Angola’s diamond mining sector is undergoing a series of reforms that enhance transparency thereby positioning it for growth, experts have said.
This came out during an Africa Mining Forum webinar, in which experts also urged better dispute resolution mechanisms and other reforms to attract more investment.
Mr Ahmed Abdel-Hakam, senior associate at international arbitration group Eversheds Sutherland in the United Kingdom, said the Angolan mining sector was going through substantial reforms.
“So I think that this reform is key to compensate for the sharp decline in public revenues because of the low oil and gas prices and the decrease in the global demand for these commodities,” he added.
He also said “it is crucial that Angola keeps to the pace of current legislative reforms and also, the best way of avoiding disputes down the line, is to work on how to avoid disputes with foreign investors. The more disputes you have with foreign investors, the less attractive you become as a country”.
Mr Edahn Golan, an Israeli diamond industry analyst, said Angola should modernise its approach to the sector.
“This is true for producing countries as well as for trading countries such as India and Belgium. What we should remember in this context is that when we talk being involved, we are talking about support, the kind of support that generates a lot of problem solving, allowing commerce to work freely.
“Diamonds are an unusual commodity. They are small, high value, difficult to price and we find that many traders are very price sensitive, so the way taxation is treated and all of those elements are very important when a government is evaluating what kind of policies it needs to implement when approaching its diamond sector.”
He said Angola needed an accredited dispute resolution mechanism for diamond traders.
“If it wants to have a successful diamond industry, Angola needs to have a bourse and the bourse needs to be a member of the WFDB (World Federation of Diamond Bourses).”
Diamond production is one of Angola’s main revenue sources. The Southern African country is the world’s sixth-biggest producer and third largest in Africa.
The Africa Mining Forum webinar also discussed how the COVID-19 pandemic had affected the Angolan diamond market.
According to Mr Golan, diamond prices globally declined between nine percent and 15 percent, with the retail market hardest hit.
“Consumers don’t buy a lot of diamonds online … Even cars are bought online more frequently than high priced diamond jewellery,” he said.
Mr Golan said because the industry was cash intensive, small miners had found it difficult to stay open during the pandemic. However, the mines that continued to operate built up a big inventory.