Lesotho to tap rare earths in coal reserves to diversify from diamonds

Lesotho plans to diversify its economy away from diamonds and into critical minerals by tapping its coal fields for rare earths, Prime Minister Ntsokoane Samuel Matekane said at the Africa Down Under conference in Perth, Australia, on Sept. 5.

The diamond market, which contributes about 10% to Lesotho's GDP, has been in a prolonged downturn due to the proliferation of lab-grown diamonds.

Gem Diamonds Ltd. said Sept. 4 that 240 workers were retrenched at the Letseng diamond mine, which had its life shortened from 2039 to 2035 after the company's first-half revenue fell 42% to $45.4 million. Gem Diamonds cited "persistent challenging market conditions and low diamond prices achieved during the period," as its average price received at Letseng for the six months to June 30 fell year over year to $1,008/carat from $1,366/carat.

While Lesotho is "committed to supporting its mines" in the belief that "this downturn will pass," the government is also "developing a forward-looking national mine strategy" to "open real opportunities for exploration of rare earth deposits right across the country," Matekane said at the conference.

"Our coal deposits long considered [low] value, are in fact rich in rare earth elements, the building blocks of [new] technologies. We now want to become a reliable source of critical minerals that the world urgently needs for the green energy transition and digital economy," Matekane said.

"This will open the door to a new industry that could diversify our industry and strengthen Lesotho's role in global supply chains."

The government of Lesotho, a landlocked country surrounded by South Africa, is also looking to "Australian partners to share experience, technology and investment that can help us grow" its mining industry, among other sectors, in a "sustainable and transformative" way, the prime minister said.

Work by researchers from South Africa's University of the Witwatersrand, published in The Journal of the Southern African Institute of Mining and Metallurgy in October 2024, said rare earths demand has "sparked interest" in Lesotho's coal deposits as "potential sources for valuable minerals."

"Late Triassic coal deposits in Lesotho have previously not been well documented and these low-rank coals can be a potential source of rare earth elements," the researchers said.

This demand, as well as "extraction efficiencies of rare earth elements and yttrium from traditional ore bodies and geopolitics, have enabled unconventional sources like coal and coal derivatives such as fly ash to be considered as potential sources of these elements," the researchers said.

While Lesotho has been known for its diamonds for over a century, with Letseng, Kao, Liqhobong and Mothae renowned globally, "today, truth be told, the global natural diamond industry is going through a difficult transitory period," Matekane said. "Prices are at historic lows. Demand is being reshaped by synthetic diamonds and mining companies worldwide are retrenching thousands of workers."

Liqhobong and Mothae are on care and maintenance, while other diamond mines in Lesotho "operate on thin margins" -- a challenge which "has been compounded by the lingering aftershocks of COVID-19 on the world economy," the prime minister said. "Producers everywhere are requesting suspensions or omissions of royalty payments to stay afloat."