Angola, the world’s second-largest diamond producer, possesses abundant critical minerals vital for the green energy transition. Historically dependent on oil exports, Angola is actively diversifying its economy to reduce this reliance. As of 2023, Angola is Africa’s third-largest crude oil producer, trailing Nigeria and Libya. The country’s oil exploration began in the 1950s, with production starting in 1968. Despite oil and gas comprising a significant portion of its GDP and fiscal revenues, Angola is expanding its mining sector, which currently contributes only 1.6% to GDP.
Angola boasts a variety of mineral resources, including gold, platinum, nickel, and critical minerals such as chromium, cobalt, graphite, lead, lithium, and nickel. The country holds 36 of the 51 most critical minerals globally. This mineral wealth, coupled with increased stability and government reforms, has sparked international interest. Analysts believe about 60% of Angola’s territory remains unexplored for metals and minerals, presenting significant opportunities for investors.
The government, led by President João Lourenço since 2017, has introduced measures to enhance transparency and attract foreign investment. These include joining the Extractive Industries Transparency Initiative and establishing the National Agency of Oil, Gas, and Biofuels. Furthermore, Angola is privatising parts of its economy, such as Sonangol and Endiama, and implementing a National Development Plan up to 2027 to boost foreign investment.
Diamonds remain a significant export, with production expected to increase by 50% in 2024. The Luele diamond project, Angola’s largest diamond mine, started production in 2023 and is expected to transform the industry. Angola is also investing in diamond processing capacity and has launched several initiatives to improve value addition in the sector.
Pensana, a London-listed mining company, is developing the Longonjo project, aiming to produce rare earth elements crucial for green technologies. Funded partly by Angola’s Sovereign Wealth Fund, this project underscores Angola’s commitment to becoming a key supplier of energy transition-related minerals.
International partnerships are also growing. In 2023, Japan signed an agreement with Angola to enhance trade and investment cooperation. Additionally, the US and EU are investing in the Lobito rail corridor to improve regional transport and mineral export capacity.
Pensana highlights Angola’s potential to support the global clean energy transition by developing its critical mineral resources. The success of these initiatives depends on responsible mining practices, transparent governance, and strategic investments.
Pensana plc (LON:PRE) explores and mines neodymium, praseodymium, and rare earth minerals. The Company’s flagship assets are the Saltend rare earth refinery project in the United Kingdom and Longonjo neodymium and praseodymium (NdPr) Project in Angola.
