PERTH (miningweekly.com) – Diamond miner Lucapa has entered into a cutting and polishing agreement with leading diamond manufacturing group Safdico International over its Lulo alluvial mine, in Angola.
As a preferred buyer, Safdico could purchase up to 60% of Lulo’s yearly alluvial rough diamond production, as permitted under Angolan law.
The diamonds purchased by Safdico will be placed into the cutting and polishing partnership, and once procurement and manufacturing costs have been deducted, the profits generated beyond the mine gate from the sale of the polished diamonds will be shared equally between the parties.
To date, Safdico has purchased some 4 900 ct of run-of-mine rough diamonds from the Lulo operation under its commercial partnership.
Lucapa told shareholders on Wednesday that the new Lulo revenue stream represented another key milestone for the company’s value-adding strategy, and comes after the Lulo alluvial mining company Sociedad e Minera do Lulo (SML) had completed a self-funded $12-million capital investment programme designed to expand total group production to some 60 000 ct in 2020.
Lucapa said that the production increase, coupled with the new revenue stream generated from the cutting and polishing agreement with Safdico, would enable SML to generate higher returns for its partners and to make more regular loan repayments to the parent company, Lucapa.