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| February 2001
Diamonds/News Angola's Tangled Web Even with tighter government screening, Angola's diamond supply remains tainted and provides little benefit to the people who live there Desespero, which means “desperation” in Angola’s official language of Portuguese, sums up the average Angolan’s feelings after 25 years of violence in this southern African nation. The government and UNITA rebels have been waging an on/off war since Gerald Ford was president, fueled initially by dueling governments such as the U.S. and the former U.S.S.R. and now funded by the country’s rich mineral resources, including diamonds. Both sides have stockpiled arms and used brutal tactics in an effort to control the country. Over a million people have died in the war. Many more have been left homeless. The dim and dangerous streets of Luanda, Angola’s capital, are filled with the displaced who come here in hopes of prospering. That’s a fantasy because 66% of Angola’s citizens live on less than $500 a year. Yet Angola is far from poor. Last year, it netted $3.5 billion in revenue from oil deposits alone. By some estimates, Angolan oil production may one day eclipse that of the North Sea. In addition, official diamond production is estimated at over 3 million carats a year. “Some people think things are getting better. But the real people never see evidence of the money so they get angry,” frets a Luandan. Sadly, but perhaps understandably, crime in Luanda is dangerously high. In fact, security and protection services are reportedly Angola’s largest industries after oil and diamonds. In other words, Luanda is the very definition of desespero. Six hundred miles east of Luanda, near Angola’s northeast border in the province of Lunda North, are some of the world’s richest diamond deposits. Angola’s rivers flow northeast through Lunda and into the Democratic Republic of Congo (formerly Zaire). They carry alluvial diamonds washed clear of kimberlite deposits scattered throughout central and northeastern Angola. Though remote, Lunda is no less dangerous than Luanda. “Up toward the border with the Democratic Republic of Congo, along portions of the rivers, it’s the real wild west,” says Charles Skinner, exploration manager for De Beers Angola’s prospecting operations. Skinner manages a prospecting camp at Lucapa, a village near the border with the Democratic Republic of Congo. De Beers no longer buys Angolan diamonds to avoid helping rebels who fund their wars by selling diamonds illegally. But De Beers still prospects for diamond-bearing kimberlite pipes for potential future joint ventures with the Angolan government. De Beers’ view is that once the wars end, kimberlite pipes will be like money in a vault. They require sophisticated equipment and mining experience not accessible to the thousands of independent miners who flock to alluvial riverbeds for easier pickings. The flow of Angolan diamonds – legal and illegal – continues not just in the rivers. Independent miners, known as garimpeiros in Portuguese, mine at concessions along river banks in the Lunda province. The garimpeiros, who produce practically half of Angola’s diamonds, must register with the government and sell their diamonds through Ascorp, the government’s diamond-buying arm. The only kimberlite mine in Angola is Catoca in the Cuango Valley, not far from Lunda. It produces some 40% of Angola’s total official diamond production, more than 1.5 million carats a year. Israeli diamond dealer Lev Leviev and Isabel Dos Santos, the daughter of Angola’s president, are among the partners. Leviev is a stake-holder in Ascorp also. In addition, all legal Angolan diamonds (Catoca’s and those from independent miners) are marketed by another government company, Sodiam, in which Leviev also has a major stake. Ascorp’s diamond-buying prices aren’t always competitive with the free market, so some miners seek unofficial buyers. As a result, some convoluted distribution channels have evolved in which Eastern European arms traders and Lebanese diamond dealers smuggle diamonds, often through Kisingani in the Democratic Republic of Congo. “Independent” commanders control patches of the river banks in diamond-rich areas where thousands of hired Congolese diggers unearth diamond-bearing dirt. “UNITA commanders may be in charge of one side, while Angolan generals control the other,” says an observer. He describes these alluvial diamond deposits as fiercely guarded fiefdoms where there is no regard for environmental issues or the value of human life. “As far as they are concerned, a diamond is a diamond and business is business,” he says. This melange of diamond buying “opportunities” cannot help but affect Angola’s legal diamond-buying system. BBC reporter Lara Pawson, who has visited border areas, suggests as much in her BBC Focus on Africa magazine article titled “Rich Pickings in Angola” (October-December 2000). She writes that Ascorp employees freely admit they buy diamonds from garimpeiros who mine for UNITA. This means production deemed as official and supposedly untainted nonetheless contains conflict diamonds, sales of which continue to arm UNITA rebels. Separately, hundreds of thousands of tainted carats each year meander across borders clandestinely and find their way into the market through other southern African nations, including Rwanda, Uganda and Burkino Faso, according to an October 2000 United Nations report. That a product as pure as a diamond should fit into as bleak a picture as Angola seems perverse – and it is for most of Angola’s citizens. Despite efforts by foreign politicians, the United Nations, human rights organizations, De Beers and the world’s most influential diamond associations, illegal diamonds continue to flow out of Angola daily, providing no benefit to average Angolans. UNITA brags that its control of diamond areas has not been diminished greatly in spite of government assertions to the contrary. It’s clear Angola’s government has no foolproof plan for the positive, legal use of its rich diamond resources. Perhaps it cannot, given its perennial state of war with UNITA. Alluvial diamond deposits continue to be hit-and-run affairs, forgotten when sources run dry. And De Beers officials say they prefer to mine for diamonds in stable countries where long-term commitments are honored and where a country’s citizens can enjoy the bounty of their natural resources – directly or indirectly. For now that’s not the case in Angola. Here, it’s still a case of desespero. – Robert Weldon, G.G.
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