New Luele Mine Could Double Angola’s Diamond Revenue.

Date: 23 Nov, 2023 | By John Jeffay

Angola could double its diamond revenue following the official opening of Luele, its newest and biggest mine (on Monday 27 November).

Commercial production will start soon, and the deposit is expected to produce 6m carats annually, eclipsing Catoca, currently the country’s biggest mine. It reported a 2021 output of 5.7m carats.

Luele, formerly known as Luaxe, will become the biggest new diamond mine top open anywhere in the world in the last 30 years.

The new deposit, just 25km from Catoca, in the Lunda Sul province, in the northeast of the country, is is expected to reach 600 meters in its open pit phase, and will mine exceptionally high-grade kimberlite.

The Angolan president, João Lourenço, officially inaugurated the project on Monday.

Diamantino Azevedo, minister of minerals, resources, oil and gas, told guests at the inauguration: “Today, we are carrying out this act that marks the start of operations of the Luele Mining Company. The production of this mine will contribute to a significant increase in diamond production in Angola.”

Luele is forecast to yield 628m carats of diamonds over its 60- year lifetime.

It will be “one of the largest deposits in the world,” Vladimir Marchenko, Alrosa’s deputy chief executive in charge of its Africa business, told Reuters already in 2019.

The Luele pipe was discovered in 2013 and has been described as possibly the largest discovery in the industry in 60 years.

Luele covers an area of 105 hectares and contains 647m tonnes of ore.

Trial mining phases have already taken place  and have so far produced 5m carats. In 2020 Luele produced 311,500 carats in 2020 and 1.7m carats in 2021.

“This is a real game changer for Angola,” said one analyst who is well acquainted with the country’s diamond industry.

“It will almost double Angola’s production in terms of volume and could more than double the value of its diamond sales. Catoca is now achieving around $120 a carat, on average. Luele could get similar values, but there are expectations for even larger volumes.”

Catoca, the world’s fourth largest open-pit mine, is currently responsible for around 65 per cent of Angola’s diamond production.

It is jointly owned by Endiama, Angola’s state-owned miner, and Russian state-owned miner Alrosa, which both hold 41 per cent.

There has, however, been recent speculation that Alrosa could be negotiating an exit from its joint venture, prompted by US sanctions, a decline in global demand, and banking restrictions which have prevented it transferring $185m in dividends from Angola.

Angola’s total output for 2022 was 8.75m carats, well down on an initial forecast of 13.8m carats. In the first half of 2023 it sold 2.93m carats for $594m, a 37 per cent drop year on year.