1990: Congo Diamond Market Will Grand Diamond Mining Rights To De Beers
If you can’t beat ‘em, join ‘em.
That, at least, appears to be the strategy of the new government of Congo, which is drafting a new contract for an exclusive joint diamond venture with De Beers. The contract, if it materializes, would seem to reverse the Congo government’s emphatic anti-monopoly stance of just a year ago, following its rise to power last May.
Already, Congo’s state mining company, Miba, has awarded De Beers provisional rights to conduct aerial reconnaissance for kimberlite over some 10,000 square kilometers of Congo, according to Trudon Katende Muta, Miba’s CEO. A final agreement would grant De Beers exclusive prospecting rights over 240,000 square kilometers in proven diamond areas of the nation, Katende told a Wall St. Journal reporter. He added that De Beers would be given a 50% stake in a joint venture with the Congolese state for any areas it would seek to develop as diamond mines.
For its part, De Beers is downplaying the size of any future diamond project in Congo. Bill McKechnie, De Beers’ Africa exploration manager has referred to the current wave of aerial reconnaissance as a “technical-assistance project… that will hopefully lead to something else.” He also questioned whether the company could be granted prospecting rights over 240,000 square kilometers, citing Congo’s draft mining code which limits any company or individual from exploring more than 20,000 square kilometers.
Still, however unclear the exact details of any possible final deal at this point, De Beers and the new leadership in Congo have certainly come a long way since the days just under a year ago, when Congo’s then newly declared president, Laurent-Desire Kabila canceled De Beers exclusive contract to buy Miba’s total production, lashing out at De Beers for “irregular business practices” with the Mobutu regime.