Mining Regulation in Lesotho

Pursuant to the Constitution, all rights to land & minerals belong to the Kingdom of Lesotho. Hence, exploration & mining in Lesotho require having an appropriate mining concession granted by the country’s government.

Exploration & production rights in Lesotho are provided on the basis of the Law on Minerals & Mines (MMA). The Law on Environmental Protection additionally regulates mining & exploration activities; it also contains provisions regarding obtaining consent & licenses for mining activities. The main body responsible for regulating the mining industry in Lesotho is the Ministry of Mines.

Licensing

Obtaining a license for exploration of minerals in Lesotho requires applying to the Mining Council via the Mining Commissioner. In general, a license for exploration & production of minerals in the Kingdom of Lesotho gives its holder the following rights:

• prospect for minerals for which the license is issued;
• carry out excavation & drill wells;
• set up camps & makeshift structures for vehicles needed for exploration.

Normally, a license is issued for no more than twenty four months; it can be renewed for twelve months (but no more than that) by filing a corresponding application. Transferring a license requires compliance with certain MMA provisions.

Lesotho: Obtaining a Lease for Development of Minerals

Typically, a mining lease gives its owner the following rights:

• extract the minerals to which the license relates;
• install equipment & build structures necessary for mining, transporting, enriching, processing, smelting or refining minerals;
• sell any extracted minerals;
• carry out exploration within a mining zone;
• dispose of any mining-related waste.

Obtaining a lease of subsoil plots in Lesotho requires applying with the Mining Council via the Commissioner. Approving, issuing, renewing, cancelling or suspending mining leases is the exclusive prerogative of the Ministry of Mines. A lease is issued for ten years (but no more than that); it can be renewed for another ten years by submitting a corresponding application prior to expiration of the lease.

Lesotho: Obtaining a License for Oil & Gas Production

There’s currently no oil & gas exploration rights in Lesotho.

Requirements

Unless they’re citizens of Lesotho, individuals can’t obtain the right to mine minerals in Lesotho in their own name. Companies can acquire mining rights if they’re or are going to be registered in Lesotho.

Apart from having to register a company in Lesotho, foreign applicants are required to comply with any other rules. The government can acquire no less than twenty percent of shares in a mine; it’s also required to inform lessees of its intention to purchase a stake in a mine. The government's stake in diamond mines is negotiated between the government & lessees & must be reflected in a lease agreement.

Royalties & Taxes 

As of now, mining companies are taxed the same way as any other enterprises. Pursuant to the MMA, holders of mining concessions must pay for royalties for any minerals extracted by them. Royalty payments for gemstones are currently set at ten percent; royalty payments for other minerals or mineral products are set at three percent. The royalty rate for diamonds can be negotiated between the government & holders of concession rights in a lease agreement; however, its rate mustn’t exceed ten percent. Royalties are calculated based on a mine’s gross market value & paid by holders of concessions rights.

Apart from royalties, holders of concession rights must also pay an annual concession fee. Registering a company is a prerequisite for obtaining a permit for exploration & production of minerals in Lesotho.