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Fri, 22 May 2020 13:26 - Updated Fri, 22 May 2020 13:27

World's diamond market in downfall

Dundo - The world's diamond market registered since March this year a significant downfall of about 50%, compared to the production sales of the previous period of last year, revealed last Thursday the General Director of Endiama Mining, Pedro Galiano.

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World´s diamond market in downfall

Photo: Pedro Parente

Endiama Mining is an institution that has as its corporate object the research, prospecting, recognition, exploration, treatment and sale of diamonds and accessory minerals.

Until the first semester of 2019, Angola, through the SODIAM firm, sold 1.5 million of carats (at the price of US $155,3/carat), resulting on a gross income of US $232.8million.

Without further details on the number of the present year, the official that was speaking about the future of the diamond subsector said that the downfall of the sales is due to a slowdown in transactions caused by the pandemic of covid-19.

He went on to say that the fluctuation of diamond prices could create uncertainties in the realization of the revenues expected in the diamond subsector this year, should the current epidemiological situation in the world continue.

With this drop in the market, the exploration process is becoming more complex and costly, with operating costs above normal, since most of the production is in storage at SODIAM, due to a shortage of customers.

To mitigate such trend, Endiama Mining made an investment of US $10 million for the acquisition of land removal equipment that is being used in alluvial projects in the service provision area.

Four bulldozers and six excavators were also acquired for the same aim, reducing the operational and company's exploration costs.

In 2018, the Angolan executive approved new diamond sales policies currently in force, in which the reference sale base price is previously defined by agreement of the main players in the process, namely the producer, SODIAM and the Independent Appraiser.

The policy aims to assure an efficient system and a buying and selling transparency on the process of the product, different than what used to happen  until the middle of 2018, which the sales and prices were based of exclusive (preferred customers) and a small group of companies had the right to buy all the country's production.

With this measure, the conditions for healthy competitiveness in the market were created, encouraging Angolan companies to increase production, although interrupted by covid-19, an unpredictable situation.

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