Angola’s 2018 diamond production exceeded forecast

Media

Angola’s 2018 diamond production exceeded forecast

25th January 2019 By: Rebecca Campbell – Creamer Media Senior Deputy Editor

Angola produced a total of 9.43-million carats of diamonds last year, which brought in revenues of $1.2-billion. These figures were reported to Angolan news agency Angop by Endiama President Ganga Júnior. Endiama stands for Empresa Nacional de Prospecção , Exploração, Lapidação e Comercialização de Diamantes de Angola (the National Company for the Prospecting, Mining, Polishing and Commercialisation of Diamonds of Angola). It is the country’s State-owned diamond mining company.

He added that production from formal mines – what he called “industrial” production – reached 9.22-million carats. This was 8% higher than the forecast, which was 8.53-million carats. ‘Semi-industrial’ and artisanal production totalled 212 540 ct, which was significantly down on the 465 120 ct that these operations produced during 2017.

The company’s 2018 revenues represented an increase over those for 2017 (in that year Angola’s diamond exports brought in gross revenues of $1-billion), which he attributed to the Angolan government’s new policy of allowing diamond producers to sell up to 60% of their output in the free market, ending the practice of requiring them to sell to preferred buyers. The new policy was authorised by a Presidential decree issued in July last year.

Under the previous system, preferred buyers were designated by the State-owned Empresa Nacional de Comercialização de Diamantes de Angola (National Diamond Commercialisation Company of Angola), better known by its acronym, Sodiam. Last August, the Angolan weekly magazine ‘Expansão’ reported that, under the preferred buyers system, the country’s diamond miners had lost gross revenues estimated at $5-billion. This was because the preferred buyers were able to enforce a discount of 30% on the miners in relation to market prices.

The number of carats sold by Endiama last year totalled 8.26-million carats, at an average price of $148.65 per carat. The average price per carat obtained in 2017 was $117.23, while the figure for 2016 was $121.1/ct.

Júnior forecast that, this year, Endiama would produce 9.5-million carats of diamonds and accrue revenues of $1.3-billion. The average price per carat would be $154. This year will also be the company’s 38th since it was originally founded.

In accordance with the country’s new diamond marketing strategy, on January 31, the private-sector Angolan company Sociedade Mineira do Lulo will hold its first auction of exceptional quality stones, in Luanda. Lulo is operated by Australian miner Lucapa Diamond Company, which owns 40% of the operation; Angolan private-sector company Rosas & Pétalas owns another 28%, while the remaining 32% is held by Endiama.

Diamonds are Angola’s second-most important export commodity, after oil and gas. Angola is Africa’s number two or number three diamond producer in quantity, after Botswana (and, according to some sources, the Democratic Republic of Congo), and is, in value terms, the world’s number five producer. There is, however, a huge gap between Angola’s oil and gas sector, responsible for 91% of its exports, and diamonds, responsible for 4.9%.