Angola's diamond industry to regain record production levels —report
Angola, the world's fourth-largest diamond producing country by value and sixth by volume, could regain record production levels enjoyed before 2002 thanks to its new mining law and higher quality diamonds, says a new study.
Analysts at the Sinese economic geology consultancy and the sub-Saharan investment bank Eaglestone, predict an increasing Asian luxury goods market that would boost Angola’s diamond output.
"The country is endowed with both kimberlites and alluvial diamond deposits, many of those still await development,” says the report.
Angola’s diamond industry, which began a century ago under Portuguese colonial rule, is successfully emerging from a long period of difficulty as a result of a civil war that ended in 2002.
The country’s production volume has remained relatively stable at 8 million carats per year since 2006.
After a new mining code intended to attract foreign investment and boost exploration for diamonds and other minerals was introduced in late 2011, there has been an increased interest in the country’s industry.
“The Angolan government has made a major effort in simplifying the law relating to mining, and is also committed to using the country’s oil wealth to diversify the economy and improve infrastructure. Mining and diamond production should be important beneficiaries of that process as the upgrading of the country’s road and power infrastructure will improve the mining sector’s productivity,” says Eaglestone’s Manuel Reis.
Over the last five years, while production remained fairly steady at the Catoca mine – the world’s fourth largest diamond mine in which Russia’s Alrosa is a joint venture partner – the impact of the financial crisis slowed production across the country and prompted international mining companies to abandon their operations.
However, Sinese and Eaglestone say that this trend is now starting to reverse.
Angola is also known for its significant gold and oil reserves.