Angola: Hopes raised by recovery in diamond sales and oil revenue

4 May 2009

Luanda, Angola, 4 May – The recovery in Angola’s diamond sales and oil revenue is raising hopes that the worst period for the extractive industry, a pillar of the Angolan economy, might be over.

Mankenda Ambroise, Angolan mining minister, has been giving many interviews in recent weeks to reveal that ten mines which had been temporarily closed had returned to operations thanks to “positive signs” in demand, greatly subdued since the last three months of last year.

“I am not saying that the crisis is already over, but that we have managed to temper the effects of the crisis (…) With this progress in sales, we will slowly recover our financial equilibrium,” he said.

Angola, the fifth largest diamond-producing country in the world, aims to produce nine million carats this year, seven percent less than in 2008.

Prices fell seven percent in the first quarter of the year, after closing last year down nine percent, according to the standard index.

To support the industry, affected by the almost paralysis of the international diamond market, the government recently launched a program for the purchase of stones from mining companies, but Ambroise guaranteed that until now, no purchase had been made.

He also revealed that companies which had abandoned Angola in the current crisis would not be allowed to return, at the same time appealing to investors to continue to support the country’s second most important export industry after oil.

Among the companies which packed their bags was BHP Billiton, which operated in association with Portuguese company Escom and Russian company Alrosa at diamond mines in Luó, Chimbongo and Camatchia Camagico, according to Africa Monitor newsletter.

In 2007, the multinational won five new concessions along the Cuanza River, all considered promising in terms of reserve potential.

The small projects were worst affected (the closure of Luarica and Fucaúma), yet the adverse situation forced the larger ones to re-size and only the large concessions such as Catoca and Chitolo, survived the period relatively unscathed.

Also in oil, the main source of revenue for Angola, the latest signs are encouraging, showing a recovery over the last two months, thanks to a slight increase in production and prices according to figures in the latest “Angola Brief” from the World Bank offices in the country.

In November and December last year, revenue from oil represented 52 percent and 46 percent respectively of the average value for the first ten months of

Yet from that point on, prices showed “some recovery” and in March production rose one percent on the previous month, despite still being below the amount posted for the same period last year. (macauhub)