Angola State Diamond Co. Endiama To Develop Luaxe Project Exclusively with ALROSA

Mining and Exploration
16/02/2017 10:53

The Angolan state diamond company, Endiama, said it is currently negotiating with its partner ALROSA for the financing of the Luaxe kimberlite project and will not seek additional investors, reports Macauhub. The Luaxe Kimberlite was discovered in 2012 when Endiama and ALROSA carried out the correlation study to identify Angola's diamond potential. The geological research points to reserves evaluated at 350 million carats and a mining lifespan of 30 years. According to Chaiman Antonio Carlos Sumbula, the size of investment of Luaxe Kimberlite will be US$1.5 billion (ALROSA president Andrey Zharkov said last September capital investments in Luaxe project during its mine life was estimated at $1b) and the exploration work is to be concluded between late 2017 and early 2018. Once fully operational it will create over 2000 jobs. Luaxe is said to be bigger than Catoca, which currently produces about 80 percent of the country’s total diamond output.

Sumbula also said that until this project starts operating, Endiama will choose to slightly reduce production to improve revenue. “When the company was producing 8 million carats revenue was US$1.2 billion, but in 2016, with production of 9 million carats, revenue fell to US$1.07 billion,” he said. He also said Endiama will negotiate with major world producers, such as De Beers, ALROSA and Rio Tinto, a slight reduction in production in order to allow the price of diamonds to rise. “Our intention is to work towards more revenue, based on a drop in production,” he said.