years. She maintained that it would be impractical to expect Lephema Executive Transport to settle these debts within two and a half years and cautioned of parliamentary action if the deal continues.
“This thing you are secretly doing with Lephema Executive Transport, we advise you to make it public so that it does not explode in your face. For eight years Lucapa did not pay these royalties, there is no magic that Lephema is going to perform to pay these royalties in two and a half years. Do not do that fraud, parliament is stopping you now,” said Lemphane-Letsie.
She concluded by saying, “If Lucapa has failed, he must pack and go, you should seize his property, sell it and recover the money that he owes. Thereafter, you should advertise the mine so that Basotho who can meet the conditions to mine at Mothae can get the opportunity.”
