Australia’s Lucapa Diamond and its partners in Angola have sold $5.6 million worth of diamonds from the Lulo mine at their latest event, a fresh sign that the market is slowly improving.
The miner, Angola’s national diamond company (Endiama) and Rosas & Petalas sold 3,862 carats at an average price of $1,450 per carat. The figure took total sales of diamonds recovered so far this year at Lulo mine to 16,128 carats and $21.3 million.
“As foreshadowed, the strong operational performance and record diamond recoveries at Lulo in July and August, together with a recovering diamond demand positively impacting prices, should bode well for Lulo in H2 2020,” Lucapa’s managing director Stephen Wetherall said.
Global demand for all types of diamonds fell between 2018 and 2019, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.
Increasing demand for synthetic diamonds also weighed on prices. Man-made stones require less investment than mined ones and can offer more attractive margins.
Just when the market seemed to have bottomed out, it was hit in March by the coronavirus pandemic. Its rapid spread forced some mine shutdowns and limited mobility of potential buyers, painting a bleak picture for even the largest diamond miners.
Conditions since have improved and De Beers, the world’s largest diamond producer by value, was the first major producer to come out with good news. It said earlier this month it had made about three times as much in sales of roughs in the seventh sales cycle of the year as it did in the previous event.
The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called sights, sold $320 million worth of rough diamonds in the seventh cycle. That compares to the $116 million fetched in the previous sight and is not far behind the $400 million De Beers sold on average each month last year.
Angola’s diamond push
Lucapa’s improved sale also come in the midst of Angola’s fresh attempts to boost its local industry. The West African nation is the world’s fifth diamond producer by value and no.6 by volume.
According to official figures, however, only 40% of Angola’s kimberlite has been discovered.
The country’s industry, which began a century ago under Portuguese colonial rule, is successfully being liberalized.
Last year, Angola held its first public diamond auction and since then, producers no longer have to sell at below-market prices to a handful of buyers favoured by the state.
Endiama revealed in February it was seeking international partners in an attempt to place Angola among the world’s top-three diamond producers.
The country currently has 14 diamond mining projects, with the largest being the Catoca mine, which produces 61% of the country’s output.
Catoca is also the world’s fourth-largest diamond mine in the world. It is owned by a consortium of international mining interests, including Endiama, and Russia’s Alrosa.