Feb. 5, 2010 -
PRLog -- The slump in global commodities prices is likely to have a severe impact on Angola's mining sector, with producers already beginning to scale back operations in the country. The diamond sector is likely to be the hardest hit, as demand falls and prices drop. In January 2009, Russian diamond company ALROSA announced that it was unlikely to resume exploration at its Catoca venture in Angola in 2009, due to the impact of the global downturn. However, the company has said that it has no plans to leave Angola. Angola was historically a major producer of diamonds, iron ore, gold and copper before its independence. However, the ensuing civil war disrupted its infrastructure, significantly slowing the pace of exploitation of its considerable metals and minerals base. Following the end of the 27-year-long conflict in 2002, the Angolan mining industry, along with the economy, has grown rapidly. Angola is globally the fifth-largest producer of diamonds by value, supplying 7-9% of the world diamond output. The country hosts intensive diamond reserves, principally in the provinces of Lunda Norte and Lunda Sul. The majority of Angola's diamonds comes from alluvial deposits. However, state-owned mining company Endiama is confident that there could be large-scale deposits in shafts of volcanic rock throughout the country. However, mining in kimberlite is both expensive and technically difficult, meaning that Endiama has had to partner with global companies, such as South Africa's De Beers and BHP Billiton, who have the necessary expertise. De Beers has invested in a kimberlite concession in northern Angola, while Russia's ALROSA also has a partnership with Endiama. Companies that wish to explore for diamonds in Angola have to do so in partnership with state-owned mining firm Endiama, as is stated in Angolan law. According to the latest reports, the company has around 100 mines throughout the country that are ready for exploration. Indeed, some market watchers claim that less than 50% of Angola's diamond potential is currently being realised. For example, of the 61 concessions currently operating in the country, only around 14 are thought to be producing diamonds. Meanwhile, in line with BMI's expectations, the ruling Movimento Popular de Liberação de Angola (MPLA) party secured a strong victory in the September 2008 elections, enabling it to extend its stronghold in parliament. Looking ahead, however, we believe the new government will face a challenging time as the lifeblood of the Angolan economy - oil revenue - comes under threat. While Angola has enjoyed double-digit economic growth and booming oil earnings for the past few years, 2009 will likely prove a less hospitable macroeconomic environment as global growth slows and oil prices continue to moderate. This could slow investment in infrastructure and the mining sector.
For more information or to purchase this report, go to:
-
http://www.fastmr.com/prod/47381_angola_mining_report_q1_...About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at
http://www.fastmr.com/catalog/publishers.aspx?pubid=1010About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at
http://www.fastmr.com or call us at 1.800.844.8156.
Account Phone Number