Guess who is poised to benefit greatly from peace and opportunities in Angola. SUF has a carried interest in the Camafuca Pipe
"A total of 20% of the project will be held by Empresa Nacional de
Diamantes de Angola ("Endiama"), the Angolan state diamond mining company. An
affiliate of Endiama, Sociedade Mineira do Lucapa Limitada ("SML"), will hold
15%. Another 33% (formerly 32%) will be held by Welox Limited, a member of the
Leviev Group of Companies. Mr. Leviev is an internationally recognized
businessman who is a member of a syndicate which has been granted the
concession to market Angolan diamonds. Welox has committed to provide up to
US$18 million in new financing for Camafuca which should be more than
sufficient to meet the requirements specified in the feasibility study.
SouthernEra, through its subsidiary company, SouthernEra Angola LDA will be
the project operator and retain a 32% carried interest.
Total resources at Camafuca to a depth of 145 meters are estimated at
209.5 million cubic meters containing 23.24 million carats of diamonds valued
at US$109 per carat, resulting in an in-situ value of approximately US$2.5
billion. The Phase I Feasibility Study proposes the application of a marine-
type cutting head dredge rated at 550 cubic meters per hour for mining
operations. During the 60-month Phase I period, mining operations will
concentrate on the southeast corner of Camafuca where 6.13 million cubic
meters of material will be dredged with an average grade of 0.18 carats per
cubic meter and a value of US$117 per carat. The kimberlite material will be
slurry transported from the dredge by pipeline to a land-based traditional
dense media separation plant.
Overall operating costs during Phase I are estimated at US$9.76 per cubic
meter, or approximately US$55 per carat. Phase I capital costs are projected
to be US$16 million. Construction of the dredge and processing plant will take
approximately 9 months after final permits have been granted. Phase I net cash
flow before interest expense is estimated at US$40 million, generating an
internal rate of return of 185%. Payback of the initial US$16 million of
capital costs is expected to occur during the first 12 months of full
production."
newswire.ca
Angola full of opportunities, but would-be investors urged to walk
Sherilee Bridge
April 09 2002 at 12:04AM
Johannesburg - Investing in a post-war Angola could still be a minefield, South African companies have been warned.
The SA Institute for International Affairs (SAIIA) said last week that local companies should wait for the ink to dry on the Angolan peace accord before rushing into the huge investment opportunities that exist there.
It is hoped the formal signing of a ceasefire agreement between the Angolan government and Unita rebels on Thursday will bring an end to the country's 27-year civil war.
The agreement comes less than six weeks after Unita founder and leader Jonas Savimbi was killed in battle.
Sapa reported the first batch of Unita officers had been incorporated into the Angolan armed forces under the ceasefire deal.
"Any investor looking at Angola must look at its history to more accurately evaluate investment risk," said Neuma Grobbelaar, a senior researcher at the SAIIA.
"Yes, the death of Savimbi does present an opportunity for Angola to find a real and lasting end to its political and economic conflicts, but the transition will not be without its problems."
She said investors burnt their fingers in 1992, the year of Angola's first election, and in 1996, when peace negotiations were resumed. On both occasions the promise of a new Angola collapsed.
While the UN believed "there can be no excuses for failure now", Grobbelaar said the situation was still sensitive and should be given time to prove to be peaceful.
Paul Runge, the managing director of Africa Project Access, said the peace truce could trigger an immense amount of investor interest.
South African-driven projects, particularly in southern Angola, could be revived.
"And if the Angolan government manages to secure an International Monetary Fund loan, something it has been working on for years, the vote of confidence would boost investor perceptions," Runge said.
It was very expensive to do business in Angola, with its power and facilities all based in dollars, he said.
But despite this, Angola continues to attract the highest foreign direct investment in Africa.
Duncan Clarke, an oil and gas specialist at Global Pacific, said $20 billion had been earmarked for investment in the Angolan oil industry over the next five years.
While local oil company Energy Africa had little serious investment left in Angola, Clarke said Sasol could be interested in the gas deposits and might tie up with Chevron, already an operator in the Angolan oil industry, to build a gas to liquids plant there.
South Africa's state-owned oil company, Soekor, was also known to be interested in entering Angola's rich oil industry.
Clarke said the Angolan government was keen to develop a diversified downstream sector, with a refinery and liquified natural gas plant worth several billion dollars already in the pipeline.
The Angolan government has said it was committed to creating an enabling environment for business people to invest in its mineral development.
Mankenda Ambroise, the national director of mines at the Angolan ministry of geology and mines, said the reforms being carried out by the Angolan government were aimed at creating an enabling environment for private investment and minerals development.
Nearly 98 percent of Angolan government revenues generated by the mining sector, excluding oil, were derived from the export of diamonds.
Despite its civil war, Angola has grown its diamond exports from $189.6 million to $688.6 million in the past decade.
Besides its diamond deposits, which are said to rival those of Botswana, the country boasts gold, platinum group metals, iron ore and manganese, which can be economically exploited.
Ambroise said at the Investing in Mining Conference in Cape Town earlier this year that the government of Angola continued to encourage reputable mining companies to invest in the country to develop its mineral wealth in a diversified manner.
Angolan mining and petroleum development are, however, governed by specific legal statutes, most of which have been updated in the past few years.
Patrick Evans, the president and chief executive of SouthernEra, believed Angola's minerals industry had immense potential to attract foreign investment, but its minerals laws were not yet in line with world best practice.
SouthernEra is a diamond and platinum exploration and production company with operations in South Africa and headquarters in Toronto.
The company hoped to finalise the details of an operating agreement for the Camafuca mine with the Angolan government this week.
SouthernEra has already invested $12 million in Camafuca, which is believed to be one of the world's largest diamond deposits. Along with the Leviev Group, it hoped to soon begin phase one of the kimberlite mine's construction.
"We have been operating in Angola for the last five years and it has taken a year to negotiate the operating agreement," said Evans.
"Even with the ceasefire, investment in Angola's mining industry will not increase until its minerals regime is updated."
Besides mining laws preventing private business partners from holding more than 50 percent of mining operations, all diamond production has to be sold through one marketing channel - the Angolan Selling Corporation.
Angola's diamond marketing policies were the reason behind diamond giant De Beers' exit from that country.
busrep.co.za |
