STORM MOUNTAIN DIAMONDS: Weathering the Storm
By blasting home its deep-rooted principles of safety, efficiency and quality, Storm Mountain Diamonds is persevering in what is an extremely challenging global diamond market. CEO Neo Hoala explains that planning and focus, and a bit of optimism, are required when times get tough.
Supported by:
The global diamond industry is going through one of the most turbulent periods in recent memory. After years of steady demand and consistent value, diamond prices have slumped, synthetic alternatives have surged, and geopolitical and economic challenges have piled pressure on even the most established names in the sector. In Lesotho – a country where mining remains a cornerstone and vital economic pillar, the ripple effects have been deeply felt. Yet at Storm Mountain Diamonds (SMD), the company behind the famed Kao mine, a story of resilience and strategic navigation through this storm is unfolding.
SMD has earned international acclaim for its remarkable pink diamond recoveries. The Kao mine has delivered stones like the 47.8-carat Pink Eternity and the 108.39-carat fancy intense pink discovered in March 2023, underlining its status as one of the world’s premier sources of rare fancy-coloured diamonds. However, even for a business with a glowing reputation and consistent operational success, market dynamics have not spared the mine from pressure.
“For the past year SMD has engaged with various stakeholders to advocate the challenges that the mining industry is facing. Almost every major project that we initiated on had to be put on hold due to massive financial constraints resulting from poor market performance, especially reduced dollar per carat, which showed no sign of improvement. This has been our daily story to closely assess the market direction,” CEO Neo Hoala tells Enterprise Africa. “Our immediate priority as a mine has been focused on stabilising the organisation and executing disciplined cost management to safeguard the long-term sustainability of the Kao operation. With the downturn in the market, despite our continued efforts to contain costs, we were forced further to assess all areas and ensure the longevity of operation.”
EFFICIENCY AND STRATEGY
At the heart of SMD’s response to industry headwinds is a strategic operational renewed focus on improving efficiency, enhancing throughput and fostering accountability at all levels of the company. The company recently concluded a strategic operational review which is already driving positive change on productivity.
“We have just completed our strategic operational review and that led to streamlining processes to ensure we have efficient ore handling, and we have also looked at what can be improved in terms of plant throughput areas. We are also looking to improve planning cycles and ensuring that every person involved enhances or contributes with accountability, ensuring positive and meaningful performance improvement.”
These adjustments are especially critical given the gap between initial projections and market realities. According to Hoala, the company’s business plan initially forecasted a much higher per carat revenue than what has been realised in the current market.
“The market is very challenging. When we developed our business plan, we planned in a stronger dollar per carat rate, but we are now realising only 40-50% of those projections. Across the sector globally, many large players are struggling significantly and either curtailing production considering shutting down their operations, and that should be concerning for governments and all stakeholders.”
Despite these challenges, SMD has pressed ahead with one of its most important capital projects to date: the High-Pressure Grinding Rolls (HPGR) installation.
“We have just completed our HPGR project which we hope will be our strategic game changer and improve diamond liberation while reducing wear and maintenance costs. Currently, we are at the commissioning stage, and when successfully tested within the next six months, we will see increased production of approximately 20%. This is the main capital project that we are focussed on as it will yield positive results in terms of improving our efficiency by increasing our output once fully operational.”
The HPGR technology, which uses inter-particle compression rather than impact force to crush rock, has been shown to reduce energy consumption, extend equipment life, and improve mineral recovery. For SMD, this represents a key lever for stabilising performance in the face of global uncertainty.
SUPPORT AND STABILITY
With its feet firmly planted on the ground, SMD has taken a practical approach to cost containment and business continuity.
“With cost containment strategies, we are renegotiating contracts with our partners to ensure the prices we get are affordable. That has helped us to provide some stability to the financials of the business.”
Hoala notes that while forecasts previously suggested a market bounce back within six months since December 2024, real recovery has been elusive.
“Last year, expert reports indicated that markets should improve in six months’ time, which was from June 2025, but in industry as sensitive as diamond markets, it is impossible to be precise around what will happen, the volatile market makes precision always difficult. As we speak, we are still in the downturn, and we haven’t seen any clear visibility to great improvement across the market in general.”
This caution is well-placed. Macroeconomic pressures, the boom in synthetic diamonds, and global inflation have all weighed heavily.
