Overview
Angola has extensive diamond reserves (estimated at 180 million carats), principally in the provinces of Lunda Norte and Lunda Sul in the central and northeastern parts of the country. To date, approximately 700 kimberlites have been located in the country. Most of the diamond rich kimberlites are located along a north east – south west trernd that extends in to neighbouring DRC. Diamond production generates over $650 million annually, although exact numbers are uncertain due to the amount of illegal diamond mining and smuggling.
In 2003, Angola sold between 5,3 Mct and 6 Mct worth of diamonds, at a value of about US$1 billion, through Sociedade de Comercializacao de Diamantes de Angola (Sodiam). Angola produced an estimated 5.5 million carats in 2002 (officially). Almost all of this production was from alluvial and kimberlite deposits in the Catoca, N’Zagi, and Lucapa regions. Developing projects that also produced include the Calonda, Mufuto, Luo and Cuango areas.
Most of the diamondiferous lands are located within territories controlled by rebel Unita forces. The war has resulted in a decline in outputs. Diamond smuggling will continue to remain a major problem until such time as the Government can gain control of rebel-held areas and impose a strict policy with stiff penalties imposed on violators in order to deter smuggling.
Kimberlite mining would be able to place more control on smuggling and production than the current alluvial methods. However, capital outlays for the development of a kimberlite mining operation are extensive. Only foreign investment can provide such capital, and only under an agreement with Endiama, the state owned diamond mining company.
Government approved the opening of Angola’s second kimberlite mine, Camafuca, to SouthernEra in 2002. Development of Angola’s third kimberlite Camatchia -Camagio was granted to a joint venture with similar equities as Sociedade Miniera de Catoca. Petra Diamonds in a joint vaneture with BHP Billiton is exploring the Alto Cuilo kimberlites in the Northwest of the country. During 2003, Petra Diamonds Ltd and its Angolan partners, Empresa Nacional de Diamantes de Angola (Endiama)and Organizacoes Moyoweno, began drilling diamondiferous kimberlites on their Alto Cuilo diamond project in northeastern Angola.
There is also scope for developing small business in the diamond-cutting industry, and in the artisinal exploration for gem-stones or industrial diamonds. Angola must, however, diversify from both petroleum and diamond mining in the medium-to-long terms in order to achieve sustainable development.
In August 2003, the government ended the monopoly of the state-controlled diamond marketing firm, Ascorp, which until then had the sole right to market the country’s diamonds. Sodiam, which has 51% control of Israeli diamantaire Lev Leviev’s Ascorp organisation, took over the marketing of gems produced by larger producers in the formal sector, in partnership with local and foreign companies, creating a semi-open market regulated by the state.
In an attempt to regulate its diamond market, the Angolan government have introduced several steps to control diamond trade. New legislation has been passed stating that all buying and selling of Angolan diamonds was to go through state owned company Sodiam (part of the Ascorp joint venture with Israeli businessman Lev Leviev). Attempts at licesning the estimated 350 000 artisinal miners has also begun. Les Leviev has had a long history in Angola’s diamond sector. He began by part financing the Catoca diamond mine, Angola’s largest producing kimberlite mine, whose owners (Endiama, Odebrecht and Alrosa) requireed an additional $25 million financing. At that stage, the only person who was brave enough (in light of the iminent collapse of the Lusaka Peace accord) to put up the money was Leviev. It is not sure whether Ascorp’s unified marketing system will keep Angola’s diamond production “conflict free”.
Alluvial Diamond Mining
Apart from the numerous artisinal workings scattered throughout the Lundes, some commercial operations are producing good quality stones, despite extensive smuggling and security threats.
Sociedade de Desenvolvimento Mineiro de Angola, S.A.R.L. (SDM) is a joint venture with Endiama (50%) and Odebrecht (50%) to exploit the Tazua deposit at its Luzamba project. Field exploration investigating further alluvial deposits continues, despite numerous withdrawals of personnel due to the security situation. Bulk sampling of river terrace gravels in the vicinity of the Ganzo, Tázua and Ginge river diversions have revealed economic diamond grades. SDM produced a total of 419 000 ct in 2001.
