The African continent is endowed with huge deposits of precious gems that are mined generating considerable profit. The continent has one half of the deposits located outside Russia and two thirds of the world’s forecast diamond resources.
Diamond mining in Africa is practiced by 15 countries. The largest of them, which annually recover over one million carats of diamonds worth more than half a billion U.S. dollars, are Angola, Botswana, the Democratic Republic of the Congo, Namibia and South Africa.
The other countries where diamonds are mined in Africa include Zimbabwe, Guinea, Ghana, Congo, Lesotho, Liberia, Sierra Leone, CAR, Tanzania, and Togo.
Rough&Polished is pleased to offer our readers information on the diamond mining in each of these 15 countries, which will be regularly published in the Expert Reports column.
Angola
Angola is situated on southern Africa’s Atlantic coast, bordering Namibia, the Democratic Republic of Congo and Zambia. A former colony of Portugal, with a current population of 12.3 million, Angola gained independence in 1975.
Diamonds were first discovered in Angola in 1912. For the next 40 years, the industry was exclusively based on alluvial diamond mining (mining that extracts diamonds from deposits of sand, gravel and clay, which have been naturally transported by water erosion and deposited along either the banks of a river, the shoreline or on the bed of the ocean). 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 trend that extends in to neighbouring DRC.
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 discontinued its alluvial mining programmes 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%). Chitotolo 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.
Kimberlite and Alluvial Exploration
Several foreign companies had been carrying out exploration programmes 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.
Diamond Mines
Catoca
The Catoca diamond mine is the fourth largest diamond mine in the world, it is owned by a consortium of international mining interests, including Endiama (the state mining company of Angola) (32.8% ownership), Alrosa of Russia (32.8%), Odebrecht of Brazil (16.4%), and the Diamond Finance CY BV Group (16.8%). The mine is located on a kimberlite pipe.
The mine had production of 1.8 million carats (360 kg) in 2000 and 2.6 million carats (520 kg) in 2001. Catoca management has been actively expanding capacity at the mine. The mine's production is 35 % gem quality, compared to a global average of 20 %; the diamonds produced at Catoca have an average value of $75 to $100 USD per carat (375 to 500 $/g). Estimated reserves are 60 million carats (12,000 kg).
The diamonds from Catoca Mining Society topped the sales of 2009, with a net profit of 70 million US Dollar, resulting from a gross production of $122.6 million. The information is contained in an annual report from the company released in September 2010. According to the source, the sales reached 7.050.521 carat, at the average rate of 62.23 US Dollar, a volume that represented about 78 percent of the amount sold by the diamond companies around the country. The note states that as a result of the processing of the ore, the company obtained a total of 7.5 million carat that permitted to establish the operational costs.
Fucauma
The Fucauma Diamond Mine is a diamond mine under construction in the Lunda Norte Province of Angola. The mine is owned by a consortium of diamond mining companies, the two largest holders being Endiama with 40 percent ownership and Trans Hex with 35 % ownership.
A feasibility study was done, which included the second phase of bulk sampling and drilling was completed in February 2004. Facauma is under care maintenance.
Luarica
The Luarica diamond mine is owned by a consortium of diamond mining companies, the two largest holders being Endiama with 38 percent ownership and Trans Hex with 32 percent ownership.
In 2004, the Luarica mine produced about 95,000 carats (19 kg) of diamond from over 632,000 cubic meters of ore processed. 84,000 carats (16.8 kg) of the production was sold in 2004, at an average price of over $300 USD per carat (1500 $/g), a new high mark for Angolan diamond production.
Probable reserves are 1.3 million cubic meters of ore at an ore grade of 21.6 carats (4.3 g) per 100 cubic meters (43.2 mg/m³). There is a waste rock overburden of about 9.5 million cubic meters. The mine is currently under care and maintenance.
Companies
Endiama (Empresa de Diamantes de Angola)
Endiama is the national diamond company of Angola and it is the exclusive concessionary of mining rights in the domain of diamonds.
Endiama's mining operations (each of which is a company in its own right):
1. Associacao Chitotolo (35% ownership) located in N'Zagi - Lunda Norte
2. Sociedade de Desenvolvimento Mineiro (SDM) in Cuango, 50% ownership in association with Odebrecht in Brasil.
3. Sociedade Mineira de Catoca- 32.8%, in association with Almazzi Rossi and Alrosa in Russia, Daumonty Financing Company in Israel and Odebrecht Mining Services in Brasil.
