Angola promoted new investment opportunities in its diamond-mining sector at the South African-hosted Mining Indaba conference Feb. 11, African media reported. At the conference in Cape Town, Angolan Geology, Mining and Industry Minister Joaquim David said that in 15 to 20 years, Angola's diamond sector could rival its oil sector. Projects in the provinces of Lunda Norte and Lunda Sul in northeastern Angola were prominently mentioned during Angola's participation in the conference. South Africa surely welcomed the news, as it has been trying to gain a foothold in Angola's diamond sector. South Africa's participation in the Angolan diamond sector could be strengthened by the construction of new road infrastructure in western Zambia that will link to Angola, backed by a recent loan from the South African-owned Development Bank of Southern Africa (DBSA). These moves highlight the interests Angola and South Africa share in developing the Angolan diamond sector. However, the former foes will approach cooperation with caution, particularly because of the Angolans' fear of losing control of their diamond-rich areas as South African influence in the area grows. (click here to enlarge image) South Africa's regional importance is well established, while Angola is seen as a rising power in southern Africa. The countries have a history of animosity dating back to the Cold War, when the apartheid-era South African government financed and manipulated the Angolan rebel group National Union for the Total Independence of Angola (UNITA), which waged a decades-long war against the Luanda-based government for control of the resource-rich country. The Angolan civil war did not end until 2002, when UNITA leader Jonas Savimbi was defeated on the battlefield. Even though relations between Angola and South Africa have improved since then, and especially since the election of Jacob Zuma as South African president, Luanda remembers well how South Africa contributed to the conflict. Memories of such meddling have led the Angolans to fear that South Africa could undermine their influence in Angola's diamond-rich areas. Investment in Angola's diamond sector could raise Angola's prestige, and the South Africans are interested in getting involved in diamond-mining projects in Angola. The South Africans have tremendous expertise in mining engineering and operations, but South African mining operators have not been able to establish a strong stake in Angola's diamond resources, largely because of the Angolans' concerns. Though it would be in Angola's interest to allow the South Africans to build a significant presence in the diamond sector, Luanda is still concerned that Pretoria could end up exerting such dominant influence over the diamond-producing areas that Luanda would get bypassed in the mining-to-market supply chain in the future. Angola could prevent South Africa from making any gains in the mining sector by selecting non-South African mining companies for winning concessions, but the possible supply chain infrastructure being developed and ultimately traveling from the Lunda provinces to Johannesburg and Durban could still reinforce South African influence over the region. (click here to enlarge image) The DBSA loan for the road infrastructure project in Zambia — $262 million, approved Jan. 26 — is the largest the bank has ever made. The road infrastructure to be built with the DBSA loan will connect western Zambia, where there is little significant economic activity, to the North-South corridor, an existing road network that links the landlocked countries of Botswana, Zambia, Zimbabwe and Malawi between South Africa and Tanzania, with South Africa as the hub. The proposed extension to the North-South road will also link to northeastern Angola, where the country's diamond resources are concentrated. Such infrastructure would generate a more efficient supply chain network incorporating parts of Angola into the rest of southern Africa, and it would allow Angola's diamonds and other commodities and supplies to be transported more easily throughout the region. But the Angolans are concerned that in the long run, the South African-financed road system will increase South Africa's influence in Angola's diamond industry. There are few good roads between the diamond-producing areas of northeastern Angola and Luanda, and this lack of infrastructure, as well as other impediments, severely restricts a fuller development of the mineral-rich region. The Angolan government has proposed rehabilitating roads throughout the country, including in the Lunda provinces, in the next few years, but Luanda is also facing high-cost development and reconstruction needs in the capital region that may keep its attention focused on its core base of support. The South Africans have no need to concern themselves with popularly demanded reconstruction needs in Luanda and can concentrate on their commercial interests in the Lunda provinces. Thus, the new roads, potentially dedicated to supporting a renewed diamond sector in northeastern Angola, would pull traffic and commerce away from Luanda, bypassing the Angolan capital, and funnel it into South Africa's sphere of influence. South Africa and Angola both have an interest in developing Angola's diamond sector. However, Angola's suspicions of South Africa — and South Africa's involvement in the new road infrastructure leading into Angola's diamond-producing areas — will lead Luanda to approach any business deal with great care.