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Friday, 1 November, 2002, 09:34 GMT
De Beers opens Angola negotiations
Prospecting for diamonds in Angola
Angola is rich in diamonds
International mining giant De Beers has opened negotiations with the Angolan government to restart diamond mining in the central African country.

A team of De Beers negotiators arrived in Luanda on Friday to hammer out the terms of a new agreement with state-owned mining firm Endiama.

De Beers suspended its investment in Angola in May 2001, after reaching an impasse with the government.

There is a long-running dispute over when Endiama will repay a $50m (32m) loan to De Beers - the loan has now accrued a further $40m in interest.

De Beers' prospecting and marketing rights are also on the table.

Potential reserves

Angola is the world's fourth largest diamond producer, with estimated reserves of 180 million carats.

Diamond production is thought to generate $650 million a year, although illegal mining and smuggling significantly distort the figures.

Angola officially produced an estimated 5.1 million carats of diamonds in 2001.

Endiama is dependent on De Beers for the technical expertise needed for deep-level mining operations.

'Spirit of hope'

An official arbitration process in the Angolan courts has been temporarily suspended while negotiations take place between the two parties.

A De Beers spokesman said the firm was enthusiastic about returning to Angola once the terms of a new contract had been clarified.

A statement from the Angolan government said the negotiations represented "a new spirit of hope".

See also:

28 Oct 02 | Business
31 May 01 | Business
24 May 01 | Africa
17 Nov 00 | Africa
12 Oct 00 | Africa
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