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Energy & Mining
Planning for a new 200,000 bbl/d refinery to be lo-
cated in the coastal city of Lobito is in progress.
50% of the products produced at the new refinery
will be consumed domestically; the remaining 50%
will be for export. The lack of a partner and financ-
ing has delayed the expected startup of the project.
The refinery’s completion is now programmed for
2015.
Sonangol estimates that Angolan demand for oil
products will grow by 500% within 10 to 20 years.
From 2004, Sonangol has imported fuel from
abroad to ease domestic shortages as the Luanda
refinery is unable to meet increasing demand.
In 2010, Angola’s mineral industry was dominated
by diamond and petroleum production. At lower
scales, other mineral commodities produced in the
country are cement, granite, gypsum, marble, and
salt. Furthermore, other unexploited mineral re-
sources include beryllium, clay, copper, gold, iron
ore, lead, lignite, manganese, mica, nickel, peat,
phosphate rock, quartz, silver, tungsten, uranium,
vanadium, wolfram, kaolin and zinc. The country
has large diamond reserves, mainly in the provinc-
es of Lunda Norte and Lunda Sul but the full extent
of mineral resources still need evaluation.
The First diamonds discovered in Angola were
found in 1912 near current RDC. Former Diamang
was established in 1917 and started operations in
the 1920’s. Prior to independence, diamond pro-
duction peaked in 1971 with a production of 2,1 mil-
lion carats and fell to 350,000 carats in 1977 due to
the civil war. After the signature of Lusaka Protocol
in 1994, foreign consortiums rushed to Angola to
evaluate potential alluvial and kimberlites resourc-
es, allowing the production to catch 1,5 million car-
ats in 1997 and go over 5 million in 2001.
Diamond industry in Angola suffered the crisis in
2009. The vertiginous drop of the prices caused
by a low international demand resulted in a sub-
stantial slowdown in diamond production and loss
of employment in the sector. In June 2011, the first
of 120 mining certificates were granted to artisa-
nal diamond producers in Cuango, Lunda Norte
Province in an effort to reduce the unemployment
in mining companies that went bankrupt. Stores
designated to sell rough diamonds have opened in
the province to help improve living conditions of lo-
cal populations.
MINING
In 2009, Angola accounted for about 11% of the
world’s total diamond production by volume and
for about 13% of the world’s total diamond produc-
tion by value. The country is the 5th world largest
producer of diamonds by value, supplying 7-9% of
the global output. Most alluvial diamonds in Angola
originate from erosion of kimberlites.
State-run Endiama claims a production of 8,55 mil-
lion carats of diamonds in 2010, with estimated
earnings of US$ 956 million from diamond sales,
achieving an average price of $ 111,74 per carat.
In 2010, diamonds accounted for 5% of the GDP
growth.
Mining industry is expected to greater contribute to
the development of Angolan economy. A new min-
ing code has been in the process of being ratified
since 2006. The new code aims to regulate the
distribution of the revenues generated by diamond
producers. Half of the revenues must pay opera-
tional costs while the other half will pay taxes, in-
vestors and local community development. Cur-
rently, the law stipulates that mining companies
should pay 35% of their profits in taxes to ENDIA-
MA (Empresa Nacional de Diamantes de Angola
E.P.). Furthermore, investors are requested to pre-
sent environmental impact studies to be approved
by the authorities.
Angola ended a policy of granting 51% stakes in
all diamondiferous kimberlite concessions to Endia-
ma. The company will now have a minimum stake
of 10% in the developments. Angolan authorities
have proposed to end a ban on domestic sales of
cut diamonds as a way of attracting investors to es-
tablish diamond polishing factories in the country.
Additionally, the government is planning to offer
an international tender to help create the geologi-
cal charter to assess the real mining potential and
establish the most attractive regions for mining. The
collected data will help plan and diversify the coun-
try’s mining activity beyond diamond exploration. In
the longer run, new projects in the nonfuel minerals
sector, namely the developments of iron core, gold
and copper deposits are likely to add significantly to
the growth of the sector and attract foreign invest-
ment in this segment.
Projections for diamonds in 2011 are excellent
as Endiama plans to produce 9 million carats by
increasing production at Catoca, Luo and Luana
mines. The soon beginning of production at Ch-
inge, Capenda and Camulemba should also con-
tribute to the growth.