Shine on: exports provide about eight percent of overseas earnings

Diamond life returning for miners
The industry seeks foreign partners now that the state has recovered areas rich in deposits and abolished its monopoly

iamonds are undoubtedly Angola’s next best friend, though development of this hugely rich natural resource has been delayed and disrupted by the civil war.
In the years before independence, Angola was the third or fourth-largest producer of diamonds in the world, but the industry has lost some of its sparkle since.
At one stage of the fighting, Unita skimmed off as much as 90 percent of export earnings from locally-mined diamonds, which was a major source of funds for its war campaign.
Today, the government claims its military forces have recovered most of the diamond-producing areas and that the industry is once again making a significant contribution to the economy. Diamond exports are currently estimated to provide eight percent of overseas earnings.
Most of the activity is concentrated on extracting diamonds from alluvial deposits in the northeast of Angola, much of which was previously under Unita control. These reserves are estimated to total anything between 40 million and 130 million carats. Angola also has huge reserves embedded in pipe-like volcanic structures known as kimberlites. These deposits include some of the largest diamonds in the world and are estimated at 180 million carats.

Other minerals
But Angola is not just about diamonds: the country is endowed with many other minerals, including substantial deposits of iron ore, gold, copper, manganese, phosphates, lead, zinc and base metals, as well as kaolin, quartz, gypsum, marble and black granite.
Reviving the mining sector hinges on attracting foreign investment.
In an attempt to encourage joint ventures, the government abolished the state monopoly on mineral rights.
“The state will no longer have a monopoly on mining,” says Edgar da Costa Peres, director general of state-owned Ferrangol, which led the post-independence drive to make iron ore mining an important element of the economy.

Moves are afoot to revive the firm, which went out of business as a result of the unrest. “We are undergoing a process of transition from war to peace and we are confident that this will make progress,” says Mr Costa Peres. “We are going through an act of faith, and with peace the reconstruction of this company will be made possible.”
The authorities are seeking foreign business partners in the mining industry. “The main problem is the lack of investment,” says Mr Costa Peres. “We are trying to find partners to help us get out of that situation.
“There is an opening in the market for national and foreign companies that want to invest. That is why we are working hard to get more than one partner to help us meet this great challenge,” he adds.

Russian diamond monopoly Alrosa is heavily involved in the Catoca kimberlite project in northeast Angola. Surveys suggest that reserves at Catoca, which accounted for over 40 percent of Angolan diamond production last year, could be as much as 500 million carats.
Meanwhile the state mining company, Endiama has formed a partnership with South African diamond giant De Beers to exploit a complex of kimberlite deposits in Lunda Sul province.
Canadian firm Southern Era and Welox of Israel have formed a joint partnership to create what is expected to become the world’s biggest kimberlite diamond mine at Camafuca near the Chicapa river in Lunda Norte province.

Five kimberlite structures in the area are thought to contain diamonds valued at more than 23 million
carats, making it one of the largest undeveloped sources in the world. Production is targeted at 220,000 carats a year, starting in mid-2002.
Mr Costa Peres sees mining as the key factor in developing mineral-rich provinces such as Huila and Namibe. “Mining will promote the economic development of the country by creating new employment for the populations of those areas,” he says.