The Angolan government and Russian authorities are in talks to find a solution to the departure of Russian giant Alrosa from the Catoca mine, the fourth largest diamond mine in the world and the largest in Angola.
The Catoca mine is majority owned by the Angolan Government and Alrosa has a 41% stake. However, due to Western sanctions imposed on Russia due to the conflict in Ukraine, Alrosa is affected and Catoca’s relationships with banks and suppliers are compromised.
It is in this context that discussions began in January 2024 between the Russian authorities and Angola. The objective is to achieve a negotiated departure of Alrosa from the Catoca mine. According to certain sources, meetings took place in Dubai during the first half of January to discuss the terms of this exit.
Luanda, the capital of Angola, is demanding a departure without financial compensation for Alrosa, while the Russian side believes that its past investments require some form of compensation.
It is important to note that the Angolan state owns the majority shares of Catoca, which accounts for approximately 70% of Angola’s diamond production.
Such negotiations highlight the impact of Western sanctions on Russian companies operating abroad. Alrosa, as one of the world’s largest diamond producers, faces major challenges in its international operations.
For Angola, it is essential to maintain profitable partnerships that are beneficial to its economy. The search for a new partner for the Catoca mine could be an opportunity to diversify partnerships and seek more stable foreign investments.
The future of the Catoca mine remains uncertain, but ongoing discussions between Angolan and Russian authorities indicate a desire to find a mutually acceptable solution. Developments in this situation will undoubtedly have an impact on the diamond sector in Angola and on economic relations between the two countries.
It will be interesting to follow the outcome of these negotiations and see how Angola bounces back from this potential change in the ownership structure of the Catoca mine.