Cost reduction increases profits of Angolan diamond mining company Catoca

3 May 2016

The reduction in operating costs achieved in 2015 by Angolan mining company Sociedade Mineira do Catoca (SMC) led to profits of US$126.8 million, announced Monday in Luanda the director-general of the diamond company.

Sergei Mitiukhin said that in 2015, operating costs decreased by US$34 million and now represent 60 percent of total turnover, following decisions taken by management to minimise the effects of the crisis on the company.

The economic environment climate in which the company operated in the past year was characterised by a drop in the price of diamonds per carat to US$87, against a forecast of US$97, as well as by increasing the tax burden and fuel prices, which make up 75 percent of costs.

Cited by Angolan news agency Angop, Mitiukhin said that to reduce costs the company handed over certain services to third parties and carried out wage increases, which provided gains in efficiency.

SMC is a diamond mining, exploration, recovery and sale company, whose shareholders are state-owned diamond company Endiama (32.8 percent) Russia’s Alrosa (32.8 percent), LLI Holdings (18 percent) and Brazilian group Odebrecht (16.4 percent). (macauhub/AO)