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A new frontier for Angola’s diamond industry

Angola’s diamond industry has come a long way in a relatively short time. The country’s mineral reforms under President João Manuel Gonçalves Lourenço have sought to rid the sector of the cronyism and opacity that characterized operations under his predecessor.

The new policy, published by presidential decree in July 2018, marked the beginning of change in every aspect of the African nation’s diamond pipeline — from how licenses are issued, through its exploration and mining operations, to how it approaches diamond sales.

Now, Angola is ready to sell itself to the world.

Endiama, the state-owned mining company, hosted the inaugural Angola International Diamond Conference (AIDC) in late November to present the scope of the local industry to potential investors. Participants included an eclectic mix of international and local geologists, miners, manufacturers, financiers, bureaucrats, consultants, analysts and journalists — including this reporter, who attended as a guest of Endiama.

Angola makes no secret of its ambition to become a top-three producer alongside Russia and Botswana; currently, it ranks seventh by volume. The country is also in the early stages of creating a beneficiation sector for manufacturing and rough trading, and has laid out plans to establish a bourse in Saurimo, the capital of Lunda Sol province, where many of the diamond mines are located.

Prospects for the country’s burgeoning diamond sector are outlined in the December issue of Rapaport Research Report. The nation still has a long way to go and a lot of perceptions to change about the way it operates.

However, arriving at the conference in Saurimo, participants were surprised at how much Angola had already achieved. Many weren’t expecting to see the recently constructed diamond development hub — a particularly impressive feat given that building work only commenced in early 2020, just as the pandemic was about to take hold.

That progress alone sends a message that the country means business, according to government officials. But the reforms are starting to resonate with international players, too, and they’re buying into the idea that Angola can become a major responsible-diamond center.

The primary interest is coming from the mining sector. Angola is arguably the most promising of all diamond-producing countries when it comes to production potential. In the last three months, Rio Tinto and De Beers have both stated their intentions to engage in exploration there, while Alrosa has long held a stake in the Catoca mine.

The country faces greater challenges in jumpstarting its beneficiation program. It is relying on the adage that buyers will go where the rough is, and that may be so. However, convenience, financial incentive and ease of doing business also matter.

One way or another, Angola is reaching out to the global diamond community and making an effort to join its ranks. That in itself is a departure from its former ways, and a good reason for the rest of us to take note. (RAPAPORT)

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