An historic tender process has resulted in Lucapa Diamond Company (ASX: LOM) pocketing $22.9 million for the sale of diamonds from its Lulo alluvial mine in Angola.
The tender process formed part of Angola’s new diamond marketing policy and delivered an average price of US$33,530 per carat.
The sale, undertaken via electronic transfer, encompassed seven large and high-quality diamonds weighing 498 carats.
The competitive bid sale, which closed on 31 January 2019, was organised in Luanda by SODIAM, the state-owned company responsible for the trading of diamonds in Angola.
According to Lucapa, the exceptional sale prices achieved for the Lulo diamonds reflected the “highly-competitive bidding from leading international diamantaires and large stone manufacturers from eight countries that participated in the tender.”
The sale brought total sales of Lulo diamonds to date to US$141 million at an average price per carat of US$2,105.
Transparency key for new policy
The outcome heralds a new era for the Angolan diamond mining industry, marking the first sale of diamonds under the marketing policy enacted by the Angolan President Joao Lourenco.
The policy, approved in Q3 of 2018, is designed to enhance transparency in the country’s diamond industry by putting an end to the monopoly of preferred customers.
Until the initiative was introduced, diamond producers in Angola complained that they were forced to sell their diamonds to middlemen in the region at below international prices, which cuts potential profits.
Last month, Eugénio Bravo da Rosa, chairman of the board of directors of SODIAM, reinforced Angola’s pledge to transparency within the diamond industry.
“This commitment is necessary for the sustainable development of the national diamond industry, so that foreign investors look at the Angolan market and its agents as credible partners for the development of new projects,” he said.
The Lulo diamond mine remains Lucapa’s flagship asset. The operation has produced 11 diamonds with a 100 carats or more to date and is the highest US dollar per carat alluvial diamond mine in the world.
Production for the December 2018 quarter from Lulo totalled 5,070 carats, with the mine regularly producing large and premium-value diamonds throughout the period.
The company also owns a 70% stake of the Mothae kimberlite diamond mine in Lesotho, an 80% stake in the Brooking project in Australia and a 100% of Orapa in Botswana.
Lucapa shares jumped 11.1% to $0.20.