Abu Dhabi, UAEThursday 23 May 2019

Angola's first diamond auction to feature 114-carat stone

Evaluation of seven gemstones from Angola’s north-east Lulo mine that will be sold is expected to end between January 25 and 28

The Angolan central bank in Luanda. The country is pushing its diamond sector. Reuters
The Angolan central bank in Luanda. The country is pushing its diamond sector. Reuters

Angola will give the results of its first diamond auction on January 31 as the south-west African country seeks to increase transparency, attract more investment and boost government revenue, state-owned diamond-trading company Sodiam said.

The evaluation of seven gemstones from Angola’s north-east Lulo mine that will be sold is expected to end between January 25 and January 28, Eugenio Bravo da Rosa, head of the Luanda-based company, said. Lazare Kaplan International, the KGK Group, Rosy Blue and the Diarough Group are among diamond manufacturing and distribution companies invited to the auction, he said.

Among the gemstones that will be sold this month is a 114-carat stone and a pink, 46-carat gem. Both diamonds were found in the alluvial Lulo mine, where in 2016 one of the world’s biggest diamonds - a 404.2-carat stone - was found.

“We’re confident that this auction will result in a level of revenue that is higher than normal,” Mr Bravo da Rosa said. The auction is in line with Angola’s goal to become “increasingly more open to foreign investment by following the best global practices”, he said.

Angolan President Joao Lourenco has been trying to open up and diversify the economy of Africa’s second-biggest oil producer to shake off a slowdown that began with a drop in crude prices in mid-2014. His predecessor Jose Eduardo dos Santos’ tight grip on the economy prompted some foreign miners to avoid Angola, which is also the source of the fifth-most diamonds in the world.

Mr Bravo da Rosa said Sodiam now plans to hold at least six diamond auctions a year to entice more investment in the industry. The dates of the auctions are still being decided, he said.

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The lion’s share of Angola’s diamond production comes from alluvial deposits, or rivers, but Angola has been working to increase exploration of gems in shafts of volcanic rock, known as kimberlites.

Much of Angola’s diamond deposits remain under-explored because of a 27-year civil war and a business environment that remained difficult to enter after fighting ended in 2002. Diamond output fell 11 per cent to 8.4 million carats in 2018 from a year earlier. Still, higher gem prices led to an 11 per cent increase in revenue to $1.22 billion, said Mr Bravo da Rosa, who cited preliminary data.

“The average price in 2018 increased by about 24 per cent compared to the previous year,” he said. “There is currently a price reduction environment, especially for smaller diamonds.”

The Lucapa Diamond operates the Lulo mine in Angola’s Lunda Norte region through holding company Sociedade Mineira do Lulo, or SML. Lucapa has a 40 per cent stake in SML. The remaining shareholders are state-owned Angolan diamond mining company Empresa Nacional de Diamantes, or Endiama, and local partner Rosas & Petalas, according to information on Lucapa’s website.

Updated: January 15, 2019 04:53 PM

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