Catoca diamond project in Angola to generate profit of US$100 million this year

29 September 2006

Luanda, Angola, 29 Sept – Sociedade Mineira de Catoca (SMC), which operates the fourth largest diamond mine in the world, in the Angolan province of Lunda Sul, expects to have diamond production of 5.5 million carats this year, generating net profits of US$100 million.

“We are structured to process 8.8 million tons of ore per year and have diamond recovery of 5.5 million carats and these are the figures we expect to reach this year,” said Ganga Júnior, chairman of SMC.

In an interview with daily newspaper Jornal de Angola, Júnior said that following the beginning of operations of the second ore processing plant at the end of 2005, this year the company should have, “US$100 million in net profit.”

SMC is a partnership between the national diamond company Endiama, Russia’s Almazzi Rossi Sakha, Israel’s Daumonty Financing and Brazil’s Odebrecht Mining.

The Catoca kimberlite (rocks in from which diamonds are extracted), located some 30 kilometers from the city of Saurimo, capital of Lunda Sul province, is considered to be the fourth-largest in the world.

Studies carried out showed that this kimberlite should produce around US$11 billion’s worth of diamonds over the next 40 years, but specialists have said this projection may be increased as the studies only refer to a depth of 600 meters, but it is possible that the project will be viable up to a depth of 800 meters.

Angola’s largest mining project, which began production in 1995, has already received investment of US$400 million, of which US$130 million were spent on the second ore processing plant, which made it possible to double diamond production at Catoca.

Currently, this diamond mining project, which covers an area of 640,000 square meters, represents 70 percent of Angolan production in carats and 45 percent of the sector’s turnover in the country.

Angola is currently the sixth-largest diamond producer in the world, but, due to the quality of its stones, is the fourth in terms of revenue from diamond mining. (macauhub)