Online Reporter
MASERU. – Storm Mountain Diamonds in Lesotho will cease operations at its Kao Mine on June 30 due to rising fuel costs linked to the conflict in the Middle East and a prolonged slump in global diamond prices.
The company announced earlier this week that the Kao Mine would be placed under care and maintenance from July, citing unsustainable fuel costs, depressed diamond prices and mounting capital requirements. The move is expected to affect hundreds of workers.
“The biggest challenge confronting the operation was the prolonged, severe decline in global rough diamond prices,” SMD chief executive officer Neo Hoala said, noting that the market downturn is the primary trigger for the closure.
However, rising fuel costs have dealt an additional blow to the company.
Since the United States and Israel struck Iran in late February, triggering the closure of the Strait of Hormuz, global oil supplies have been severely disrupted, with landlocked countries such as Lesotho bearing amplified price shocks at the end of long logistics chains. – Xinhua
