According to the Oil and Gas Journal, at the beginning of 2010, Angola had proven oil reserves of 9.5 billion barrels although the Angolan Government’s estimates place this closer to 13 billion. Oil exports brought in some £30 billion in 2010 and the enormous industry shows little sign of slowing down. Angola competes head-to-head with Nigeria as the top African oil producer, and today the sector contributes 85 per cent of the country’s GDP.
In May this year, the nation’s output averaged 1.6 million to 1.65 million barrels per day (bpd). According to Minister of Petroleum Jose Maria Botelho de Vasconcelos, however, Angola is already more than capable of reaching 1.9 million bdp, a figure that could even rise to 2.2 million bpd by the end of 2012.
Earlier this year, Mr Botelho de Vasconcelos said that Angola expects to begin exporting liquid natural gas (LNG) in the first quarter of 2012, pointing out that his Ministry is currently drawing up the legislation to regulate natural gas exploration in Angola.
Set to produce 5.2 million tonnes of gas per year, the Angola LNG project will make use of natural gas for export and feeding the Angolan petrochemical industry, thus helping to eliminate gas flaring.
The Government is aware that a heavy reliance on hydrocarbons does little for economic stability in the long run. It is therefore focusing its efforts on attracting foreign investors for other sectors, such as mining, agriculture and energy, which also show great, and largely untapped, potential.
In February, Minister of Geology, Mines and Industry Joaquim Duarte da Costa David said that within 15 to 20 years mining may even reach the level of development of the oil sector if the right combination of correct legislation, peace, joint efforts with the private sector, and the financial and technological expertise of foreign partners comes into play.
‘ANGOLA HAS THE CAPACITY TO PUMP 1.9 MILLION BARRELS A DAY OF CRUDE OIL. WE ALSO EXPECT TO START EXPORTING LIQUID NATURAL GAS IN THE FIRST QUARTER OF 2012’
JOSE MARIA BOTELHO DE VASCONCELOS, Minister of Petroleum
‘WE STARTED THE PRODUCTION OF BITUMEN AND ASPHALT ROCKS. AND THERE IS A STRONG POTENTIAL FOR IRON PRODUCTION, MANGANESE, GOLD AND COPPER’
DR MANKENDA AMBROISE, Secretary of State for Geology and Mines
‘JOINT EFFORTS WITH THE PRIVATE SECTOR AND WITH THE CAPABILITIES OF FOREIGN PARTNERS, THE MINING SECTOR WILL SOON BE EQUIVALENT TO THE OIL SECTOR’
JOAQUIM DUARTE DA COSTA DAVID, Minister of Geology, Mines & Industry
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Nonetheless, Angola’s mining sector is also disproportionately skewed to one commodity: diamonds. While mining contributes some 12 per cent of Angola’s GDP, 98 per cent of this stems from diamonds alone. Angola ranks as the fourth largest diamond producing country by value today, with reserves – both in the form of kimberlite and alluvial fields – estimated at between 180 million and 200 million carats.
The recent global recession has shown that this over reliance on diamonds is perhaps equally as dangerous as the so-called Dutch disease with oil. Diamond prices plummeted during the recent global economic downturn, forcing producers to take action.
The Ministry of Geology and Mines gathered the industry’s players – producers, investors and buyers – and together identified the challenges and solutions.
“It was the major damage of the crisis,” says Secretary of State for Geology and Mines Dr Mankenda Ambroise.
“One of the solutions was the reduction of costs. Our priority was also to secure the jobs of the Angolans because in mining areas, there is no alternative form of employment. Therefore all companies were instructed to pursue a policy of reduced costs. We also worked with the companies to define the minimum acceptable price for sale.”
A wide variety of other known minerals also forming Angola’s geological makeup are now being targeted for exploitation in line with the Government’s economic diversification strategy. These include base metals (lead, zinc and copper), ferrous metals (iron and manganese), precious metals (gold and platinum), decorative stone (black and red granites, quartz and marble), phosphates, kaolin and raw materials suitable for cement production.
Mining-related activities lend themselves well to spurring the country’s development and rebuilding.
Dr Ambroise says the Government would like to develop agro-minerals to produce fertilisers and therefore replace imports whilst supporting agriculture, agro-farming, forestry and aquiculture.
“We also started the production of bitumen and asphalt rocks, crucial for the country’s reconstruction. And there is a strong potential for iron production, manganese, gold and copper,” he adds.
The Angolan Government is now liberalising its mining regulations and offering more favourable investment terms in an effort to appeal to a greater number of foreign investors, especially from the United Kingdom.
“Angola’s doors are open and I think that the British can bring a lot; they have the technology, expertise and knowledge of the field,” explains Dr Ambroise.
“They have nothing to lose and should come to Angola and develop genuine projects. I believe we must strengthen bilateral cooperation between the two Governments in terms of training; the UK has very good schools and mining trade training programmes and Angola could benefit greatly.”
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