Russian miner Alrosa (MCX:ALRS), the world's top diamond producer by output, received Friday approval from Angolan President Joao Louren??o to expand its stake in local producer Catoca.
The deal, worth $70 million, gives Alrosa a further 8.2% stake in Catoca Mining, providing the diamond giant with access to a production base outside Russia.
Deal gives Alrosa a further 8.2% stake in Catoca Mining, providing the diamond giant with access to a production base outside Russia.The parties expect to complete the transaction in the next two months. Once finalized, Catoca will be 41%-owned by Alrosa, while Endiama - the National Diamond Company of Angola - will hold another 41%. LL International Holding B.V. will have an 18% stake.
Catoca Mining was established in 1992 and is engaged in diamond mining at the namesake deposit in Angola's Lunda Sul province. It has two processing plants with the overall performance exceeding 10 million tonnes of ore per year, Alrosa said.
Every year Catoca's mines and sells rough diamonds worth some 6.8 million carats. Its estimated reserves are 60 million carats. The company is responsible for the extraction of more than 75% of Angolan diamonds.
Alrosa and Anglo American's De Beers unit produce about half of the world's rough diamonds.
The company is currently being investigated by the Russian Federal Anti-Monopoly Service (FAS) about the forthcoming sale of its natural gas assets following a complaint from would-be buyer, energy giant Rosneft, which is the country's largest oil producer.