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Angola - The Mining Sector

Overview

''Angola is one of the world's biggest -- and least developed -- mineral treasure troves..." The Economist, July 1, 1995

Angola has numerous mineral deposits, including diamonds, iron, gold, phosphates, manganese, copper, lead, zinc, tin, wolfram, tungsten/vanadium, titanium, chrome, beryllium, kaolin, quartz, gypsum, marble, granite and uranium. The full extent of these resources has yet to be fully evaluated. Since independence mining activity has been limited to diamonds and, on a smaller scale, to the extraction of marble and granite.

The supply industry for mining activity is thus not well developed at all and, as with many other activities, companies that are now beginning to operate in Angola are sourcing equipment from South Africa. It is expected that, as the sector matures, companies will establish in-country distribution networks.

In Angola, all minerals belong to the State. The Ministry of Geology and Mines manages mineral exploration and development activities through the granting of relevant prospecting and mining titles. According to the law, any mineral prospect is transferred to a state company for further development. The Mining Law of 1992 reflects a change in policy aimed at reducing the dominance of the State by eliminating monopoly mineral rights and providing opportunities for private sector investment in the mining sector.

ENDIAMA (State Diamond Mining Company) was formed in 1981 and started operating in 1987. FERRANGOL is a state owned company responsible for mining iron ore and manganese. ROREMINA: is a state company responsible for mining ornamental stone. MINAQUARTZ is responsible for the mining quartz FOSFANG for mining rock phosphate.


Precious Metals

Gold

The Maiombe region of Cabinda Province accounts for 90% of gold production in Angola. It has been reported that approximately 500kg of gold have been removed from this region, mainly from small tributaries of the Luali River in central Cabinda. The alluvial gold was associated with vein quartz in granite. The average recovered grade varied between 1 and 2g/m3 however, a number of higher grade "pockets" were recorded. Most high-grade material has been removed, leaving only lower grade gold occurrences. There are other alluvial gold deposits in Cuanza Norte, Huila and Cunene Provinces.

The Mpopo Deposit is the largest primary gold deposit in Angola, some 36km south-west of Cassinga. This deposit comprises auriferous quartz veins, and has an estimated possible mineral resource of 700,000t at 8g/t. It is thought that 23 300t of ore at 6g/t gold (a total of 140kg gold) have already been removed from this deposit. Alluvial placer deposits also occur nearby, and have been mined in the past.

No industrial gold mining operations exist in Angola. Approximately 90% of the country's production has been mined by artisan miners. Both Huila and Cunene Provinces have been prospected by companies such as Ashanti Gold Company Limited and Anglo American plc in the past.



Platinum

Platinum has been reported in association with norite complexes in the Cunene Complex in south-western Angola.



Base Metals

Copper production has largely been from the high-grade ore ofthe Tetelo-Mavoio Bembe region. Lead and zinc have also been recorded in this region. Copper deposits of potential economic value occur in the coastal plain (e.g. the Cachoeiras and Loeto deposits) and copper of volcanic origin has been identified in the Menongue district of south-east Angola. Vanadium has been mined at Lueca and Kinzo.

Prior to 1963, Angola's copper production ranked second to that of diamonds in terms of value, producing an estimated 200 000t of high grade copper ore of between 2-23% copper. Limited work has been carried out at the Tetelo copper and Cachoeiras copper-gold deposits that appear to have potential.



Ferrous Metals

Iron

Most iron mined in the past in Angola has been from the Cassinga Mine in Huila Province, where the high-grade portion of the reserve has been largely depleted. A slump in global iron ore prices, coupled with the onset of the war when the rail link connecting the mine at Cassinga to the port of Mocamedes (now Namibe) was destroyed, saw production end. The Cassinga mine produced 40Mt of high-grade iron ore (graded 50-60% Fe) between 1957 and 1975, with 6.1Mt having been produced in 1974. Rehabilitation of the Cassinga mine by State-owned iron company, Companhia de Ferro de Angola (Ferrangol), was completed in 1986, but production never recommenced.

Since then several attempts to revive production have failed. A Japanese consortium, comprising Kobe Steel and Nissho Iwai, and Odebrecht Mining Services carried out a feasibility study for the development of a direct-reduction iron plant utilising domestic iron ore resources. From 1998, the Government has transferred all iron ore mining rights from Ferrangol to a new company, Sociedade Miniera de Kassinga, which plans to reopen Cassinga. Cassinga has remaining reserves estimated at 34.2Mt (44%Fe) and

1000Mt at 30% Fe. At other deposits at Cassala-Kitungo, a proven reserve of 194Mt (23-33% Fe) iron has been identified, of which only 84Mt are amenable to open pit mining.



