Angola Expands Production Amid Falling Diamond Prices

Angola, Africa’s largest diamond producer, is taking a counterintuitive approach to the ongoing downturn in global diamond prices. Instead of cutting supply, the country is increasing production to protect revenue and maintain its position in the global diamond market.

According to recent reports, Angola has set its diamond production target at 16.2 million carats for the year, representing a 7% increase compared to the previous year. With an estimated average price of $150 per carat, total annual revenue is projected to reach approximately $2.43 billion.

Why Diamond Prices Are Declining

The global diamond industry is currently facing sustained price pressure due to several structural and economic factors:

• Rise of lab-grown diamonds: These alternatives, chemically identical to natural diamonds but significantly cheaper, are reshaping consumer preferences.
• Weak demand in key markets: Slower economic recovery in major markets—especially China—has reduced spending on luxury jewelry.
• Oversupply concerns: Increased production levels globally have added pressure on already declining prices.

As a result, the average price per carat has dropped from around $150 to the low $100 range in recent months.

Volume Strategy: Angola’s Economic Response

Angola’s strategy focuses on compensating for lower prices through higher output. This volume-driven approach aims to stabilize revenue despite unfavorable market conditions.

Government officials have confirmed that expanding production is a deliberate move to offset declining international prices. Notably, Angola experienced a 70% surge in diamond output last year, but revenue increased by only 6.7%, highlighting the impact of falling prices.

Key Mining Operations Driving Growth

Nearly 90% of Angola’s diamond production comes from two major mining operations:

• Catoca Mine
• Luele Mine

The government plans to further expand production by accelerating kimberlite mining, a process that extracts diamonds from volcanic rock formations. Continued investment and exploration efforts are expected to support long-term growth.

Investment and Industry Expansion Plans

Angola is actively encouraging foreign investment and partnerships to strengthen its diamond sector. The state-owned diamond company is also exploring strategic opportunities to enhance its global position and increase market influence.

These initiatives aim to ensure that Angola remains competitive and retains its leadership role in the diamond industry, even during periods of price volatility.

Market Outlook: Balancing Supply and Demand

While increasing production may help stabilize short-term revenue, it also raises concerns about further oversupply, which could prolong the price slump.

However, Angola’s long-term strategy is clear:

• Maintain high production levels
• Strengthen global market share
• Position itself for higher profitability when prices recover

Conclusion

Angola’s decision to boost diamond output during a period of declining prices reflects a calculated economic strategy focused on volume and resilience. As the global diamond market continues to evolve—driven by changing consumer preferences and technological disruption—Angola is positioning itself to weather the downturn while safeguarding its leadership status.