Angola’s state-owned diamond producer, Endiama, acknowledged that some clients are hesitant to engage due to its partnership with Russia’s Alrosa PJSC.
However, the company emphasized that its diamond production is not subject to Western sanctions.
Alrosa, the Russian diamond giant, holds a 41% stake in Angola’s Catoca mine and a controlling interest in the Luele mine.
Endiama Mining SA, which owns the majority shares in both mines, has made recent management changes to strengthen its control, according to CEO José Ganga Júnior.
“The diamonds we have in Angola are ours,” said Ganga Júnior during an interview in Luanda, Angola’s capital.
Despite the ownership structure, he admitted that Angola occasionally faces challenges with clients in certain markets due to Alrosa’s involvement, although he refrained from discussing any pressure to remove Alrosa from the Catoca operation. He reiterated, “Alrosa has no interference in Angola’s operations.”
The Group of Seven (G-7) nations implemented a ban on Russian diamond imports at the beginning of 2024, initially targeting rough diamonds directly from Russia and later expanding to include processed stones from third countries. Both the U.S. and the European Union have also sanctioned Alrosa.
To comply with G-7 regulations, Endiama must establish a system to trace and verify the origins of its diamonds, ensuring that they do not fall under the scope of the sanctions.
Ganga Júnior explained that a diamond’s origin is clear at the start of the supply chain through certification under the Kimberley Process, designed to eliminate the trade of conflict diamonds.
However, tracking the diamonds becomes more challenging as they move through the supply chain.
Alrosa, which played a significant role in establishing both Catoca and Luele mines, continues to receive revenue from these operations.
However, these funds are held in Angola and cannot currently be repatriated to Russia due to sanctions.
Earlier this year, Russia suggested that Alrosa might sell its interests in Angola, as its involvement was believed to hinder the development of Catoca.
In May, Angola’s Minister of Minerals and Petroleum, Diamantino Azevedo, referred to the partnership with Alrosa as “toxic.”
Alrosa, a state-controlled entity, competes with De Beers, owned by Anglo American, as one of the world’s largest diamond producers.
