The Angolan Council of Ministers (Cabinet) last week approved a new policy on the commercialisation of diamonds. This is intended to stimulate more investments in the production of the precious stones, as well as to open the market to all those interested in it, explained Mineral Resources and Petroleum Minister Diamantino Azevedo.
Speaking on the sidelines of the Ministry’s first Consultative Council meeting since Azevedo’s appointment as Minister, he pointed out that the new policy represented a great change to the previous commercialisation policy. Previously, diamonds could only be sold to “preferred clients”. These were a restricted group of companies that bought the country’s entire production.
From now on, sales will be made by the diamond miners themselves, with the State-owned Sociedade de Comercialização de Diamantes (Diamond Commercialisation/Marketing Company, better known as Sodiam) acting as an oversight agency. This change is expected to increase the number of enterprises seeking to buy Angolan diamonds.Preferred Purchasers
Just over a month earlier, the country’s biggest (and the world’s fifth-biggest) diamond mine, Catoca, had reportedly briefed Azevedo that the preferred clients sales system had cost it $464-million over the past six years. This was because it had been forced to sell its diamonds to these preferred purchasers at below market prices. These preferred clients were often, it was also reported, “politically connected” during the administration of previous Angolan President José Eduardo dos Santos. The reform of the country’s diamond sector is a publicly tated objective of current President João Lourenço.
Catoca is a joint venture between Endiama, Russian diamond major Alrosa and Netherlands-domiciled LL International Holding. Endiama and Alrosa each hold 41% of Catoca, with LL International Holding having the remaining 18%. Until recently, Brazilian group Odebrecht owned 16.4% of Catoca, but was forced to sell its stake to Alrosa and Endiama to raise cash to pay $2.6-billion in fines to Brazilian, Swiss and US authorities for its involvement in massive corruption schemes in Brazil and 11 other countries; $2.39-billion of the fines are being paid to Brazil (former Odebrecht CEO Marcelo Odebrecht is also serving a 19-year prison sentence for his involvement).
Meanwhile, State-owned national diamond company Endiama announced that its gross revenues from the sales of diamonds last year came to $1.1-billion.