THE REPUBLIC OF ANGOLA’S GOVERNMENTAL STRATEGY FOR ITS MINING

SECTOR

1PRESENTATION

1. The Country and the Public Management of Mineral Resources 1.1. History, Geography and Macroeconomic Data 1.2. Public Management of Mineral Resources: Vision, Mission and Values

2. PALANEGO - National Geology Plan2.1. Studies 2.2. Public Infrastructure supporting PLANAGEO

2.3.1. Railroads, highways and bridges 2.3.2. Mineral Ports2.3.3. Electrical Energy 2.3.4. Financial System

3. Opportunities for Investment and Partnerships4. Current Results5. Partnerships 6. Conclusion

2PRESENTATION

1. THE COUNTRY - History, Geography and Macroeconomic Data

3PRESENTATION

THE COUNTRY

Republic of Angola, since 1975 Presidential System of Government Elections every 5 years. The most recent in

2012 and upcoming ones in 2017 Some 20 million inhabitants in 18 provinces; Area - 1,246,700 Km2 ;

HISTORY OF MINING

INDUSTRY

Mining (for more than a hundred years); 1912 – setting up of Angola’s first explorations

company – Companhia de Pesquisas Mineiras de Angola

1975 – Natural Resources property of the Angolan State: SONANGOL, ENDIAMA and FERRANGOL

2014. PLANAGEO. Mining diversification; CATOCA - fourth largest diamond mine operation

Worldwide

Angola’s Rating: BB (Standard & Poor’s 2013):

WB Report, May -2013: - Third largest nominal GDP in Sub-Saharan Africa: 125 billion USD

– Third largest GDP per capita : 6,070 USD:

– Largest growth in GDP: average of 9.1%:

– Growth of non-oil and gas sector : 9.5%

1.1 MINISTRY OF GEOLOGY AND MINES - Services

4PRESENTATION

The Ministry of Geology and Mines, as the State’s Central Administrative body, ensures the execution of national policies defined by the Executive in the domain of geological and mining activities in Angola.

CENTRAL SERVICES

National Department of Mines. (present)

National Department for Mining Licenses and Registration;

National Department of Geology;

INSTITUTES AND COMPANIES OVERSEEN BY STATE

Public institutes:

GEOLOGICAL INSTITUTE OF ANGOLA (present); NATIONAL AGENCY FOR REGULATION OF GOLD

MARKET

Companies subject to oversight: ENDIAMA E.P (National Concessionaire); FERRANGOL (National Concessionaire for

Precious and Base Metals); GOLD AGENCY (Marketing Gold); AGROMINAS (Agriculture in mining areas).

1.2 Vision, Mission, Goals and Values in Managing Mineral Resources

5PRESENTATION

Vision, Mission, Values, Goals and Strategic Challenges

•Vision Be one of the largest contributors to GDP:Be the largest source of jobs (especially for young people).

•Mission Execute the National Development Plan (PND 2012 -2017) as defined by the Angolan Government successfully.

•Goals Diversify mining, currently concentrated in oil/gas and diamonds; Increase tax and fiscal revenues; improve population’s standard of living (whether by increasing number

of jobs, or by social investment in regions adjacent to mining areas).

•Values Transparency, Loyalty and Rigor

2. PLANAGEO - National Geology Plan

6PRESENTATION

NATIONAL GEOLOGY PLAN – Goal: to enhance geological knowledge throughout national territory, by:

Aerogeophysical, aerophotogrammetric, terrestrial geophysical, geological and geochemical surveys of the entire country;

Geological, geotechnical and hydrogeological maps to different scales:

Construction, equipping and operation for 2 years of 3 geochemistry laboratories (Luanda, Saurimo and Huila).

Training and qualification of staff; Operating method: Division of the country into 3 parts and contracting of 3 companies for the aerogeophysical and chemical surveys.

Duration: 5 years Investment: US$ 405,000,000 totally supported by the Government.

