Lucapa Diamond to begin mining at its Lulo project in Angola
Shares of Australia-based Lucapa Diamond (ASX:LOM) gained almost 4% Thursday after the miner announced Thursday it will begin mining at its Lulo alluvial concession in Angola in January.
In a first phase the miner plans to target high-grade diamond ore bodies, meeting a target of 14,000 bank cubic metres (bcm) per month before the end of June.
In the second half of the year Lucapa will bring in additional earth moving machinery to ramp up production to about 40,000 bcm per month.
The company’s new chief executive officer Stephen Wetherall noted that mining in Stage 1 would focus on select areas within the licence area, which produced higher grades during the bulk sampling programs.
Lulo, about 700 kilometers (435 miles) east of Angola’s capital Luanda, could be even more valuable than the country’s biggest gem producer, Catoca, which is also the world’s fourth-largest kimberlite mine, Lucapa managing director Miles Kennedy has said.
World's rarest gems
The project, a joint venture between the company and the Angolan government, hosts type-2a diamonds, which the company qualifies as "the world's rarest and most valuable gems". These kinds of precious rock account for less than 1% of global supply and, according to Lucapa, the world's most famous large, white, flawless diamonds belong to this category.
Angola is the world’s No.4 diamond producer by value and No.6 by volume. Its industry, which began a century ago under Portuguese colonial rule, is successfully emerging from a long period of difficulty as a result of a civil war that ended in 2002.
The government has recently reduced taxes and cut state ownership requirements as it seeks to rekindle the industry after the global financial crisis forced mines to close.