Republic of Angola: Governmental Strategy for its Mining Sector


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Republic of Angola: Governmental Strategy for its Mining Sector

Hosted by Hon Francisco Manuel Monteiro de Queiroz,
Minister of Geology and Mines

Mining On Top: Africa - London Summit
24-26 June 2014 | London

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Republic of Angola: Governmental Strategy for its Mining Sector

  2. 2. 1. The Country and the Public Management of Mineral Resources 1.1. History, Geography and Macroeconomic Data 1.2. Public Management of Mineral Resources: Vision, Mission and Values 2. PALANEGO - National Geology Plan 2.1. Studies 2.2. Public Infrastructure supporting PLANAGEO 2.3.1. Railroads, highways and bridges 2.3.2. Mineral Ports 2.3.3. Electrical Energy 2.3.4. Financial System 3. Opportunities for Investment and Partnerships 4. Current Results 5. Partnerships 6. Conclusion 2PRESENTATION
  3. 3. 1. THE COUNTRY - History, Geography and Macroeconomic Data 3PRESENTATION THE COUNTRY  Republic of Angola, since 1975  Presidential System of Government  Elections every 5 years. The most recent in 2012 and upcoming ones in 2017  Some 20 million inhabitants in 18 provinces;  Area - 1,246,700 Km2 ; HISTORY OF MINING INDUSTRY Mining (for more than a hundred years); 1912 – setting up of Angola’s first explorations company – Companhia de Pesquisas Mineiras de Angola 1975 – Natural Resources property of the Angolan State: SONANGOL, ENDIAMA and FERRANGOL 2014. PLANAGEO. Mining diversification;  CATOCA - fourth largest diamond mine operation Worldwide Angola’s Rating: BB (Standard & Poor’s 2013): WB Report, May - 2013: - Third largest nominal GDP in Sub- Saharan Africa: 125 billion USD – Third largest GDP per capita : 6,070 USD: –Largest growth in GDP: average of 9.1%: –Growth of non-oil and gas sector : 9.5%
  4. 4. 1.1 MINISTRY OF GEOLOGY AND MINES - Services 4PRESENTATION The Ministry of Geology and Mines, as the State’s Central Administrative body, ensures the execution of national policies defined by the Executive in the domain of geological and mining activities in Angola. CENTRAL SERVICES National Department of Mines. (present) National Department for Mining Licenses and Registration; National Department of Geology; INSTITUTES AND COMPANIES OVERSEEN BY STATE Public institutes: GEOLOGICAL INSTITUTE OF ANGOLA (present); NATIONAL AGENCY FOR REGULATION OF GOLD MARKET Companies subject to oversight: ENDIAMA E.P (National Concessionaire); FERRANGOL (National Concessionaire for Precious and Base Metals); GOLD AGENCY (Marketing Gold); AGROMINAS (Agriculture in mining areas).
  5. 5. 1.2 Vision, Mission, Goals and Values in Managing Mineral Resources 5PRESENTATION Vision, Mission, Values, Goals and Strategic Challenges •Vision Be one of the largest contributors to GDP: Be the largest source of jobs (especially for young people). •Mission Execute the National Development Plan (PND 2012 -2017) as defined by the Angolan Government successfully. •Goals Diversify mining, currently concentrated in oil/gas and diamonds; Increase tax and fiscal revenues; improve population’s standard of living (whether by increasing number of jobs, or by social investment in regions adjacent to mining areas). •Values Transparency, Loyalty and Rigor
