De Beers suspend operation

Mining giant, De Beers said in a statement on Thursday that the company has decided “with immediate effect” to suspend its investments and prospecting operations in Angola.

De Beers said it had decided to suspend investments and operations because of new legislation introduced by Angola last year on diamond prospecting and marketing. The company said that it had “reluctantly” taken the decision after an “impasse” in its negotiations with the Angolan government. “Negotiations that it was hoped would have clarified De Beers legal rights in relation to mining and marketing contracts and guarantees for future investments in Angola,” the statement said.

The diamond company said that an Angolan government decree last February suspended its contract with the Endiama state diamond company and introduced new conditions for operating in the diamond sector. “Unfortunately, 14 months after the decreed suspension of the contracts, no agreement has been reached and, therefore, there are no legal guarantees that underwrite the continued operations and future investment of De Beers in Angola,” the De Beers statement said. “Under these circumstances, the board of De Beers is unable to justify continued investment in its projects in Angola.”

De Beers has no operating mines in Angola, but had embarked on a prospecting programme in partnership with Endiama in August 1996. James Allan, diamond analyst at South African brokerage Barnard Jacobs Mellet was quoted by AFP as saying that he believed the announcement by De Beers could be seen as a move by the company to avoid trading in so-called “conflict diamonds”.