JOHANNESBURG (miningweekly.com) - Alrosa CEO Sergey Ivanov and Angolan President João Lourenço this week held their second meeting to discuss issues related to the closing of the transaction to increase Alrosa's shareholding in Catoca Mining to 41%.
"Recently, we have seen positive changes related to increasing of transparency and improving the investment climate in Angola. I am sure that the efforts being taken by the Republic's authorities to attract investments to the economy, will soon bear fruit and will contribute to the launch of new large projects," Ivanov said after the meeting, which was held on the sidelines of the World Economic Forum, in Davos, Switzerland.
The Russian miner was a co-founder of Catoca Mining, through which it also plans to participate in the development of the Luaxe concession.
The company has also been engaged with Angola's national diamond-mining company Endiama in carrying out geological exploration in Angola as part of a joint venture since 2014.
Lourenço earlier this month signed a decree permitting the redistribution of a 16.4% stake in Catoca Mining to Wargan Holdings, which is owned by PJSC Alrosa.
At a later stage, a further 16.4% stake in Catoca would be equally distributed between Alrosa and Endiama.
The decree would come into force this month, with the transaction to be legally formalised in February or March this year. Upon completion, PJSC and Endiama will each hold 41% of Catoca Mining, with LL International holding the remaining 18% stake.
The cost of an 8.2% stake in the share capital of Catoca Mining would amount to $70-million, which Alrosa plans to fund from its own resources.
Catoca was established in 1992 and is engaged in diamond mining at Catoca deposit in Lunda Sul province. It has two processing plants with the overall performance exceeding ten-million tons of ore a year.
Every year Catoca mines and sells rough diamonds worth some 6.8-million carats. Its estimated reserves are 60-million carats.
Meanwhile, Alrosa this week also reported that its diamond production for the 2017 financial year had totalled 39.6-million carats, up by 6% year-on-year.
"Despite the shutdown of the Mir underground mine in view of the accident in August 2017, the company delivered on the yearly diamond production plan.
"The key drivers for diamond production growth were higher output at the Udachny underground mine, development of the richest part of the deposit at the Jubilee pipe, increased grade at the Arkhangelskaya and Karpinskogo-1 pipes operated by Severalmaz, as well as higher production at the Botuobinskaya pipe," said Alrosa VP Igor Sobolev.
Indicatively, in 2017 Alrosa sold 41.2-million carats of diamonds, while rough and polished diamond sales amounted to $4.2-billion and $96.9-million, respectively.
Rough diamond sales in the fourth quarter amounted to 9.4-million carats, including 6.2-million carats of gem-quality diamonds at an average price of $139/ct per carat, and 3.2-million carats of industrial diamonds at an average price of $6.50/ct.
Rough diamond sales amounted to $81-million, while polished diamond sales for this period amounted to $28.7-million.