Australian diamond company Lonrho Mining (ASX:LOM) dazzled investors Tuesday as the company confirmed the finding of two huge diamonds at the Lulo project, in northeastern Angola.
From the two stones unearthed, one 38.3-carat rock and one 131.5-carat diamond, the latter is the largest ever found in Lulo since the project started two years ago.
Although the gems are yet to be valued, Lonrho’s managing director Miles Kennedy said the finding reinforces the potential of the project and Angola as an emerging diamond market.
"Given the incredible size of this diamond, there is little doubt the kimberlite source is very close by," Kennedy said in a statement.
The Lulo project operates as a joint venture between Lonrho and the Angolan government-owned Endiama.
Lulo is only one of the several diamond projects and mines present in Angola, a country whose northeastern and central regions boast large diamond reserves.
Diamond production is a significant source of all, foreign and domestic revenue for Angola, generating over $650 million a year. The exact amount – and the potential – of profit from diamond mining, however, is unknown due to illegal diamond mining and smuggling, according to a report from Consultancy Africa Intelligence.
The country seems to be on a roll. The chairman of Angolan state diamond company, Empresa Nacional de Diamantes de Angola (Endiama), said last week that activities at diamond mines currently on standby due to the global financial crisis are due to begin again in October.
The African nation, the world's fifth-largest diamond producer by value, has had a hard time attracting foreign investment due to corruption, alleged human rights violations and frequent smuggling.
Angola is now a leading member of the Kimberley Process, which was initially lauded for its commitment to human rights. However, critics have been pointing out that it should be reviewed, as it doesn't take into account human-rights abuses in diamond territory controlled by governments themselves.