Lesotho, a landlocked country in Southern Africa, has rich natural resources that boost its economy. Water is the most valuable, earning it the nickname “Water Tower of Southern Africa.”
The Lesotho Highlands Water Project exports water to South Africa, bringing in over $800 million since 1996 and making up 10% of the GDP. Hydropower plants like Muela generate 72 MW of electricity to cut reliance on imported coal-based power.
Diamonds are another major resource. Mines like Letšeng and Liqhobong produce high-quality gems, driving export revenue.
In 2014, production hit 24,000 carats. Other resources include sandstone, clay, wool, and mohair, which have been supporting agriculture and construction.
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Lesotho’s Natural Resources And Their Locations
Here’s a list of all the natural resources that can be found in Lesotho and their locations:
| Natural Resources | Locations |
|---|---|
| Water | Orange River, Caledon River, Makhaleng River, Senqunyane River |
| Hydropower | Muela Hydropower Plant (Northern Lesotho), Mohale Dam |
| Diamonds | Letšeng Mine, Kao Mine, Liqhobong Mine, Mothae Mine (Northeastern Lesotho) |
| Sandstone | Throughout Lesotho |
| Clay | Lowlands and foothills |
| Wool and Mohair | Highlands (Mountainous regions) |
| Tourism Resources | Qiloane Falls (Makhaleng River), Semongkoaneng Waterfall (Senqunyane River) |
Lesotho’s Natural Resources Discoveries
Lesotho’s resource discoveries began with its unique geology. In the mid-20th century, kimberlite pipes, essential for diamond mining, were found. The Letšeng-la-Terae Kimberlite Pipes, discovered in 1957 by Peter H. Nixon, led to the opening of the Letšeng Mine.
Since then, it has produced some of the world’s largest diamonds, including the 601-carat Lesotho Brown in 1967 and the 603-carat Lesotho Promise in 2006.
For centuries, sandstone and clay have been used for construction and ceramics. These materials are found throughout Lesotho’s mountains and lowlands.
Water remains Lesotho’s most valuable resource. The Orange, Caledon, Makhaleng, and Senqunyane rivers provide an abundant supply.
Their potential for large-scale water transfer led to the Lesotho Highlands Water Project in 1986. Today, it exports about 800 million cubic meters of water yearly to South Africa while generating hydroelectric power.
Lesotho’s landscapes also attract tourism. Sites like Qiloane Falls and Semongkoaneng Waterfall draw visitors, boosting ecotourism.
In 2024, scientists uncovered an ancient lake in the Eastern Highlands near Mafadi Summit, 3,400 meters above sea level.
Research led by Professors Jennifer Fitchett and Anson Mackay found that it thrived between 4,600 and 100 years ago.
Using sediment analysis and radiocarbon dating, they confirmed that it supported aquatic life for thousands of years. Geological surveys suggest untapped resources like shale gas and oil may exist.
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Viability Of Lesotho’s Natural Resource Exploitation
Lesotho’s natural resources depend heavily on infrastructure. Water from the Orange and Caledon Rivers is exported to South Africa through the Lesotho Highlands Water Project.
While this brings in royalties and hydroelectric power, many rural areas still struggle with clean water access due to poor distribution.
Diamond mining in Mokhotlong faces transportation challenges because of the rugged terrain and weak road networks.
Wool and mohair production thrives in the highlands but suffers from limited transport options. Hydropower has seen progress, with the Muela Hydropower Plant supplying half of Lesotho’s energy. Phase II of the water project aims to increase capacity.
However, mining operations rely on foreign expertise and equipment, with companies like Gem Diamonds leading extraction.
Agriculture also lags in modernization, affecting wool, mohair, and farming efficiency. Resource governance favors foreign investment.
The diamond industry is mostly foreign-owned, with the government holding minor stakes. While royalties support the economy, local communities feel left out.
In 2020, the Afrobarometer reported that 51% of Basotho lived in poverty despite resource exports. Several challenges make resource exploitation difficult. Only 9% of the land is arable, which limits farming expansion.
Overgrazing and poor practices worsen soil erosion, reducing productivity. Hydropower meets half the country’s needs, but many rural areas still rely on biomass for energy.
Lesotho’s natural beauty and attractions like Qiloane Falls could boost tourism, but weak infrastructure holds the sector back.
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Export Potential Of Lesotho’s Natural Resources
| Natural Resources | Major Markets | Revenue Contribution |
|---|---|---|
| Diamonds | Europe, Asia, North America | 22% of total exports (2013) |
| Water | South Africa | M142.8 million annually |
| Wool and Mohair | United States (AGOA), Europe | 14% of global mohair production |
| Trout | South Africa, Japan, USA | Emerging aquaculture sector |
Diamonds are the top export, which made up over 22% of total exports in 2023. Mines like Letšeng and Kao produce high-quality gems sold in Europe, Asia, and North America. Water is another key export, transferred to South Africa through the Lesotho Highlands Water Project.
This project generates royalties and hydroelectric power, bringing in M142.8 million annually. Wool and mohair are also essential, with Lesotho supplying 14% of the world’s mohair.
These products reach the U.S. under the African Growth and Opportunity Act, allowing duty-free access. Trout farming is growing, with exports to South Africa, Japan, and the U.S.
However, Lesotho faces challenges in export growth. Poor transportation slows resource distribution. Most diamond mines are foreign-owned, which limits local benefits. Wool and mohair are often sold unprocessed, reducing their value.
Yet, there are expansion opportunities. The Polihali Dam will boost trout farming. Lesotho’s landscapes, including Qiloane Falls, could attract more ecotourism. Hydropower growth could supply electricity to Southern Africa.
Economic Impact Of Lesotho’s Natural Resources
1. Contribution To GDP Growth
Lesotho’s natural resources have greatly impacted its economic growth. Water, often called “white gold,” is a key contributor.
The Lesotho Highlands Water Project (LHWP) exports water to South Africa, which generates annual royalties of M142.8 million.
This revenue supports infrastructure development and boosts GDP growth. In 2024, LHWP Phase II further increased economic activity, adding 2% to GDP in the first quarter.
Diamonds are also essential, making up 22% of total exports in 2023. High-quality gems from mines like Letšeng bring in foreign earnings.
2. Employment
Natural resources offer jobs to thousands of Basotho. Diamond mining provides direct employment at places like Kao and Liqhobong Mines.
Wool and mohair production also supports rural communities in the highlands. Agriculture, including trout farming in LHWP dams, creates jobs and supports many households.
3. Infrastructure Development
Projects such as LHWP have changed Lesotho’s infrastructure. The construction of dams and hydropower plants has improved energy access, with the Muela Hydropower Plant meeting 50% of domestic electricity needs.
Expanding transportation networks that serve mining and agriculture have helped with better resource distribution and trade.
4. Regional Integration And Trade
Lesotho’s natural resources strengthen its regional ties, especially with South Africa, through water exports and the Southern African Customs Union (SACU).
SACU membership brings in revenue from customs duties. Meanwhile, global markets for diamonds and wool link Lesotho to international trade.