“The influx of synthetic diamonds in the markets has significantly disrupted the diamond pricing structure and that has impacted the industry negatively. We can also look at global economic factors that have impacted the whole mining industry. We are faced with macro-economic factors such as high inflation, currency fluctuations, and ongoing geopolitical uncertainty. That has eroded customer demand, particularly strong markets like China and the USA. These are not isolated variables, proving that whatever happens around the world certainly impacts the diamond market, and that impacts smaller diamond mines such as SMD. Pressure on sales has changed pricing, and that has contributed to tighter working capital management.”
Still, Hoala remains optimistic, buoyed by shareholder confidence and a united front with Government of Lesotho.
“Both Shareholders have been very supportive. There, however, many dynamics to consider and we are all working on this together. A total of 75% ownership comes from investors outside of Lesotho and 25% belongs to the government of Lesotho. We are in collaboration with both investors to ensure that any assistance we can get does come through.
“Since last year, the government has helped us to restructure royalties to tie to the level of revenue that we receive. Our Investors have also helped us secure funding necessary keep the operations running and move forward. It is warming when both parties show confidence in the operation during challenging periods.”
BUILDING FOR THE FUTURE
Despite the difficult conditions, SMD continues to contribute significantly to Lesotho’s economy and society. Bringing a 10% the mines contribute to Lesotho’s GDP.
“SMD currently employs around 1,000 people, including contractors, with the majority being Basotho Nationals. Production-wise, we have remained within reasonable range despite the challenges in the industry, but revenue figures are lower, reflecting the global diamond market. In terms of economic contribution, we remain a significant contributor to the government of Lesotho’ fiscus.
“That is driven by localisation strategies as well as taxes, royalties, and licenses that we pay. In the past five years, we have contributed approximately M4.6 billion to the Government’s fiscus and that is impactful in Lesotho despite the challenging times we are in.”
This level of contribution is no accident. The company has prioritised sustainability, governance, and localisation.
“We are not immune to growing public sentiment around sustainability, but Lesotho has a strict governance framework, coupled with our commitment to community engagement. We are a proud member of the Responsible Jewellery Council (RJC) and that helps us to retain trust and credibility. We are in good reputational standing when it comes to perception around mining and the quality of our natural diamonds.”
SMD also prides itself on a values-based internal culture, where accountability and unity are key.
“We have been intentional about cultivating a culture rooted in safety, empowerment and accountability. We are also very keen on promoting teamwork, highlighting that even though people work across different positions, working together will allow us to go above and beyond the challenges we are facing by ensuring we continuously improve to achieve stability and growth.”
READY FOR RECOVERY
Even with the market fundamental changes underway, the Leadership Team is preparing for the next growth cycle.
“Our focus remains on efficiency and cost management discipline as we search for profitability in a depressed market. We renegotiated key contracts and are close to finalising our HPGR project, and both of this key enablers have helped to provide stability. The main goal is to ensure that when the market improves, alongside the full impact of our efficiency measures, we will regain profitability very quickly. The yield from the HPGR project will definitely come into play and make a significant contribution toward improved output.”
Looking ahead, Hoala is clear about the legacy she wants to leave.
“My ambition as a Leader is to make sure that I lead the SMD into a new chapter of resilience, sustainability, and value creation. Longer-term, I envision KAO as a responsible mine that not only produces quality diamonds but also do its utmost best to enrich the communities that surround us. We also want to empower and employ more Basotho in our operation while minimising our environmental impact. I am strongly passionate about advancing localisation through procurement, keeping more wealth in the country of Lesotho. If I can leave a company that is economically robust and socially meaningful in the communities we operate, I will be happy.”
It’s clear that this is more than just a business. For Hoala, this is about people, pride, and perseverance.
“I do my best to be a game changer through value creation as much as possible, either onsite or offsite. One has to be mindful of how the team is coping. Leadership has a side of emotional nurturing and this is where as a Leader you listen to people, include everyone and allay fears. I always try to share my perception of the market and instil hope, while giving people a pat on the shoulder for not quitting when things are hard. You can never build a strategy and leave out the implementers. Strategy without your people is just a plan. So I always make sure everyone is included in a collaborative effort.”
Storm Mountain Diamonds has shown that, even when skies darken, clarity of vision and strength of purpose can still produce sparkle.