A good move today--output to double--REUTERS
--13Jan98 SOUTH AFRICA: DIAMONDWORKS SAYS ANGOLA OUTPUT TO DOUBLE.
By Nicholas Shaxson
CAPE TOWN, Jan 13 (Reuters) - Canadian-based Diamondworks said on Tuesday it
hoped to more than double its total production of alluvial diamonds in Angola to
13,000-15,000 carats per month by end-1998.
A further increase is expected in 1999 when production on kimberlite pipes
begins, a company spokesman said.
All of Diamondworks' African concessions, including six in Sierra Leone, are
held through its wholly-owned regional subsidiary, Branch Energy Ltd.
Once production is running at full steam at the Luo and Yetwene concession sites
in the southern African country, it should reach an average of about 14,000
carats a month, according to a company statement.
Current output is around 5,000-6,000 carats.
"The new plant at Yetwene will be commissioned in the second quarter of 1998,
enabling Diamondworks to increase its diamond production from Angola to a
projected level of 175,000 karats a year," it said.
Interest in Angola diamonds has surged since the government took control of the
rich Cuango River valley once controlled by the erstwhile rebel UNITA
movement.
UNITA fled the area in October, weakened by the loss of key allies in the two
neighbouring Congos.
Branch Energy moved onto its Luo concession in 1996, east of the Cuango, despite
instability in the diamond-rich Lunda Norte province, after two decades of civil
war which ended in 1994.
Diamondworks chairman Bruce Walsham said in December that the value of Luo's
diamonds sold between July 1997, when commercial production started, and the end
of November was $238 per carat.
Branch operates the 500-square-km (188-square-mile) Luo concession through its
48 percent stake in the Angolan company Tricorp. It also has a 50 percent
participating interest in the 50-square-km Yetwene concession, northwest of
Lucapa town.
"We hope to have the plant up and running (on Yetwene) some time in the second
quarter of 1998," Bill Trenaman, Diamondworks' vice president for corporate
relations, told Reuters in an interview.
"Once production is running at full scale, which will take two to three months,
we should be doing 8-9,000 carats per month with the value at about $250-$275
per carat."
Production at the Luo site totalled 35,000 carats as of the end of December,
according to Trenaman.
"We should currently be working at around 5-6,000 carats in an average month,"
he said.
Luo has two major kimberlite pipes that are among the world's top 12 known pipes
in size, Trenaman said, adding that an initial survey showed reserves on both at
15 million carats.
Test drilling on the Camatchia pipe was complete and bulk sampling is due to
start by mid-1998, he said.
"I am assuming we will start production on Camatchia by early 1999. We are
looking for between 250,000 and 500,000 carats a year from that one pipe,"
Trenaman said. Development of the smaller Camagico pipe would begin much
later.
Diamondworks also has concessions in the east of Lunda Norte, an area called GT,
and at Luarica, where reserves are estimated at 500,000 carats.
"Once we get Luo and Yetwene up and running we will start to focus on doing the
same thing with Luarica and GT," he said.
The company holds an exploration-only concession at Alto Kwanza, in the central
highlands province of Bie, where the it plans an airborne magnetic survey this
year to search for kimberlite pipes.
Trenaman said improved security and less rebel activity in Lunda Norte had
allowed the company to operate better.
Industry sources say total Angolan production fell in 1997 to around $700-$800
million from one billion dollars in 1996, around two thirds of which was mined
from territory held by UNITA (National Union for the Total Independence of
Angola).
((Cape Town newsroom, +27 21 252-238
newsroom@reuters.co.za))
(c) Reuters Limited 1998
REUTERS NEWS SERVICE
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