  6. 6. 2. PLANAGEO - National Geology Plan 6PRESENTATION  NATIONAL GEOLOGY PLAN – Goal: to enhance geological knowledge throughout national territory, by: Aerogeophysical, aerophotogrammetric, terrestrial geophysical, geological and geochemical surveys of the entire country; Geological, geotechnical and hydrogeological maps to different scales: Construction, equipping and operation for 2 years of 3 geochemistry laboratories (Luanda, Saurimo and Huila). Training and qualification of staff; Operating method: Division of the country into 3 parts and contracting of 3 companies for the aerogeophysical and chemical surveys. Duration: 5 years Investment: US$ 405,000,000 totally supported by the Government. PLANAGEO The National Geology Plan (Planageo) approved by Resolution Nº 85/09 of September 24, 2009, which establishes the reparation of shortcomings of Angola’s geological and mining information PLANAGEO is a project whose objective is to: 1. Increase knowledge of the country’s geological and mining potential 2. Support Angola’s growth, identifying sources of resources needed to develop the economy 3. Develop the diversification of the national economy, currently concentrated on the production of oil/gas and diamonds TYPE OF STUDIES AEROGEOPHYSICAL Regional (M/R) and local (M/R+TEM/AAG) Flights
  7. 7. ... PLANAGEO - National Geology Plan 7PRESENTATION AEROGEOPHYSICAL Regional (M/R) and Local (M/R+TEM/AAG) Flights
  9. 9. ... PLANAGEO - National Geology Plan 9PRESENTATION GEOLOGICAL On different scales (outcrops, channels, trenches) Key: CITIC IMPULSO COSTA NEGOCIO MAP: SCALE 1:100 000
  10. 10. ... PLANAGEO - National Geology Plan 10PRESENTATION SPECIFIC (Geotechnical, mineral resources for construction and metallic minerals)
  11. 11. 2.2.1 PLANAGEO – Railroads 11PRESENTATION RAILROADS North – Luanda Railroad, Port of Luanda to Malange, projected for Eastern provinces Center – Benguela Railroad, Port of Lobito to Luau, going to DRC and Zambia South – Mocamedes Railroad, Port of Namibe to Kuando Kubango PROJECTED North-South Rail link English key: ------ PROJECTED NETWORK ######## EXISTING NETWORK DEPARTURE, ROUTE & ARRIVAL POINTS JUNCTION WITH OTHER SADC NETWORKS
  12. 12. 2.2.2 PLANAGEO - Mineral Ports 12PRESENTATION MINERAL PORTS  Lobito Mineral Port; Namibe Mineral Port; Projected Mineral Port in new Port of Luanda (Barra do Dande); Cabinda Mineral Port Project
  13. 13. 2.2.3 PLANAGEO – Electrical Infrastructure 13PRESENTATION ELECTRICAL ENERGY More than 6,000 MW by 2018 - Med Kwanza: Lauca, Caculo Cabaça, Alteamento Cambambe, Thermoenergy, Natural Gas in Soyo, Others - Lomaun, Gove, Jamba ya Mina, Jamba ya Oma, Keve - By 2018 the country will produce sufficient electrical energy for all requirements and to kickstart of industrialization.
  14. 14. 2.2.4 PLANAGEO - Communications 14PRESENTATION COMMUNICATIONS – Fiber optic telecommunications throughout the country, Africa, Europe, America and a soon-to-be communications satellite
  15. 15. 2.2.5 PLANAGEO - Financial System 15PRESENTATION FINANCIAL SYSTEM – Comfortable liquid financial reserves, little foreign debt, external credibility and dynamic banking system. Commercial Banks Multiple Banks Savings Banks Credit, Financing & Investment Systems Real Estate Loan Companies FOREX Brokers Stock Market BM&F Investment Banks Broker/Dealers Investment Clubs CBANK SEC NMC NFS
  16. 16. 2.2.6 PLANAGEO – Roadway Network 16PRESENTATION ROADWAY NETWORK - The country is linked by main secondary and tertiary roads.
  17. 17. 3. OPPORTUNITIES 17PRESENTATION OPPORTUNITIES Opportunities for the exploration and mining of: Diamonds, Ornamental Stones, Agri-minerals, Industrial Minerals, Minerals for construction, Base Metals, Iron, Manganese, Gold and copper. RESULTS Diversification of Mineral Production Diamonds Ornamen- tal Stones Agri- minerals Industrial Minerals Minerals for Construc- tionBase Metals Steel Man- ganese Gold Copper
