New mine to uplift Angola's diamond production

Angola should produce 14-million carats of diamonds between now and 2022. This was reported by Empresa Nacional de Prospecção, Exploração, Lapidação e Comercialização de Diamantes de Angola (the National Company for the Prospecting, Mining, Polishing and Commercialisation of Diamonds of Angola – better known as Endiama) president Ganga Júnior. He was speakingon the sidelines of the recent Russia-Africa Economic Forum in Sochi, Russia.

This would be the result of the start of production at the new Luaxe mine, in Lunda Sulprovince. It has an estimated reserve of 350-million carats. A kimberlite pipe, it was discoveredin 2009, following the start of geophysical surveying and geological prospecting in the region the year before. It covers an area of 100 ha, and mining operations were expected to eventually reach a depth of 400 m.

Júnior stated that the construction of the mine infrastructure necessary to extract and process the diamonds would be accelerated. This was because the development of the mine was regarded as a strategic project. Implementing Phase 1 of Luaxe will cost $250-million to $300-million.

He explained that productionat the new mine would beramped up in phases. Theobjective was to reach an oreprocessing capacity similar tothat of the existing Catocaoperation, which currently was about ten-million tons a year.

(Catoca is currently the country’s biggest diamond mine, and the fifth-biggest such mine in the world. It is a joint venturebetween Endiama, Russian diamond major Alrosa and Netherlands-domiciled LL International Holding BV. Endiama and Alrosa each hold 41% of Catoca, with LL International Holding having the remaining 18%. Catoca is currently responsible for 89% of Angola’s diamond production.)

Endiama is one of the State-owned companies included in the country’s Privatisation Programme, which was recently approved by government. The percentage of the companythat will be offered for salehas not yet been determined,but the sale is scheduled for2022. This is part of the Angolan government’s major reformprogramme for the country’smining sector.

A necessary precondition for the privatisation of Endiama is the setting up of the country’s new National Minerals Resources Agency. This is currently under way and, once the new agencyis functional, it will assume responsibility for the grantingof exploration and miningconcessions in Angola. Untilnow, the power to grant such concessions had been vested in Endiama (for diamonds) and the Empresa Nacional de Ferro de Angola (the National Iron Company of Angola, better known as Ferrangol), for most other minerals and metals.

This step will, the Angolan government has explained,create greater transparencyand openness in the country’sminerals sector and allow Endiama and Ferrangol to concentrate on their core businessesof prospecting, mining and commercialising mineral products. The creation of the new agency follows on from the successful setting up of the National Petroleum, Gas and Biofuels Agency, which is now the concessionary body for the oil and gas sector.