Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Angola plans to boost diamond mining and open a new large mine in the east, aiming to produce 5.7 million carats there in 2023, or more than half of its total output last year, Mineral Resources and Petroleum minister Diamantino Azevedo said.
In an interview with Reuters, he also said the state-owned diamond company Endiama had been “instructed to negotiate with the biggest companies in the mining world to invest in the diamond subsector” in other projects, without specifying.
Asked if Angola was negotiating specifically with diamond majors De Beers Group and Rio Tinto to enter its mining sector, he said: “I confirm … The latest information we have is that the negotiations are going at a good pace.”
Angola – the world’s sixth-largest producer – produced 8 million carats in 2020, 23% below the initial plan and down from 2019’s 9.4 million carats due to the global economic meltdown from the covid-19 pandemic, Azevedo said.
But “the prospects for 2021 are encouraging” with two new projects due to start producing in the second quarter, and Angola targeting a total output of 10.1 million carats in 2022.
Despite the “unfavourable situation due to the lockdowns caused by the covid-19 pandemic, we are working to accelerate the start of production in Luaxe”, he said. The project in the eastern province of Lunda-Sul is close to the Catoca mine, now responsible for 70% of Angola’s diamond production.
It will begin pilot production this year.
“We are committed to transforming the Luaxe deposit in 2022 into a structured and organised conventional mine, expecting production of about 5.7 million carats in 2023,” he said.
With 41% each, Angolan state-owned company Endiama and Russia’s Alrosa are the largest shareholders of Sociedade Mineira de Catoca (SMC), owner of the Catoca mine.
SMC owns 50.5% of the Luaxe project, while Endiama and Alrosa each hold another 8%.
“Although Luaxe is in attractive project for any investor, its shareholding structure has already been established,” Azevedo said, without elaborating further.
(By Sergio Goncalves and Noah Browning; Editing by Andrei Khalip and Philippa Fletcher)
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