Manganese

Numerous small manganese deposits occur scattered throughout Angola. The most economically of them is known as the Lucala manganese triangle, and is situated in Cuanza Norte and Malanje Provinces. Numerous small manganese deposits occur in this region, concentrated in alluvial or near surface deposits.



Diamonds

In Angola, both kimberlite and alluvial diamonds occur. Some 700 known kimberlites occur in Angola and are aligned in a northeast-southwest direction across the country. The kimberlites vary in shape from rounded to elongate and diamond grade increases with depth. The Camafuca and Catoca kimberlites are the best known. A number of kimberlite pipes occur in Lunda Norte Province. These include the economicalIy interesting Camafuca, Camatchia and Camagico and Camatue pipes.

Most alluvial diamonds in Angola originate from erosion of kimberlites. The Lunda Norte and Lunda Sul areas of north-eastern Angola host rich alluvial diamond fields.

Diamonds were first found in the north-eastern parts of Angola in 1912 following discoveries in the neighbouring Belgian Congo (now the DRC). Diamang was established in 1917 with operations commencing in the 1920s. Prior to Independence, production peaked in 1971 when 2.1 Mct were produced. However, with the war production fell, reaching a low of 350 000ct in 1977. In the temporary stability after the signing of the Lusaka Protocol in 1994, a mini-mining rush occurred, with several foreign consortia teaming up with Endiama to evaluate potential alluvial and kimberlite diamond resources. This led to production of 1.5Mct in 1997 and to over 5Mct in 2001.

Angola is currently the world's fourth largest diamond producer with alluvial resources alone estimated at containing 110-185Mct. Some 70% of Angola's diamonds are considered to be gem quality, with 20% being near-gem and 10% industrial quality. Angola's diamonds are thus rated second only in quality to those of Namibia.

Endiama, a state company, controls industrial diamond mining. It has several joint ventures, including with companies from Brazil, Israel, Russia, South Africa, Australia and Canada. Angola's formal diamond production is dominated by one kimberlite operation, Catoca, and several medium to large-scale alluvial operations.


Motives - diamond exploration can be carried out in two ways, as follows:

1- Alluvial exploration (in rivers)
2- Exploration of kimberlites
• A concession for alluvial exploration is issued for an area covering up to 10,000 hectares.
• A concession for the exploration of kimberlites (zones where diamonds are formed) is issued for an area of up to 30,000 hectares.


Obtaining authorization for a concession

1- For alluvial exploration, a fee of between USD 15 and 20 million has to be paid to the State.
2- For the exploration of kimberlites, a fee of between USD 80 and 100 million has to be paid.

Surveying

The cost of surveying is borne by the applicant. The State will take up a stake of between 15% or 20% in a company for alluvial explorations, and 51% in the case of kimberlites.
Acquiring an area with the prospect of the existence of diamonds is really difficult at the moment, and the only option is to go into partnership with people who already possess demarcated areas.




Industrial Minerals

Decorative Stone

Good quality red and black granites are exported from Angola. These rocks occur in Namibe and Huila Provinces in south-eastern Angola. These provinces are also known for deposits of crystalline quartz and marble.

After diamonds, the development of Angola's stone industry is a priority for the Angolan Ministry of Mines. This sector has recently experienced rapid growth with exports of black granite nearly doubling over the last few years. Exports in 2000 totalled 7 200m3, worth around US$2.2 billion. Angola's south-eastern Namibe and Huila Provinces have a variety of stone deposits, including marble, crystalline quartz and the highly sought after red and black granites.

At present, Angostone Lda produces most of Angola's stone, although Metarocha Lda is evaluating a US$3 million project to produce an initial 1000m3 of granite per year. State-owned companies produced limited quantities of marble and granite from Namibe and Huila Provinces in 1983. Studies suggest that the region can sustain an annual output of 5 000m3 of marble over a period of twenty years.



Phosphates

Substantial phosphate resources have been found in Cabinda and Zaire Provinces. The Angolan Government established a company to exploit the known phosphate resources located in these areas, where resources were estimated to exceed 200Mt. Although studies were carried out by Yugoslav and Bulgarian companies, the deposits were never fully exploited, with only 30 000t being produced by Fosfang/Bulgargeomin between 1982 and 1984.



Kaolin

Kaolin has been found in Bengo, Huila, Bie and Uige Provinces. It was produced on a small-scale between 1972 and 1973 when 140t was produced for the domestic market. There are plans to develop the Quihita deposits located in Huila Province.



Cement and Raw Materials

Although large volumes of limestone, sands, sandstone and clays occur, production has not been substantial.

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