Angola 2005 Diamond Production Estimated at $892.7 Million

Diamond production in Angola is estimated to have totaled $892.7 million in 2005.  The figure represents about 6 percent of Angola's total exports and the country’s second-largest source of export revenues, says the OECD (Organization for Economic Co-operation and Development) in its “Economic Perspectives of Africa 2005/2006” report.

The OECD found it difficult to estimate the increase in real production, as a larger share of informal mining has recently been included in official statistics. However, it estimated diamond exports to have risen by 24 percent over the 2002-04 period.

The organization predicts that diamond mining in Angola will increase in the short term, as a consequence of granting 296 licenses in 2004 and 2005.  Angola has extensive kimberlite operations and both formal and informal alluvial diamond projects.

The OECD recommends changes to the state-owned diamond company, Empresa Nacional de Diamantes de Angola (Endiama).  The company currently combines regulatory responsibilities with commercial operations, and these two functions, says the OECD should be separated.  “This is a necessary condition for opening up the diamond sector to small and medium-scale private operators, the report states.”

In 2005, De Beers reentered Angola to explore a 3,000 sq km kimberlite concession. Their return to the country signaled the end of many years in which Lev Leviev of Israel and Omega of Belgium dominated Angola’s diamond landscape.

While recognizing De Beers and Angola's first polishing and cutting plant, which was opened by Leviev in November of 2005 and can process $20 million worth of diamonds a month, as positive elements for the Angolan economy, the OECD report states that Angola’s greatly improved macro-economic management in the post civil war era still needs to reduce dependency on oil and diamonds.  Otherwise, the organization warns, “Angola will soon face an abrupt deceleration of growth, since oil production is expected to reach a ceiling in 2008.”