HomeDiamonds & GemstonesAngolan diamond sector is recovering

Angolan diamond sector is recovering

Head of Endiama
Dr. Manuel Calado
Luanda, Angola — MININGREVIEW.COM — 04 May 2009 – Angola’s faltering diamond sector is showing the first definite signs of recovery but prices of the precious stones will have to increase by at least 15% this year to persuade foreign companies to re-invest in the industry.

Making this prediction here, the head of state-owned diamond company Endiama, Manuel Calado, said the price of Angolan gems had fallen by around 70% in 2008 because of the global economic downturn, and what he called ‘negative speculation from dealers’, but he added that prices had been on an upward trend since the start of the year.

“I am not saying that we are satisfied with the current price. What I’m saying is that prices have recovered since falling sharply in October and November,” Calado said in an interview with Reuters. Asked how much price recovery was needed to enable companies to start reinvesting in the sector, he replied: “I think prices still need to rise around 15%.”

Diamonds have been among Angola’s worst affected exports – along with crude oil – due to the global collapse in demand for gems and luxury items. The drop in prices prompted BHP Billiton – the world’s biggest miner – to abandon its exploration projects in Angola last year.

However, Calado said he expected Angola’s diamond production to remain at around 10 million carats in 2009 – much the same as in 2008.

The slight recovery in diamond prices was already producing some positive results in terms of investment in the sector. “The country has around 14 active diamond mines and 100 mines open for new investors,” he said. “Diamond companies are slowly reinvesting in the sector,” Calado added, but he provided no details.