12 Dec 2019 15:04

Alrosa geologists to study Mozambique's diamond potential

MOSCOW. Dec 12 (Interfax) - Geologists at Russian diamond miner Alrosa will look at geological data in Mozambique to assess the country's diamond potential, Alrosa's press office told Interfax.

Alrosa will send specialists to Mozambique in December to study archive material and the latest documents about prospecting and exploration for diamonds to assess the likelihood of kimberlite pipes being discovered there. Field works will be carried out there in the spring of 2020 for that purpose.

Dialog with Mozambique intensified after the Russia - Africa forum in October.

"Alrosa and Mozambique do not have any specific cooperation agreements as of today. The opportunity for further steps will be considered once the geologists have finished their work and have submitted their assessment of the country's diamond potential," the company said.

Mozambique is not yet party to the Kimberley Process, which unites administrations, civil societies and industry in reducing the flow of conflict diamonds - rough diamonds used to finance wars against governments - around the world. The country has, though, undertaken initial steps to obtain certification. Rough diamonds without KP certification cannot legally be bought and sold on the international market. Mozambique's government said at the beginning of November that the country had commercial quality diamond deposits and was committed to creating legal sales mechanisms to prevent the use of the gems to finance illicit activities. No assessments of the country's diamond potential were given.

Alrosa said that when considering whether to work in Africa it evaluated not just resource potential and economics but also whether a project and associated infrastructure complied with ethical business standards. "Alrosa is prepared to work only where we see a willing and practical steps taken by the authorities to explore, mine and sell diamonds legally and transparently and improve corporate and CSR practices. In this event Alrosa, for its part, is also prepared to share its experience and skills, both technical and in the field of corporate governance and business transparency," the company said.

Alrosa's presence in Africa is currently limited to Angola, where it owns 41% of the Catoca deposit, the world's fourth biggest by output, and Zimbabwe, where a JV was created this year. Catoca Mining Company produces and sells around 6.8 million carats of diamonds per year and has estimated reserves of 60 million carats.

Through Catoca, Alrosa also plans to participate in the development of the Luaxe concession, which hosts the Luele pipe, and which is one of the largest in the world with reserves worth an estimated $35 billion in 2017 prices. Catoca will sell around 1.1 million carats of diamonds worth around $95 million next year recovered from ore removed during stripping at Luaxe next year. A feasibility study for Luaxe is still being drafted.

Alrosa and Zimbabwe Consolidated Diamond Company (ZCDC) have signed a joint venture agreement to develop diamond deposits in Zimbabwe. According to the terms of the agreement, Alrosa gets a 70% controlling stake for the development of greenfield projects and ZCDC - 30%. Alrosa has filed requests for the granting of 30 licenses within the JV, most of them for properties where kimberlite pipes have been discovered but are not yet being developed. Alrosa will allocate around $12 million for exploration in Zimbabwe over two years.

Alrosa has also been part of an exploration JV in Botswana with Britain's Botswana Diamonds, but pulled out of this in November last year.