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Angola wants foreign investors for diamond sector

De Beers has invested in a concession in Angola’s northeastern region.

LUANDA (Reuters) – Angola’s state-run diamond company wants foreign companies as partners to tap what it believes are vast undiscovered pockets of the precious gems, a company official said on Thursday.

In an interview with Reuters, Endiama spokesman Sebastiao Panzo said the mineral-rich southwestern African nation wanted to attract investors who were interested in bottom-up diamond exploration and prospecting.

Angola, the continent’s third largest diamond producer and the world’s fifth biggest in terms of value, is exploring only about 40 percent of the territory believed to have potential for diamond mining, with production concentrated in its northeastern provinces.
“Surveys from the colonial era show we have diamonds in other areas we need to prospect. Who dares to prospect with us — those are the partners we need. We want international partners to go to the bottom of the pipeline of the industry with us,” Panzo said.
He identified the provinces of Bie, Malanje and Uige as among the areas that should be explored.

Angola’s diamond production is forecast to rise by about 8 percent to 10 million carats this year after surging by nearly a third in 2006, Endiama said earlier this year. It wants to boost output to 17-19 million carats by 2010.

Encouraging exploration is key to that objective and part of Angola’s bid to diversify its oil-dependent economy, which has been booming since the end of a 27-year civil war in 2002. But foreign interest in its diamond sector has often been confined to buying of cut and uncut stones.

“You can’t imagine how many companies we receive here who come and just want to buy diamonds. But the demand is much bigger than our capacity to provide,” Panzo said.

Endiama is considering introducing new mining legislation that would streamline regulation and make it easier for foreign firms to invest in the sector. The legislation could be passed by parliament in 2007, Panzo said.

“Foreign partners say we have to have better legislation on the timings for prospecting and exploration, the fees that are asked for from investors, the tax regime. That’s what we are trying to do,” he said.

Companies partnering with Endiama in the exploration and prospecting phases also could be given rights to trade the gems, although Panzo said it was too early to commit to such incentives.
South African mining giant De Beers, which is 45-percent owned by mining group Anglo American Plc, has invested in a concession in Angola’s northeastern region. Other foreign firms have also expressed interest in exploration there.

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