According to the Kimberley Process statistics for 2022, Angola ranks sixth in the world in terms of diamond production by volume (8.763 mn carats) and third by value ($1,965 mn). Until 1975, the country was a Portuguese colony, and after gaining its independence, a long civil war broke out in Angola. The end of the war in 2002 set the stage for the beginning of an active development of the diamond mining industry in the country with the involvement of foreign mining and exploration companies, but its rough diamond potential is still underexplored and not fully discovered, which makes Angola one of the most attractive countries for diamond miners.
Angolan diamond deposits are located mainly in the northeast of the country, in the Lunda Norte (North Lunda) province. There are two largest diamondiferous areas there, the Lunda Norte one where both primary kimberlite and alluvial diamond deposits are located, and the Cuango diamondiferous area, where only alluvial deposits have been discovered so far in the basin of the Cuango River.
The Catoca, Luele, Camachia, Camagico, Camutue, Camafuca Camazambo kimberlite pipes are located in the Lunda Norte diamondiferous area, as well as the Chitotolo, Somiluana, Furi, Uari, Calonda, Luminas, Luachimo, Yetwene, and other placer deposits.
The Catoca kimberlite pipe is one of the largest diamond deposits in the world in terms of diamond production. The kimberlite pipe has been developed since 1997 by the mining company Sociedade Mineira de Catoca Lda (Catoca Ltd.) owned by the Angolan state company Endiama (41%) and the Russian ALROSA (41%); the remaining 18% belonged to the Lev Leviev International company owned by the Israeli diamantaire Lev Leviev, which is currently a division of the China Sonangol; but in the summer of 2022, the control over this share was transferred to the Angolan state body, Instituto de Gestão de Activos e Participações do Estado (Institute for the Management of State Assets and Participations), as a result of legal proceedings.
According to the latest reporting data, 5.7 mn carats of diamonds were recovered from the Catoca pipe in 2021, which amounted to almost 67% of the Angola’s total diamond production by volume and 46.8% by value. At the same time, production tends to decrease because, about 7.2 to 7.6 mn carats of diamonds were recovered at the mine annually from 2016 to 2019, and just 6.5 mn carats in 2020. The data on the reserves and resources of the pipe are not disclosed, however, according to a Catoca company’s representative, the mine life will not exceed 10-13 years in case of open-pit mining. That is why the company is considering options for switching to underground development, and is also carrying out geological exploration in the nearby areas.
In fact, a good replacement for the gradually declining reserves of the Catoca pipe already exists - this is the Luele kimberlite pipe discovered in 2013 in the Luaxe concession area located 25 km from the Catoca mine. According to available data, the reserves of the Luele pipe (better known as the Luaxe concession area) amount to 350 mn carats. The very fact of such a discovery indicates the Angola’s enormous diamond potential because over the past 30 years, no new large-scale diamond deposits have been discovered in the world, with the exception of the infamous placers in the Chiadzwa region in Zimbabwe. The new mine was put into operation in 2021, and the plans are to produce 5.7 mn carats of diamonds in 2023. It is noteworthy that the owners of the mine are almost the same because a 50.5-percent share belongs to Sociedade Mineira de Catoca Lda., Endiama and ALROSA own 13 percent each, the remaining 23.5 percent belong to four Angolan companies.
At the remaining diamond fields that are under development in Angola, the precious stone production is significantly more modest.
At the Lunhinga mine (formerly called Luo) that operates the Camachia and Camagico kimberlite pipes, only about 100 thousand carats are mined annually with a planned increase in annual production to 200-220 thousand carats. The exploration at the sites was carried out in the 1970s. According to its results, the Camachia pipe contains 3 mn carats of proven and probable reserves to a depth of 300 m and about 10 mn carats of inferred resources of diamonds. Probable reserves of diamonds from the Camagico pipe are 730 thousand carats to a depth of 100 m. At the beginning of the 21st century, the Russian ALROSA company showed its interest in the Camachia and Camagico pipes and set up a joint venture with the Portuguese company Escom Mining Inc in 2002, as well as with several Angolan companies, including Endiama, to develop the pipes. The Luo mine was built on the deposits that operated until 2019, but then the Angolan authorities revoked the company’s license due to a number of problems, including non-compliance with tax obligations. The mine came completely under the control of the Angolan state company Endiama and continued its operation under a new name (Lunhinga).
