Production at the Catoca mine in Angola fell 3 percent year on year to 6.852 million carats in 2010 while management warned that the recovery in rough diamond prices should be viewed with caution.

“Although we had seen the recovery of the prices of diamonds, this time recommends the maintenance of a parsimonious management, to the extent that the aforementioned recovery in prices was based solely on an increased demand in Asia, especially in China and India,” management wrote in its annual report. “An economic recovery in countries that are traditionally consumers of diamonds, such as the United States, Japan and the European Union, is not expected in the short term.”

Catoca reported that it sold all its 2010 output for an average price of $76.95 per carat, representing an increase of 24 percent from the previous year. Sales rose 20 percent to $527 million in 2010 and net profits grew 59 percent to $111 million, as previously reported. Catoca’s sales volume of 6.852 million carats represented 86 percent of Angola’s total production sold and 65 percent of sales by value.

Production declined as the diamond content found ion its processed ore fell to 0.64 carats per ton, from 0.72 carats per ton in 2009. Management did not say what caused the decline.

In 2010, Catoca shareholders included Angola’s state mining company, ENDIAMA, and Russian miner ALROSA, which each held a 32.8 percent stake in the mine, while Lev Leviev’s LLI Holding held 18 percent and the Brazilian company Odebrecht had a 16.4 percent stake. Rumors that Leviev has divested from the mine remain unconfirmed.