  18. 18. 4. Current Results 18PRESENTATION RESULTS INDUSTRIAL – A total of 7,923,532.56 carats marketed, worth 957,390,886.48 USD, at an average price of 120,828 USD. DIAMONDS MINING Some results that involve Angola’s mining sector ORNAMENTAL STONE SUBSECTOR - Ornamental stones (which include marble, granite and similar stones), overall production reached 32,857.03 m3 (to be reconciled, because quarries are located in areas without communications - telephone and internet) and exports, 25,003.07 m3. Sales (on the local market and exports) amounted to 9,148,117.15 USD. QUARTZ SUBSECTOR - The export of large-volume samples (3,536 tonnes marketed), generated a total gross revenue of 85,020,000 Akz. (805,002 USD). The installed capacity of mines surpasses 70,000 tonnes/year, with existing stockpiles of quartz estimated at 45,000. MINERALS FOR CONSTRUCTION (INERTS) SUBSECTOR – This includes Sand, Burgau, Gravel, Clay and Limestone, reached a total production 4,699,028.28 m3. OTHER MINERALS SMALL-SCALE – Small-scale production counted on six accredited operators for the purchase of raw diamonds, with 678,884.15 carats having been marketed, worth 206,473,890.33 USD, at an average price of 304.137 USD/ carat.
  19. 19. 5. OPPORTUNITIES FOR INVESTMENT AND PARTNERSHIPS 19PRESENTATION • Surface Tax – US$ 01/km2 in first year; US$ 07/km2 in second year; US$ 12/km2 in third year; US$ 20/km2 in third year and in fifth year US$ 40/km2; Tax Regime • Income Tax on Mining Activity – 25%, of which 05% reverts to the local authority whose jurisdiction covers the mine; Income Tax • Royalty 02% – 05% on value of minerals produced at minehead Royalty TAX REGIME
  20. 20. 6. Partnerships 20PRESENTATION PARTNERSHIPS The Republic of Angola subscribes, within the scope of mining, to the following vision: IN RELATION TO AFRICAN COUNTRIES - exchanges of synergies, sharing of investments, knowledge and technologies, cooperation and involvement in regional and continental initiatives. Mutual assistance in improving knowledge of mineral resources on the continent with geological-mining research programs on every scale, in the diversification of geological-mining activity, in the establishment of better regulations that reinforce values of transparency in processes and legal security, in a greater conjoining of financing which is applied to the entire mining sector chain (from exploration to beneficiation) and in sustainability and social responsibility. IN RELATION TO AMERICA, EUROPE, ASIA AND OCEANIA - change in thinking on Africa, in its fundamental pillars of Independence, Sovereignty, Trust and Respect; Independence - on the continent, natural resources belong to the African countries and their citizens, under the same conditions in which, in Europe, natural resources are also for their states and citizens; Sovereignty - African countries have the same right to decide freely, and without external conditions, on the mining of their resources; Trust - Western countries have - above all - to give the benefit of the doubt to African leaders; Respect - for the cultural and spiritual references, and even the behavioral ones, of Africans.
  21. 21. 6. Conclusion 21PRESENTATION ADVANTAGES OF INVESTING IN ANGOLA’S MINING SECTOR •Angola’s vast territory presents geological characteristics and an attractive mining potential, conducive to the discovery of new mineral deposits; •The Mining Code offers guarantees and protection for private investment; •Tax and customs regime, of the most attractive in Africa; •PLANAGEO will produce geological information to support the making of sound investment decisions in Angola’s mining sector; •The country has infrastructure (energy, highways, railroads, ports, telecommunications, etc.), capable of meeting the mining industry’s demands; •The country offers political, economic and social stability, a pleasant climate, peace, tranquility and hospitality
  22. 22. 22PRESENTATION