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12 september 2012

Three years ago the Partnership Africa Canada (PAC) issued a report, which claimed that Angola had weak internal controls of diamonds produced by artisanal miners or garimpeiros as they are locally known.

The majority of these illegal diamond miners came from neighbouring countries, mainly the Democratic Republic of Congo.

Angola derived no benefits from the mined diamonds as they were sold illegally.

The disturbance of the civil war also saw the country heavily exposed to illegal diamond mining.

UNITA - a rebel group - mined diamonds and sold them abroad to fund its operations.

According to the United Nation's Fowler Report, Joe De Deker, a former stockholder in De Beers, worked with the government of Zaire (now DRC) to supply military equipment to UNITA from 1993 to 1997.

Wikipedia also noted that De Deker's brother, Ronnie, allegedly flew from South Africa to Angola, directing weapons originating in Eastern Europe. In return, UNITA gave Ronnie bushels of diamonds worth $6 million at the time.

De Beers openly acknowledged spending $500 million on legal and illegal Angolan diamonds in 1992 alone.

PAC said in its 2009 report that despite a new artisanal diamond law introduced in Angola, the regulations had proved difficult to implement, as it was nothing but a verbatim of the old law, which failed to stem illegal diamond activities.

The report also noted that the expulsion of the garimpeiros had done nothing much to control illegal diamond mining as figures show that informal garimpo diamond production in 2003, before the crackdown began, was 1,231,688 carats and 1,102,198 carats in 2007, recording a decline of 11 percent.

However, the situation appeared to have improved considerably as Angola was on a massive drive to regularise the operations of artisanal diamond miners.

The state-owned diamond company Endiama recently awarded 154 new artisanal diamond mining licenses to the budding miners in the Lunda Norte Province.

Provincial governor, Ernesto Muangala was quoted as saying that the awarding of more artisanal diamond mining licences was meant to create employment to locals.

Endiama chairperson Carlos Sumbula said that areas where industrial diamond reserves would have depleted were often profitable to the artisanal miners.

He said in some cases Endiama had granted direct artisanal concessions, meaning that, “we do not need industrial activity to have ended.”

“These reserves are granted to Angolan citizens so that they can carry out artisanal mining,” he said.

Sumbula said that in future artisanal mining would be the responsibility of diamond sales company Sociedade de Comercialização de Diamantes de Angola (Sodiam), and would be coordinated by logistics company Endiama Logística Integrada (Enditrade) together with residents of the respective areas.

Endiama had so far issued out about 1,000 mining licenses to the artisanal miners in several parts of the southern African country.

Angola’s Geology, Mining and Industry minister Joaquim David said artisanal miners that received the certificates were allowed to establish joint ventures to boost production.

The minister said then that government had also opened shops in areas where artisanal miners would sell their diamonds.

To show further support to the artisanal miner, the government had also decided to reduce the tax rate charged on the sale of diamonds produced by local artisanal miners.

Sumbula said that Angola would now charge 3 percent tax on all artisanal diamond sales from the previous 8.5 percent.

He said, without providing comparative figures, that the new rate was lower than what was being charged in the Democratic Republic of Congo (DRC) and the Republic of Congo.

Angola should indeed be commended for working hard to bring sanity in the industry, which is now one of the leading diamond producers on the African continent and the world at large.

According to the Kimberley Process, Angola's rough diamond production in 2011 was 8.32 million carats, from 8.36 million carats recorded in 2010.

The majority of the diamonds were produced by Catoca, which is now operating at capacity of around 6.7 million carats per year.

There is certainly no doubt that Angola is leading the way in Africa as far as artisanal diamond mining is concerned.

It remained to be seen if other producers such as DRC and Sierra Leone will successfully bring the operations of artisanal miners to book as Angola is doing.

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