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A new steel market: Business opportunities in Angola

In a world of steel dominated by China, many countries continue to invest heavily in the steel market for its development, as well as in reducing their dependency on imported products. In this sense, and despite many political and civil instabilities, countries like Angola are finally taking their first big steps in this market with the goal of becoming competitive and self-sufficient, opening doors to various investment opportunities.

Market Insights

According to data pointed out by the Ministry of Industry, Angola currently produces almost one million tons of steel per year. One of the country's largest steel producers is ADA - Aceria de Angola.

With an investment of about USD 300 million, this plant has been operating since 2015, and is located in Barra do Dande, Bengo province, with 150 thousand square meters. It was designed to produce around 300 thousand tons of rod, electro-welded mesh, ingot and wire rod, and thus stop importing steel rod.

In Angola, the steel market is currently controlled by several local companies, and exports to the Democratic Republic of Congo (DRC), Rwanda, Mali, Gabon, Ivory Coast and Ghana according to Mercado newspaper in Angola. Georges Choucair, one of the most important names in the Angolan steel market, and current administrative manager of ADA, adds: "Democratic Congo represents an important strategic partner, given the border access, the size of the country, and the complexity of its infrastructure”.

Despite the lack of raw material producers, and ore mining, the newspaper Jornal de Angola wrote that ADA is reinforcing its raw material supply with the extraction of iron ore from the Cassinga deposit in Jamba, Huila. However, despite this exploitation, a large part of the raw material for the steel industry in Angola still has to be imported. Ferroalloys, for example, which are extremely important and versatile for the steel production process, are not easily purchased in Angola, which further limits the process. The steel mills therefore have no choice but to import the products. This situation is also indicated by the Minister of Industry, Bernarda Gonçalves Martins, who reinforces that the full operation of the factories depends on the current exchange rate situation in the country. In terms of scrap, the industry uses mainly national raw materials, however there are other products, materials, consumables, which have to be mandatorily imported.

Despite this situation, Angola intends to reach self-sufficiency in this market already this year, alleviating their dependence on oil.

\ The great mineralogical potential of the Angolan subsoil is still partially known, but it is under continuous study and represents a key opportunity to invest in the country. Besides diamond, the Angolan territory is a depository of ferrous metals (iron, manganese, titanium and chromium), non-ferrous or base metals (copper, lead, zinc, tungsten, tin, nickel and cobalt), rare metals (lithium, niobium and tantalum), noble metals (gold, silver and platinum) and also rare earths, useful in telecommunications (in Jornal de Angola). This potential is confirmed by the local governor, Joana Lina, who also adds that the mining sector is one of the main strategic areas of the national economy.

In summary, Angola has enormous economic potential in the steel sector, with capacity for various investments in different aspects of this industry. However, the exploration of Angolan soil is still a difficult and risky task, and therefore the potential it hides is not yet 100% visible.

Nevertheless, this investment by Angola in the steel market may come as a surprise with its growth rate and may even make Angola a very competitive country in steel production, at the level of various other countries. If the exploration of its subsoil will unveil its full potential in the near future, this growth may be even more significant, opening the doors to a new world of steel in the African subsoil.

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