In an article for Energy Capital & Power, Miguel Artacho stated that Angola is the leading producer of crude oil in sub-Saharan Africa. In the third quarter of 2021, the country’s mining sector contributed to 1.6% of its GDP – primarily through the export of diamonds. Surprisingly, the country is the sixth-largest producer of diamonds globally despite the fact that it has only exploited about 40% of its reserves.
The global energy transition and the use of strategic minerals in lithium-ion batteries are expected to dramatically increase the demand for rare-earth elements. The mining industry is cognizant of these developments and is expected to play a bigger role than ever before in contributing to the country’s GDP.
Indeed, several key developments across the mining and extractive industries were in the spotlight as the country celebrated the 37th anniversary of its Mining Labor Day in April 2022. Some of these are highlighted below:
According to H.E. Diamantino Azevedo – Angola’s Minister of Mineral Resources, Petroleum and Gas – the country is on the road to becoming the second-largest producer of rough diamonds globally by 2030. The growth is linked to developments across the diamond space coupled with market-driven regulatory reforms that have enabled investment in the sector.
These reforms include the establishment of the National Agency of Oil, Gas and Biofuels as the national concessionaire along with the approval and implementation of Presidential Decree 143/20. The latter is a governance model which has streamlined the mining sector by reducing the State’s role. A significant boost has also come from measures that promote transparency along with fiscal incentives for encouraging the exploration of mineral wealth.
Currently, Angola is the fourth-largest producer of diamonds globally – with production estimated to be around 9.3 million carats in 2021. However, about 60% of the country’s mineral basins remain unexplored, opening crucial opportunities for further exploration. It comes as no surprise then that Angola is accelerating diamond mining activities in 2022 and beyond.
More news regarding diamonds…
- Top 10 Diamond Mines, World’s Largest Diamond Mining Countries
- Price of a one-carat diamond fell 9.7% first quarter of 2020, down 13.1% year-on-year
- De Beers diamond mines win this year’s industry awards for safety record.
- Faraday Copper, DevEx Resources, and Arras Minerals Announce Promising Results
Retaining Value In The Country
Angola has been focusing on building capacity in the domestic mining sector in order to galvanize its economic and industrial development. The country has ramped up local production and manufacturing industries to stimulate job creation, industrialization and infrastructure development.
Angola has invested in a slew of forward-looking initiatives. For instance, given the fact that the country currently exports 95.5% of its rough diamonds, the Ministry announced plans to cut 20% of diamonds domestically in April 2021.
The country also launched the $77-million Saurimo Diamond Development Hub in August 2021. This facility brings the entire diamond value chain together and consists of three major diamond-cutting factories along with a diamond-cutting and polishing training center to facilitate capacity building and skill transfer.
Similarly, Angola has heavily invested in upskilling its local mining workforce – a development that the country celebrated during Mining Labor Day 2022. An initiative of the then-Defense and Security Council, Mining Labor Day is a celebration of the role that mining workers play in transforming the country’s mining sector and the fabric of the national economy.
Riding The Strategic Minerals Wave
Apart from diamonds, Angola is blessed with iron ore, phosphates, copper, gold and manganese. There are 28 gold mining projects – including 20 in the prospecting phase – with the average production capacity for each mine pegged at roughly 4.5 kg per month.
However, it might just be the country’s energy transition-related minerals which rope in foreign investment. With shifting global priorities and new technologies like electric vehicles (EV) and battery storage, rare-earth elements on the African continent have become hot commodities.
Estimates by The World Bank predict that mineral production is likely to increase almost five-fold by 2050. Furthermore, roughly 3 billion tons of minerals and metals will be needed to sustain wind, solar and geothermal power expansion and energy storage.
Consequently, the demand for minerals like lithium, nickel, copper, cobalt, manganese and graphite has escalated. These minerals are essential for battery performance. Similarly, the demand for minerals like neodymium and praseodymium (NdPr) has increased dramatically because of their utilization in wind turbines and EV production.
Longonjo Rare Earth Project in Angola
Angola has taken action to ensure that it is at the cutting edge of producing energy-transition minerals at the global level. For instance, the Longonjo Rare Earth Project is set to become the first major rare earth mine in Africa. The project is located near the city of Huambo and has a production target of 56,000 tons per year. The initiative will be operated and funded by London-listed Pensana Plc along with additional funds coming from Angolan Sovereign Wealth Fund (FSDEA).
The country has also positioned itself strategically to meet the surge of demand in clean energy by targeting investment and development within the sector.