SouthernEra Resources Ltd., Toronto, Canada, said it would seek the necessary licensing to start building a diamond mine in Angola.
The company said it had the approval of its partners in the Camafuca project in northeastern Angola, including state-owned diamond company Empresa Nacional de Diamantes de Angola (Endiama), its affiliate Sociedade Mineira do Lucapa Limitada (SML), and Welox Ltd., a member of the Israeli-owned Leviev Group, which is part of the syndicate that markets Angolan diamonds.
‘With this acceptance, formal application has now been made for the mining permits required to begin construction of the mine,’ the company said in a statement.
The statement said Welox had committed up to $18 million in new financing for Camafuca, which SouthernEra considers more than enough to meet requirements outlined in the feasibility study.
The study estimated that the proposed Camafuca site contains 23.24 million carats of diamonds valued at $109 per carat, resulting in an in situ value of approximately $2.5 billion.
The company said initial mining operations will concentrate on the southeast corner of Camafuca where 216.479 cubic feet of material will be dredged with an average grade of 0.18 carats per cubic meter and a value of $117 per carat.
‘We and our partners used the best available technical consultants to develop and evaluate the Camafuca feasibility study. Nonetheless, technical assumptions have been made which need to be confirmed by actual operating experience, particularly with regard to the mining method,’ SouthernEra chairman Chris Jennings said in a statement. ‘We have therefore decided to scale-up production beginning with a phase 1 period designed to confirm project design and operating parameters. If successful, we will move to an expanded operation employing additional dredges well before the completion of phase one.’
Angola produced about $750 million in 2000, although estimates on output vary.
Control for diamond-rich territory has dominated fighting between the MPLA-led government of Jose Eduardo dos Santos and the UNITA rebels of Jonas Savimbi. The country could potentially become one of the world’s biggest diamond producers, but the war has prevented extensive development of mines and has limited prospecting.