Sale of Alrosa's share in Catoca may be completed in Dec - Russian deputy finance minister

MOSCOW. Dec 12 (Interfax) - A deal to sell Alrosa's share in the Angolan diamond mining company Catoca may be completed in December, Deputy Finance Minister Alexei Moiseyev told journalists.

"Indeed. The deal has not been closed yet, but it's close. Work on this is ongoing. The Angolan government has unequivocally stated its position. We're now close to completing the deal. I hope it will happen in December," he said.

Moiseyev did not disclose the details of the deal.

Previously, Bloomberg, citing Angolan Mineral Resources Minister Diamantino Pedro Azevedo, said that Alrosa had sold its stake in Catoca to the Omani state fund Maaden International.

Alrosa owned 41% of Sociedade Mineira de Catoca. Alrosa was its founder together with the Angolan company Endiama.

Alrosa was forced to sell its share in Catoca due to Angola's concerns about future cooperation with the Russian company, which is currently under sanctions. Azevedo previously said that the state-run Alrosa had become a "toxic partner due to the global context."

Maaden International, which belongs to a consortium of Omani investors headed by the sate fund Mercury Investments International, bought 24% of the shares in the gold company Polymetal in January 2024.

Catoca produces a record 6.5 million carats of diamonds a year. Its reserves are estimated at 120 million carats. Alrosa receives dividends from its share in Catoca without having a share in sales. Since the start of production in 1995 up to 2018, it has received around $464 million in dividends.

In addition to Catoca, Alrosa is involved in a joint venture with Endiama for developing the large-scale Luaxe diamond project. It is anticipated that Luaxe will reach its planned annual production level of 8 million carats by 2027.

Sanctions have created problems with withdrawing capital from Angola, in particular in terms of transferring dividends amounting to $185 million, Angolan media previously reported. Paying for foreign equipment and compensating Catoca's Russian workforce in foreign currency is also problematic.