Angola seizes stake in nation’s biggest diamond miner from LLI International (China)

Angola has seized a stake in the nation’s biggest diamond miner, from LLI International, a unit of China Sonangol, that was previously a well-connected Chinese investor in the country.

“The attorney-general’s Office of the Republic of Angola blocked LLI’s participation in Catoca in 2021 and transferred control of this 18 per cent stake to the state body IGAPE,” which manages government shares in companies, Catoca said in a statement released this month.

The move gives Angola 59 per cent control of Catoca, that owns the world’s fourth-largest diamond mine (pictured above). Catoca’s owners include Russia’s Alrosa, the world’s big

gest diamond miner and subject of US sanctions, Angolan state diamond company Endiama.

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China Sonangol was the most prominent of the so-called Queensway Group of companies that was formerly centred on Sam Pa, a Chinese magnate who struck resource deals in Africa. The company was established nearly two decades ago as a joint venture between a Queensway group company and Sonangol, Angola’s state oil firm.

The whereabouts of Pa, who was detained in Beijing in 2015 in a corruption probe, are unknown. “We can state for the record that there is no current relationship with Mr Sam Pa,” China Sonangol told the Financial Times.

China Sonangol indicated it was pursuing the matter through the courts. “As we have appointed Angolan counsel to represent us in this matter and this matter is before the Angolan courts, we are unable to comment further on this,” China Sonangol said.

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Angola has been “investing heavily in improving their image” as a diamond producer, said Hans Merket, a natural resources researcher at the International Peace Information Service. “All of the big players are looking at how they can get back to become active in Angola,” he told the Financial Times, adding there were risks to this strategy given Alrosa’s involvement.

The US imposed sanctions on Alrosa in April as part of what it said was a “continued effort to restrict the Kremlin’s access to assets, resources, and sectors of the economy that are essential to supplying and financing [Vladimir] Putin’s brutality”.

Catoca said it was not affected by the sanctions “because Alrosa does not directly participate in the management of the company, in terms of mining operations and sales management”. Under a so-called 50 per cent rule, US sanctions apply to companies held by sanctioned owners only if they have majority control.

 

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