Australia’s Lucapa Diamond (ASX:LOM) is restarting operations at its Lulo mine in Angola on a two sift six-day week basis, with 50% of the workforce
Mining at Lulo has been halted
since April 1, following Angola’s declaration of a State of Emergency to
contain the spread of the covid-19 pandemic.
The diamond producer noted the plan
is to be ready to ramp up to full scale operations once restrictions are
completely lifted.
“Lucapa and its partners continue
to work with leaders in our industry on innovative solutions to ensure that our
mines receive the best possible value for their special product,” managing director,
Stephen Wetherall, said in the statement.
The miner has a 40% stake in the
prolific Lulo mine, which hosts the world’s highest dollar-per-carat alluvial
diamonds. The rest is held by Angola’s national diamond company (Endiama) and Rosas
& Petalas, a private entity.
Lucapa’s Mothae mine in
Lesotho is still under care and maintenance, but the company is negotiating
with the government a potential restart of mining activities at the 1.1 million
tonne per annum (Mtpa) treatment plant.
New threat
Coronavirus is a new threat to the
diamond industry, which has already been hit by lower demand from China, the
world’s second largest market after the United States, following a long-dragged
trade war and anti-government protests in Hong Kong in 2019.
Now, over a month into lockdowns in India, where most stones are cut and polished, and in other key nations, including top retailers, even major players face a bleak future.
Global demand for all types of diamonds fell between 2018 and 2019, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.
Increasing demand for synthetic
diamonds also weighed on prices. Man-made stones require less investment than
mined ones and can offer more attractive margins.