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The largest partner of Endiama has become a liability to the Angolan diamond sector. At a time when the government is preparing to divest part of Endiama’s capital and is approaching the United States and other multinational companies in the sector, an exit by Alrosa would be viewed favorably.
Alrosa has requested a meeting with the Angolan government this month to discuss the possible exit of the Catoca Mining Society, according to sources from the Ministry of Mineral Resources, Petroleum, and Gas and the government, as reported by Expansão. Despite their long-standing relationship with the company, international sanctions related to the war in Russia and Ukraine have rendered their association toxic, affecting the diamond trade and the operations of the mining company.
“There are negotiations between Alrosa and Endiama, but at this time, no agreement has been reached,” admits a source from Expansão, who anticipates a Russian exit from the partnership where they hold a 41% stake, equal to that of Endiama. Endiama Mining is also a partner, holding the 18% stake expropriated from Leviev International Holding BV last year.
Sanctions against Russia have caused problems for the multinational diamond company, making it difficult to move capital out of Angola, including the transfer of dividends totaling $185 million USD. It has also affected the payment of salaries in foreign currency to Russian workers and foreign suppliers of equipment and services.
Before the start of the conflict in Ukraine, these transfers were facilitated through the Luanda branch of the Russian bank VTB, which has since been disconnected from the SWIFT system and, as a result, cannot transact in dollars or euros. These difficulties have been ongoing since last year, and according to Expansão, the multinational attempted other avenues, such as using VTB in South Africa, which ultimately did not yield results.
In this context, the Catoca Mining Society is facing several constraints in its negotiations today…
