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Alrosa and Endiama sign JV
The JV is for diamond exploration in Angola
By: Diamond World News Service
Feb 27 2014 10:01AM
Reference: 8888  

OJSC Alrosa and the Angolan national diamond company Endiama have signed an agreement for an exploration joint venture in Angola. The deal was signed on the 26th of February in Moscow. This is a 50-50 joint venture.

The deal is pursuant to the MoU signed between the two entities in June 2013 where both decided on joint work.

Registration of the JV procedure is expected to take several months, with the launch of exploration phase to follow in the second half of this year. The parties also signed a mining investment contract regulating the JV’s activities. Accordingly, the first stage will comprise the acquisition of the prospective Cassango area for 3-year exploration works with the total financing estimated at $15.5 million. The agreement envisages granting the joint venture with diamond mining rights in case of discovery of a cost effective kimberlite deposit. Under this scenario Alrosa could invest not less than $150 million into building mining facilities. Production would be equally divided. The agreement also provides for return of investment when the joint venture reaches its target capacity: 75 percent of its profit will cover the return of investment and 25 percent to be paid as dividends to the stakeholders. Also, ahead in 2014, the joint venture will receive exploration rights for another prospective area.

At the signing ceremony ALROSA CEO Fedor Andreev said that Angola has been Alrosa’s strategic partner in Africa for long, with the Alrosa and Endiama’s partnership of over 20 years in the Catoca joint mining project. Andreev added, “We are very optimistic about the prospects of our exploration efforts in Angola, and perceive the probability of finding new primary sources of diamonds there as high”. He noted diamond prospecting and exploration in Angola to be key for the company’s developmental growth strategy.

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