Sources inform “Globes” that Russian government diamond company Alrosa is tightening its ties with Israeli diamond merchant Lev Leviev. Alrosa has confirmed that the company and Leviev were increasing their joint investment in Angola's largest diamond mine, Katoka.
Contrary rumors are flooding the Ramat Gan Diamond Exchange, that Alrosa is tightening it relationship with diamond merchant Dan Gertler, and that Gertler is tightening his ties with Angolan state company Endiama, allegedly at the expense of Leviev's relationship with Alrosa. Sources at the Diamond Exchange say that Leviev's competitors are spreading the rumors.
A Leviev group spokesman said in response that the company did not comment on international diamond deals. Gertler denied reports published on the Internet this week that Alrosa had bought a large stake in Sunland Mining (Angola), which Dan Gertler Israel (DGI group) founded and owns.
Through its holding in Sunland, DGI recently obtained a license from Diamond Trading Society of Angola (Sodiam Sarl), a subsidiary of Endiama, to market a large part of Angola's diamond production.
Alrosa CEO Alexander Nichiporuk announced this week that Alrosa had a policy of expanding its business in Africa in general and in Angola in particular, through new and follow-on investment in Katoka. A recently initiated investment is intended to expand current rough diamond production from the current $170 million a year to $300-350 million a year. Katoka, which has reserves estimated at 60 million karats, is owned by Alrosa (32.8%), Endiama (32.8%), Leviev (18%), and Brazilian Odebrecht Mining (16.4%).
Meanwhile, Alrosa and the Angolan government are building a hydroelectric plant to provide power for Katoka, at an investment of $45 million. Alrosa owns 55% of the project.
Alrosa is a global competitor of De Beers Diamond Trading Company (De Beers), which has dominated the international diamond market since the 1960s. Leviev is also challenging De Beers, while Gertler is considered very close to the syndicate.
Last month, top Israeli diamond industry sources claimed that the Angolan government had cancelled Leviev's exclusive right to export the country's diamonds, worth $650 million a year, and awarded part of the export rights to DGI. Sources close to Leviev claimed that irrespective of other rights holders, nothing had changed in Leviev's relations with the Angolan government.
Published by Globes [online], Israel business news - www.globes.co.il - on April 6, 2005