HomeCentral AfricaDRC diamond auction fetches US$8 million

DRC diamond auction fetches US$8 million

Terrace deposits along
the Tshikapa River,
in the south-
western DRC
Kinshasa, DRC – MININGREVIEW.COM — 13 May 2008 – Democratic Republic of Congo (DRC) state miner Societe Miniere de Bakwanga (MIBA) raised over US$8.2 million (R62 million) in its first public diamond sale in five years, and expects production to triple by the year’s end.
Reporting from here, Reuters attributed this statement to a company official, who pointed out that the auction was the troubled parastatal’s first since it ended an agreement last month that had previously allowed Emaxon Finance International Inc. – a subsidiary of Israeli DGI Group – the right to purchase 88% of its production.

Five buyers divided up 12 lots containing a total of 348 000 carats when the winning bids from the sale, which began on April 28, were revealed yesterday.

“If we were able to raise US$8 million, then we are of course happy,” MIBA commercial director Placide Ndumbi told Reuters, adding that the company planned to make up to 400 000 carats available in another sale at the end of June. “If something works, you continue,” he said.

MIBA – 20% of which is owned by Africa-focused miner Mwana Africa Plc – is recovering from decades of theft and mismanagement under former dictator Mobutu Sese Seko, as well as from the five-year war that devastated the DRC’s infrastructure.

Production – in steady decline due to power shortages and equipment failure – stopped entirely last May, when the company’s more than 6 000 employees went on strike over unpaid salaries.

“Production is already growing again, even without much investment. We’re now back up to around 100 000 to 150 000 carats per month,” Ndumbi claimed.

“With improvements to basic infrastructure, output should reach 550 000 carats in the last four months of 2008,” he concluded.

Reuters reports that regional experts believe that the DRC is Africa’s second largest diamond producer after Botswana, and ahead of South Africa and Angola. But illegal mining and smuggling are rife in the country complicating the calculation of real output, and only a fraction of the country’s total diamond output is believed to pass through MIBA.