Angola wants to become international mining powerhouse

FEBRUARY 14TH, 2013    FEATURES

Angola wants to become an international mining powerhouse, attracting investors to steel, gold and copper production thus leaving the sector less dependent on diamond price fluctuations.

An essential part of this was the Minister for Geology and Mining, Francisco Queiroz, presenting investment opportunities to international investors last week at Mining Indaba, Africa’s biggest mining fair.

Diversification, the minister said, cited by newspaper Jornal de Angola, includes making aggregate exploration more common, revitalisation of the ornamental rock sub-sector, and opening iron, gold, phosphate and copper mines.

The minister gave investors his assurance that Angola had an attractive private investment law, is politically stable, and also noted that the government was acting to increase its knowledge of the country’s geological potential.

“Within three years we will have a full map [of mining resources], which will help to attract investment, on a more secure basis, to promote investment and attract investors from other countries,” said Queiroz.

“We will take specialised photographs of our entire territory to identify resources. We will have a database that will allow us to plan exploration and investment to ensure the survival of future generations. We will also plan cooperation with investing countries,” he said.

The survey is being carried out by Russia’s Alrosa, to identify the quality and size of Angolan reserves.

In Cape Town, Queiroz noted there was a need to revitalise the diamond sub-sector, along its entire chain, to provide new concessions for prospecting, exploration, diamond cutting, along with finding investments for the national mining industry, as well as a jewellery industry.

Mining investors and operators took part in the South African fair along with banks and services companies. Angola was represented by Endiama, Sodiam, Ferrangol and other mining companies.

According to the Economist Intelligence Unit (EIU), Queiroz’s “bid for Angola to become a ‘mining powerhouse in Africa’ may not be that far-fetched,” as it was likely there would be “more interest from overseas firms and investors”.

The interest is based on new concessions that are due to start being explored and the fact that a New Mining Code has come into force.

“However, international firms may choose to wait for the results of the geological survey before they come forward, while delivering on programmes to improve energy supplies and infrastructure will be key to development of the mining sector”, said the EIU m its latest report on Angola.

According to the EIU railways, roads and ports are being repaired and prospecting and exploration for iron ore, gold, and copper have begun, including medium term plans for building aluminium foundries.

The new mining code is intended to introduce more transparency to the industry, along with improving guarantees for foreign investors and safeguard the environment and local jobs.

Foreign investors welcomed the more detailed legal framework, especially joining exploration and production contracts, greater transparency in granting mining rights and clarifications of the tax regime, as well as the stake to be held by Angolan entities.

Amongst other things the new code establishes that concessions in areas considered to have great geological potential (diamonds, gold or metals such as uranium) should be submitted for public tender, replacing the current system of sealed proposals, in which the final decision is made by the Angolan President, the EIU said.

Another significant change is transfer of all regulatory responsibilities for diamonds, gold and uranium to the Regulating Agency of the Strategic Minerals Market. Sodiam, which used to have these duties, has become a commercial unit in charge of promoting Angolan diamonds overseas and for selling them on the domestic market. (macauhub)