Angolan government authorises cooperatives to exploit diamonds

A total of 77 cooperatives in Angola have been authorised to explore for and mine diamonds, stated an official announcement at the end of last month. The authorisations were issued by the State-owned Endiama diamond mining company.

The information was released by ‘Operation Transparency’ Forward Command spokesperson, Commissioner António José Bernardo. Operation Transparency was launched in September last year, aimed at combating illegal diamond mining, the associated environmental crimes, and illegal immigration, but is being expanded to the country’s sea frontier to counter illegal fishing. The operation is directed by Minister of State and Head of Security in the Presidency Pedro Sebastião and overseen by the country’s National Security Council.

The authorised cooperatives are spread across six provinces. These are Lunda Norte, with 34 cooperatives; Lunda Sul, with 17; Malanje, 12; Uíge, 8; Cuanza Sul, 5; and Cuanza Norte, 1.

Bernardo explained that government intended, by means of these authorisations, to ensure that all the legal norms, currently in force, regarding exploitation of the country’s mineral resources, were complied with. Thecooperatives would have to supply the information on the results of their activities to Endiama and to another State-owned company, Sodiam. (‘Sodiam’ is an acronym – the full name in English being the Angola Diamond Commercialisation Company.) The cooperatives are also required, by law, to sell their diamonds only to legally authorised entities.

The second phase of Operation Transparencywas launched on May 15. By the end of the month, it had resulted in the seizure of 700 diamonds that had been in the hands of illegal miners, as well as $70 000 in cash. This is over and above the 34 000 carats of illegal diamonds and some $1-million in cash seized during the first phase of the operation.

Diamonds are Angola’s second-most-important export commodity, after oil and gas. There is, however, a huge gap between oil and gas, responsible for 91% of the country’s exports, and diamonds, responsible for 4.9%.

The country’s diamond production last year came to 9.43-million carats, slightly down on the 9.44-million carats for 2017. ‘Industrial’ (that is, large-scale mine) production in 2018 came to 9.22-million carats, which was noticeably higher than the forecast of 8.53-million carats. However, ‘semi-industrial’ and ‘artisanal’ only came to 212 540 ct, a more than 50% decline relative to the 465 120 ct achieved in 2017.

The total amount of diamonds sold last year came to 8.26-million carats, and the average price was $149/ct. This was a significant (27%) increase over the $117/ct for 2017. As a result, revenues for 2018 came to $1.2-billion, which was a 9% increase, compared with the $1.1-billion earned in 2017.

Endiama aims to produce 9.5-million carats this year and to achieve an average price of $154/ct and total revenues of $1.3-billion. The company also believes it can continue growing its revenues, and is aiming for $2.1-billion by 2022. In addition, it is of the opinion that Angola can become one of the world’s top three diamond producers by 2021.