Angola forces ALROSA to withdraw from a joint diamond mining project – Kommersant

Angola forces Russian diamond mining group ALROSA (MOEX: ALRS) exit the share capital of Sociedade Mineira de Catoca (owned by ALROSA and the Angolan state-owned company Endiama), writes a local publication Expansao. According to him, Sociedade Mineira de Catoca has become “toxic” for the sale of Angolan diamonds due to international sanctions against Russia.

According to Expansao, representatives of the Angolan Endiama have been trying for several months to complete ALROSA’s participation in the joint capital. To resolve this issue, Angola last week sent a delegation to Dubai to meet with Russian authorities there.

During the meeting in Dubai, the Angolan side, according to Expansao, demanded that “the Russians leave immediately and without demands.” Russia insists on receiving financial compensation for investments in the development of the Catoca field in Angola. “The heritage is Angolan and will we still be forced to pay compensation? This cannot happen,” said a source close to the negotiation process.

Expansao notes that this week the head of Endiama, Ganga Junior, said that the good performance of the Catoca deposit and its credibility in the international market depend on the exit of ALROSA. According to him, many banks do not want to work with Angola’s main diamond company because of its partnership with a Russian company.

In October 2023, the African publication Africa Intelligence wrote about negotiations between ALROSA and Endiama on the Russian group’s withdrawal from the diamond mining project in Catoc. After this, ALROSA denied the existence of any negotiation processes on this issue with the Angolan company.

ALROSA has been operating in Angola since 1992. In the Sociedade Mineira de Catoca project, the Russian group owns 41% of the shares, the Angolan Endiama – another 41%, the remaining 18% of the shares are held by the international holding LL International Holding BV Catoca – the largest kimberlite pipe in Angola and the fourth deposit in the world in terms of deposits. About 6.8 million carats of diamonds are mined in Katok every year.

On January 3, the European Union imposed sanctions on ALROSA and its CEO Pavel Marinychev. On December 18, the EU approved the 12th package of sanctions against Russia, which included a ban on the import of non-industrial diamonds mined, processed or produced in the country. Starting March 1, a phased introduction of restrictions on the import of Russian diamonds processed in third countries will begin.