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Gold/Mining/Energy : DIAMONDWORKS DMW.v

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To: gg cox who wrote (370)11/3/1999 5:30:00 PM
From: marcos   of 413
 
The Angolan war has just been "born again"

Neither side is positioned to stop fighting, the
international community is hell-bent on finishing off
Savimbi on the battlefield, while the domestic society
pleads for negotiation and peace.



The situation for UNITA leader Dr. Jonas Savimbi seems to get
worse by the day, as pressures mount in Angola and around the
world for him to give up the fight.

AP reported that political leaders of the Southern African region
pledged on October 31 to coordinate efforts aimed against
Savimbi. AP said representatives from the ruling parties in Angola,
Malawi, Mozambique, Namibia, South Africa, Tanzania,
Zimbabwe and Zambia met in Luanda on October 30 and issued
a statement that termed Savimbi a "menace to regional peace and
stability."

It is not clear what this meeting was all about, who called it, or
why. It is also not clear what impact this will have, but what is
clear is that considerable efforts are being made around the world
to organize the end of Savimbi's leadership in rebel affairs in the
country. Rumors abound that the government nearly captured
Savimbi during the latest attacks against Bailundo and Andulo,
that arrangements are quietly being made to whisk Savimbi out of
the country and into exile, and that efforts are being made to arrest
him and bring him to trial for crimes against humanity.

In addition to these woes, Savimbi's forces are thought to be in a
strategic withdrawal to the east of the country, where they are
being pursued by government forces.

There have been numerous calls for peace negotiations, many of
the calls of which have come from Savimbi himself, since
December and earlier. These calls have largely been ignored by
everyone, leaving the impression with the casual observer that the
domestic and international forces opposed to Savimbi, including
those entrusted to implement the Lusaka Peace Accords of 1994,
such as the UN, the U.S., Russia and Portugal, have set out on a
path to destroy him militarily. This impression, in turn, has served
to reinforce the contention in some quarters that these forces were
pitted against Savimbi from the first day of the accords, making it
impossible for him to comply with the accords, and forcing him
into the situation in which he now finds himself.

A group of "significant others" from Angolan society has been
pressing for peace negotiations since the summer, but to no avail.
They signed a Manifesto for Peace this summer calling for
negotiations. More recently a leader of the political opposition
urged the same. Savimbi himself has repeatedly asked for
negotiations. But the dos Santos government, buttressed by the
UN Security Council, the United States, Russia and Portugal,
adamantly has rejected all negotiation with Savimbi. Indeed dos
Santos has issued a warrant for his arrest.

Confirming all these suspicions, Chris Gordon of Mail & Guardian
reported on October 29 that "Western diplomats in Luanda have
made it clear that the international community no longer believes
that negotiations with Savimbi would produce anything other than
a rerun of the last peace process, a new cycle of negotiations to
buy time for fresh re-arming."

It is against this background that the Russian ambassador to
Angola, Vladimir Reavski, has repeated urgings from other
international quarters for the UNITA rebels to comply with the
Lusaka Protocol. But what has not been clear is how these
officials expect Savimbi to comply absent any further negotiation
or even contact. This public rhetoric, therefore, is largely seen as a
smokescreen for the real intention of defeating Savimbi on the
battlefield.

Reavski's recent statements in Luanda, seem to reinforce this
position. The strategy now appears to be to coax the rebels to
bolt from Savimbi's UNITA and come over to the other side, the
dos Santos side. Reavski told a press conference that Savimbi's
followers should surrender all territories to the government so that
the government can restore state administration all over the
country.

While Savimbi seems under mounting pressure to give up, there
are mounting indications that the renewed warfare has just begun.
Chris Gordon reported for Mail & Guardian on October 29 that
for every action there is a reaction, and while government forces
have successfully forced UNITA out of the central highlands,
UNITA forces have simply moved into the Cuango Valley to
commence implementation of a guerrilla warfare campaign
directed at mining operations there. Gordon said diamond mining
company Sociedade Desenvolvimento de Mineiro (SDM) has
withdrawn its staff to Luanda.

