Angola Eyes Antwerp as Ally in Diamond Reforms

RAPAPORT... Angola is seeking stronger ties with Antwerp as the southernAfrican nation looks to improve the profitability and transparency of itsdiamond sector.The country has failed to benefit sufficiently from itsdiamond resources due to government policies, according to its president, Jo??oLouren??o, who came to power in September and is planning to reform theindustry. Catoca, the country's largest diamond mine, lost $464million over the past six years because producers were only able to sell goodsthrough Sodiam, the state-owned trading company, Reuters reported Monday,citing an internal Catoca document. That policy has restricted miners'revenues, as Sodiam could choose to whom it sold diamonds, often resulting in politically connected buyers obtaining goods at below-market prices, Reuterssaid. Engaging in trade with Antwerp could present an opportunityto create value, according to Nishit (Bali) Parikh, president of the AntwerpWorld Diamond Centre (AWDC). The Belgian city has a track record of generatinga 15% premium for producers that export their goods directly to the hub ratherthan shipping them elsewhere, Parikh said in a speech during Louren??o's visitto Antwerp last week. "It has been said that Angola has been absent from Antwerp,but that is set to change," Louren??o said while meeting AWDC officials. "We aregoing to be represented in Antwerp, and will work together in partnership. Theresponsible institutions have been instructed to see that Angola can return tothis great diamond center."Antwerp is the first diamond trading center Louren??o hasvisited as president, the AWDC claimed. Angola's transformation would involve both increasing roughproduction and creating more employment through local processing and polishing,Louren??o added. Angola currently only exports 1% of its rough diamondsdirectly to Antwerp, but some 50% end up in the city, Parikh noted. The Africannation ships 70% of its diamonds to the United Arab Emirates, according toReuters. "If I can do better business by trading my goods through themarket in Antwerp, why would I send my goods somewhere else first, and then letsomeone else get a better deal by sending them to Antwerp?" Parikh said. Selling straight to Antwerp would also "show the world youare serious about fostering transparency, and intend to follow through on yourmessage of change," the diamantaire continued. Louren??o has embarked on a reform agenda since taking overfrom Jos?(C) Eduardo dos Santos, whose controversial rule lasted 38 years. Throughthose changes, the nation hopes to attract more foreign diamond miners, Reutersquoted Louren??o as saying. Alrosa - the largest rough supplier to the Antwerpmarket - currently holds 41% of Catoca, which produced 7.2 million carats in2016. The Russian miner is also an investor in Angola's new Luaxe miningproject. Angola's total output was 9 million carats in 2016,including other smaller deposits such as the Somiluana and Lulo mines,according to data from the Kimberley Process. The country plans to double its annual production by developing Luaxe,which, at full output, it expects to yield 10 million carats annually, Reutersreported in 2016. Sodiam and its parent company, Endiama, could not be reachedfor comment.Main image: AWDC president Nishit Parikh (center) talks with Angolan President Jo??o Louren??o in Antwerp. Inset: Louren??o with AWDC officials. Images courtesy AWDC.