ALROSA Co. Ltd. has co-founded two new companies in Angola – the Luo-Mining Society of Camatchia-Camagico, SARL, and Hydrochicapa. Participation in these projects enables ALROSA to consolidate its position in a major diamond-producing region and improve performance of its earlier projects in Angola.
On March 28, ALROSA representatives signed foundation documents to establish the Luo-Mining Society of Camatchia-Camagico, SARL, and Hydrochicapa, thus implementing its long-term co-operation strategy with the Republic of Angola approved by the Supervisory Council of ALROSA Co. Ltd. in March. In April, all the registration procedures in Angola were completed, and shareholders’ meetings of both companies took place. The shareholders’ meetings approved the constituent documents, formed and appointed the top management teams, and approved the companies’ short- and long-term development strategies. In 2003, ALROSA plans to invest $85 million in these projects.
The Luo-Mining Society of Camatchia-Camagico has been established for commercial development of the Camachia and Camagico diamond deposits. The major shareholder in the Camatchia-Camagico Mining Society is ESCOM-ALROSA Ltd. (45%), a jv between ALROSA and Escom Mining – a division of the Portugese Espirito Santo Financial Group. Also some other Portuguese companies have interest in the enterprise.
At the same time ALROSA acquired the controlling interest (55%) in Hydrochicapa. It was established to implement a hydroelectric power station construction project on the Chicapa River. When commissioned, the hydroelectric power station should enhance performance of Catoca Ltd., in which ALROSA has been a partner for a decade. The second stage of Catoca is to be commissioned soon to enable the operation to increase its sales up to $350 million a year.
Diamond mining projects in Angola are of key importance for the ALROSA development strategy. “These projects, together with further development of its Russian deposits, are designed to secure ALROSA’s position in the world market in the long-term perspective”, said President Vladimir Kalitin.
“As our presence in Angola expands, we have decided to establish an Angolan-based subsidiary ALROSA-Africa to develop and implement the company’s African projects and perform all the supporting functions”, he added.
NOTE
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1. ALROSA Co. Ltd.
ALROSA is a world’s major diamond mining company accounting for about 25 per cent of the world diamond output. In 2002 it produced $1.466 billion worth of rough diamonds, its sales volume amounting to $1.557 billion, with $106 million from polished diamond sales. ALROSA’s production target for 2003 is $1.560 billion. The company’s biggest shareholders are the Russian Ministry of State Property (37%), and the Yakutian Ministry for the Management of State Property (32%).
2. Catoca Ltd.
Catoca Ltd. was founded in the Republic of Angola in 1992 as a joint venture among the Russian NPO Yakutalmaz (Research and Production Association), ENDIAMA (Angola) and Odebrecht Mining Service Inc. (Brazil) for the commercial mining of the Catoca kimberlite pipe.
ALROSA being the successor of Yakutalmaz has 32.8% interest in Catoca.
In 2001 Catoca diamond sales revenues were $169.5 million, and its profit amounted to $38.4 million. On the initiative of ALROSA, a project was launched to build the second stage of Catoca. When commissioned, it will turn this mining operation into a major enterprise of this kind in the South African Region, with an annual capacity of 7 million tons, and sales revenues of up to $350 million.
Catoca is one of the largest kimberlite pipes in the world.
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