Central Africa, Angola and the Democratic Republic of Congo (DRC) will overtake Southern African countries in the next 10 to 20 years as Africa’s dominant diamond producers, a conference heard on Tuesday.
At the same time, Africa is the world’s preferred destination for exploration, with about $400-million spent in 2006 compared with $59-million in 2000, overtaking Australia and Canada as the previously most favoured countries, an expert said.
Africa attracted about 45% of the global spend in exploration in 2006 alone, and older producers including South Africa are likely to be eclipsed by Angola in 10 to 15 years, Geoscientist Frieder Reichhardt, a regional diamond consultant and director of MSA Geoservices said.
”DRC and Angola have in the past couple of years emerged from decades of civil war and are undergoing an exploration boom,” Reichhardt told the IQPC Diamonds Africa 2007 conference.
He said other previously war-ravaged states such as Sierra Leone and Liberia have also had similar exploration growth.
Reichhardt said the dominance of the Southern African countries, which also include Namibia and Lesotho, was based on favourable infrastructure, climate and political stability.
Based on current annual output, the Southern African Kalahari region produces $5,1-billion-worth of diamonds and is clearly ahead of the combined Central African region at $2,2-billion and the West African region’s $0,34-billion, he added.
The focus on exploration in Africa was fuelled by the fact that about 60% of the world’s known diamond reserves are located on the continent, whereas Africa’s contribution to the global output was 90-million carats in 2006 or 55%.
So far Africa has produced diamonds worth $192-billion or over 76% of the world’s diamonds by value, he said.
South Africa
Reichhardt said he was not optimistic about new finds in South Africa.
”I’m not bullish about finding new reserves in South Africa, I think it has had its share, this is why De Beers is investing in exploration in Angola,” he said.
Nicky Oppenheimer, chairperson of De Beers, the world’s top diamond producer, has previously said Angola and the DRC are the new great things in Africa in terms of prospecting.
De Beers, which is 45% owned by Anglo American, also has exploration in Gabon, Guinea and the Central African Republic and spent $100-million on global prospecting in 2006.
Reichhardt said there was a shortfall of supply, which was also driving diamond exploration, and predicted that by 2010 to 2015 the gap would widen further.
He said synthetic diamonds were unlikely to rival real diamonds or help close that gap because they had a parallel market, as true buyers of diamonds would hold out for the gems. — Reuters