By Dan Oancea

Lesotho is a small mountainous enclave within South Africa with its entire area more than 1,000 m above sea level. It was founded by king Moshoeshoe, who took refuge in the mountains where he bravely fought Zulu warriors, Afrikaner settlers, and South Africa’s British armies. In 1868, Basutoland became a protectorate of the British Empire. It won independence from Britain in 1966.

Historical accounts acknowledged that Basuto women have long used ground ilmenite for cosmetics. Then in 1957 a UNDP diamond exploration program headed by geologist Peter Nixon discovered two kimberlite pipes at 3,100 m altitude, on top of the Maluti Mountains in northeastern Lesotho, some 70 km from Mokhotlong in a place named  the “swamp in the corner” or Letseng-la-Terae in local Sohto language.

Hearing the rumors that kimberlites lay hidden somewhere up in the mountains, the very next year a South African adventurer, colonel Jack Scott, accompanied by a young man named Keith Whitelock, set out prospecting for diamonds.

They came up on horses and at times spent up to a week stranded in blizzards that swept the high altitude country but it was a success story as they managed to find diamonds. The colonel's booty: 1,800 carats of diamonds. Soon he left and abandoned his claims. Charmed by the rugged beauty of the country Whitelock stayed. Subsequently the local government divided the area into small claims to be mined by artisanal diggers.

In 1967, a fabulous 601-carat diamond was discovered up in the mountains by a simple Basuto woman. It was named Lesotho Brown and weighed enough to trigger another diamond rush.

Acting fast, Rio Tinto acquired the claims and started a difficult mining operation. There were no roads leading up there, but there was no need for them: an airstrip would suffice. The mine geologist was the same Keith Whitelock.

The greatest challenge wouldn't come as expected from the harsh climate and remote location but from the mine itself. It was such a low grade operation that it made almost no profit. In 1972 Rio Tinto ceased their mining operations.

The then prime minister of Lesotho went to Harry Oppenheimer to ask him to venture into Letseng mine, which he did. De Beers operated the mine from 1977 to 1982. Mine manager:  Keith Whitelock. The company withdrew with less than 20% of the open pit mineable ore having been processed. Their reasoning: low grade, small operation, and lower diamond prices.

An excellent account of a 1978 visit to the Letseng mine was given by Edward Jay Epstein, a journalist who investigated the African diamond mines and business. His online book The Rise and Fall of Diamonds, is a must read for people interested in diamonds, mining, cartels and history. By reading it one could easy understand the mine's total dependence upon finding the next big stone to further finance the operation. It simply was such a low-grade operation that their main income was much derived from the sale of the coveted big diamond stones (greater than 10 carats).

The mountain top wrapped itself in fog and silence until 2003 when Letseng Diamonds, a joint-venture between the Lesotho government, a black empowerment company, and a South African company managed by Brett Kebble started to rumble again through the roof of Africa.

The mine was officially re-opened in November 2004 but it started to operate on a smaller scale some time before. And what an operation it was!

In 2005, Matodzi's website stated that:

"The mine has produced three diamonds larger than 500 carats in the 50 years that the existence of diamonds has been known in the area. In November 2003, Letseng Diamonds discovered a 215 carat diamond which fetched $2,31m, equivalent to $10 750 per carat. A week later, the company found a 95 carat gem on its sorting table which fetched $1,57m, equivalent to $16 433 per carat. In November 2004, a spectacular 123 carat flawless white diamond was discovered days before the official opening ceremony and sold for $2.33-million.

On Friday January 21, 2005 a flawless 76-carat stone was recovered. This was followed two days later by a 112-carat stone. On Tuesday 25 January a 106-carat beauty turned up and a further 72-carat stone was recovered on Wednesday. "I can't wait for the rest of the week," quipped Whitelock."

Yes, not surprising at all, it is the same Whitelock: prospector, geologist and manager at the famous Letseng diamond mine.

In 2005 Brett Kebble ran into financial trouble and wanted to dispose of some of his assets, including Letseng. One month later, the South African magnate was gunned down in Johannesburg, not before asking Clifford Elphick to have a look into the Letseng operation.

Elphick is the former MD of E. Oppenheimer & Son, the investment arm of the Oppenheimer family, the 40% owners of De Beers. He manages Gem Diamonds, a private diamond mining and exploration company which looks forward to be listed in London at the end of 2006. It has assets in Central African Republic, DRC and other African countries.

Eleven offers have been analyzed and subsequently rejected by the Lesotho government. The 12th offer won the bid for Letseng. The $118.5 million deal: Gem Diamonds – 70%, Lesotho – 30%.

A part of the country is underlain by the Archaean Kaapval craton. Hundreds of Cretaceous kimberlites (dykes and pipes) riddle the basaltic Maluti Mountains and the Triassic sedimentary rocks of the lowlands. A geological snapshot of the region could be retrieved from the University of Kwazulu-Natal' s site (1 & 2).

Letseng is a mine best described by superlatives. At 3,100 m altitude it is the world's highest diamond mine; at just over 2 carats per 100 tones (cpht) it is the world’s lowest grade kimberlite mine; at over $1,200 a carat it has the world's highest average cost per carat; its large diamonds account for two thirds of its revenue.

The open-pit mine consists of two diamond pipes: the 16 hectare Main pipe and the 4.7 hectare Satellite pipe containing a total of 150 million tones of kimberlites at a grade just over 2 cpht for 2.5 million carats. Diamonds over 10 carats accounted for about 16% of the total production, while diamonds over 100 carats accounted for 2%.

The proximal alluvial diamond deposits have been mined by independent contractors; diamond production has been split with the mine’s owners. Diamonds of over 100 carats have been retrieved by the operators.

Gem Diamonds intends to double the diamond production by building a second treatment plant. In comparison with De Beers’ operation, Gem halved its workforce to about 400 people. Manager: Keith Whitelock.

As history has it on August 22, 2006 a local woman working at the sorting facility started to scream; everybody rushed in fearing that she was injured. Her hands held tight a 603 carat white diamond: the Lesotho Promise, .

Then in Antwerp, October 9, 2006: South African Diamond Corporation (the manufacturing arm of Graff Jewelers) acquired the uncut stone for $12.36 million dollars. It is estimated that cut up, it could fetch over $20 million.

The story cannot end here. More large diamonds are to be found at the exotic Letseng mine. If the mine doubles its capacity it could provide more gems at an even faster speed.

How much will the next ‘monster’ diamond weigh?

Note:  As of September 2007, Letseng continues to surprise the diamond industry not only by achieving the highest average price per carat of any diamond miner (i.e. $1,776 per carat), but also by yielding other really big stones, the latest one being a superb 494-carat diamond named Letseng Legacy.

In September 2008 another giant diamond came to light: The 478 carat Leseli La Letseng (The Light of Letseng).