Angola Mining Report Q1 2012
Business Monitor International, November 2011, Pages: 75
Business Monitor International's Angola Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Angola's mining industry.
Mining Sector Recovery Gains Momentum
Signs of a further recovery in Angola's mining sector were visible in the latest production figures released from the Lulo diamond concession, which is operated by Lonrho Mining in the Lunda Norte province. A company announcement revealed that the mine had recorded its best ever production figures, recovering 19 rough diamonds with an average ore grade of 31.86 carats per 100 cubic metres. The results represent a noticeable improvement over the previous best sample grade of 16.23 carats per 100 cubic metres. Furthermore, the company is reportedly planning to launch a US$12.7mn exploration programme aimed at sourcing kimberlite diamond deposits in the surrounding region. The recovery in Angola's diamond production chimes with BMIs overall growth forecasts for the country's mining output.
BMI estimate the industry to have grown by 9.9% year-on-year (y-o-y) in 2011 in real terms, with growth forecast to average 4.9% a year during the five years to 2015.
Striking While The Iron Is Hot
In October 2011 the chairman of state-owned Empresa Nacional de Ferro (Ferrangol), Diamantino Azevedo, revealed the company's plans to form a joint venture (JV) with mining firm AMR to begin iron ore production at the companies' operations in the Huila and Kwanza Norte provinces from 2013. Production was expected to begin at 3mtpa (mn tonnes per annum) and could eventually rise to as much as 30mtpa. The company also announced plans to construct two steel mills in the regions, each with a capacity of 4ktpa. Meanwhile, foreign firms are also viewing Angola's iron ore mining potential with interest. In October 2010, Brazilian mining giant Vale said it was looking at opportunities in the Angolan copper sector as part of its wider plans to invest some US$15-20bn in Africa over the coming five years.
Regulatory Environment
The long-anticipated introduction of a new mining code for Angola's mining sector looked to be moving closer to a reality following hints by Angola's secretary of state Kiala Gabriel that the country's mining sector was set for a revival following a period of decline resulting from the global economic crisis. According to Gabriel, cited by national news Agency Angop, the contribution of Angola's mining sector to the country's overall GDP had fallen substantially in the three years to 2011, but could be expected to reach 5% of GDP over the next few years as a series of new prospecting and exploration projects come under way. The arrival of the new mining code was expected a basis for growth in the country's mining output in conjunction with a recovery in global mining prices and the government's soon-to-beintroduced geological plan.
Key Players
Angola's mining industry is dominated by diamond exploration and production. Major reserves of diamonds are located in the provinces of Lunda Norte and Lunda Sul. Local firms dominate the market, with state-owned Endiama the exclusive concessionary of mining rights for diamond-mining in Angola. Sociedade Mineira de Catoca (SMC) operates the Catoca mine, the world's fourth largest kimberlite facility. SMC is 32.8% owned by state-controlled Endiama, 32.8% by Russian concern ALROSA, 16.4% by Odebrecht and 18% by Israeli company LLI Holding. There is increasing interest from overseas firms, with companies such as Trans Hex Mining, a South Africa-based miner, making entries into the market in recent years. The company has a stake in the Luana, Luarica and Fucauma mines.
Executive Summary
SWOT Analysis
Angola Political SWOT
Angola Economic SWOT
Angola Business Environment SWOT
Global Mining Outlook
Table: Recent Tax Increases
Table: Largest Coal Projects
Table: Frontier Mining Projects
Industry Trends and Developments
Table: Angola's Mining Industry, 2008-2015
Business Environment
Table: African Government Mining Plans
Table: Africa Mining Business Environment Ratings
Chile Business Environment
Table: BMI Business And Operation Risk Ratings
Institutions
Table: BMI Legal Framework Rating
Infrastructure
Table: Labour Force Quality
Market Orientation
Table: Middle East & Africa, Annual FDI Inflows, 2006-2008
Table: Trade And Investment Ratings
Table: Top Export Destinations, 2002-2009
Operational Risk
Political Outlook
Foreign Policy
Long-Term Political Outlook
Q4 2011
Table: Angola Political Overview
Industry Forecast Scenario
Diamonds: Growth Back On Track
Table: Diamond Mining Output, 2008-2015
Regulatory Development
Competitive Landscape
Company Profiles
Endiama
Trans Hex Mining
Sociedade Mineira de Catoca
Commodity Strategy – Metals Update
Monthly Metals Update
Gold
Copper
Aluminum
Lead
Nickel
Tin
Zinc
Global Assumptions: Q1 2012
Europe On The Edge
Table: Global Assumptions
Table: Global & Regional Real GDP Growth, % chg y-o-y
Table: Developed Market Exchange Rates
Table: Emerging Market Exchange Rates
Developed States
Developed States, Real GDP Growth Forecast
Emerging Markets, Real GDP Growth Forecast
REAL GDP GROWTH CONSENSUS FORECASTS
Business Environment Ratings Methodology
Table: Mining Business Environment Indicators
Table: Weighting Of Components
- Endiama
- Trans Hex Mining
- Sociedade Mineira de Catoca,
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