Angolan President João Lourenço is looking to revise policies that inhibit diamond production capacity and revenue generation, writes FBL Advogados, Angolan member of Lex Africa.
Better days could be on the way for Angola, the world’s fifth largest producer of diamonds, as government seeks to improve its investment relationship with foreign investors. Angola’s potential as a diamond producer is still largely untapped, in part due to the 27-year long civil war it endured and over poor governance of its natural resources.
To worsen the situation, government policies on foreign direct investment have largely been viewed as restrictive. According to Reuters, despite the wealth contained in its diamond mines, major international investors have largely shunned Angola due to unattractive investment terms.
‘All production in Angola must be sold through state-owned diamond trading company Sodiam, which makes the stones available to buyers of its choosing. Two industry sources with knowledge of the matter have told Reuters that under the previous government of Jose Eduardo dos Santos these ‘preferential buyer’ were often politically connected and able to negotiate prices below fair value. Producers are not able to sell their diamonds independently,’ reads an article dated 11 June 2018.
Now, newly elected President João Lourenço says hope is on the horizon as policies which do not best serve the interests of the country or of the producers are placed under revision.
“We will soon announce the new framework for the diamond industry and we believe that with this, the big diamond mining companies will return to Angola,” Lourenço said on a recent visit to Antwerp, Belgium.
Top of the list of changes is for more open channels of communication which encourages increased transparency. “We will soon announce the new framework for the diamond industry and we believe that with this, the big diamond mining companies will return to Angola,” he said.
Russia’s Alrosa is the only major diamond miner producing in Angola and the southern African country exports roughly 70% of its diamonds to the United Arab Emirates (UAE).
Source: The article was written by FBL Advogados, the Angolan member of Lex Africa.
LEX Africa is a legal network of leading law firms in over 20 African countries and is Africa’s largest legal alliance. Each member is an independent law firm whose key specialist focus is on general corporate and commercial law as well as litigation and dispute resolution.