Although Unita has little choice but to part with some of its diamond concessions, it will not do so without haggling, reports Chris Gordon
UNITA, the Angolan opposition group, is optimistic that deals concerning the diamond mines it occupies will be concluded soon, according to government sources in Luanda. Angola produced diamonds valued at close to $1-billion last year, with about two-thirds of that produced by the opposition party.
Unita refused to surrender the mines it has occupied since October 1992 without an agreement giving it an income from diamond mining.
Former president Mobutu Sese Seko’s departure from Zaire and an unfriendly new government have reduced Unita’s bargaining power over withdrawal from the mines.
Unita has lost its fallback position – the Zairean bases and its diamond trading and supply lines through Zaire. Angolan army troops securing the border Dundo region to prevent Hutu incursions from Zaire have reduced Unita control of the mining regions – without a shot being fired. Luanda sources say Unita is being outmanoeuvred.
The recent capture of Unita soldiers, supporting Mobutu, in Zaire will not help the party’s case either.
Nonetheless, Unita does, despite its weakened position, still control the Cuango mines, and smaller areas of Lunda Norte. It also occupies De Beers’s prospecting areas near Mavinga in the south and Branch Energy Angola’s new Alta Kwanza concession in Bie Province.
Discussions on possible deals with Endiama, the Angolan diamond parastatal, began in June last year, but have not been finalised. Marcos Samondo, the Unita member who has been appointed minister of geology and mines, says Unita was given the go- ahead to set up a company to mine and market diamonds, and three mining concessions.
Unita has been marketing diamonds for at least 10 years, using the income to support its war until 1994. Samondo told the Mail & Guardian that Unita had its own trained sorters and valuers marketing diamonds, but relies on its South African and other “foreign joint venture partners” for mining expertise. The party has produced diamonds at a minimum value of $2,5-billion since 1992.
However, four days after the new Government of Unity and National Reconciliation took office in April, Angolan Prime Minister Fernando Franca Van-Dunem, of the ruling party MPLA, announced that Unita would surrender the mining areas.
The negotiations are being handled by Endiama, under the United Nations Angola Verification Mission’s (Unavem) supervision, and are expected to result in Unita partnerships with Endiama’s foreign partners.
But Unita’s presence in the mining region is blocking access for mining companies with government contracts. The key area is the Cuango Valley, Unita’s main base in the Lundas, Angola’s richest diamond fields.
Unita wants recognition of its diamond rights in these areas, saying it should have similar rights to Endiama. Unita is reluctant to work with companies with close links to the MPLA, or to invest in the projects.
Endiama is offering a shareholding of up to 25% in Socidade Miniro de Desinvolvimento (SDM), the company with the Luzamba concession. Unita must put up the necessary investment, according to SDM, a joint venture between Ashton Mining of Australia, Odebrecht Mining Services and Endiama. The company has to agree to the terms, as does the Angolan Council of Ministers.
The International Defence and Security/America Mineral Fields combine, in northern Cuango, is expected to reach a profit-sharing deal with Unita – with Endiama’s backing.
De Beers wants Unita to withdraw from its Mavinga concession in the south, and from full access to the Lunda Norte prospecting regions. De Beers cannot be seen to be negotiating directly with the opposition group.
Instead De Beers says Endiama is negotiating on its behalf. It is difficult to know what De Beers could offer Unita – it is not mining in Angola yet.
The new order in Zaire leaves Unita with little choice but to go through with its agreements. It also leaves Endiama in a stronger position to push these through quickly.
Once Unita withdraws, and that should be within weeks, Angola’s diamond industry will be in a strong position to recover.