The carat value of rough diamonds began the year to grow robustly, generating good prospects for companies operating in Angola, an example being the growing profits of Lucapa, the Australian company that manages the Lulo mine, in Lunda Norte, where the most valuable stones in the national diamond industry are released, which saw its business soar by almost 400% in the last quarter of 2021.
De Beers and Alrosa, two of the most well-known multinationals in the sector, increased the carat value of rough diamonds by close to 15% for smaller stones and up to 12% for larger and higher quality ones, which reveals , according to experts, a strong recovery of this market and opens up optimistic prospects for 2022.
With a production of around 9 million carats, Angola, despite being far from the target of 14 million indicated by the Executive, has an outstanding opening to grow one of its strategic sectors to overcome the economic crisis in which the country has been plunged for several years old.
A good example of this auspicious start to the year 2022 comes from Lucapa Diamond Company, a listed Australian company that manages Lulo, in Lunda Norte, with Endiama and Rosa & Pétalas, and the Mothae mine, in Lesotho, and which saw the its dividends exploded 393% in the last quarter of 2021, to 13 million dollars, from the 39% it has at Lulo and 70% at Mothae.
The diamonds extracted in Lulo are the jewel in the crown of this company, considering that it extracts from it the most valuable in the world, having even beaten the world record in 2016, with 2,983 USD/carat, having, in the last four months of 2021, increased the gains by 294%, with a revealing USD 3,196 per carat, making a turnover of USD 26 million in that period. In his Lesotho mine, the carat was sold at an average of less than 500 USD.
But the bulk, about 80%, of the 9 million carats produced by the national diamond industry come from Catoca, the national giant in quantity and the 4th largest kimberlite in the world, although here the average value of the carat is only slightly above 100 USD, with the company forecasting an increase of just over 7% for its 2022 production, a year clearly already out of the negative effects of the Covid-19 pandemic.
The main reasons for this performance of the diamond markets, according to most analysts, is, whether in the raw or polished stone market, the scarcity of supply in view of the increase in demand and a good moment of sales in the major world economies, such as, and mainly, in the USA, but also India and China, the latter showing to be more timid in leaving the placidity generated by the pandemic.
Luaxe, the shine to find
One of the country's great bets to increase national production is the Luaxe mining project, in Lunda Sul, where the Russians from Alrosa, who invested in the project, estimate that there are millions of carats in stock.
The Luaxe project, close to the Catoca Mining Project, the 4th largest diamond mine in the world, began to be consolidated in 2012, when it was discovered.
Completion of the first phase of the start-up of the Luaxe kimberlite mine will cost US$350 million, with US$200 million having already been invested since 2007 in geological prospecting work and more.
The Luaxe mine has been in the experimental production phase since the middle of last year, so work is being carried out to gain greater knowledge of the 1195 square kilometer concession area.
In search of a place among the biggest producers in the world
Angola has, in recent years, especially since João Lourenço assumed power, a set of investments, legislative measures aimed at accelerating national production and even a set of operations involving security forces to ensure the reduction of illegal mining whose final objective is to place Angola among the three largest producers in the world.
With an average production of more than 9 million carats per year and with some of the most important kimberlites in the world, whether that of Catoca, the 4th largest in the world, or the promising investment of the Russian giant Alrosa, in Luaxe, also one of the largest kimberlites in the world, Endiama, still in February 2021 launched the goal of reaching an average production of 14 million carats.
Currently, despite being among the great world producers, Angola is still far from the podium, which is occupied by Russia, Botswana and the Democratic Republic of Congo, being among other giants, such as Zimbabwe, Australia or Canada.
It should be remembered that Russia produces more than 39 million carats, Botswana slightly exceeds 23 million, while the DRC, without reliable official figures, should have a production of around 15 million carats, a large percentage coming from mining. artisanal and much of it illegal, therefore outside the official accounts.
To surpass these three producers, Angola will need to see the Luaxe mining project active, and the Russian Alrosa has already put forward as an estimate for this mine the presence of carats worth USD 35 billion, which could lead to the country, with its estimated annual production of 9 million carats, almost double when in full swing.
But, in addition to the Russian giant Alrosa, the Angolan government needs to attract other investors, having, for this, produced strong changes to the previous legislation, the most noticeable touch being the liberalization of sales that was, until recently, subject to the logic of the buyer. preferential.
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