De Beers returns to Angola in search of diamonds

De Beers, the world’s largest diamond miner by market capitalization, has inked two mineral investment deals with the Angolan government granting the company exploration rights for 35 years in the country’s northeast.

Each concession area will be held by a separate new joint venture between De Beers Group and Endiama, Angola’s state-owned diamond company, the parties said.

De Beers, a unit of Anglo American (LSE: AAL), will hold a “substantial” majority of the new joint ventures, it said, without specifying a percentage. Endiama will be able to increase its equity share over time.

The contracts come after years of negotiations that led the company to apply for exploration licences in December, following substantive reforms in the country’s diamond sector.

“Angola has worked hard in recent years to create a stable and attractive investment environment, and we are pleased to be returning to active exploration in the country,” De Beers chief executive Bruce Cleaver said in the ­statement.

This is not the first time De Beers ventures into Angola. Between 2005 and 2012 it carried out exploration activities, which ended without finding an economically viable project.

Growth plan

Angola’s diamond industry, which began a century ago under Portuguese colonial rule, is successfully emerging from a long period of difficulty after a civil war that ended in 2002.

The country has plans to boost diamond mining and open a large new operation in the east, with the goal of producing 5.7 million carats in 2023, or more than half of its total output in 2020.

Angola – the world’s seventh-largest diamond producer according to Kimberley Process statistics – generated 9.3 million carats in 2021, up from the 8 million carats in 2020.

For this year, it plans to ramp up production to 10.3 million carats, a revised forecast from an initial target of 13.8 million carats.  In Africa, De Beers also owns diamonds mines in Botswana and Namibia.