January 28, 2019 / 12:44 PM / a month ago

Angola to hold first diamond auction

LUANDA (Reuters) - Angola is planning to hold its first diamond auction this week, inviting around 35 companies to bid for seven stones as the world’s fifth largest producer moves to make the sector more lucrative for producers and the state.

The stones, selected for their rare quality and size, were produced by the Lulo project operated by Australia-listed Lucapa in the northeastern province of Lunda Norte.

“It’s our conviction that the final result of this auction will show to our society and the wider world our total commitment to transparency and innovation in the commercialization of diamonds in Angola,” Minister of Mineral Resources Diamantino Azevedo said on Monday.

The auction on Thursday will use a sealed system by which interested parties submit their offers electronically without knowing what others have bid. This model is proven to garner the highest price, Azevedo said.

The new system, part of wider reforms in the commercialization of diamonds in Angola, has been welcomed by producers who long complained they were not getting fair value for their stones.

Producers were previously obliged to sell through an opaque government marketing system to buyers selected by the Angolan state, a process they said resulted in prices well below international levels.

Angola has vowed to increase diamond production and per carat value, aiming to become a top 3 producer by 2021, as part of an attempt to diversify its economy away from a dependence on oil.

Reporting by Stephen Eisenhammer, editing by Ed Osmond

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