Angola doubles diamond production, fails to improve people's lives

A report by Canadian human rights NGO Partnership Africa Canada claims that the success of Anglo's diamond production has not translated into benefits for the nation's people

The Angolan government has almost doubled its diamond production five years after the end of 27 year-old civil war that virtually halted the diamond industry.

However, a new report by a Canadian-based human rights organization, Partnership Africa Canada (PAC) says this fete has not translated into the people's well being.

The report Angolan Diamond Industry Annual Review published Monday indicates that from 2002 to 2006 diamond production in Angola doubled from 5 million carats to 9.5 million carats. The document says the upsurge in diamond production also saw a similar upsurge in gross revenue from diamond sales, "while diamond contribution to government coffers has more than tripled, from US$45 million in 2002 to US$165 million in 2006."

Recent media reports indicate that Angola will soon overtake South Africa as the largest diamond producer

The report praises Endiama - Angola's government owned company with exclusive concessionary of mining rights in the country - of doing a recommendable job in courting multinational companies to exploits vast diamond reserves in the country. Due to its joint ventures with international companies, Endiama evolved from a loss-generating organization to one which is now posting profits, according to PAC.

As an example the report cites that the company posted a loss of US$2.1 million in 2001 but generated a profit of US$3 million two years later. Angola had 12 active projects in the diamond industry by mid-2007, with another 15 planned to come on line in the next few years. Thirty more projects are engaged in active prospecting.

Nevertheless, the report states that ordinary Angolans living in the diamond mining areas haven't benefited from the boom in the country's diamond industry. PAC claims life is actually tougher now for artisanal miners. The study notes that the country is using the international Kimberley Process diamond certification system-originally aimed at preventing the conflict diamonds that fueled the Angola civil war-- as a tool to criminalize artisanal diamond digging.

The report further faults Endiama of awarding joint venture projects to political cronies who contribute little to the overall success of the industry. PAC officials--who traveled extensively in the mining areas of Lunda Norte and Lunda Sul--found there were very few schools, little treated water, roads not maintained since colonial days, and little public investment geared to solving these problems, although these regions are the hub of Angola's diamond industry.

While peace has been touted as the major reason behind the boom in the diamond industry, other factors, such as sound investment legislation, have had a major impact as well. Angola allows companies to have control of foreign exchange earnings and the right to market their diamonds to Endiama. That type of policy that is lacking with most African governments, especially those with a history of civil unrests.

In addition to these incentives, the Angolan government allows the importation of mining equipment duty free.