Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
De Beers, majority-owned by Anglo American (NYSE:AAL), has been granted a new new diamond exploration license in Angola, the world’s fourth largest producer of diamonds by value, and sixth by volume.
Geology and Mines Minister Francisco Queiroz told the Reuters Africa Summit on Thursday “the company made that big investment in prospecting, and unfortunately it didn’t have great results, but it is making a new bid, and another investment will be approved.”
Queiroz was referring to De Beers’ exploring for diamonds in the Southern African nation between 2005 and 2012 which ended without finding an economically viable project.
Rough diamond prices have climbed 3% over the last few months and Bain & Company and the Antwerp World Diamond Centre (AWDC) predict prices for the gems will continue to climb at least until 2018.
Angola’s diamond industry, which began a century ago under Portuguese colonial rule, is successfully emerging from a long period of difficulty as a result of a civil war that ended in 2002.
The country’s production volume has remained relatively stable at 8 million carats per year since 2006.
After a new mining code introduced in 2011, which intended to attract foreign investment and boost exploration for diamonds and other minerals, there has been an increased interest in the country mineral potential.