There is a Camutue kimberlite pipe in the northeast of the Lunda Norte diamondiferous area known for its high-quality type IIa diamonds. The pipeline has been operated since 2007 by a joint venture of Camutue Angola Diamond Deposits sarl (60%), Endiama (25%), Sociedade Mineira do Lucapa Lda (10%), Consorcio Camutue (5%). By 2013, about 12 thousand carats of diamonds were recovered at the mine every month. Interestingly, as in the case of the Camachia and Camagico pipe mine, the Camutue mine came under the control of Endiama in 2019, and later on, in 2021, a new company called Sociedade Mineira de Kaixepa (Maoma - 48 %, Endiama - 35%, Kiluanje Kamanga - 10%, Kupolu - 5%, and VDB - 2%) was set up to operate it. The mine also received a new name - Kaixepa. In early 2023, the company announced the plans to invest $44 mn in the project for purchasing the mining and processing equipment. The company intends to increase its production volumes at the mine and increase its revenue from the sales of gemstones (in 2022, the revenues amounted to $117 mn as a result of selling 71 thousand carats).
The Camafuca-Camazambo kimberlite pipe, the largest diatreme in the world with a cross-sectional area of 160 hectares, is located to the west of the Camutue pipe. The deposit was discovered in 1952 by the Diamang company founded by Portugese investors, and the company carried out diamond exploration in Angola from 1917 to 1988. In 2000, the Canadian SouthernEra carried out a feasibility study on the deposit, and the inferred resources were estimated at 23.25 mn carats to a depth of 145 meters based on the study’s results. The average price of diamonds at that time was $109 per carat. A joint venture Sociedade Mineira do Camafuca Lda was set up by SouthernEra and Endiama in 2008 to develop the deposit, but the mine has never been built due to lack of funding, and one of the Angola’s most promising diamond deposits remains underexplored. The deposit is currently owned by Endiama, which is looking for an investor to develop it.
Among the alluvial deposits of the Lunda Norte diamondiferous area, a special attention should be paid to the Chitotolo and Uári placers as sources of the highest quality diamonds. In particular, at an online tender held by the Angolan national diamond trading company SODIAM in May 2023, the diamond mined at the Chitotolo placer was sold for $4 mn, and the stone from the Uári mine was sold for $1.1 mn.
The Somiluana, Furi, Calonda, Luminas, and Luachimo placers are also under development, and in total, about 290 thousand carats were recovered from the alluvial gravels in 2021, sold approximately for $172 mn. More than half of the production by value (about $89 mn) was provided by the Somiluana diamond placer operated by the South African company Trans Hex Group since 2010. Trans Hex owns a 33% share of the mine, Endiama owns 39%, and the rest is owned by local Angolan companies.
In 2023, mining at the Yetwene placer in the Chicapa River’s valley, which had been suspended since 2008, was resumed. The work is carried out by a joint venture of the Mountain Stability’s companies (65%; a transnational company with divisions in Portugal, South Africa and the UAE); the plans are to produce about 120 thousand carats of diamonds annually. The resources of the diamond placer estimated based on the results of work carried out in the 1950s and 1970s, amount to 750 thousand carats of diamonds.
In the Cuango diamondiferous area, several diamond placers are under development, the largest of which are the Cuango placer in the Cuango River basin, and the Lulo project.
