Angola’s mining ministry is investing millions to attract investors.
Despite the tremendously rich resources, Angola has not attracted the investment it needs to fully develop the mining industry. What steps is the ministry putting in place to foster the growth of a sustainable mining sector and help diversify its reliance on oil?
FQ: Angola has a strategic plan for the ownership and development of its resources. A decade after 27 years of war, we are reconstructing the whole country, establishing infrastructure and developing a national plan for investment of our natural resource industry.
Our constitution states that all the mineral resources belong to the state, and therefore we started adopting models to access the mineral resources in the country through national con-cessionary companies. These include, Sonangol for oil, Endiama for diamonds and Ferrangol for iron ore and other potential minerals which is also 100% state owned.
Any national or international investors interested in accessing diamonds, gold or metals needs to negotiate directly with those companies to form a joint venture for the exploration of the minerals. It means that in the oil sector for example Sonangol is present in every oil company in the industry and negotiates from 10-30% of its ownership. In the mining industry the percentage of ownership is negotiable depending on what the investors bring to the table, how much they want to invest and what technologies they have.
The new Mining Code and the National Geological Plan (Planageo) is an ambition plan to attract investment into the mining industry. Please can you outline the pivotal mile-stones this plan aims to achieve and what timeframe we can expect these to be real-ized?
FQ: The national geological plan is an ambitious plan that will change the face of the country. Within 10 years we expect to see a mining boom in the country and a major contributor will be the access to geological data that we do not have today. We have already contracted the companies that will conduct the aerial, geophysical, geological and geochemical surveys across the country, which is a large undertaking based on the size of the country. This project is an example of the government’s commitment to develop the industry and is funded by the government.
A budget of 400 million USD will be used for the implementation of this plan, which includes the training of human resources, environment management as well as the construction of geological institutes and regional geological centres throughout the country.
What sets Angola apart from your resource rich neighbours?
FQ: There are several aspects that are appealing in Angola and the most important is the political and social stability and the fact that there is a legal framework in the country that is competi-tive and distinguishes it from the other African countries. Our legislation in the mining sector defines the rights for the investors, there are clear and transparent procedure that guarantee the laws are stable. We are creating favourable conditions for mining companies including lowering tax from 35% to 25%.
The other aspect is its potential, which given the vast land, and the tremendously under ex-plored areas, Angola has huge opportunities. The government wants to diversify its mining activities from diamonds, into iron ore, gold and phosphate and invites potential investors to come and see what Angola has to offer.
How do you expect the mineral industry to involve in Angola over the next 3 to 5 years?
FQ: We are certain the national plan will generate more investment from the international com-munity. We already have interest from the South Africans, Canadians, Australians and of course you can not ignore China when you look at investment. Russia is already present in Angola and will continue their investment. In the next 3 to 5 years we expect to see a major rush in new investors present in Angola.
In Africa, Angola will become the centre of the interest of international investors in the mining industry. A big challenge for African countries is how to develop the relation between our nations and the Western countries that want to invest. In Angola we are working on a strategy and the contribution will be based on our experience, the critical point is the ownership of the natural resources and Angola will ensure to offer a stable and win-win relation for both the state and the private sector.
This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Second Official Mining in Africa Country Investment Guide, will be launched next February 2015, as the only official publication providing country-specific information at Africa’s top mining event, the 2015 Investing in Africa Mining Indaba™ held in Cape Town, South Africa. You can view the 2014 Official Mining in Africa Country Investment Guide here