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KP reform: No to stifling of debate says Angola’s mines minister

17 february 2014

Angola, which is set to take over from China next year as the Kimberley Process chairperson said it has a duty together with the Asian giant to promote debate around the reform of the diamond watchdog.
There had been calls, among other things, to broaden the definition of conflict diamonds to one that reflects the role state actors play in human rights abuses in diamond zones.
Angolan minister of geology and mining, Francisco Queiroz told Rough & Polished Editor in Chief of the African Bureau Mathew Nyaungwa in an interview on the sidelines of a mining indaba held early this month in Cape Town, South Africa that they will not impose their opinion on others.
He also said critics of the diamond watchdog were mistaken to suggest that it was ineffective as it controlled 99.8 percent of the global diamond trade.
Meanwhile, Queiroz reviewed that Angola was losing about $150 million annually due to smuggling of diamonds by illegal immigrants from neighbouring countries.
He was just short of mentioning nationals of the Democratic Republic of Congo (DRC) as the the majority of the illegal immigrants.
Angola, Queiroz said, is targeting an output of 9 million carats this year valued at $1.5 billion up from 8.5 million carats recovered last year worth $1.2 billion.
Below are the excerpts.

As the Kimberley Process vice chairperson, what sort of vision and contribution will Angola bring to the scheme?

Our vision is linked with the Kimberley Process Certification Scheme (KP). KP has its mission and it is through that mission that Angola will [get] instructions from. We have been compliant with KP throughout these years and in fact were the ones that inspired the creation of the certification scheme. Angola will keep on following the process and now as the vice chair we will work closely with China, which is the leading country now. We will also work with the three pillars of the organisation namely the governments, companies and non-governmental organisations.

The Belgian Parliament recently said that KP is not effective. Do you agree with such an assessment?

No! We do not agree because KP controls 99.8 percent of the world’s diamond trade. This means that it is working well. I do not know the criteria that they use to evaluate the Kimberley Process; however, you cannot evaluate an institution out of the core business of that institution. The last meeting we had in November 2013 in Johannesburg, South Africa showed that the organisation is [moving in a good direction].

A report recently released by Financial Action Task Force noted that the diamond industry and trade are susceptible to vulnerabilities and risks associated with money laundering and terrorist financing. The alleged closed and opaque nature of the diamond market and the high value of diamonds combined with a lack of expertise in this area on the part of the authorities was also said to have opened room for abuse by criminals. What is your take on that?

Any business including diamonds has risks involved in it. There are risks that KP have been called to avoid and they are namely the illegal exploitation and trade of diamonds as well as the bad use of income generated from the diamonds. However, the KP cannot control the money that is generated through the illegal selling of diamonds and when people get their money they use it in a way they want and some of the uses are not right, that happens with diamonds, oil and other minerals. So I think the question is not on the control systems that were established [by KP] but on the fundamental principle of the private right. The right of private property is a right that you cannot violate…and if one gets money under the private property right then the person can use the money under private property right. It also has to do with moral code of the people who are using the money generated from the diamonds and they are right when they (Financial Action Task Force) acknowledged that we still have an opaque way of trading diamonds…the private property right can give way for the use of money in ways that we do not agree with [so] the problem might be that.

There are some people that are calling for KP to broaden the definition of conflict diamonds. What is your comment on that?

We agree with the principle that every aspect or every issue has to be debated, that is the democratic principle that we have. There are some that are in support of the broadening of the definition of conflict diamonds and those that are against. However, we see that for the time being those that are against the broadening of the concept are having an advantage. Those who are defending the much broadening of the definition, I think they haven’t yet defined in a clear way their position to convince others. So they need to bring an argument that brings consensus on the broadening of the definition of conflict diamonds. Our task as the vice chair, just like the chair, is to guarantee that this debate is done following the rules of a democratic debate as well as create conducive environment for the debate to take place. We will do things to avoid imposing our position.

What is Angola’s position in this matter?

Angola follows the position that is in accordance with the evolution of KP. The KP now has 10 years, and naturally the task that it is undertaking on the conflict diamonds is expected to continue. So, we think that KP’s task to end conflict diamonds is not finished yet. It is still a big challenge. We should stress that if this debate is not carefully guided it can bring conflict within KP and we do not want that to happen.

Moving on, Angola signed a cooperation agreement last year on mining and geology with Mozambique. What is the progress to date?

We have a memorandum of understanding (MOU) that we signed with Mozambique last year and under that agreement there are several minerals to be considered. We officially visited Mozambique last year, and instructed our national diamond company called Endiama to work with Mozambique and we are ready to share our experiences with our brothers. Regarding KP, we now have Angola and South Africa jointly working to help Mozambique become a KP member. That work is underway and we are now waiting for a technical delegation from Mozambique to work with our team in Angola.

Angola introduced a programme to register and formalize activities of artisanal diamond miners. Can you provide an update of this exercise?

The process in underway but it is a very delicate matter. Our small exploration and mining of diamonds is mainly done by illegal immigrants. The illegal immigrants are flooding mining regions and that is bringing management difficulties. We want to legalise [local] artisanal miners, however, they are several illegal immigrants. They created links, trading links, logistical and operational networks to avoid paying taxes and smuggle the money out of our country.

How much are you losing annually through these illegal operations?

It is a lot of money…; it is estimated that $150 million is being lost through illegal diamond mining and trading per annum. We lose control of that revenue as [they smuggle the diamonds] to neighbouring countries. We will have to engage neighbouring countries diplomatically so as to help us control such illegal activities.

How many carats of diamonds are you expecting to produce this year?

We produced 8.5 million carats last year and we expect to produce 9 million carats this year. Last year we produced diamonds worth $1.2 billion and we are expecting $1.5 billion this year.

Catoca, a company in which the Angolan have shares through Endiama, is said to be eyeing Zimbabwe diamonds. How far has it gone with this plan?

They are still negotiating; this was necessitated by the signing of an MOU between the governments of Angola and Zimbabwe. Catoca has already visited Zimbabwe where they convened meetings with the local officials.

How optimistic are you of a JV that Endiama entered into with Alrosa to locate new kimberlites in the country?

We have good expectations; Alrosa has already conducted an airborne survey. We hope that we will have a good partnership.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished