Angola’s Catoca Diamond Complex to Add Mill as Miners Dig Deeper

Sociedade Mineira de Catoca Lda., the operator of Angola’s largest diamond mine, plans to expand processing capacity to maintain output as the pit deepens.

Catoca will add a mill to the five already running at the site, according to an executive who asked not to be identified, citing company policy. The expansion will allow the mine to keep the same rate of production for three decades, he said, without specifying when the new facility will be built.

The company needs to increase processing capacity as miners dig deeper, extracting denser ore that requires more time for crushing, sifting and washing. Diamond producers are investing in output on the expectation that rising demand for jewelry in China and India will drive up prices of the precious stones.

Catoca’s mine produced 6.5 million carats last year from 10 million metric tons of ore, generating revenue of $575 million before costs, the executive said at the site on July 11. The open-pit mine near Saurimo, 840 kilometers (520 miles) east of Luanda, is built around a geological structure that was formed deep underground and pushed up by an ancient volcano.

Angola’s production of diamonds, its biggest mineral export, may rise to about 9 million carats this year from 8.3 million in 2012 as the southwest African country starts four new mines and resumes work at three others, Geology and Mines Minister Francisco Queiroz said in March. Catoca accounted for about 70 percent of the country’s output last year.

Deeper Reserves

The Catoca reserves, currently drilled to about 200 meters (660 feet), will extend to at least 600 meters deep, the executive said. While deposits as deep as 800 meters have been found, their recovery would require underground mining, for which the company must conduct feasibility studies, he said.

Sociedade Mineira de Catoca is owned by Angola’s state-owned diamond company Endiama EP, which holds a 32.8 percent stake. OAO Alrosa of Russia also has 32.8 percent, a venture between China and state oil producer Sonangol EP owns 18 percent and Odebrecht SA of Brazil has 16.4 percent.

Angola is the world’s fourth-largest diamond producer by value, after Botswana, Russia and Canada. The country’s output of the gems was valued at $1.1 billion last year, according to the Kimberley Process, an international group that works to stop the supply of so-called blood diamonds from war-zones. Angola’s 27-year civil war ended in 2002.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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