See How Sanction On Russia Is Affecting Diamond Mining In Angola

 The Republic of Angola in southern Africa has relied on diamond production for economic sustenance for many years now. Currently, the third-largest producer of diamonds in Africa and the sixth-biggest producer in the world, the industry has unfortunately explored only 40% of its production capacity due to corruption, human rights violations, and diamond smuggling.

According to data from the national diamond company of Angola, Endiama, annual diamond production rose to 10,000,000 carats (2,000 kg) in 2007, an 8% increase from the previous year. This year, annual production was expected at 13.8 million carats, but the suspected delay in essential production machinery and disruption in funding influenced Endiama’s decision to revise its forecast output to 10.5m carats, pushing forecast revenue down from $1.9 billion to $1.4 billion.

The company shared that the mounting economic sanctions by the United States and Western countries on Russia might affect production output, and here is why this could be true.

Russia has maintained strong economic ties with Angola for many years now, with a particular interest in Angola’s diamond mining industry.

In 2017, Endiama signed an investment contract with Russia’s State-owned Alrosa to launch the Luaxe diamond project. Luaxe is regarded as one of the biggest kimberlite deposits in Angola and is expected to move national total production output from 9-million carats in 2017 to about 13.7 million carats by 2023.

The project is a joint venture between Endiama (with an 8% share), Alrosa (also 8%), the Catoca Mining Company (Sociedade Mineira de Catoca 50.5%) and three other companies; Artcon (23.3%), Makakuima (5.2%) and Kollur (5%). However, Russia’s Alrosa also holds 32.8% of Catoca, meaning Alrosa most likely holds at least 40.8% of Angola’s mineable deposits.

Russia’s continued investments in Angola’s diamond production could be put on hold if the sanctions targeted at Moscow’s economy worsen. Economists believe that these could cripple mining activities, and cut production output by nearly half.

Another glaring difficulty is the disruptions in the supply of essential Russian-made machinery needed for production.

“One of the great challenges for 2022 will certainly be to maintain the sustainability of the mines while the war between Russia and Ukraine lasts,” said the government brochure, “since the sanctions that the United States and Western countries have imposed on Russia may affect some national mining companies, delaying the supply of some machinery, parts and spares.”

Meanwhile, the Russian ambassador, Vladimir Tararov, told reporters that the sanctions have “even strengthened relations between” both countries.

Patsy Nwogu

Reporting on data-driven featured stories and investigations.

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