De Beers pulls out of Angola

The world’s main producer of uncut diamonds on Thursday said it had suspended investment and prospecting in Angola because of a lack of clarity over its legal rights in the war-ravaged country, the Associated Press (AP) reported.

The decision by De Beers followed an impasse in its negotiations with the Angolan government over mining rights, marketing contracts and investment guarantees, according to De Beers Centenary, a Switzerland-listed company that is part of De Beers, AP reported.

 

In 1990, the Angolan government approved an agreement between De Beers and state diamond company Endiama to develop the local diamond industry. But last February it canceled the deal and sought to negotiate more favorable terms.

 

Rebels, who have waged a 25-year battle to overthrow the Angolan government, control many of the country’s diamond mines. The U.N. Security Council banned rebel diamond exports in 1998.

De Beer’s decision means the Leviev Group, an Israeli company, now has exclusive rights to market Angola’s legitimate diamond output.

De Beers shareholders voted last week to sell the company to a consortium of London-based mining group Anglo American, South Africa’s Oppenheimer family and Debswana, a diamond company jointly owned by De Beers and the Botswana government.