(Bloomberg) -- Angola will give the outcome of its first diamond auction on Jan. 31 as the southwest African country’s seeks to increase transparency, attract more investment and boost government revenue, state-owned diamond-trading company Sodiam said.
The evaluation of seven gemstones from Angola’s northeast Lulo mine that will be sold is expected to end between Jan. 25 and Jan. 28, Eugenio Bravo da Rosa, head of the Luanda-based company, said. Lazare Kaplan International Inc., the KGK Group, Rosy Blue and the Diarough Group are among diamond manufacturing and distribution companies invited to the auction, he said.
“We’re confident that this auction will result in a level of revenue that is higher than normal,” Bravo da Rosa said in an e-mailed response to questions late Sunday. The auction is in line with Angola’s goal to become “increasingly more open to foreign investment by following the best global practices,” he said.
Angolan President Joao Lourenco has been trying to open up and diversify the economy of Africa’s second-biggest oil producer to shake off a slowdown that began with a drop in crude prices in mid-2014. His predecessor Jose Eduardo dos Santos’ tight grip on the economy prompted some foreign miners to avoid Angola, which is also the source of the fifth-most diamonds in the world.
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Bravo da Rosa said Sodiam now plans to hold at least six diamond auctions a year to entice more investment in the industry. The dates of the auctions are still being decided, he said.
Among the gemstones that will be sold this month is a 114-carat stone and a pink, 46-carat gem. Both diamonds were found in the alluvial Lulo mine, where in 2016 one of the world’s biggest diamonds -- a 404.2-carat stone -- was found. The lion’s share of Angola’s diamond production comes from alluvial deposits, or rivers, but Angola has been working to increase exploration of gems in shafts of volcanic rock, known as kimberlites.
Much of Angola’s diamond deposits remain under-explored because of a 27-year civil war and a business environment that remained difficult to enter after fighting ended in 2002. Angola’s diamond output fell 11 percent to 8.4 million carats in 2018 from a year earlier. Still, higher gem prices led to an 11 percent increase in revenue to $1.22 billion, said Bravo da Rosa, who cited preliminary data.
“The average price in 2018 increased by about 24 percent compared to the previous year,” he said. “There is currently a price reduction environment, especially for smaller diamonds.”
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