Southern Era has discontinued its alluvial mining programs along the Cuango River, which produced 144 300 carats in 1998.
America Mineral Fields holds the Luremo and Cuango licenses with Endiama. These two licenses cover the northen half of the Cuango Basin, historically a major producer of Angola’s diamonds. Based on the security situation in the country, no work has been carried out, although AMF are keen to begin development once the situation is controlled.
Sociedade Mineira do Lucapa (SML) was formed in 1992 as a company representing Endiama (51%) and Sociedada Portugese de Empreendimnetos (49%). SML has invested significantly in the development of several projects in Angola, including exploration concessions totalling 35 000 km2. SML, along with operators ITM Mining operate several alluvial concessions in the Lundes, viz the Calonda project that produced 199 000 ct, the Mufuto project that yielded 244 000 ct and the Lucapa project 69 000 ct in 2001. SML also holds a 15% interest in Southern Era’s Camafuca project and 50% of DiamondWorks’ Yetwene project.
Another major alluvial diamond producer is Associacao Chitotolo that is owned by Sociedada Miniera de Lumanhe (15%), ITM Mining (50%) and Endiama (35%). Chitolo produced 232 000 ct in 2001.
Kimberlite Production
The Catoca Mine is the world’s 4th largest kimberlite and is currently being operated by SMC (Sociedade Miniera de Catoca), which is in turn owned by Endiama (32.8%), Russia’s Alrosa (32.8%), Brazil’s Odebrecht Mining (16.4%) and the Diamond Finance CY BV Group (18%). The mine produced just over 2.6 Mct in 2001. The kimberlite yields quality diamonds, of which 35% is gem quality, fetching prices of around $75 – $100/carat. Reserves are estimated at 60 million carats. SMC intends increasing production to as much as 5 Mct per year.
DiamondWorks, through its wholly owned subsidiary, Branch Energy, has numerous interests in Angola, including alluvial and kimberlite operations. DiamondWorks operated the Luo and Yetwene kimberlite mines. The Camatchia and Camagico diamondiferous kimberlite pipes are also located within DiamondWorks’ license areas. The Luo mine began production in 1997 and has produced almost 200 000ct, with diamonds fetching between $120 and 350/carat. The largest diamond recovered to date has been a 232.6 carat stone. The Yetwene mine began production in June 1998. Exploration activities on this property have been suspended due to the security situation. DiamondWorks have alluvial concessions in and around the kimberlite operations, including the Luarica property (North of Luo) and the Alto Kwanza property in the Bie province of central Angola. The Alto Kwanza concession is Diamondworks’ largest, with an area of 18 000km2.
Southern Era is currently investigating the Camafuca – Camazambo kimberlite pipe in the Calonda area of the Lunde Norte province. Camafuca is estimated to be the world’s largest undeveloped diamondiferous pipe with a surface area of 160 hectares. The pipe is approximately 3.3 kilometres in length and 500 metres in width, and lies 40 kilometres north of the Luo concession on the Chicapa River. Camufuca was the first kimberlite pipe to be discovered in Angola. Recent sampling of the Camafuca pipe yielded just over 1000 carats from a bulk sample of 3 500 m3treated. This represents a significant increase from previous historical estimates. Grades ranged from $126 – $140/carat, with 32% of the diamonds being greater than 1 carat in size and 21% greater than 2 carats. A feasibility study to evaluate the technical and economic viability of the project is essentially complete and was presented to the Camafuca partners in April, 2000. Plans are to develop the higher grade portions of the pipe first – an exercise that is estimated to cost $14 million. The partners have accepted the feasability study and now plan to move ahead with the development of Phase 1 that intends developing the southeastern part of the kimberlite that contains 6.1 million cubic metres of material at an average grade of 0.18 carats per cubic metre. Mining of Camafuca has been complicated by a major river that dissects the kimberlite – initial mining will utilise dredging methods. Ownership of the project is outlined as follows: SouthernEra Angola LDA 32%, followed by Endiama 20%, SML 15% and the Welox Limited 33%. Welox Ltd is part of the Leviev Group of companies . In mid 2002, the Angolan Government formally approved the operating agreement and formation of the operating company, to be called Sociedade Mineira do Angola, Lda (SMC).
