Monday, Oct 23, 2017
Mining | Africa | Angola

ADPA brokers unprecedented growth


3 years ago

Edgar Carvalho, Executive Secretary Association of Diamond Producers of Africa (ADPA)
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Edgar Carvalho

Executive Secretary of Association of Diamond Producers of Africa (ADPA)

The Worldfolio Team interviewed Mr. Edgar Carvalho, Executive Secretary of the Association of Diamond Producers of Africa, and asked him about the burgeoning diamond industry in Angola, the work of ADPA to support its member states and Angola’s presidency of the Kimberley Process. He emphasized the strong ties between ADPA and the Kimberley Process in guaranteeing that synergies are maintained in the diamond industry and discussed the role of ADPA in training diamond evaluators and increasing diamond production in Africa.

Angola is one of the countries with the best quality of diamonds in the world. Africa has been recovering from the global recession that has affected the diamond industry, mainly because of the huge demand from China and India. How does ADPA in particular work to help its member States to have a bigger influence in the global diamond market?

As you said, Angola is blessed to have such good quality of diamonds. In terms of ADPA’s influence and how we work to help the African diamond producers all over the world, we are actively working closely with the Kimberley Process. As you know we have to conform to all the requirements of the Kimberley Process. We are concerned about our countries because sometimes if they don’t fulfill the requirements of the Kimberley Process they can get sanctioned by the UN and that is what we do not want. We are promoting our mining sector in Africa, so most of the countries are now conducting big researches, like Angola, where we have began to discover our mineral resources so that we can promote them in the future, including the diamonds. And the West African countries are doing the same; we have a regional approach for these countries so that they begin to conform to the Kimberley Process. There are also big plans for research in terms of diamonds; this is what we are promoting. This helps us, ADPA, to promote our diamond sector in Africa. We can, for instance, talk to investors and banks because we have something on our end that we can show, so we do feasibility studies for the future so that we can get funds to increase our diamond production.

What we really want in Africa is to increase our diamond production, because you know we are responsible for more than 60 percent of the production of the world, and we want to increase that. In Angola we have the best quality of diamonds in all of Africa, except the Democratic Republic of Congo, although the diamonds there are mainly industrial, not the gems like we have in Angola, Namibia and other countries.

I would like to talk about the effect of the global recession on the diamond industry. Now that the African economies are recovering from this, what other challenges is the diamond industry experiencing in Africa?

In West African countries, for instance, the most diamond producers are coming from artisanal production. We want to change that because they have the potential to start with industrial production.  As you know, more than 2 million people mining are artisanal miners (garimpeiros, as we used to call them in Angola). Our challenge is to change that, because artisanal mining in West Africa is a way of subsisting for these people, the income of this activity is very, very low and what we want is to bring the industry into these areas of Africa to increase the production and to contribute to the budgets of these countries. Also, we need training. Now, for instance, we have a plan with the Antwerp World Diamond Center to help African countries to train diamond evaluators. We started in Ivory Coast. In Africa sometimes we lose a lot of money because these people are not well trained in sorting the diamonds and so during negotiations to establish the price of the diamonds we can lose some money. That is why we are concentrating in this area of training our people in Africa so that tomorrow we can negotiate properly.

When you talk about negotiations, I would like to know how the Member States of ADPA work to harmonize the policies in the diamond industry and the laws that direct the industry?

We had three workshops; one was in Namibia, the second and third was in Ivory Coast. The point of the workshops was to harmonize our diamond policies, norms and fiscal regime. There were recommendations from these seminars and we are going to start implementing them in our diamond policies, because the idea is to harmonize our diamond policies, including the fiscal regime. Now the ADPA countries have started implementing these recommendations to achieve that harmony.

How does ADPA cooperate with the biggest companies in the diamond sector in order to ensure synergies are maintained in the diamond industry?

