Monday, March 24, 2014

De Beers hopes for diamond exploration rights in Angola by year-end

De Beers, the world’s largest diamond miner by market value, hopes to obtain a concession to explore in Angola by the end of this year, CE Philippe Mellier has said.

The London-based company, majority-owned by global miner Anglo American, is also holding initial talks with India about exploring in some areas in the centre-north of the country.
"We expect to have news about exploration licences before the end of this year and we are in contact with the Angolan government to discuss that. We hope that it’s going to be successful," Mr Mellier said in an interview with Reuters news agency last week.
Early-stage work in Angola should start later this year, a spokesman for the company added.
Russia’s Alrosa, De Beers’ main competitor, already operates the Catoca mine in Angola, the world’s fourth largest, in a joint venture with Angola’s state-owned Endiama.
De Beers previously explored for diamonds in Angola between 2005 and 2012 but concluded that a standalone deposit in the area was not economic and relinquished its concession.
It is now going back to explore a new area in the country, which Mr Mellier said was highly prospective.
Angola is the world’s fourth-largest diamond producer by value, and sixth by volume, and the government is keen to boost a sector where few companies are drilling. But the country needs to develop transport links and services for mining companies, and make geological data more accessible, according to a study published late last year.
Rough and polished

De Beers produced more than 31-million carats of diamonds last year at its existing operations in South Africa, Botswana, Namibia and Canada. The Botswana government owns 15% of De Beers, while Anglo American owns the rest.
With underlying operating profit of just more than $1bn in 2013, the diamond miner was the third-largest contributor to the Anglo American’s earnings.
De Beers, which mines and distributes rough diamonds and manufactures and sells diamond jewellery under its Forevermark brand, said rough diamond prices rose by about 2%-3% last year and have increased by a further 2%-3% this year.
Mr Mellier, a French national who before joining De Beers as CE in 2011 held senior positions at Ford, Renault and Alstom, said sentiment was upbeat this month at the Hong Kong international diamond show, seen as a barometer of the health of the diamond industry.
"The Hong Kong show was pretty good, it was better than last year. We saw Chinese, Indians, Japanese were buying, and buying in good numbers," he said. "Expectations were high, because Chinese New Year was good and the first feedback I am getting is that it was in line with expectations or even better."
He said he expected 4%-4.5% growth in the dollar value of the global polished diamond market this year.

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