South Africa: New Letseng Owners Unearth a 603-Carat Sparkler

FORTUNE has blessed the new owners of the Letseng Diamond Mine in Lesotho with the discovery of the 15th-largest diamond the world has yet seen.

Gem Diamond Mining, which took over the Letseng mine on July 1, said a white diamond weighing 603 carats was found recently and had been put on sale in a private tender process in Antwerp that closes on Monday. It is the biggest diamond yet found on the mine.

Gem Diamonds CE Clifford Elphick said yesterday he was not surprised by the discovery. Gem bought Letseng because it was known to produce large diamonds.

But Gem was obviously delighted as it has been managing the mine for only three months.

“It is a complete fluke and very lucky that the mine has thrown out a whopper of this size,” he said. “We hope it will continue to do so.”

Letseng, in the high plateau of the Maluti Mountains, was owned by De Beers between 1977 and 1982 and closed after a tax dispute with the Lesotho government. JCI reopened it in 2004.

Gem Diamonds’ discovery is less happy for the luckless JCI group, the mining house formerly headed by Brett Kebble, who was murdered last year. Since then a mass of irregularities and a precarious financial state of affairs at JCI have been uncovered, necessitating the sale of assets. Letseng Diamond Mine was one of them.

Gem Diamonds bought 70% of Letseng for R879,5m from JCI and its empowerment partners, Matodzi Resources. As part of the deal, the Lesotho government also raised its stake in the mine and now holds the remaining 30%.

Elphick said the price the diamond, dubbed the Lesotho Promise, would fetch would be known only after the tender closed next week. It was impossible to extrapolate a price for the stone as its rarity introduced other factors. There was not “a vast universe of possible buyers”, Elphick said.

The stone would probably be cut up and polished into a suite of diamonds, he said. The biggest diamond yet discovered remains the Cullinan, found in SA in 1905 with a weight of 3106,75 carats — more than three times bigger than the next largest diamonds found.

Of the 15 biggest diamonds discovered, seven have been found in SA and one in Lesotho.

The Lesotho Brown, discovered in 1967 at Letseng, was cut into 18 polished diamonds, all of which are now privately owned. Outside SA, two exceptionally large diamonds have been found in Sierra Leone, one in the Democratic Republic of Congo, one in Brazil and one in India.
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Diamonds are formed deep in the earth from carbon under intense heat and pressure, and are carried to the surface by rising magma, or liquid volcanic rock, which then solidifies into kimberlite and lamproite.

As the kimberlite and lamproite are weathered by air and water, they form secondary deposits, such as alluvial diamonds found around rivers. Because the water carries away smaller stones, the diamonds found at alluvial sites are generally bigger than those found in kimberlites.

According to De Beers, there are about 5000 known kimberlites in the world, but only 100 of them contain enough diamonds to be of economic interest. Even in the economically viable deposits, diamonds are found in concentrations of less than one part per 5-million.
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