I can assure you that up to now our cooperation has been a good one. If you see, for instance, in ENDIAMA they started a program to develop some mining sites in Zimbabwe, in Mozambique and in Central African Republic, so our way to cooperate is mainly to facilitate the investment of these big companies in our countries, because we know the lands of Africa are rich in diamonds, so if you don’t mine the diamonds that are there we cannot profit. These companies can come and help improve the standard of living of the people; therefore, what we want is to facilitate the investment of these companies in these countries. They come, we facilitate, and we give them all the conditions for investment. Angola is now leading in private investment law, which is now very, very flexible to help the companies come and give them many advantages. And other countries are now following what Angola is doing, and this is what we want; not only to come and to mine and take the money, but also to help the country to develop. In Angola we have joint ventures with these big companies, so they can come as investors or as partners, because they have the technology. These are joint ventures that also help promote the Angolan companies, so everybody wins.

As you said, Angola is a leader in this industry in the whole of Africa and this year they have the presidency of the Kimberley Process. Since you are working so closely with the Kimberley Process, what are the objectives that they have for this year with Angola at the heart of the process?

It is a privilege for Angola to host the presidency of the Kimberley Process and ADPA has played a very important role to help Angola achieve these objectives. And we will continue to do so, because we still have a problem: Angola is the chair of the Kimberley Process now but there is not a vice chair, because there was no consensus in China to elect the vice chair. The same thing happened in Democratic Republic of Congo when they were chairing the Kimberley Process, and ADPA is there to help these countries. Just like we did with DRC, now we are going to help Angola. There are a lot of problems in the Kimberley Process itself, because all the decisions in the KP are made by consensus, not by election, and ADPA is there to help to harmonize these discussions. With the leadership of ENDIAMA, Angola has got the most investments in the diamond sector in Africa and our artisanal diamond mining is now becoming very well organized. All of these factors influenced the fact that Angola was chosen as a KP chair after China.

The US is one of the biggest diamond consumers in the world, with 45 percent of global consumption. However in recent years demand has greatly increased from countries like China and India, so most of Angola’s exports have been going to China and less to the USA and Europe. How do you foresee the export situation for the next 10 years?

We are very optimistic with Angola. First of all we are increasing our production in Angola, and the quality of the Angolan diamond is very high, in terms of diversification we will start with jewelry here in Angola and in terms of markets we have, let’s say, not only in Angola but the whole African continent, we have targeted markets like Belgium, China and India. Sometimes it also depends on the buyers, because the diamonds are not like oil, with which the price is established and everyone has to pay it. With diamonds it depends on you and me, on the buyers, on negotiations and on the market. Some markets recognize the fact that we give a good price considering the quality of our diamonds.

I also wanted to ask you about the bourse project, how does ADPA support the project? Are there similar projects envisioned in Africa for the future?

Yes, ADPA is promoting this. We are promoting the creation of the diamond bourse in Africa. Unfortunately countries like the DRC have proposed to host this, but the instability in the DRC has made it not so easy for buyers to go and buy. One of the most important conditions for this diamond bourse is the country must be an established country, where there is a growth in the economy and there is peace.

Angola also has a plan to establish a diamond bourse here, and of course we are waiting for the official launch, so that ADPA can start promoting it. When it happens, ADPA have to promote it in the country and the entire continent, so that all the diamonds in Africa can pass through this bourse.

I wanted to ask you about the impact of the Ebola crisis on the diamond sector and how does ADPA minimize this impact on the diamond industry?

In the last KP plenary in Guangzhou it was so sad to see many of our West African countries could not participate in this meeting. As I said before, KP is a family, all the decisions are taken by consensus and if some of our members are not there it is difficult to reach concrete achievements. ADPA congratulated and thanked the efforts of many countries like USA, France, the UK and China who joined efforts to be there and help during this crisis that is affecting the continent. Considering the amount of people working in the artisanal mining areas, where it is crowded, we had to avoid many people being together because the disease spreads very fast. We stopped mining for a while until the disease passes. And there were also efforts from the Member States themselves to put in place some international measures as fast as possible to avoid the spread of the disease.



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