Mwana Africa, the London-listed miner, has launched a hostile takeover bid for SouthernEra Diamonds, which will create the largest diamond producer in the Democratic Republic of Congo (DRC).

The £31 million deal will give Mwana control of an area that produced the world’s fourth-largest diamond, the 890 carat “Incomparable”.

Political turmoil in the DRC in recent years has restricted mining investment but the new Government is giving investors more confidence in the mineral-rich country.

The Congo region is particularly famous for its diamonds but production has slumped after years of civil war. Production by Miba, the state-owned diamond miner, has fallen from 8 million carats to 2.5 million carats in the past decade.

Mwana is taking the opportunity to invest as the political environment becomes more stable. Last year it bought a 20 per cent stake in Miba, as well as the Australian miner Gravity Diamonds. Acquiring SouthernEra will give it access to some of the most famous diamond mines in the region.

In the early 1980s a young girl found the Incomparable diamond in rubble that had been dug from one of these mines. It took four years to cut the diamond into its polished state.

Mwana’s strategy in the DRC will be watched by BHP Billiton, the world’s largest miner, which has joint ventures with both Gravity and SouthernEra.

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