Russian diamond producer Alrosa and the Angolan national diamond company Endiama have established a 50:50 exploration joint venture in Angola. The registration procedure is expected to take several months, with the launch of exploration to follow in the second half of 2014. The parties also signed a mining investment contract regulating the joint venture’s activities.

The first stage of the agreement calls for acquisition of the prospective Cassango area for a three-year exploration program, with total financing estimated at $15.5 million. The agreement envisages granting of diamond mining rights to the joint venture if a cost-effective kimberlite deposit is discovered.

Under this scenario, Alrosa would invest at least $150 million into building mining facilities. Production would be equally divided between the parties. The agreement also provides for the return of investment when the joint venture reaches its target capacity; 75% of its profit will go toward return of investment, and 25% will be paid as dividends to the stakeholders.

Later in 2014, the joint venture will receive exploration rights for another prospective area.