London-listed Gem Diamonds has reached agreement with Matekane Mining Investment Company (MMIC) to terminate MMIC's load and haul contract at the Letšeng mine, in Lesotho, with effect from December 1.
Letšeng's management had been considering options in respect of the contract following the election of MMIC owner Sam Matekane as Prime Minister of Lesotho in October 2022, which resulted in him being designated a politically exposed person.
The contract termination is 11 months ahead of its scheduled contractual end date.
The mine will now insource the load and haul activities and will acquire the mining equipment in use at Letšeng from MMIC. It will also offer employment to MMIC employees who are currently working exclusively for Letšeng, in line with operational requirements.
This will enable Letšeng to continue seamlessly with its mining activities.
"This transaction brings a long-standing and successful business relationship we've enjoyed with MMIC, since 2005, to an end. The transaction resolves important issues relating to governance and conflicts and will lead to operational efficiencies and cost reductions being achieved," says Gem CEO Clifford Elphick.