PLANAGEO

The National Geology Plan (Planageo) approved by Resolution Nº 85/09 of September 24, 2009, which establishes the reparation of shortcomings of Angola’s geological and mining information

PLANAGEO is a project whose objective is to:

1. Increase knowledge of the country’s geological and mining potential

2. Support Angola’s growth, identifying sources of resources needed to develop the economy

3. Develop the diversification of the national economy, currently concentrated on the production of oil/gas and diamonds

TYPE OF STUDIES

AEROGEOPHYSICAL

Regional (M/R) and local (M/R+TEM/AAG) Flights

... PLANAGEO - National Geology Plan

7PRESENTATION

AEROGEOPHYSICALRegional (M/R) and Local (M/R+TEM/AAG) Flights

... PLANAGEO - National Geology Plan

8PRESENTATION

GEOCHEMICAL(Stream sediments, panning etc.)

DISTRIBUTION OF LABORATORIES

ADMINISTRATIVE DIVISION

... PLANAGEO - National Geology Plan

9PRESENTATION

GEOLOGICALOn different scales (outcrops, channels, trenches)

Key: CITIC IMPULSO

COSTA NEGOCIO

MAP: SCALE 1:100 000

... PLANAGEO - National Geology Plan

10PRESENTATION

SPECIFIC(Geotechnical, mineral resources for construction and metallic minerals)

2.2.1 PLANAGEO – Railroads

11PRESENTATION

RAILROADS

North – Luanda Railroad, Port of Luanda to Malange, projected for Eastern provincesCenter – Benguela Railroad, Port of Lobito to Luau, going to DRC and ZambiaSouth – Mocamedes Railroad, Port of Namibe to Kuando Kubango PROJECTED North-South Rail link

English key:------ PROJECTED NETWORK

######## EXISTING NETWORK

DEPARTURE, ROUTE & ARRIVAL POINTS

JUNCTION WITH OTHER SADC NETWORKS

2.2.2 PLANAGEO - Mineral Ports

12PRESENTATION

MINERAL PORTS

Lobito Mineral Port;

Namibe Mineral Port;

Projected Mineral Port in new Port of Luanda (Barra do Dande);

Cabinda Mineral Port Project

2.2.3 PLANAGEO – Electrical Infrastructure

13PRESENTATION

ELECTRICAL ENERGY More than 6,000 MW by 2018 - Med Kwanza: Lauca, Caculo Cabaça, Alteamento Cambambe, Thermoenergy, Natural Gas in Soyo, Others - Lomaun, Gove, Jamba ya Mina, Jamba ya Oma, Keve - By 2018 the country will produce sufficient electrical energy for all requirements and to kickstart of industrialization.

2.2.4 PLANAGEO - Communications

14PRESENTATION

COMMUNICATIONS – Fiber optic telecommunications throughout the country, Africa, Europe, America and a soon-to-be communications satellite

2.2.5 PLANAGEO - Financial System

15PRESENTATION

FINANCIAL SYSTEM – Comfortable liquid financial reserves, little foreign debt, external credibility and dynamic banking system.

Commercial BanksMultiple BanksSavings BanksCredit, Financing & Investment Systems

Real Estate Loan Companies

FOREX BrokersStock Market

BM&FInvestment Banks

Broker/DealersInvestment Clubs

CBANK SEC

NMC

NFS

2.2.6 PLANAGEO – Roadway Network

16PRESENTATION

ROADWAY NETWORK - The country is linked by main secondary and tertiary roads.

3. OPPORTUNITIES

17PRESENTATION

OPPORTUNITIES

Opportunities for the exploration and mining of:

Diamonds, Ornamental Stones, Agri-minerals, Industrial Minerals,Minerals for construction, Base Metals,Iron, Manganese, Gold and copper.

