The sale of Brazilian group Odebrecht’s 16.4% stake in Angolan diamond mining company Sociedade Mineira de Catoca (Catoca Mining Company) to the mine’s two main shareholders has been approved by Angolan President João Lourenço. He signed the decree authorising the deal earlier this month, Russian diamond mining group Alrosa has reported. The value of the deal is $140-million.
The deal is being executed in two stages. Firstly, Odebrecht will sell its entire stake (which has been held by its subsidiary, Odebrecht Mining Service Investments) to a company called Wargan Holdings, a wholly owned subsidiary of Alrosa. Then, later, this equity will be split equally between Alrosa and Angolan State-owned diamond company Endiama. This will result in Alrosa and Endiama each having 41% of Catoca, while third shareholder LL International Holding will hold the remaining 18%. Alrosa will buy the stake using its own funds and the deal will be legally formalised in February or March this year.
Catoca was founded in 1992 to mine the Catoca diamond deposit in the Lunda Sul province. It is reported to be the fourth-largest diamond producer in the world. Alrosa states that it is equipped with two processing plants and processes more than ten-million tons of ore a year. Its annual rough diamond output is about 6.8-million carats. Its reserves are estimated at 60-million carats.
Odebrecht has had to sell its stake in Catoca to raise funds to help pay fines of at least $2.6-billion to authorities in Brazil, the US and Switzerland for a massive bribery scheme operated by the group. From 2001, Odebrecht paid some $788-million in bribes to government officials and political parties in Brazil and other countries.