The industry suffered during decades of conflict, but the government has now gained control of the main areas of production and clamped down on illegal trafficking
brighter future lies ahead for Angolan diamond mining now that the state
has gained control of the main areas of production and clamped down
on illegal trafficking.
Several international firms are negotiating for exploration and mining
rights in areas liberated from the Unita rebels by the Angolan army.
Work is due to commence this year in Camafuca, an area containing diamond-rich
geological formations called kimberlite pipes, in Lunda Norte.
Construction work will be carried out by Southern Era Resources of Canada
and Welox of Israel. A study indicates that the area contains more than
23 million carats of diamonds, worth $2.5 billion, making it the world’s
largest mine of its type.
Russian diamond monopoly Alrosa is negotiating with the Angolan government
to secure access to four diamond deposits. A deal should be reached
soon on the size of the stakes in a new joint venture, according to
Alrosa vice-president Sergei Ulin.
South African firm De Beers, which sells two-thirds of the world’s
rough diamonds, closed all its mines and buying offices in Angola in
1999 following United Nations’ worries about ‘blood diamonds’
– illegally obtained and sold by Unita to fund its rebel war –
leaking into the official market.
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De
Beers carried on prospecting for new deposits in partnership with Endiama,
the state-owned diamond firm, until May when it walked out following
disagreement over marketing rights. But De Beers is optimistic about
a deal which would see its return.
Diamond exports increased by 28 per cent last year to $739 million and
even better results are forecast this year by Ascorp,
Angola’s sole diamond-mining syndicate. The increase is a result
of the government’s move to set up a single diamond-buying agency,
Sodiam,
in January 2000.
Output
from most successful mine is set to double
Alrosa has given the sector a fillip by announcing that it is to double
production at Catoca,
Angola’s most successful diam-ond mine and one of the world’s
largest kimberlite pipes, in Lunda Sul. Russian prospectors estimate
reserves of 400-500 million carats. Catoca’s output last year was
1.8 million carats, worth $153 million.
Jose Manual Augusto Ganga Junior,
general manager of the Catoca Mining Company, says the increase would
move Angola from the sixth to fourth-largest diamond-producing country
in the world. “We have 700 known diamond sources. Some are bigger
than Catoca,” he says.
Catoca
employs 1,650 workers, including 120 from Russia and 80 from Brazil.
The Angolan workforce supports about 10,000 dependents. “Our objective
is to assure earnings for every partner in order to form a good and
coherent company,” says Mr Ganga Junior. “We have created
a common culture in the firm among people from different countries and
cultures.”
Such has been the success of the first phase of the Catoca operation
– Alrosa’s dividends from the joint venture amounted to $9.3
million last year – that a second phase is being planned which
will double production over the next four to five years. Investment
in the second phase will be more than $40 million.
Government troops have secured a 30km security zone around the Catoca
mine, but one major drawback remains – lack of fuel. Each day,
two or three Boeing cargo planes loaded with diesel take off from Luanda
to Catoca. But Alrosa is ready to finance and manage a new hydropower
plant on the Chicapa River in Lunda Sul.
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The
project is expected to cut Catoca’s fuel costs by a third, saving
millions of dollars. Alrosa has already signed a protocol with Endiama
to build a dam and hydroelectric plant for an estimated $40 million.
Antonio Carlos Sumbula, vice-minister
of geology and mines, says discussions are being held with a view to
setting up a diamond cutting and polishing factory in Luanda. At present,
Ascorp sells only rough diamonds but it aims to add value
to the raw material and establish a quality ‘Diamond of Angola’
mark. “We are convinced that we have the best stones in the world
and we want to establish a quality label for our products,” says
Mr Sumbula.
South African company Mvelaphanda Holdings has been reported to be bidding
for a 33 per cent stake in SDM, an Angolan alluvial diamond mining firm.
Production at SDM’s operations in Cuango began in 1998. Alluvial
diamonds are highly sought after because of their high quality.
Until
recently, many diamond concessions have been worked by illegal miners
– ‘garimpeiros’ – many from neighbouring countries,
who panned for high-quality alluvial diamonds along Angola’s rivers.
The government is working on a strategy to give licences to the garimpeiros
to bring them into the official system. Concessions are for areas of
3,000 sq km, to make room for these small-scale operations.
Total diamond reserves in Angola are unknown, simply because less than
half the country has been surveyed. There are thought to be considerable
volumes of alluvial diamonds. “Our policy is to legalise the garimpeiros.
We want them to sell their production to Ascorp and pay taxes,”
says Mr Sumbula.
He says Endiama must start producing diamonds on its own: “Up to
now, it never run a project alone. We would like to see this happening
and it is a challenge for this year. We plan to reduce the size of concessions
for better control of the areas.”
According
to the UN, Unita rebels still smuggled about $100 million worth of diamonds
out of the country last year, but Manuel Calado, the administrator of
Sodiam, says the level is falling.
“We still have illegal diamonds, but not in great quantities,”
he says. “We no longer fear that diamonds are financing arms for
Unita leader Jonas Savimbi. He has no more diamond areas under his control.”
Mr Calado says people who live in the mining areas are too dependent
on the industry and the garimpeiros have no other source of income.
“To solve this problem we should industrialise the diamond areas,
and develop agriculture and other sectors to improve social and economic
life.
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“We
are deeply concerned about the 350,000 illegal foreigners exploring
for diamonds in our country. Obviously, we will not give licences to
everyone – just Angolans and people willing to work for the benefit
of those regions,” he says.
Ascorp president Firmino Valeriano
adds: “When we started, many people did not trust the viability
of Ascorp. Its creation was based on three fundamental objectives: to
fight the illegal traffic in diamonds, increase revenues for the state,
and to contribute to the social and economic development of our country.
“Fortunately, we have good relations with the UN and Ascorp has
participated in many international meetings about diamonds. All our
government strategies were supported by the UN, which encouraged our
resolutions pertaining to the illegal trafficking of diamonds.”
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