RESULTS

Diversification of Mineral Production

Diamonds

Ornamen-tal Stones

Agri-minerals

Industrial Minerals

Minerals for Construc-tionBase Metals

Steel

Man-ganese

Gold

Copper

4. Current Results

18PRESENTATION

RESULTS

INDUSTRIAL – A total of 7,923,532.56 carats marketed, worth 957,390,886.48 USD, at an average price of 120,828 USD.

DIAMONDSMINING

Some results that involve

Angola’s mining sector

ORNAMENTAL STONE SUBSECTOR - Ornamental stones (which include marble, granite and similar stones), overall production reached 32,857.03 m3 (to be reconciled, because quarries are located in areas without communications - telephone and internet) and exports, 25,003.07 m3. Sales (on the local market and exports) amounted to 9,148,117.15 USD.

QUARTZ SUBSECTOR - The export of large-volume samples (3,536 tonnes marketed), generated a total gross revenue of 85,020,000 Akz. (805,002 USD). The installed capacity of mines surpasses 70,000 tonnes/year, with existing stockpiles of quartz estimated at 45,000.

MINERALS FOR CONSTRUCTION (INERTS) SUBSECTOR – This includes Sand, Burgau, Gravel, Clay and Limestone, reached a total production 4,699,028.28 m3.

OTHER MINERALS

SMALL-SCALE – Small-scale production counted on six accredited operators for the purchase of raw diamonds, with 678,884.15 carats having been marketed, worth 206,473,890.33 USD, at an average price of 304.137 USD/ carat.

5. OPPORTUNITIES FOR INVESTMENT AND PARTNERSHIPS

19PRESENTATION

•Surface Tax – US$ 01/km2 in first year; US$ 07/km2 in second year; US$ 12/km2 in third year; US$ 20/km2 in third year and in fifth year US$ 40/km2;

TaxRegime

•Income Tax on Mining Activity – 25%, of which 05% reverts to the local authority whose jurisdiction covers the mine;

Income Tax

•Royalty 02% – 05% on value of minerals produced at minehead

Royalty

TAX REGIME

6. Partnerships

20PRESENTATION

PARTNERSHIPS The Republic of Angola subscribes, within the scope of mining, to the following vision:

IN RELATION TO AFRICAN COUNTRIES - exchanges of synergies, sharing of investments, knowledge and technologies, cooperation and involvement in regional and continental initiatives. Mutual assistance in improving knowledge of mineral resources on the continent with geological-mining research programs on every scale, in the diversification of geological-mining activity, in the establishment of better regulations that reinforce values of transparency in processes and legal security, in a greater conjoining of financing which is applied to the entire mining sector chain (from exploration to beneficiation) and in sustainability and social responsibility.

IN RELATION TO AMERICA, EUROPE, ASIA AND OCEANIA - change in thinking on Africa, in its fundamental pillars of Independence, Sovereignty, Trust and Respect; Independence - on the continent, natural resources belong to the African countries and their citizens, under the same conditions in which, in Europe, natural resources are also for their states and citizens; Sovereignty - African countries have the same right to decide freely, and without external conditions, on the mining of their resources; Trust - Western countries have - above all - to give the benefit of the doubt to African leaders; Respect - for the cultural and spiritual references, and even the behavioral ones, of Africans.

6. Conclusion

21PRESENTATION

ADVANTAGES OF INVESTING IN ANGOLA’S MINING SECTOR

• Angola’s vast territory presents geological characteristics and an attractive mining potential, conducive to the discovery of new mineral deposits;

• The Mining Code offers guarantees and protection for private investment;

• Tax and customs regime, of the most attractive in Africa;

• PLANAGEO will produce geological information to support the making of sound investment decisions in Angola’s mining sector;

• The country has infrastructure (energy, highways, railroads, ports, telecommunications, etc.), capable of meeting the mining industry’s demands;

• The country offers political, economic and social stability, a pleasant climate, peace, tranquility and hospitality

22PRESENTATION