Alrosa has sold out of the Luo diamond project in Angola, according to the Russian state mining company's audited financial reports, which were issued in Moscow late Wednesday.



A note by PriceWaterhouseCoopers, the Alrosa auditor, reveals for the first time that on December 30 of 2009, Alrosa sold its interest in the Luo diamond deposit, Angola's second diamond mine, for a price equivalent to $4.3 million.

However, Alrosa's report reveals that the company has agreed to defer receipt for ten years "for the possible risk", Alrosa's auditor claims, "that this amount will not be recovered".

The sale of Alrosa's 44% stake in the Luo project to Portuguese partner, Escom Mining, followed a loss for the year of Rb1.2 billion ($38 million). The loss reported for the year before, 2008, had been Rb816 million ($28 million). After Alrosa's sale, Escom announced in January that it plans to inject $750 million in the Angolan diamond mining sector over the next five years.



According to this week's financial report, the only African asset with value remaining to Alrosa is the Catoca Mining Company, in which Alrosa holds a 33% stake.

The asset value of Catoca has been reduced on Alrosa's balance-sheet from Rb11.3 billion ($385 million) in 2008 to Rb9.8 billion ($324 million) in 2009. Revenues from, the mine also fell from Rb14.5 billion ($494 million) in 2008 to Rb13.3 billion (($440 million) in 2009. Catoca's reported profit for 2009 was Rb1.7 billion ($56 million), but the company reports that it drew just Rb46 million ($1.5 million) in "currency translation income" from Catoca. Catoca's debts and liabilities are estimated at about $200 million.