Natural Resources
Lesotho is poor in natural resources. Economically the most important resource is water. The Lesotho Highlands Water Project allows exporting water from the Malibamatso, Matsoku, Senqu and Senqunyane rivers to South Africa, while also generating hydroelectric power for Lesotho's needs. As of April 2008, the first phase of the project has been completed. The project already accounts for an estimated five percent of Lesotho's GDP, and when fully completed, it could account for as much as 20 percent.
The main mineral resource is diamonds from the Letseng diamond mine in the Maluti mountain range. The mine produces very few stones, but has the highest dollar ratio per carat of any diamond mine in the world. Other mineral resources include coal, galena, quartz, agate and uranium deposits, but their exploitation is not considered commercially viable. Clay deposits can be found in the country, and are used for producing tiles, bricks and other ceramics.
Much of the population engages in subsistence farming, even though only 10.71% of the country's surface is classified as arable land and 0.13% has permanent crops. Much of the land has been ruined by soil erosion. The most fertile farmlands are in the northern and central lowlands, and in the foothills between the lowlands and the mountains. Large tracts of the fertile farmland to the north of the country—in the Free State region of South Africa—were lost to European colonists in wars during the 19th century.
Read more about this topic: Geography Of Lesotho
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