Sociedade Mineira do Angola, Lda (20%)
4. Projecto Fucaúma/Fucauma diamond mine, 40% owned in association with Trans Hex and others;
5. Projecto Luarica/Luarica diamond mine, 38% owned in association with Transhex, Micol and others
6. Sociedade Mineira do Lucapa/SML, 51% owned by Endiama, 49% owned by Sociedade Portuguesa de Empreendimentos/SPE; operations are located in the Chicapa River and Luachimo River basins.
7. Sociedade Mineira do Camatchia-Camagico/LUÓ, a joint venture formed in 2003 with Hipergesta, Angodiam and ESCOM-Alrosa/Espírito Santo and Alrosa.
8. Chimbongo
9. Alfa 5 diamond production
10. Projecto Yetwene, 50% owned, in association with Mining BV/Grupo Lev Leviev; located in the Camissombo exploration area in the province of Lunda Norte.
Trans Hex
Trans Hex completed in July 2008 an extensive programme of drilling and bulk sampling to assess the potential of the west bank of the Luana River on the Luana Concession. The results from this programme allowed the delineation of 3 million carats in Indicated resource and over 10 million carats in Inferred resource.
Venmyn Rand was commissioned to carry out an independent Competent Person’s Report (CPR) on the resources and reserves of the Luana concession. The CPR was completed in November 2008 and validated the work and resource reserve reporting done to date.
A pre-feasibility study on the Luana project was undertaken by independent contractors PPM/Metcon from Johannesburg during the second half of 2008. The study found that it was technically feasible and economically viable to open a new mine at Luana. The findings of the study were presented to Endiama in November 2008 and duly approved.
After minor changes to some aspects of the study, the Minister of Geology and Mines approved the study in June 2009. Negotiations for the conversion of the prospecting contract to a mining contract commenced in earnest in December 2009 with the appointment of the new Endiama board of directors. The mining contract negotiations were concluded in May 2010 and the contract was signed on 12 May 2010.
Reverse circulation drilling is set to commence on the east bank of the Luana River with the objective of further delineating the Calonda deposits in this area.
IGE Resources AB
IGE Resources AB (formerly International Gold Exploration) is a Scandinavian company mainly focusing on diamonds exploration and production in Southern Africa. The company partly owns the Luxinge mine and it is currently evaluating the future of this mine, where project economics have proven less attractive than previously anticipated.
IGE is also focusing its diamond mining investments on the Cassanguidi mine, where production is expected to reach 9,000 carats per month in second half of 2011.
Dе Beers
Exploration activities in Angola are focused on two concessions of 3,000 km2 each: the Lunda NE concession, located in the Lunda North province, near the town of Lucapa, and the Dando Kwanza concession in the province of Bié in the highlands of Central Angola, east of the town of Andulo.
In the Lunda NE concession De Beers has discovered 108 kimberlites. The economic assessment of these discoveries has rapidly progressed with 60 sampled for microdiamonds and 33 bulk-sampled at depth through large-diameter drilling.
Results from the Lunda NE project are steadily being integrated with geological models and revenue information with a view to selecting priority pipes and clusters for more detailed drill bulk sampling.
Three immediately adjacent pipes have been selected for priority work in an area where the average overburden is less than 40 metres. It is expected that additional pipes will be added to the evaluation portfolio as further results become available.
Whilst at an early development stage, the programme at Dando Kwanza has advanced rapidly. Exploration activities are now focused on an isolated cluster of some 42 kimberlites in the catchment area of the diamond-bearing Lubia River. In 2009, an on-site diamond recovery plant was commissioned and one kimberlite was bulk-sampled.
Gem Diamonds
Gem Diamonds is a diamond producer with diamond mining operations throughout the world and headquartered in London.
Country Output
Angola’s state-owned diamond mining company, Endiama, had set a target of 10-million carats for 2008 up from 9, 7-million carats realised in 2007. The country, however, reduced its production to 8.67 million carats in 2008 due to the global economic downturn, before it picked up to 9.8 million carats.