Kimberlite and Alluvial Exploration
Several foreign companies have been carrying out exploration programs in Angola, including De Beers, Botswana Diamondfields, Amcan, American Mineral Fields and Petra Diamonds.
De Beers has been given approval by the Angolan council of ministers to prospect for five years on three prospects covering a total of 63,000 km2 in the Quela, Mavinga and Lunda Norte areas of the country. The company plans to spend $ 75 million on this venture. In June 1996, De Beers and Endiama signed new prospecting agreements. De Beers Consolidated Mines has started drilling for kimberlites on its three concessions near Saurimo in Lunda Norte province, the first drilling De Beers has done for diamonds in Angola since the country’s independence from Portugal in 1975. De Beers also has concessions at Mavinga in the southern Cuango Cubango province and at Quela off the Cuango River valley. These concessions await progress in ending the civil war. De Beers and Endiama uncovered two kimberlites north of Saurimo near the Catoca mine of northeastern Angola. The pipes were intersected below a considerable depth of tertiary and quaternary sediments. Despite these involvements in the Angolan diamond sector, De Beers has decided to pull out of Angola, following a breakdown with Angolan authorities.
Botswana Diamondfields Inc, a subsidiary of the Crew Development Corporation of Canada, has entered a joint venture with Gema Dourada Ltd. (GDL) to explore a 13,230 km(SUP>2concession in the northern parts of Lunda Norte province. A pre feasibility study indicates a resource of 1 Mct at a grade of 0.4 – 0.7 ct/cubic meter.
AmCan purchased 100% of Oriole Marketing Limited, whose holdings include four major diamond-bearing properties:
the Tejok Diamond Concession, covering 114 km2;
the Grupo W Concession, covering 64 km2;
the Four River Diamond Concession, covering 8,200 km2;
and the Quilemba Property, covering 15,000 km2.
All of these concessions are located within the Lunde Norte Province.
Randsburg International Gold Corporation has acquired an interest in the Louva concession in the Lundes from Gema Dourada. American Mineral Fields’ Angolan subsidiary Idas Resources, has announced a joint venture with Endiama over two concessions located in the Provinces of Lunda Norte and Malange. Licences cover areas of the Cuango River floodplain up to the border with the DRC as well as ground to the north of the town of Cafunfo. These concessions contain defined alluvial occurrences, such as the Camutue alluvial resource, as well as good potential for primary kimberlite deposits. Trans Atlantic Enterprises has reached an agreement for 50% of the Camuanzanza pipe in the Lundes. The company is required to spend $5 million on the project.
Up and coming Australian junior mining and exploration company, Majestic Resources have an option to acquire two concessions on the Luachima River. Following an evaluation of the alluvial resources on the river in 2000, Majestic has suspended work on the project until the Angolan operating company, Opala Majestic Diamonds, has been granted a diamond selling licence. South African based Petra Diamonds are evaluating three concessions for alluvial and kimberlitic potential, viz. Alto Cuilo, Muriege and Medio Kwanza.
Participating Organisations
Almazy Rossii-Sakha
Alrosa has a 32.8% interest in SMC that operates the Catoca kimberlite mine
Ashton Mining Ltd
Ashton are developing the Cuango River alluvial project as well as evaluating the Bapsil prospect in Angola.
Endiama (Empresa de Diamantes de Angola)
Endiama is involved in all offficial aspects of diamond exploitation in Angola.
Leviev Group
New Millennium Resources NL
Odebrecht Angola Ltd.
Odebrecht has a 32.8% interest in SMC that operates the Catoca kimberlite mine
Southern Platinum Corp
Southern Era has a 32% interest in the developing Camufuca kimberlite mine.
