Congo state diamond miner to hold April 28 auction

KINSHASA, April 25 (Reuters) - Democratic Republic of Congo's state diamond miner, Societe Miniere de Bakwanga (MIBA), will sell around 300,000 carats of diamonds at an April 28 auction, a company official said on Friday.

The sale will be MIBA's first since it ended earlier this month an agreement that had previously allowed Emaxon Finance International Inc, a subsidiary of Israeli DGI Group, the right to purchase 88 percent of its production.

The Congolese state diamond miner, 20 percent of which is owned by Africa-focused miner Mwana Africa Plc (MWA.L: Quote, Profile, Research), is still recovering from decades of theft and mismanagement under former dictator Mobutu Sese Seko, and from a 1998-2003 war that devastated infrastructure in the vast, former Belgian colony.

MIBA signed the 2003 purchasing agreement with Emaxon in return for $15 million worth of financing aimed at rebuilding its wrecked infrastructure. It said its collaboration with Emaxon had ended amicably.

MIBA Chief Administrative officer Paul Kabongo said the company was deciding on a sales strategy for its future production. "We are going to give this method a try," Kabongo told Reuters, referring to next week's diamond auction.

"We're still looking for the best formula to used in the future," he added.

Regional experts estimate that Democratic Republic of Congo is Africa's second largest diamond producer, after Botswana and ahead of South Africa and Angola.

But illegal mining and diamond smuggling are rife in the country, complicating the calculation of its real output.

Tens of thousands of small, informal miners encroach on legal concessions and also work illegal diggings.