Lucapa Diamond restarts Lulo mine in Angola
Australia’s Lucapa Diamond (ASX:LOM) is restarting operations at its Lulo mine in Angola on a two-shift, six-day week basis, with 50% of its workforce.
Mining at Lulo has been halted since April 1, following Angola’s declaration of a State of Emergency to contain the spread of covid-19.
The diamond producer noted the plan is to be ready to ramp up to full- scale operations once restrictions are completely lifted.
“Lucapa and its partners continue to work with leaders in our industry on innovative solutions to ensure that our mines receive the best possible value for their special product,” managing director, Stephen Wetherall, said in the statement.
The miner has a 40% stake in the prolific Lulo mine, which hosts the world’s highest dollar-per-carat alluvial diamonds. The rest is held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.
Lucapa’s Mothae mine in Lesotho is still on care and maintenance, but the company is negotiating with the government a potential restart of mining activities at the 1.1 million tonne per annum (Mtpa) treatment plant.
Coronavirus is a new threat to the diamond industry, which has already been hit by lower demand from China, the world’s second-largest market after the United States, following a long-dragged out trade war and anti-government protests in Hong Kong in 2019.
Now, over a month into lockdowns in India, where most stones are cut and polished, and in other key nations, including top retailers, even major players face a bleak future.
Global demand for all types of diamonds fell between 2018 and 2019, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.
Increasing demand for synthetic diamonds also weighed on prices. Man-made stones require less investment than mined ones and can offer more attractive margins.