VZCZCXRO8196
PP RUEHJO
DE RUEHLU #0358/01 1071254
ZNR UUUUU ZZH
P 171254Z APR 07 ZDK
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC PRIORITY 3877
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHJO/AMCONSUL JOHANNESBURG 0447

UNCLAS SECTION 01 OF 02 LUANDA 000358 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR AF/S and EB/CBA 
JOHANNESBURG FOR FCS 
 
E.O. 12958:  N/A 
TAGS: EINV ETRD BEXP PGOV EMIN ECON AO
SUBJECT:  ANGOLA - TROOPS SHUT DOWN AMCIT-OWNED QUARRY 
 
 
LUANDA 00000358  001.2 OF 002 
 
 
¶1.  (SBU)   Summary.  On March 27, 2007, Angolan soldiers shut down 
an Amcit-owned quarry near Luanda, claiming to be acting on behalf 
of Angola's National Reconstruction Council.  Several other quarries 
were shut down at the same time.  The Embassy has explained the 
potentially damaging effect on investment from the U.S. with the 
Deputy Prime Minister, the Ministry of Exterior Relations and the 
National Association for Private Investment.  The Deputy Prime 
Minister has assured Ambassador Efird that he will raise the issue 
with President dos Santos during a face-to-face meeting this week. 
End Summary. 
 
¶2. (SBU) Background: On the morning of Tuesday, March 27, soldiers 
identifying themselves as troops of the National Reconstruction 
Council (Gabinete de Reconstrucao Nacional) arrived at a quarry near 
Luanda owned by Afritrack and instructed the workers to turn off all 
equipment, prevented delivery trucks from hauling away rock and 
refused entry to trucks arriving to pick up rock.  Afritrack is an 
American-owned Angolan construction and manufacturing company, and 
its CEO has lived in Angola for 15 years.  Valued at USD 6 million, 
the quarry employs 300 workers.  The CEO told us that workers at the 
quarry are unable to perform any work, and that the lack of rock 
from the quarry has also slowed work in other Afritrack businesses, 
such as housing construction.  According to the CEO, the soldiers 
produced no documents to support their action and had not provided 
any as of Monday, April 16.  Afritrack CEO called on Ambassador 
Efird on April 3 to initially advise her of the situation, and has 
followed up with subsequent telephone conversations with Ambassador 
Efird and Econ/Commercial officer. 
 
Embassy Advocacy 
---------------- 
¶3. (SBU) Following the meeting, Ambassador Efird telephoned Deputy 
Prime Minister Aguinaldo Jaime on April 3 to discuss the issue and 
faxed him supporting documentation on the case.  Jaime called back 
the following day to report that he had briefed President Jose 
Eduardo dos Santos's Diplomatic Advisor.  On April 16, 2007 DPM 
Jaime told the Ambassador that the documents are with the President 
and said that Jaime would personally brief the President at the end 
of the week.  In addition, Embassy Pol/Econ Chief raised the issue 
with the National Association for Private Investment (ANIP) on April 
10, and with the Ministry of Foreign Affairs.  ANIP volunteered to 
have its legal staff review Afritrack's case with Afritrack's legal 
department. 
 
¶4. (SBU) During their meetings with GRA officials, Ambassador Efird 
and P/E Chief both emphasized the Embassy's concern that Afritrack 
be given written notice explaining the situation; accorded equitable 
treatment under the law, and be provided with the full protection of 
Angolan law accorded to investors.  We also reminded Angolan 
officials that the US Embassy has a responsibility to US companies 
wishing to invest in Angola and that if this situation does not 
receive due process quickly we would revise our Investment Climate 
Guide and other guidance to investors to reflect this situation.  We 
strongly reiterated that armed militia denying an owner and her 
employees' access to their place of work is not an acceptable 
business practice.  Note: Angolan law on eminent domain requires 
sufficient notice to individuals and businesses to be affected by 
government taking of property and adequate compensation for any 
property taken by the government. End note. 
 
Other Companies also Shut Down 
------------------------------ 
¶5. (U) Several companies operate quarries near Afritrack's, 
including the Portuguese construction companies Soares da Costa, 
Mota-Engil and Tecnovia, as well as Cojoal, Sanir, and Africavision. 
 They were also shut down.  The Portuguese Ambassador told 
Ambassador Efird that his Embassy had also been contacted by the 
Portuguese companies affected by the shut down and asked what 
measures the US Embassy was taking.  On April 16, 2007 the Afritrack 
CEO told us that the Tecnovia and Mota-Engil quarries had been 
permitted to re-open on Saturday, April 14.  This was also reported 
in the press.  The rock quarried at these sites is used in the many 
infrastructure construction projects around Luanda.  Mota-Engil is 
the largest Portuguese construction company operating in Angola. 
 
¶6. (U) President dos Santos issued a decree on March 27 revoking all 
mining permits in the area where the future Luanda international 
airport is to be built.  While these quarries are also located in 
Vianna, it is not clear that they sit on the site of the new 
airport.  Afritrack's CEO asserts that her quarry is not within the 
new airport zone. 
 
¶7. (SBU) Comment. Embassy Luanda will continue to support the 
Amcit-owned company in pursuing an acceptable solution to this 
situation.  That other companies have been able to reopen is a 
positive sign.  However, as the largest Portuguese construction firm 
operating in Angola, clearly Mota-Engil has a higher degree of 
 
LUANDA 00000358  002.2 OF 002 
 
 
leverage with the government to get a quicker resolution to the 
situation than a smaller company will have. 
EFIRD