Dubai investor offers $10M lifeline to Lucapa Diamond

Lucapa Diamond, the operator of Angola’s Lulo alluvial mine and Australia’s Merlin project, has struck a rescue deal with a Dubai-based group that could pull it out of administration. Administrators KordaMentha have signed a deed of company arrangement with Jemora Group’s Gaston International, which has agreed to inject about A$15 million ($10 million).

Jemora, a metals and mining conglomerate aiming to make the United Arab Emirates a hub for resource investment, operates Gaston as its energy and precious metals arm. Lucapa entered administration in May due to a combination of slumping diamond prices, intensifying competition from synthetics and mounting operational setbacks.

The collapse followed last year’s sale of its Mothae mine in Lesotho, leaving Lulo as its only source of income. That operation has suffered from flooding in higher-grade areas and a blockade by local leaders in February this year.