Oil Rich, Investor's Dream?
Minerals: Oil and diamonds
Independence: 11 November 1975
Area: 1,246,700 km
Mining fact: Diamonds are responsible for over 98% of the government's earnings
Angola is the seventh largest country in Africa with a wealth of natural mineral resources and massive potential for expansion and growth. The country’s petroleum reserves make it a very attractive investor friendly country and the economy is one of the fastest growing in the world, though it suffers from an uneven growth pattern with much of the mineral and economic wealth in the hands of a small percentage of the population. It is considered to be a country that offers the potential for high returns and massive risk for investors. Angola National Agency for Private Investment (ANIP) is a governmental agency that controls investment into Angola.
The effects of the civil war waged from 1975 until as late as 2002, still linger in all aspects of Angolan life, not just the economy. The agricultural sector was hit hardest by the civil war and is only just starting to recover.
Natural mineral resources include oil, diamonds, gold and copper.
Mining Potential and Natural Resources
The diamond, oil and gold mining sectors are thriving in Angola. Many believe that the mining sector, though strong at present, has only begun to explore and exploit the vast mineral resources in this nation. Growth right now is driven almost entirely by the petroleum industry and a swift rise in oil production.
Diamond Mining in Angola
Production of diamonds rose by 30% in 2006 and the national diamond company of Angola (Emprêsa Nacional de Diamantes), ‘Endiama’, founded in 1981, expects production and exports to rise steadily year on year. The government has embarked on a campaign to attract, foreign investors to the diamond rich areas of Uige, Malanje and Bie. Angola is the 3rd largest producer of diamonds in the world and it is estimated that only around 40% of the mineral reserves have been explored.
Diamond smuggling remains a massive challenge for the government with losses in the region of $375 million annually. Diamond mining and extraction of diamonds in Angola is usually by alluvial mining and kimberlite pipe mining. There is growing environmental concern about the effects of pipe mining on the ecosystem.
While under Portuguese rule, Angola was one of the world’s largest producers of iron ore. This came to an abrupt halt with the start of the civil war and the destruction of most of the existing mining infrastructure. It was only in the late 2000s that the iron ore mining sector started a slow recovery.
Angola exports more petroleum than any other country in southern Africa, and even overtook Nigeria as the leading producer during the early 2000s. In 2007, Angola became a member of OPEC. The exploration of deep-water offshore oil fields is set to double output in the next ten years. It is the third-largest trading partner with the USA. The exportation of oil makes up for 90% of Angola’s total exports.
A Legacy of War
Angola may be a booming economy at present but the legacy of the decades-long civil war hamper true economic growth.
Mining Companies operating in Angola
Endiama, Alrosa, Odebrecht Organization, Diamond Finance CY BV Group, Trans Hex