On January 31, the first diamond rough auction ever to be held in Angola took place. Conducted by Sodiam, the national diamond-trading company, it included seven diamonds of exceptional quality, all from the alluvial Lulo mine. Among them were a 114-carat stone and a pink 46-carat diamond.
According to Sodiam, the auction brought in $16.7 million. It was attended by 31 companies from eight countries, including Angola, Belgium, UAE, India, the United States, South Africa, Israel and China, and it was carried out under a new diamond marketing policy approved about six months earlier.
The auction was hailed as a milestone for the southwest African nation. “It is a unique moment of great importance that marks the turning point in the trading of diamonds in our country, reflecting greater flexibility and transparency in this sensitive and vital industry for our economy, stated Diamantino Azevedo, the country’s minister of mineral resources and petroleum in an official release.
“The tender means transparency in the trading of diamonds and it is an inducement for attracting several investors in the diamond sub-sector,” added Laureano Receado Paulo, a senior executive at Endiama, the state-owned diamond mining company. “In this way, Angola’s diamonds will be increasingly valued, sold at fair prices, maximizing revenues and concomitantly increasing the tax contribution to the state.”
Rough diamonds from Angola’s newest diamond producing facility, the Lulo Mine. (Photo courtesy of Lucara Diamond Corp.)
UNTAPPED RESERVES 11 TIMES WORLD’S ANNUAL PRODUCTION
Located in southern Africa and surrounded or in close proximity to several of the historically largest diamond-producing nations, Angola is one of the world’s most underrated and underexploited diamond mining nations. Much of its deposits remain under-explored, mainly because of a 27-year civil war that only ended in 2002.
A rough diamond from the Catoca Mine, the world’s fourth largest diamond producing resource. (Photo courtesy of Alrosa.)
A five-year geological studied completed in 2017, which was carried out by a team from Alrosa, the Russian mining company that has invested substantial amounts in the Angolan industry, estimated that the country’s unmined diamonds could be as high as 1.5 billion carats, which was about 11 times total world production per year.
According to data released by Victor Ustinov, head of the Alrosa department responsible for evaluating diamond deposits in new territories, Angola has at least 950 million carats of rough diamonds in known kimberlite deposits and more than 50 million in alluvial areas. This figure could climb to 1.5 billion carats if the research is continued, he said.
There currently are four producing diamond mines in Angola, with the Lulo mine being the most recent to come on line. The largest operation is the Catoca Diamond Mine, which is considered the world’s fourth-largest kimberlite mine in the world, covering some 64 hectares. The other facilities include the Luarica diamond mine and the Fucauma mine.
In August of last year, the country’s mining minister said that three new mines would come on stream over the coming five years.
ANGOLAN GOVERNMENT LOOKS TO BOOST DIAMOND INDUSTRY
President Joao Lourenco, who replaced the country’s long-serving head of state, Eduardo dos Santos, in 2017, has introduced a policy of opening up and diversifying the economy, particularly because of the fall in crude oil prices, which significantly reduced revenues from Angola’s largest economic sector. Its second largest export earner is the diamond industry.
Production of rough diamonds in 2018 was 9.4 million carats, Kapingana Mandavela Endiama’s director of geology, recently told an African mining conference. Some 8.47 million carats were sold last year, netting income worth $1.25 billion. This puts Angola behind South Africa as the world’s fifth largest producer in terms of volume.
In 2019 Endiama has forecast that production of rough diamonds will reach 9.6 million, generating exports of about $1.5 billion.
The country also has a modest diamond cutting capacity, with a single operating factory. A second plant is currently being built at a cost of about $10 million, and once complete will be able to process about 4,000 carats per month
A a diamond sorter being trained at the Catoca Mine. (Photo courtesy of Alrosa.)