As the future of the diamond mining industry seems to be nearing its inevitable end, diamond companies are scrambling to find additional resources to mine diamonds and remain a profitable market participant.
With De Beers maintaining a stronghold on the diamond market and contributing to the economic growth of Botswana, other diamond market players are seeking alliances to remain in the market. Partnerships provide funding to the expenses associated with mining such as equipment and staff, namely experienced geologists specializing in exploration of diamonds.
No other diamond mining company has the financial backing of De Beers and with resources running dry, power partnerships are being developed to ensure continued efforts to explore additional diamond mines around the world.
The newest alliance to be suggested is between Endiama, Anglola’s state diamond mining company and Indian diamond trade industry. Endiama is looking to open an office in Mumbai to sell rough diamonds directly to India. Recently, the Minister of State for Commerce, Jairam Ramesh, joined Endiama officials to discuss the possibility of arranging agreements for rough diamonds trade.
The meeting apparently went well, because Ramesh told the Press Trust of India, that following a meeting with Endiama president, Manuel Aranaldo de Sousa Calado, a new office is expected to open in Mumbai in 2008 and begin trading by the year 2009.
Ramesh’s visit with Endiama officials was part of a six-day visit to Africa. The Minister of State of Commerce is aggressively seeking alliances with African nations to establish long-term trade agreements with the world’s largest mining companies. In the past, India has had an ongoing relationship with the Antwerp diamond market, but now seeks to eliminate the middle-man by going to the mining companies directly.
Endiama plans to send a delegation to Mumbai in the next few days to examine the feasibility of the move, with further discussion expected. The joint venture would include a financial backing and partnership with the Indian holding company, the Tata Group.
One of India’s oldest and most well-respected organizations, The Tata Group is a major power player in the business partnership industry and is responsible for generating 2006-07 revenues of $28.8 billion – about 3.2 percent of India’s GDP. The group has operations that span across six continents and in over 80 countries across six continents, exporting products and services to currently 85 countries.
Tata is active in a range of industries including the automotive (Tata Motors,) aviation, food, financial services, infrastructure and publishing sectors. It is also the parent company of the Tanishq jewelry brand. The addition of Endiama would be its first direct resource in the diamonds industry.
The agreement between Endiama and India’s diamonds market clearly needs the backing of The Tata Group, as well as the approval of the Indian government to hold enough incentive for Endiama.
With obvious initial expenses from relocation and plant setup, the agreement would require setting up a manufacturing facility in Angola. According to Ramesh, Angola’s government expressed interest in attracting a reliable private sector investment resource.
The agreement will encourage the expansion of the mining company, as well as secure a direct diamonds resource for India.
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