Angola says demand for diamonds picking up...

posted on Apr 17, 09 02:12PM

First posted by QQ_GIRL on GZD ( Grizzly Diamond Hub )

Angola, the world's fifth diamond producer, said on Friday sales were finally picking up after demand for gems plunged in 2008 due to the global economic downturn.

Mining Minister Makenda Ambroise urged investors to help the African nation continue to develop its mining industry but warned those that had left the country during "these times of crisis" that they would not be able to return again. "There are positive signs," he said in an interview with Reuters, adding that sales of Angolan gems had recently surpassed US$70 million per month, up from around US$25 million at the start of the year. "I'm not saying the crisis is over yet but we have succeeded in mitigating the effects of the crisis."

Diamond prices fell 7% in the first quarter after slumping 9% in 2008, according to PolishedPrices.com index, as recession weighed on demand for luxury goods in vital markets like the United States and Europe. Falling demand for diamonds resulted in lower prices for gems, prompting Angola to announce it could buy gems from local mining companies to bolster the industry. However, Ambroise said such a move had not yet been necessary.

BHP Billiton, the world's biggest miner, had divested its diamond exploration projects in Angola last year in what it said was a cost-cutting measure. "Those (companies) that left us will never again return to the sector. It is in hard times that one finds out who their friends really are," Ambroise said. He did not say which mining companies he was referring to. He also urged new investors to come to Angola to help the resource-rich nation diversify its mining activities away from diamonds.

"This is the best time to invest in the mining sector. We are appealing to all those thave real money, technical and financial capacity, to join us and explore not only for diamonds but for other resources aswell," he said.

Ambroise lowered Angola's diamond production target to around 9Mct in 2009 -- around the same as in 2008 -- from around 10 million for this year. The country has around 14 active diamond mines and 100 mines open for new investors, he said.

Angola's diamond production has been growing at a steady pace since the end of an almost three-decade long civil war in 2002. The end of the war paved the way for diamond mining giants De Beers, Anglo American and Alrosa to partner with Endiama and tap into Angola's vast diamond reserves. These reserves are estimated to be over 200 Mct.

(Reuters, Apr 17)

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