New diamond mining and investment legislation has created a sound basis for investment in this sector in Angola. External companies must work directly or indirectly with ENDIAMA, the state diamond company. However, companies have external control of foreign exchange earnings and the right to market their diamonds with ENDIAMA. There is a royalty of 12.5% on exports, corporate profits tax of 30% a dividend tax of 5% and accelerated depreciation on capital investments. Mining equipment and supplies are imported duty free.

The diamond sector has been very important to the Angolan economy and is now the focus of intense interest. A continuing upsurge of interest in this sector can be anticipated over the next several years.

NE Angola is well established as one of the major diamond fields of the world, both on the basis of its historical production, the quality of its diamonds and its estimated diamond resources. Diamond production in the past cumulatively totalled over 60 million carats. Most of the diamond deposits that have been mined to date have been alluvial although there is a very large resource contained in the known kimberlite pipes. Catoca is the first large kimberlite pipe to be developed and is currently producing 1.5 million carats per annum. Recently, agreement has been reached to re establish production at Camafute. Erosion by the river systems has resulted in a wide dispersion of diamonds with economically viable grades found tens and even hundreds of kilometres from the known sources.

Early diamond prospecting and mining activities had been very successful in replacing alluvial reserves that were being consumed by mining and the discovery of kimberlites, a significant proportion of which are diamond-bearing. Since 1975 mining had been focused on the working of previously established deposits.

 

With the application of new exploration technology additional alluvial resources will be established and that further kimberlites, some diamond-bearing will be discovered. Important advances have been made in kimberlite exploration, the most significant being the development of aerial geophysical surveying techniques and the understanding of the chemistry of kimberlite indicator minerals. The application of aerial geophysics in particular can be anticipated to be very productive.

The NE of Angola is an undulating plateau region in which altitudes are lowest in the north at around 600 – 700m and rise gently to over 1000m to the south of Saurimo. A series of major north-flowing rivers traverse the region that have eroded wide, open valleys generally 100 – 150m deep into the plateau.

The region is on the southern margin of the rainforest belt and vegetation varies between relatively thick forest cover to relatively thin woods covering grassland to open grasslands.

The climate is seasonal wet-and-dry tropics with the rainy season between October and April. There is a general decline in precipitation from north to south. There is relatively little change in temperature throughout the year with monthly temperatures being in the range of 23-25C.

 

All the main centres have well-maintained airstrips, and an all weather road connects Luanda to Saurimo. TAAG (the Angolan national airline) has scheduled services between Luanda and Saurimo 6 days each week and services from Luanda to Dundo 5 days each week, both services operating with Boeing 737 aircraft. Dundo and Saurimo are connected to Lubango and Namibe one day a week, each, again with 737’s.

Within the diamond fields roads and tracks are in a moderate to poor condition but generally passable.

A number of major infrastructure projects are now in hand. The two most important for operations in the NE are the reopening of the road from Luanda to Saurimo and the reopening of the railway line from Luanda to Malanje. These two projects will result in major reductions in the cost of operating in the provinces of Lunda Norte and Sul.

Five kimberlites are known in or adjacent to the area and these must be seen as the primary diamond source. Catoca, the fourth largest diamond pipe in the World, is only twenty kilometres to the south.

Secondary sources of diamonds include:

• The basal conglomerate of the Calonda Formation - e.g. Lapi Garimpo ;
• Plio - Pleistocene gravels on the interfluvial ridges;
• Eluvial deposits, especially those formed by hill slope drape;
• River terraces;
• Alluvial Deposits;
• River Channel deposits;
• Point Bar meander deposits.

All these prospective elements are present in C9.