Coronavirus: Liqhobong Mine to Close for at Least a Year

(IDEX) - Firestone has halted operations at its Liqhobong mine, in Lesotho, for at least a year.

It blames the "dramatic and severe" impact of the coronavirus crisis on the global diamond market.

Work was suspended at the end of March in response to a lockdown imposed by South Africa, which surrounds the landlocked kingdom.   The company now says it is now extending the care and maintenance operation.

"The prudent course of action is not to resume operations at the mine immediately after the lock-downs are lifted," it says in a statement.

"It is in the best interest of all stakeholders to rather preserve the limited mine life at Liqhobong Mine and the limited cash resources of the group for as long as possible to ensure the mine can start up again when the market recovers, which they (the directors) believe will take at least 12 months."

The mine suffered a "devastating" power outage last October, which lasted for almost a month and cost $4.6m.

In February it said it would delist and reduce the size of its board to cut costs.

Firestone, which is a quarter-owned by the Lesotho government, started commercial production at Liqhobong in July 2017.

It says it has the full support of its two major shareholders and bondholders, Resource Capital Fund VI L.P and Pacific Road Resources Fund, and is speaking its senior secured lender, ABSA Bank, about restructuring the balance of its debt of $63.9m.