Angola is forcing Russian diamond mining group ALROSA (MOEX: ALRS) to withdraw from the share capital of Sociedade Mineira de Catoca (owned by ALROSA and the Angolan state-owned company Endiama), writes the local publication Expansao. According to it, 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 to end ALROSA’s participation in the joint capital for several months. To resolve this issue, Angola sent a delegation to Dubai to meet with representatives of the Russian authorities there.
During the meeting in Dubai, the Angolan side, according to Expansao, demanded that “the Russians leave immediately and without demands.” Russia, however, insists on receiving financial compensation for investments in the development of the Catoca deposit in Angola. “The heritage is Angolan, and will we still be forced to pay compensation? This cannot happen,” a source close to the negotiation process told the publication.
Expansao notes that this week, Endiama CEO Ganga Junior said that the good performance of the Catoca deposit and its credibility on the international market depend on ALROSA’s exit. According to him, many banks do not want to work with Angola’s main diamond company because of its partnership with the Russian company.
In October 2023, the African publication Africa Intelligence wrote about negotiations between ALROSA and Endiama on the Russian group’s exit from the diamond mining project in Catoca. After that, ALROSA denied the existence of any negotiations 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, Angolan Endiama owns another 41%, and the remaining 18% of the shares are held by the international holding LL International Holding B.V. Catoca is the largest kimberlite pipe in Angola and the fourth largest deposit in the world. About 6.8 million carats of diamonds are mined in Catoca annually.
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. From March 1, a phased introduction of restrictions on the import of Russian diamonds processed in third countries will begin.