In March, Harare based Canadian Ambassador to Angola, Lisa Stadelbauer, was welcomed in Luanda by several Ministers and national officials, as well as former CEO of National Concessionaire Sonangol and now Angola’s Vice President, Manuel Vicente.
Angola wants Canada to have permanent Canadian diplomatic representation as it is understood this is a key element to develop trade and investment between the two countries. The country is still experiencing steady economic growth and Canadian companies are looking at opportunities for bilateral engagement, including trade and investment. The two countries could be looking at entering into a new joint Declaration to strengthen their bilateral relations further to the Declaration signed in 2004 on good governance and public sector capacity building.
Although Angola is known for its oil rich offshore and accounts for a daily production of almost 2.0 million bpd, it started focusing on the non-strategic mining in 2002, immediately after the end of the armed conflict. Diversifying the sources of income of its economy has since become a priority.
The coming into force of the country’s new Mining Code in 2011 and a reform of the institutions responsible for granting mining concessions alongside the creation of new SOEs and new rules for the limits of exports are amongst the steps taken in this area which have triggered interest from multinational investors, some of them from Canada.
According to available data, Angola's mining industry is set to reach total production revenue of US$2.4bn by 2017, growing at an average rate of 3.6% per annum. Kimberlitic production will provide the main source of growth during this period. According to Ferrangol EP, the SOE responsible for ferrous metals (including gold exploration) new resources including iron ore, copper and phosphates are available joint venture opportunities.
With the coming into force of Law No 20/11 of May 2011, Angola established a new rules and a process of investment which is clearer than its predecessors. The rules aim at foreign direct investment and structural reforms into the country.
The rules applicable to private investment are particularly relevant for mining projects due to their intrinsic relation to foreign exchange regulations and transfers of dividends, profits or any types of royalties.
Understanding the legal technicalities of mining projects in Angola implies a complete understanding of the investment’s mechanisms and the way authorizations from the Central Bank (BNA) jointly with the Certificate of Private Investment (CRIP) work together. In addition, the issuance of any concessionary rights for joint ventures relies on investors seeing their foreign direct investments approved with the National Agency for Private Investment (ANIP).
In a nutshell, any actual investor in today’s Angolan mining sector will be required to navigate through the set of rules applicable to (i) private investments, (ii) foreign exchange payments, (iii) Angolan company’s law, (iv) Law applicable to Joint Ventures’, (v) Angolanisation rules (Localisation) and (vi) Law No 31/11 of September 2011(Mining Code).
With a focus on Corporate Social Responsibility (CSR) and environmental issues, the rules applied to mining concessions are now modernized, simplified and clarified. Angola wishes to establish a competitive mining market in the country by turning it into a mining power house; this will allow for a response to the current demands of that specific Africa region.