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Angola the biggest mover

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Angola the biggest mover
Road works in the Lunda Sul Province of Angola. In July and August last year, WhyAfrica, with the support of its main sponsor Remote Exploration Services (RES), travelled through the Moxico and Lunda Sul provinces in Angola to find out just how strategic this country has become. Image credit: Leon Louw for WhyAfrica

Angola the biggest mover

If you haven’t had a conversation about Angola yet, it might be time to review your Africa strategy.

By Leon Louw owner of WhyAfrica and editor of the WhyAfrica magaziner

Where there is conversation about development, exploration and business in Africa these days, it is rare to not hear the word Angola mentioned a few times somewhere in those discussions.

With the Just Energy Transition underway, and the world’s superpowers scrambling to secure a steady supply of rare metals needed for the green revolution, Angola has become a key strategic focus for the USA, China, and the European Union (EU).

Both the USA and the EU are spending a lot of money in Angola to develop the necessary infrastructure which will enable them to move large amounts of, amongst others, copper, cobalt, and nickel from the Democratic Republic of the Congo (DRC) and the north-western parts of Zambia, through Angola to the Lobito port on the west coast.

The growing importance of Angola internationally was emphasised by President Joe Biden when he hosted President João Lourenço of Angola at the White House in late November last year, saying that Africa is central to America’s plans and that there is “no country in Africa more important than Angola.”

During Lourenço visit the two leaders discussed cooperation on critical issues such as trade, energy, climate, and a USD1-billion U.S.-backed infrastructure project that would aid Angola’s economy.

Most of America’s funding will be spent on reviving the historic Benguela railway line and associated Lobito Corridor, which represents an alternative strategic outlet to export markets for Zambia and DRC and offers the shortest route linking these two countries to the sea.

In Angola, the Corridor will connect 40% of the country’s population and several large-scale investments are taking place in agriculture and retail in the provinces of Benguela, Huambo, Bie, and Moxico traversed by the Corridor.

In the DRC, the Corridor connects the mining provinces of Tanganyika, Haut-Lomami, Lualaba and Haut-Katanga. Copper concentrates are currently transported from these DRC provinces to Zambia for smelting and further export.

Angola has not only become strategic because of the Lobito Corridor though. The country is extremely rich in natural resources and hosts spectacular mineral deposits of all shapes and sizes, especially in the underexplored regions of the Moxico, Lunda Sul, Cuando Cubango, Cunene and Huambo provinces.

Angola the biggest mover
To be part of the 2024 WhyAfrica Road Trip story send me an e-mail on leon@whyafrica.co.za

A top exploration destination in Africa (Angola the biggest mover)

The presence of large mining companies like Anglo AmericanIvanhoe, and Rio Tinto  illustrate the fact that  Angola could be one of the top mining spots in Africa within the next few years.

It is not only the majors that are venturing into Angola though. Several junior mining companies have been awarded exploration licenses for lesser-known minerals. The renewable energy boom and new technology have increased demand for battery metals and other minerals used in high-tech innovations.

UK based Pensana is one of the first movers to develop a mining project from scratch in the country regarded by many pundits as the new mining hotspot in Africa.

Pensana is forging ahead with the development of its Longonjo neodymium-praseodymium oxide (NdPr) project close to the city of Huambo in central Angola.

Angola the biggest mover

Meanwhile Angola has jumped from third bottom in 2022 to around halfway in this year’s Fraser Institute Investment Attractiveness Index.

The Investment Attractiveness Index is a composite index produced annually by the Fraser Institute that combines the Policy Perception Index and the Best Practices Mineral Potential Index.

The Attractiveness Index is based on factors such as onerous regulations, taxation levels, the quality of infrastructure, and the other investment related matters.

Angola is one of this year’s biggest movers, rising from 59th out of 62 regions in 2022 to 47th out of 86 regions in 2023. The big move is a direct result of the attractive government policies and the growing interest in the country’s untapped exploration potential.

Tim George, CEO of Pensana says that the recognition of Angola as such an attractive mining destination in long overdue.

“Angola is now ranked higher than Spain and Australia’s state of Victoria and continues to attract significant investment from major mining companies,” says George.

Transformation of road networks  

Meanwhile, Angola’s road networks are being earmarked for transformation with an announcement by the Africa Finance Corporation (AFI) that they will lead commercial funding for a €381 million project

The project specifically targets improved accessibility in remote areas and supports industrial and commercial activity, advancing prosperity by reducing transport costs and travel times, and easing poverty through job creation.

The funding package will finance engineering, procurement and construction (EPC) of 186 bridges and crucially needed enhancements to Angola’s road network.

AFC, acting as mandated lead arranger for the commercial tranche, has committed to invest €85 million, combining with export credit agency financing from the Export-Import Bank of the U.S. and the U.S. Private Export Funding Corporation.

Other key partners include Standard Chartered Bank as the coordinating and structuring bank, Conduril, a Portuguese civil engineering firm which is the main EPC contractor; and Acrow, a U.S. construction industry giant as the bridge supplier.

The signing took place at the recent US-Africa Business Summit in Dallas, Texas, organised by the Corporate Council on Africa.

According to AFC Board Member and Head of Financial Services, Sanjeev Gupta this project not only supports Angola’s drive to make agriculture a foundation for economic growth, but it also prioritises the development of climate resilient infrastructure which contributes significantly to Angola’s climate adaptation plan.

In October 2023, AFC was appointed lead project developer for the Lobito Corridor connecting northwest Zambia to the Benguela rail line in Angola and ultimately to the port of Lobito, working with the US government, the European Union, the African Development Bank and the governments of Angola, the Democratic Republic of Congo and Zambia.

AFC’s investment in the new roads project showcases the Lobito Corridor consortium partnering beyond rail to support rural transport connectivity that will serve to link communities and the larger regional corridor.

Angola the biggest mover

Angola the biggest mover
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AgricultureEnvironmental Management & Climate ChangeEnergyESGInfrastructureMiningPolitical EconomyTourism and ConservationWater Management