COVID-19 slams the brakes on diamond industry
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By MATIISETSO MOSALA
Local mining companies have been hit by reduced demand for diamonds as Coronavirus known as COVID-19 outbreak puts the global economy to sleep.
According to mining companies in Lesotho, the demand for rough diamonds has dried up. Cut and polished diamonds have also not been selling from February 2020.
Due to lockdown and travel bans adopted by global countries to contain spread of the pandemic, Lesotho diamonds market destinations, Belgium and India where 90 percent of the gems sold globally are cut and polished, have closed business.
The effects of the worrying developments are starting to rear their ugly heads back home. Mines have been forced lessen operational activities, review their cash flow, and enforce pay-cuts and worst for some, possible retrenchments in order to keep afloat.
Employees of Storm Mountain Diamond will reportedly receive their full salaries and group benefits for the month of April but will be forced to take forced leaves for recovery.
The company’s Corporate Chief Executive Officer Mohale Ralikariki said the mine’s goal during the epidemic period is to save the business and to preserve human resource in the long term.
“There is no telling how long it might take for the diamond market to recover to the level where the Company can operate sustainably; this includes fully servicing our project debt especially given the possibility that the lockdowns may be extended,” stated Liqhobong mine CEO Paul Bosma.
According to Bosma, Liqhobong is considering retrenchments given the material uncertainties the company is facing regarding future revenue streams.
Letšeng Diamond mine has also felt the pinch. The mine has suspended some of the staff allowances those still in force are under strict administration of the mine.
Letšeng Diamonds CEO Kelebone Leisanyane admitted that the pandemic has not only had an unprecedented impact on individual personal lives but on business as well.