The Catoca diamond mine, which is owned and operated by Sociedade Mineira de Catoca, a joint venture between the state-run mining company Endiama, Russia-based diamond producer ALROSA, Odebrecht of Brazi, as well as a venture between China and state oil producer Sonangol, is currently the biggest kimberlite pipe in Angola.
Catoca produces more than half of Angola’s diamonds.
Angola produced 9.36 million carats in 2013 valued at $1.28 billion, behind Botswana, Russia and Canada, according to the Kimberley Process.
The Catoca kimberlite pipe, underlying a surface area of about 64 hectares, was also considered as the fourth biggest diamond-rich rock formation in the world.
The proven and probable diamond reserves of the mine are estimated at 130 million carats.
Perhaps in a bid to consolidate its position as the leading diamond producing mine in the country, Catoca recently indicated that it would develop new mines in Angola.
Instituto Angolano de Sistemas Eleitorais e Democracia noted in a report that the company had already completed a feasibility study at Tchuizo, which was the largest of the projects earmarked for development.
Catoca invested $23 million in prospecting and developing the mine, which was expected to have a mine life of about 15 years, according to Instituto Angolano de Sistemas.
It was also prospecting seven new but smaller projects in Angola.
Catoca also ordered a new mill to crush ore at its kimberlite mine in Lunda Norte to maintain production capacity.
Company managing director Ganga Júnior was quoted last May as saying by Angolan news agency, Angop that Catoca was set to increase its revenues fr om the current $600 million to about $1.5 billion in 2020, once Txiuzo, Luaxi, Luangue and Ngango mines, in the provinces of Lunda Sul, Lunda Norte and Kwanza Sul respectively start operating.
Despite these moves to boost output, Catoca might have recently felt challenged by Lucapa Diamond Company.
The company said last month that its Lulo concession, which was set be transformed into a full mining operation in two years would likely dwarf Catoca as the country’s biggest diamond producer.
Lucapa had 40 percent in the kimberlite-mining venture, while the Angolan government’s Endiama EP control 33 percent and closely held Rosas e Petalas SA own the rest.
Bloomberg cited a company official as saying that the Lulo deposit could be “more valuable” than Catoca as stones from the deposit fetch an average of A$6,960 ($6,533) a carat.
Catoca diamonds were valued at $100 per carat, claimed Bloomberg.
“Beyond doubt from what has washed off the kimberlites into the ancient river channels suggests that the prize once farmed and delivered is going to be substantial,” Lucapa managing director Miles Kennedy said.
“This is a long, scientific game and we’re not trying to over-promote it at this stage, but the early finds are definitely there.”
Kennedy said Lucapa should get a license to mine alluvial stones from the 3,000 square-kilometer Lulo concession by the end of this year.
Exploration and production agreements with the Angolan government were extended two years to May, 2016, for both alluvial and kimberlite stones.
Lucapa also continued to make interesting discoveries at Lulo.
It reported this month the recovery of 12 kimberlite diamonds from preliminary surface sampling at its concession.
The company said that the stones had been recovered from four distinct Kimberlite pipes and six of the 12 rocks had been confirmed at rare type 2A gems.
Type 2A diamonds are among the world's rarest diamonds, accounting for less than 1 percent of global diamond production.
Five of the Type 2A gems, weighing a total of 2.30 carats, are from preliminary sampling of kimberlite material from four pits at the Se251 pipe at Lulo.
The sixth Type 2A gem was recovered from another kimberlite pipe, Se257.
With a surface area of about 220ha, Se251 was the biggest pipe discovered by Lucapa within the two kimberlite provinces discovered within the 300 sq km Lulo concessions, it said.
Lucapa managing director Miles Kennedy said confirmation that kimberlite pipes at the Lulo concession hosted Type2A diamonds was another significant milestone for Lucapa.
“The fact we have now identified several diamond bearing kimberlite pipes proximal to wh ere we have found large alluvial diamonds is of great significance as we are really only scratching the surface of these pipes at this time,” he said.
"The independent confirmation that 50 per cent of the diamonds recovered are rare type 2A diamonds also adds early credence that these pipes could well be the source of the alluvial diamonds - early but exciting days."
Should Lucapa’s plans come to fruition and keep its promise to displace Catoca, then there was no doubt that the industry would witness a battle for ‘supremacy’ between the two companies.
That being said, the biggest beneficiary would be Angola as it this would surely improve its annual diamond output and revenue inflows.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
