Angola, one of the world’s top diamond producers, has officially inaugurated its new Luele project, the biggest in the country and one of the largest by estimated resources. The project, located in the eastern province of Lunda-Sul, is expected to produce 5.7 million carats of diamonds in 2023, more than half of the country’s total output last year.
The Luele project, also known as Luaxe, was discovered in 2013 by the state-controlled diamond miner Catoca, in partnership with Russia’s Alrosa, the world’s largest rough diamond producer by volume. The project has an estimated resource of 628 million carats of diamonds and a lifespan of 60 years, according to the presentation seen by Reuters.
The project’s launch comes at a challenging time for the global diamond industry, which has been hit by weak demand due to high-interest rates in the US, the largest market for diamond jewellery, a slow recovery in China, the second-largest market, and competition from lab-grown diamonds, which are cheaper and more environmentally friendly.
According to independent diamond analyst Paul Zimnisky, the demand for diamond jewellery increased by 38% in 2022 but has been weak in recent months, with India, the main hub for cutting and polishing diamonds, asking the miners to reduce their supply to manage excess inventory.
The Luele project, however, could bring significant benefits to Angola, which has been struggling with high inflation and low economic growth. The project, which cost $600 million to develop, could generate additional revenues for the country, which relies heavily on oil and diamonds for its foreign exchange earnings. The project could also attract more investment and create more jobs in the diamond sector, which employs about 8,000 people in Angola.
Angola’s Minister of Mineral Resources and Petroleum, Diamantino Azevedo, said the project was a milestone for the country and a sign of its commitment to diversifying its economy and developing its mineral potential. He also said the government was negotiating with other major players in the diamond industry, such as De Beers and Rio Tinto, to invest in other projects in Angola.
Zimnisky said Angola was the most prospective nation for diamonds and that the Luele project was the only major new diamond mine in the world that would start production this decade. He also said that despite the volatility in the industry, the long-term outlook for diamonds was positive, as consumers value natural and ethical products.
Source: Reuters
