Christopher S. Nelson 
De Beers has signed mining investment contracts (MICs) with the Republic of Angola – after 10 years of inactivity in the country – and plans to search for diamonds in the northeast of the country. The contracts expire in 35 years.
A separate, newly formed joint venture made up of the De Beers Group and the Angolan state-owned diamond company, Endiama, will hold each concession area.
Angola is the world’s sixth largest diamond producer with reserves estimated at over 300 million carats.
De Beers rivals Rio Tinto and Alrosa both currently operate in Angola.
The country’s vast mineral resources remain largely untapped due to the impact of Angola’s civil war, which began in the 1970s and only ended in 2002.
De Beers CEO Bruce Cleaver said recent humanitarian efforts to help the country recover from the conflict, as well as recent changes in investment practices, played a big role in the decision to return.
“The signing of these contracts represents an important milestone in our new partnership with Angola, which is based on a mutual desire to build a thriving diamond sector that delivers significant socio-economic benefits to Angolan citizens,” he said. declared.
“Angola has worked hard in recent years to create a stable and attractive investment environment and we are pleased to resume active exploration in the country.”
In the 2000s, President José Eduardo dos Santos implemented repressive policies that discouraged foreign investment in Angola. This included an outright ban on foreign companies holding a majority stake in diamond mining projects.
President João Lourenço was installed in 2017 and made a series of changes that reversed these policies with the aim of creating a more viable mining industry in Angola for giants such as De Beers.
De Beers last operated in Angola in 2012, completing a seven-year exploration project that was unable to locate a viable site.
Exploration activities are expected to begin this year, pending regulatory approval.
2022 strong so far
The first quarter of 2022 was positive for De Beers. He reported a 16 percent increase in production between January and March (Q1) compared to October to December (Q4) last year. It produced a 25% increase in production compared to the first quarter of 2021 (8.9 million carats compared to 7.2 million carats).
Demand for rough diamonds remains robust according to the company’s latest report, with sales totaling 7.9 million carats.
Despite the positive data, De Beers CEO Bruce Cleaver said the company would remain cautious in the generally slower second quarter, wary of the impact of the ongoing conflict in Ukraine.
“Based on robust demand for rough diamonds in 2021 and jewelry sales in the first quarter of 2022, and reflecting continued year-over-year growth in consumer demand for diamond jewelry, demand De Beers Group’s rough diamond business remained strong in the third sales cycle of 2022,” Cleaver said.
“As we head into the second quarter of the year, which is seasonally slower, diamond businesses are adopting a more cautious and vigilant approach in light of the war in Ukraine and associated sanctions, as well as blockages in the COVID-19 in China.”
De Beers currently has mining operations in Botswana, Namibia, South Africa and Canada.
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