Africa Oil & Gas: Diamond-producing companies can freely sell up to 60% of production in Angola

Lucara-DiamondCompanies that extract diamonds in Angola can freely sell up to 60% of production under the new “diamond marketing policy,” which has brought an end to the previous “Preferential Customers” regime, daily newspaper Jornal de Angola reported.

The new “Diamond Marketing Policy” specifically provides for the restructuring of the former system of “Preferred Customers” (those who had the most advantageous conditions for the purchase of rough diamonds), into another more appropriate for the marketing policy, through contracts for the regular purchase of diamonds for an extended period of time (from one to three years), with special rules.

The document, authorised by a Presidential Decree of 27 July, stipulates that diamonds from artisanal mining, through small cooperatives, are acquired exclusively by the national diamond trading company Sodiam, based on market price and the official price list, to be approved by the government.

In the new system for the sale of rough diamonds the sale by producers to “indicated companies or companies owned by them,” is possible, according to the “authorised quota of up to 60% of production,” using long-term contracts, duly authorised by the government, as well as to cutting companies located in Angola.

Auctions are also planned for the sale of diamonds with special characteristics.

Angolan weekly newspaper Expansão recently reported that the diamond-producing companies operating in the country had lost estimated gross revenue of US$5 billion with the business model adopted for the sale of diamonds since 2007, in which they were obliged to sell to the preferred customers imposed by Sodiam, which bought them at a 30% discount on market prices. (source: Macauhub)

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