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 Monday, 30 December, 2002, 17:34 GMT
Angola and De Beers delay diamond deal
Endiama logo
Angola and the diamond giant De Beers have extended a deadline to sign a new diamond mining deal and settle a debt which made the company pull out of the country in 2001.

The two had set 31 December for concluding talks, but that has now been pushed back to 28 February.

De Beers suspended its investment in Angola in May 2001 in a long-running dispute with the state-owned diamond company Endiama over repaying a $50m (32m) loan and millions of dollars in interest.

De Beers and Endiama have said in a joint statement that talks on new concession contracts were going well.

"Endiama and De Beers reiterate their commitment to continue to act in good faith...(and to) bring benefits to the Angolan diamond industry," the statement added.

Power games

De Beers said it planned to resume marketing all diamonds produced by a new venture with state-owned diamond miner Endiama in Angola early next year.

Endiama controls all official aspects of the diamond industry in Angola.

Ascorp, a joint venture with an Israeli businessman which has been marketing all Angolan diamonds since November 1999, is expected to lose its monopoly in mid-January next year.

Angola complained in June that Ascorp had not returned sufficient income from its monopoly, when it reported an 87% plunge in annual profits.

De Beers controls about 65% of the world's $8bn rough diamond market.

Potential reserves

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

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

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

Foreign mining companies are keen to return to Angola after a ceasefire in April ended 27 years of civil war between the government and UNITA.

UNITA controlled the major diamond producing areas during the war and bought weapons with proceeds from uncut gemstones.

Angola and other southern African countries signed a "blood diamonds" agreement earlier this year which certifies that gems come from legitimate mines.

See also:

14 Nov 02 | Africa
01 Nov 02 | Business
19 Jun 02 | Business
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