This article is a sponsored feature from Mining.com.au partner Minbos Resources Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
“Good for Minbos, good for Angola.”
These words from Minbos Resources (ASX:MNB) CEO Lindsay Reed encapsulate the vision driving the company as it prompts efforts to catalyse Angola’s agricultural sector.
With a strategic focus on sustainable development and community empowerment, Minbos is helping to reshape Angola and its agriculture sector through its projects and robust partnerships.
“Pequeno projecto, grande impacto — small project, big impact,” Reed tells Mining.com.au.
During the past five years, the World Bank Group says the Angolan Government has been prioritising the agricultural sector through promoting agribusiness, with the aim to reduce the reliance on external markets for food supply.
Reed, who has more than 40 years of expertise in exploration and development across Australia and Africa, emphasises the urgent need for investment in Africa to generate sustainable returns for local communities.
Or, as he says – “Minbos has a project with low-capex and high-returns, having tailored its fertiliser business to grow and support the local agricultural economy.”
‘Our fertiliser, their future’
Minbos’ flagship assets– the Cabinda Fertiliser and Capanda Green Ammonia projects – are playing a pivotal role in establishing a thriving nutrient industry within the African nation.
In 1970, Angola was considered a global agricultural powerhouse, being an exporter of sisal, sugarcane, banana, and cotton, the world’s fourth largest coffee producer, and self-sufficient in all food crops except wheat.
Yet, due to Angola’s civil war, economic challenges, infrastructure, and import dependency, the central African nation has no fertiliser factories.
Reed says Angola is a two-speed country, a “strong” middle class built on oil and diamond wealth, and has smallholder farmers that Angolan President João Lourenço seeks to lift up.
The Cabinda Project boasts a projected net present value of US$203.2 million and has a low capex and high internal rate of return. This initiative has asserted itself to help revolutionise Angola’s agricultural landscape, as well as reintroduce self-sufficiency in food production.
As Reed has previously told Mining.com.au, “you can’t just go to the farmers (in Angola) and say ‘grow more’ because they’re already growing enough to eat. There’s no point growing more if they can’t profit out of it”.
“And to do that they need training and knowledge. They’ll need good quality seeds and they’ll need fertiliser and weed control strategies, things like that.”
To make fertiliser, you need phosphate. Essential for all living cells and especially agricultural productivity, phosphate is the key deficiency in Angolan soils; and it’s something that Minbos’ Angolan project has in spades.
“If God was to design a phosphate deposit for Angola it would be Cabinda,” Reed says.
“The perfect grade and solubility for Angolan soil and climate.”
Minbos’ efforts align with increasing global demands for phosphate. As previously reported, a US Geological Survey emphasised the necessity for increased production of this essential resource to sustain global agriculture.
In 2023, phosphate’s global production was 220 million tonnes — a decrease from 228 million in 2022.
Securing sustainable growth
Minbos’ Cabinda Project and Angola seem to be two halves of the same whole, as Cabinda needs Angola for its acid soils and high rainfall, while Angola needs the project due to its low phosphate, smallholder farmers, and high phosphate-fixing.
“Cabinda has a high citrate solubility, which means it is available to the plant, but low water solubility which means the seasonal heavy rains cannot dissolve it into the soil,” Reed says.
In conjunction, the company’s assets support a step in the right direction to alleviate poverty for millions of subsistence farmers who use no soil nutrients.
Although the central African country is the second largest oil producer in Sub-Saharan Africa, according to the Borgen Project, Angola has a forecasted poverty rate of 12.4 million, as of this year.
This figure is based on rising food prices and slow growth in the nation; 33% of Angolans live on less than $2.15 per day.
As a result of the company’s efforts to leverage Angola’s unique global position, Minbos has forged strategic partnerships to bolster its operational capabilities.
Notably, collaborations with the Angolan Sovereign Wealth Fund and the Industrial Development Corporation of South Africa underscore Minbos’ commitment to sustainable development and community empowerment.
During April, Minbos was approved for a $21.5 million debt facility from the Industrial Development Corporation of South Africa, which will cover the majority of the construction costs. Since then, the company has been working to satisfy the multi-million-dollar loan facility to unlock further funding in order to start construction activities.
The Angolan Sovereign Fund (FSDEA) engaged with Minbos on an equity injection of US$10-15 million and aims to take a strategic stake in the company to show support for the project being in Angola.
In parallel, Minbos is also dipping its toes in with an emerging market fund as an alternative or co-investor.
“It is fantastic that African banks and funds are stepping up for the completion of construction and production after our Australian investors funded the long gestation phase,” Reed adds.
Commitment to sustainability
The Capanda Green Ammonia Project is focused on securing 200 megawatts of the cheapest, greenest power globally.
Reed says ammonia is considered the building block for nitrogen fertiliser.
“Cheap hydropower is essential for green ammonia, but even more important is that African Inland Premium,” he says.
During June, the company signed a non-binding collaboration agreement with energy technology company Talus Renewables to develop the project.
Both companies will work in tandem and use their combined resources to optimise the deployment of Talus’ green ammonia technology to efficiently match local inputs with local markets.
“Talus offers an accelerated path to green ammonia production, flexible low capital solution that can be deployed at a range of scales in different locations, to produce different products,” Reed says.
“The technology neatly matches Angola’s opportunities with its markets. There is much more to come in this story.”
Beyond the latest milestones, Minbos is committed to sustainability and innovation.
Initiatives like its stage two expansion plans mark the company’s approach to enhance production capacity and operational efficiency, while also ensuring sustainable growth for years to come.
On 15 May, the company decided to bring forward its stage two expansion plans at the Cabinda Project, with the design to be included into its stage one construction activities.
These stage two plans include the implementation of a 60-tonnes-per-hour crusher and surge bin to increase capacity. Minbos says dryer capacity may also be increased by switching to a larger burner, which is already on site.
Minbos’ stance is at the forefront of Angola’s agricultural resurgence, driven by a steadfast commitment and community impact.
“Focusing on the ‘Grow to Eat’ sector will alleviate poverty, supplying the ‘Grow to Sell’ sector will establish food security, developing the ‘Grow to Export’ sector will promote economic diversity,” Reed says.
“All so important for one of the world’s fastest growing populations.”
As the company continues to pioneer groundbreaking initiatives, Minbos exemplifies how strategic investments can catalyse economic growth and prosperity, making it not just good for Minbos, but indeed, good for Angola.
