Angola Mining Report Q2 2016
BMI View: Despite a challenging outlook for commodities internationally, we are looking for Angola'smining sector to continue growing at a steady pace through the next few years as the government looks tomineral extraction as a means of diversifying the economy and easing its reliance on oil and gas exports.
Diamonds will remain the mainstay of the industry, with state-owned mining company currently increasingproduction to mitigate recent price falls. A lack of sufficient mining-related infrastructure remains anongoing obstacle to mining activity in the country and the government is looking increasingly to sourcemuch-needed investment by exploring partnerships overseas. We expect this to be a long-running themewhich should create opportunities for investors and new entrants over the next few years.
Latest Updates And Developments
We have revised our estimations for diamond output upwards for 2015 following the recent release ofprovisional production data by Angola's Ministry of Geology and Mining. Angola's diamond productionis, therefore, estimated to have grown by 5.6% in 2015 to 9.3mn carats. This increased level of outputreflect recent contraction in Angola's diamond export revenues, which are estimated to have shrunk toUSD1.1bn in 2015 due to a fall in global prices.
We are looking for mined diamond output to continue growing at a solid rate through the forecast period;we forecast production to increase by 4.1% in 2016 and to expand by 4.6% a year on average over2016-2020.
We maintain our view that Angola's mining sector is well placed to expand over the next few years as thegovernment looks to promote the diversification of Angola's economy. Further talks between the Angolanand Chinese governments in December 2015 illustrate the increased role that foreign investors are likelyto play in developing the country's mineral deposits.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook