PAC ‘nullifies’ Mothae sale agreement – Lesotho Times

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Mpesi Harvester

The Public Accounts Committee (PAC) has ordered the termination ofRecommended to buyThe deal between Lucapa Diamonds and Lephema Executive Transport, saying the deal was not in the best interest of the countrys.

The directive was given at a committee meetingthis weekWhereexistThe Ministry of Natural Resources is facingserious questionAbout the transactionTransferMothae diamond mines from Lucapa to Lephema administrative transport.

Lucapa has been operating the Buta-Bute mine since 2017, holding a 70% majority stake and the remaining 30%.yesOwned by the government.

Last month, Lucapa announced plans to sell its stake to Lephema Executive Transport, a move that sparked huge controversy, especiallybecauseLephema Executive Transport is owned by the Minister of Local Government, Chiefs, Interior and Police, Lebona Lephema. As part of the deal, Lephema Executive Transport will inherit undisclosed debts of Lucapa.

The PAC last week asked the Ministry of Natural Resources to provide it with a full disclosure of Lucapa’s debt to the government. This comes after Auditor General Mathabo Makenete stated in his report that Lucapa owed 175 million manats in debt from the acquisition of Mothae in 2017.To the Government.

Although the ministry argued that Lucapa had paid the money, the PAC was not convinced and asked for proof.,So they are at it again this week.

A report submitted by the Natural Resources Department to the PAC showed that Lucapa owed the government RM31.6 million in royalties and RM2.4 million in ground lease fees. This was new information that the department had never disclosed before. However, they provided evidence that Lucapa paid RM175 million.

The note states, “Mothae has outstanding royalties of approximately RM31,658,881.75 and ground rent of approximately RM2,492,335.02. Currently, Lucapa has entered into a conditional binding sale and purchase agreement with Lephema Executive Transport for its 70% stake in Mothae.

For the Lucapa-Lefima deal to go ahead, it must first be approved by Natural Resources Minister Molomi Moleko and then assessed by the Minerals Commission, which will assess the applicant’s financial capacity and ability to handle existing debt.

The note added: “If any outstanding amounts are not settled prior to divestment, the application for transfer of the mining lease from Lucapa to Executive (Lephema Executive Transport) must specify how these amounts are to be dealt with.”

Ministry of Natural Resources Secretary Relebohile Lebeta said Lucapa will remain in charge of MothaebutReady to quit. She explainedexistthissuggestedThe transaction is successful only ifAThe Minerals Council is conducting a thorough review, particularly on how Lephema Executive Transport plans to manage Lucapa’s liabilities.

“The mine is currently owned by Lucapa. Lucapa has signed a conditional mining sale and purchase agreement with Lephema Executive Transport for a 70% stake. We have recorded these royalties and surface rents as the commission has directed us to itemise all outstanding payments. This transaction will only be successful once it passes the Mining Commission.

“These issues have not been finalized and are still in process and will be completed once all the stages are completed,” Ms. Lebeta said.

PAC chairperson Machabana Lemphane-Letsie strongly opposed the deal, citing Lucapa’s failure to paythisShe said it was unrealistic to expect Lephema Executive Transport to repay the debts within two and a half years, having paid it RM31.6 million in royalties and RM2.4 million in ground rent over the past eight years, and warned that the council would take action if the deal went ahead.

“This matter that you (Lebeta) have been doing secretly with Lephema Executive, we suggest you make it public so that it doesn’t explode in front of you.

“Lucapa has not paid these royalties for eight years..TThis is not magic, Lephema willFulfillment of paymentThese royalties will be paid over two and a half years. Don’t do this fraud, Parliament is stopping you now.

“If Lucapa fails, he must pack up and leave, and you should seize his property, sell it, and recover the money he owes. Then, you should advertise the mine and allow eligible Basotho to mine in Mosai.Get the opportunity”, said Ms. Lempane-Letsie.

Acting Mines Commissioner Mohato Moima,explainLucapaused to beGradually paying off debt but still in debtdA lot of money.explainAny transferMineThese outstanding debts must be settled.

“This debt starts from January 2023. Lucapa is repaying it in instalments. If divestment occurs, we will take steps to ensure that this debt is repaid in full. Lucapa must clearly state in the transfer application how these debts will be dealt with,” Mr Moima said.

Ms Lemphane-Letsie requested documents of the Ministry’s communications with Lucapa regarding the debt. Mr Moima assured the Committee that Lucapa is expected to respond by July 25, 2024 (today).

“Lucapa’s lease is for 10 years, with two and a half years remaining. The transfer has not yet been referred to the Minerals Commission. If approved, the new company can apply for an extension,” Mr Moima added.

Litoten MP Rethabile Letlailana criticises the government’s handling of the mine saleHe saidEnsure reasonable prices through auctions to maximize national interestssHe warned against dubious transactions that could result in significant financial losses.

“The question is whether we were deprived of the opportunity to assess the mine’s value and auction it off at a fair price. How can we achieve the best value for the Mothae mine after two years? We should avoid shady deals that could cost the country more than RM150 million,” Mr Letlelana asserted.