Commercial diamond mining at the Cuango mine has been carried out since 2005 by Sociedede Mineira do Cuango (a joint venture of the Angolan companies Endiama, ITM, and Lumanhe) on a diamond concession covering an area of 3 thousand sq. km. In 2021, the mine produced almost 250 thousand carats of diamonds worth about $108 mn. The Sociedede Mineira do Cuango’s deputy director estimates that the placer has the potential for at least another 15 years of mine life. A serious problem inherent in both the Cuango mine and the Angolan diamond placers in general is the illegal mining of gemstones by so-called 'garimpeiros', and the Angolan authorities have been fighting illegal mining for many years using various means. The state-owned company Endiama, in particular, is taking a new approach by attempting to integrate the 'garimpeiros' into the legal diamond mining process as artisanal or semi-commercial miners.
The Lulo placer diamond deposit is located in the Cacuilo River basin in the southwest of the Lunda Norte province. The placer is owned by Sociedade Mineira Do Lulo, a joint venture between the Australian company Lucapa Diamonds (40%) and two Angolan companies: the state-owned Endiama (32%) and the private firm Rosas & Petalas (28%). Along with the Camutue pipe, the Lulo placer is a source of the highest quality type IIa diamonds that are also unique in size. Commercial mining of the placer began in 2015, and in total, 37 diamonds weighing over 100 carats were produced at the gravel deposit from 2012 to 2023. The '4th February Stone' diamond weighing 404 carats, the 227-carat unnamed diamond and the 170-carat pink Rose Lulo diamond are among the most valuable gemstones recovered. According to Lucapa Diamonds’ data, the Lulo placer’s inferred resources in late December, 2022 were estimated at 385 thousand carats (excluding gemstones of unique sizes).
In addition, Lucapa Diamonds, in partnership with Endiama and Rosas & Petalas, has been exploring for primary kimberlite diamond deposits in the Lulo area for more than 15 years. By 2023, 560 geophysical anomalies have been identified, drilling operations have been carried out on 152 of them, resulting in the discovery of 132 kimberlite bodies. The diamond potential of 14 kimberlite bodies was confirmed, and two rough diamonds weighing over 15 carats were recovered during testing. Lucapa Diamonds may be on the verge of discovering a major primary diamond deposit.
At the same time, there are many examples in the history of Angola when exploration works for diamonds were curtailed because their results did not live up to expectations. In the early 2000s, for example, the British Petra Diamonds company in partnership with BHP Billiton explored for primary diamond deposits in the Alto Cuilo area within the Lunda Norte diamond-bearing province. 249 magnetic anomalies were identified and 81 kimberlite bodies were discovered; 273.4 carats of diamonds were recovered based on the results of sampling one of them. However, BHP Billiton and Petra Diamonds left the project one after another in 2008 and transferred the ownership rights for it to Endiama. Petra Diamonds chose to focus on its mining assets in South Africa, which it inherited from De Beers, and BHP Billiton soon left the diamond business altogether.
However, the trend is completely different now in the context of a natural diamond shortage looming on the horizon. Thus, the multinational mining company Rio Tinto returned to Angola in 2021 to conduct geological exploration at the Chiri kimberlite project in the Lunda South province. Rio Tinto has entered into a 35-year agreement with Endiama, their shares in the project are 75% and 25% respectively, but Endiama may increase its share to 49% in the future. Moreover, after a ten-year break, De Beers returned to Angola in 2022 and signed the investment agreements with the country’s government providing for exploration and mining for a period of 35 years on two licensed areas in the northeastern part of the country together with Endiama.
So, in 2023, Angola turned out to be the only country where all three diamond mining giants - ALROSA, De Beers and Rio Tinto - are simultaneously present. In addition, the country has the Endiama state company that is not yet privatized, which owns a stake in each of the diamond projects. That said, among large foreign companies, only ALROSA carries out diamond mining and this company has not left the country for many years unlike the other ones.
At present, Africa, whose resource potential has not been fully explored due to the difficult political, social and economic situation in many countries of the continent, has become a battlefield in the struggle for resources, and Angola is one of its most promising parts. I would like to believe that the mutually beneficial Russian-Angolan relations that began with signing the Treaty of Friendship and Cooperation between the USSR and Angola in 1976 will continue for a long time, despite sanctions and other political challenges.
Anastasia Smolnikova, Senior Expert Analyst at the Institute for Natural Monopolies Research, for Rough&Polished
