Angola grants gold exploration concession as it seeks to diversify economy
Friday, October 13, 2017 - 5:43:43 PM

Mining News - A public–private partnership (PPP) has been granted a concession to prospect for gold in the Angolan province of Cabinda, the Macauhub news agency has reported.

The PPP is named Mongo Mongo Mineração Limitada (Mongo Mongo Mining Limited). Its shareholders are the State-owned Empresa Nacional de Ferro de Angola (the National Iron Company of Angola, better known as Ferrangol) and two private-sector enterprises – Grupo Southwind: Comércio Geral, Importação e Exportação Limitada (Southwind Group: General Trade, Import and Export Limited) and Sofispa Limitada. Ferrangol holds 20% of Mongo Mongo, Southwind 60% and Sofispa also 20%.

The initial investment in the project will be above $4.2-million. The authorisation of the concession was signed by Geology and Mines Minister Francisco Queiroz. The concession is valid for five years, but this can be extended for up to 35 years, provided the concessionaire pays a tax during the first five years of prospecting. This is described by the news agency as a “surface tax” or “area tax”, which can vary between $5 and $35, but it did not report on the unit of area this tax is levied on. The concession covers an area of 195 km2.

Macauhub also noted that two of the partners in Mongo Mongo, Ferrangol and Sofispa, were also partners in another joint venture, Lombe Mining Limitada. This was also seeking gold in Cabinda province, in a prospecting area covering more than 381 km2. The Lombe project involved an investment of more than $5.6-million.

The Angola government sees mining as one of the ways to diversify the national economy away from its current dependence on oil and gas.

According to The World Factbook 2017 of the US Central Intelligence Agency, the oil sector (including supporting activities) accounts for some 50% of Angola’s gross domestic product, more than 70% of government revenues and more than 90% of exports. While diamonds are the country’s second- biggest export, they currently account for a mere 5% of exports.

This dependence on oil and gas is unlikely to change over the next few years, the Economist Intelligence Unit (EIU) has stated. Economic diversification has so far been weak, hampered by a lack of necessary reforms and a considerable degree of bureaucracy, and because of an apparent increase in late payments to companies providing services to the government.

The Angolan economy is still adjusting to a low oil price environment. The country saw average annual economic growth of 4.7% between 2011 and 2015, but experienced zero real economic growth in 2016. The EIU expects the average growth rate for the period 2017 to 2021 to be 2.5%. More precisely, it forecasts a growth rate of 2.7% this year, 2.4% next year, 2.4% in 2019 as well, 2.5% in 2020 and 2.7% in 2020.

This economic growth will mainly be the result of increased public spending and private consumption. However, Angola’s growth could be higher if the country’s new President ( João Lourenço ) approves structural reforms that have been proposed by International Monetary Fund specialists. grants gold exploration concession as it seeks to diversify economy
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