The first detailed report on financing mining projects in Angola, carried out between the 12th and 23rd of this month, coordinated by Francisco Ngongo and Lubanza Pedro, was presented today in Luanda, during the 3rd Banking & Mining Forum, promoted by Bumbar Mining and the Institute Superior Metropolitan Polytechnic of Angola (Imetro).
According to the report, the main commercial banks contacted “revealed significant resistance to financing the mining sector”.
The work points out that evidence was collected that commercial banks operating in Angola “are not willing to invest in the mining sector”.
The majority of banks contacted were not available to provide information and primary data on credit with companies in the mining industry, “revealing the lack of specific credit policies for this sector”.
Of the 10 banks approached, says the report, only Banco Keve provided relevant information on financing mining projects.
From 2022 to the second half of this year, the study indicates, the stock of bank credit for financing mining projects represents only 26.6 million kwanzas, out of a total of 887.1 million kwanzas (875,652 euros), whose rate of annual change from 2023 to June 2024 is -6.9 percent.
“These data, recently published on the BNA [Banco Nacional de Angola] website, clearly demonstrate the insignificance, the almost non-existence of financing for mining projects, ‘greenfield’ or brownfield’”, points out the report.
Extreme uncertainties, interest rate risk and high inflationary pressures are other factors that contribute to banks' fear of financing projects.
At the last forum on Banking & Mining, the national director of Mineral Resources, André Buta, cited in the report, said that banks justify themselves with the “high risk of the sector”, with “only 10 percent of prospecting projects (greenfield ) arrive at the mines.”
In an interview with the press, the director of Bumbar Mining, Sebastião Panzo, considered the resistance of the banks a challenge for the country.
Sebastião Panzo highlighted that the forum aimed to bring together banks, investors, the sector's supervisory authority and regulator, to raise awareness about the challenges that exist in implementing prospecting projects, the costs of the activity and how banking institutions can be involved without the initial risk, “which makes banks see it as an unattractive activity to invest in”.
According to Sebastião Panzo, there is beginning to be a predisposition among banks to create departments linked to mining.
“What we consider important is to bring people together for everything that can be mitigated, so that banks can start investing in prospecting,” he said.
The person in charge stressed that it is necessary to find ways of financing prospecting, looking at various modalities that exist in Africa and the world, such as the creation of financial syndicates to finance, Angolan banks with other international banks, as well as determining phases of prospecting for financial support.
