INVESTMENT INSIGHTS Angola dangles the carrot for international mining companies Luanda authorities have launched several reforms and projects to attract more investments in the mining sector that include the elimination of the state’s monopoly on mineral rights to open the sector to private investment.
Author: Rodrick Mukumbira Posted: Tuesday , 05 Jun 2007
WINDHOEK -
By liberalising its mining regulations and offering favourable investment terms, Angola is dangling a carrot to international mining companies to come in and tap the country's vast mineral resources.
With most of the country yet to be geologically assessed, "current mining operations represent only a fraction of Angola's full potential," said Mankenda Ambroise, the Angolan Deputy Minister of Geology and Mines, Tuesday at the International Seminar on Mining Investment for Base Metals in Southern Africa that started in Windhoek, Namibia, yesterday.
"Although Angola is one of the world's most endorsed and diversified mineral countries, the territory remains untapped and under-explored," said Ambroise. "In this regard, significant opportunities exist for the exploration and development of base metals as a destination of choice for businesses in Africa."
The three-day seminar that attracted nine countries from the southern African region has sought to provide a vision for the region's base metal mining countries to assist in shaping up their mining policies and encourage foreign direct investment.
Angola's state-run Agência Nacional para o Investimento Privado (ANIP) is already running a campaign to attract more foreign investment in the mining sector.
In addition to its growing diamond and oil sectors, the country also has commercial deposits of iron ore, manganese, copper, gold, lead, tin, chrome, nickel and uranium that can play a "vital role in the economic growth of the country", said Ambroise.
"It is interesting to note that geologically, Angola can be subdivided into five main regional units: Precambrian basement rocks, Precambrian orogenic belts, Paleozoic to Mesozoic sediments and magmatic rocks, tertiary coastal basin rocks and quaternary cover rocks that contain abundant and diverse mineral deposits," he said.
He added, "Investors can invest within a free-market system that offers equal opportunities for all people. The State's influence within the mineral industry is mostly confined to orderly regulation and encouragement of equal opportunities in its mineral development [strategy]."
Ambroise also said the investor would benefit from Angola's "smart, friendly, hospitable, fast learning and people with a deep sense of happiness".
"The war is over and we [will] keep you busy," he said. "In fact, peaceful Angola can be considered as having all the necessary conditions to become an economic powerhouse in the southern African region and this is where the challenges lie for the country and investors."
Ambroise said there were no risks at all for exploratory missions to Angola and, with peace having been achieved, the security situation has "greatly improved".
Angola has established a mining policy that eliminates the state's monopoly of mineral rights and opens the sector to private investment.
He said any company could apply for a prospecting licence with his ministry, adding that concessions in the country were being granted on a "first come, first served" basis provided that applicants demonstrated that they had the required financial and technical expertise to carry out mining and mineral development work.
A prospecting license is issued for a maximum of five years, including extensions, and is limited to a defined area. Should a company identify minerals for extraction, it would then need to obtain a mining title.
The country also had low royalty rates at five percent for precious stones and metals, four percent for semiprecious stones, three percent for metallic minerals and two percent for other minerals.
Mining equipment and supplies were exempt from import duty when not found locally and depreciation on fixed assets was allowed with exploration costs being amortised as follows: 50 percent in the first year; 30 and 20 percent in the following years, Ambroise said.
"Look beyond the surface to discover Angola's true worth. The business door is open, but the decision is yours. The mining sector is expecting you and don't miss the next plane," said Ambroise.
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