De Beers to spend $57 mln in DRC, Angola in 2007.

Reuters
29 October 2007
By James Macharia

Editor's Note: Keep in mind Anglo's concession in Ituri is being reviewed by the Congolese Government.

De Beers, the world's largest diamond producer, said it plans to spend a total of $56 million this year in exploration in the Democratic Republic of Congo (DRC) and Angola in an attempt to open new mines.

De Beers will spend $31.4 million in the DRC where it has so far invested over $57 million since 2004 and has projects in Kasai, a south western region, one of the richest diamond producing area in the world, Marie-Chantal Kaninda, De Beers spokesperson said in a statement seen by Reuters on Monday.

De Beers, 45 percent owned by mining group Anglo American Plc (AAL.L: Quote, Profile, Research), said it intended to open a number of mines in the DRC and in Angola if economically and socially viable.

"De Beers would not be exploring if it did not have the determination to have a fair return on investment," Kaninda said. "De Beers is focusing on delivery of an economic deposit as soon as possible."

De Beers had not yet assessed the economic potential of any of the kimberlites -- a type of rock best known for sometimes containing diamonds -- discovered to date, she said.

In Congo, De Beers said it has some small projects in the northern regions. Most of De Beers' projects involve option agreements with other Congolese exploration companies, including a joint venture with Congo's state diamond mining company, Miba.

The projects are covered by option agreements in the early stage, with the possibility of entering into full joint ventures should the interest be there from both parties, Kaninda said.


REVIEW

De Beers was trying to overcome huge technical challenges to reach the mining phase, and was confident its activities and contracts had been agreed in compliance with Congolese law, and the firm would comply with a government review of the contracts.

Congo is evaluating 65 mining concessions for all materials mostly granted during a six-year war and the three-year transition period that followed. They involve major players such as Anglo and BHP Billiton (BLT.L: Quote, Profile, Research) (BHP.AX: Quote, Profile, Research).

The review began in June and was due to last three months, but is now expected to be completed by the end of the year, when companies will be informed if their concessions will stand.

The DRC has said it could triple the value of its diamond production, which the government puts at $600 million, as more efficient industrial groups take over from local players.

Congo is still emerging from a civil war that killed almost 4 million people and has seen renewed fighting in the east in recent months, but has set itself the goal of increasing efficiency of production and boosting the transparency of distribution by 2010.

In Angola, where De Beers has spent over $58 million since 2005, discovering and evaluating kimberlites is in the Lunda and Bié provinces in partnership and joint management with Endiama, the state-owned diamond firm, Kaninda said.

Angola, Africa's third largest diamond producer, has said it is looking for companies to invest and help discover what it believes are vast diamond pockets. So far it has been exploring only about 40 percent of the territory it believes has potential for diamond mining.