October 20 2003
The Angolan government has adopted new regulations on the granting of diamond mining rights (Decree-Law 36/03). Different principles apply depending on whether the mining rights refer to alluvial diamonds or kimberlites.
The new regulations aim to prevent the illegal exploration of diamonds, thus allowing the Angolan government to increase its revenues from diamond resources. A further goal is to create more favourable conditions for the granting of mining rights to Angolan companies.
The new regulations recognize that the exploration of alluvial deposits is less expensive and concludes that preferential rights to these deposits should be given to Angolan companies.
The principles established for granting mining rights for alluvial deposits are as follows:
In contrast, the exploration of kimberlites is a long-term project which requires substantial financial investment. Therefore, mining rights should only be granted to companies of sound technical and financial reputation.
The principles established for granting mining rights for kimberlites are as follows:
The principles pertaining to kimberlites are only recommendations and exceptions may be permitted on a case-by-case basis.
Tighter regulation of the diamond mining industry will be beneficial to the
country, as it should go a long way towards reducing illegal practices. However,
an important issue is whether the new regulations might distort competition
between foreign and national entities that wish to enter the diamond mining
business. Regardless of the goals, it appears that some of the principles established
may be over-protective of Angolan companies, thus creating disincentives to
For further information on this topic please contact Alberto Galhardo Simões at Miranda Correia, Amendoeira & Associados' Lisbon office by telephone (+351 21 781 4800) or by fax (+351 21 781 4802) or by email (Alberto.GalhardoSimoes@mirandalawfirm.com).
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