In addition, Gordon reminds readers that UNITA's representative
in Lisbon, Rui Oliveira, has said that UNITA is now moving into a
guerrilla warfare phase and will target Luanda, the country's
capital.

In the case of the Cuango valley, Gordon reported that fighting
between UNITA and FAA is taking place around the town of Xa
Muteba, 60 km from some of the region's most lucrative mines.
The region around the mines is protected by the Angolan army
(FAA), as well as by Alpha 5. Alpha 5, depending on one's point
of view, is a security company and/or a mercenary cover
supporting the dos Santos government. NCN has reports that it is
one of several security firms operating in the country for the
government, and efforts are now being made to better understand
whether these companies receive any support, approvals or
direction from their home governments. Other such companies
include Biet Security, Cross Swords, Lifeguard Security, Saracen,
Shibata, and Strategic Resources. Human Rights Watch, in a
report on arms trafficking in Rwanda, identified Alpha 5 as a
South African company linked to the famous, or infamous,
Executive Outcomes, the latter of which is said to be connected
with several of the security companies mentioned above.

Gordon said that UNITA has made it clear that it intends to target
Brazilian interests in Angola, following Brazilian support for the
government at the UN. The Brazilians have two mines that appear
vulnerable, SDM and Catoca. SDM opened new mining sites in
July and October. Gordon said SDM's mining operations have
been suspended for the time being.

The UNITA action in the Cuango valley is a direct shot across the
UN's bow. The UN, led by its chief sanctions buster, Canadian
Ambassador Robert Fowler, has charged up San Juan Hill in an
international political assault on UNITA's capacity to use
diamonds and oil to fund its military. Gordon writes, "If UNITA
recaptures the region, and restarts mining operations, the sanctions
on diamonds will be severely tested, as high-quality diamonds
move with ease illegally on to the markets." Gordon points out that
a new flood of UNITA diamonds into the market would directly
threaten Fowler's partner in the sanctions effort, De Beers of
South Africa. NCN has reported previously that De Beers has
complained about the downward price pressures created by
existing diamond surpluses, so more diamonds on the market
would exacerbate that downward pressure.

The net result of all this is that both UNITA and the government
are geared to fight much more war, underscoring the assessment
that this war will never end and that Angola is a hopeless and lost
cause.

For the moment, a source reporting to NCN from the region has
indicated that the rainy season has thus far not been a very wet
season, and is not impeding military operations by either side.
Luanda, a once beautiful city, is busting at the seams with
displaced people. New luxurious housing developments are being
built for the expatriates whose businesses are flourishing despite or
because of the war, and many other homes are being refurbished
by these same people. But down with the masses, the city is said
to be shabby and in a state of disrepair. Trains used to run all the
way south to Benguela and Lobito, but now, except for a single
train that runs about 30 km to the east to Viana on an irregular
basis, all other railroad stock sits, rots and rusts in the yard just
behind the port in Luanda. Many US and UK companies are in
Luanda, including Exxon, Mobil, Texaco, Chevron, BP Amoco,
Coca-Cola, British Air (new office), Halliburton, and Western
Atlas. Europe is also well represented by Elf, Schlumberger, Total
Fina, Shell, Norsk Hydro, De Beers, Statoil, and a large number
of Portuguese companies. The economic ties to Portugal and
Brazil are quite strong. Food prices for European and South
African goods are exorbitant but local fruits and vegetables and
locally baked bread are all relatively inexpensive.

marekinc.com

=============

Had this for two days, forgot to post it, thanks for reminding me ... i'm still holding dmw, still watching, just quite obsessed in the short term with bay and jdx ... it does sound like a winner is emerging in Angola, all in all, and that could swing the international community [read the US] to back them ... luckily enough, it's the side we're on, the government ... this could just maybe perhaps possibly affect the market in dmw paper, at some point ... ya never know -g- .. cheers

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