All 400 employees at the Mothae diamond mine in Lesotho have been placed on forced leave with a 50% reduction in pay.
The move, taken by the mine’s new majority owner Lephema Executive Transport, has drawn criticism from the Independent Democratic Union of Lesotho (IDUL), which claims the decision breaches local labour laws and existing collective agreements.
The company attributed the action to ongoing weakness in the European diamond market.
Ownership Change and Financial Pressures
Australian miner Lucapa Diamond Company sold its 70% stake in the Mothae mine to Lephema Executive Transport in September 2024 for AUD 10,000 (USD 6,660). Lephema had previously provided contract mining services at the site. The Government of Lesotho retains a 30% share in the operation.
Lucapa’s exit came amid broader restructuring efforts and financial instability, including the appointment of voluntary administrators. The company cited ongoing operational challenges and sustained low diamond prices as contributing factors to its decision to divest.
The Mothae mine, located in the Maluti Mountains in Lesotho’s Butha-Buthe district, began commercial operations in 2019. Since then, it has produced more than 150,000 carats and generated over USD 100 million in revenue. Diamond mining contributes approximately 6–10% of Lesotho’s GDP, and the government retains a 30% stake in the operation.
Union Response and Allegations of Legal Breaches
IDUL, affiliated with global union federation IndustriALL, has publicly condemned the layoffs. The union argues that Lephema acted without engaging in mandatory consultation, violating the company’s recognition agreement and Lesotho’s labour legislation.
“Mothae Diamond Mine must respect trade union rights to collective bargaining and refrain from acting unilaterally where workers’ and trade union rights are concerned,” said IDUL general secretary May Rathakane.
The union has called on the Government of Lesotho to intervene, particularly in light of its equity stake in the mine. Rathakane warned of an erosion of labour protections within the country’s mining sector, noting increasing instances where workers face the consequences of market instability.
Wider Industry Context
IndustriALL director of mining and diamonds, Glen Mpufane, criticised the broader trend of using market downturns to justify wage cuts:
“Market volatility is not an excuse to withhold full wages. Diamond mining companies must plan for booms and slumps rather than sacrificing workers’ wages.”
The situation at Mothae illustrates some of the pressures smaller or locally operated mines may face during periods of market instability. The case highlights the operational and legal challenges that can arise during ownership transitions, particularly in meeting labour obligations and managing market downturns.
For jewellers, such developments at production level have implications for supply forecasting and sourcing strategies. The situation also reinforces the importance of due diligence regarding origin and compliance with labour standards across the supply chain.
