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09 Jul 2024

Chinese Investment, Cooperation to Boost Multi-Sector Development in Angola

Chinese Investment, Cooperation to Boost Multi-Sector Development in Angola
Angola represents the second largest destination for Chinese foreign investment, with Chinese firms investing approximately $12 billion in the country over the past decade. Covering various sectors of the economy, Chinese investment has served as a linchpin for project development in Angola. Strengthened trade and commercial ties between the two countries represent a priority for both Angolan President João Lourenço and his Chinese counterpart Xi Jinping, creating new opportunities for multi-sector development in Angola.  

Oil and Gas

China imported approximately 572,000 barrels per day (bpd) of Angolan crude between January and February 2024, showcasing a 7.5% year-on-year increase. While Angola is only the eighth largest supplier to the country, as an import-heavy oil economy, China is seeking diversified energy supplies to support industrial growth and is thereby strengthening trade dynamics with Angola – sub-Saharan Africa’s second largest oil producer.

At the same time, the country is incentivizing Chinese companies to invest in hydrocarbon exploration in the southern African country. In March 2024, China’s state-owned China National Offshore Oil Corporation (CNOOC) announced that it was sending a team of senior executives to Angola to discuss investment opportunities in oil exploration. A key discussion point was Block 24, a deepwater concession put on offer in the country’s latest 12-block tender – which concluded in January 2024.

Infrastructure

The Chinese Embassy in Angola estimates that Chinese companies have supported up to 2,800 km worth of railway restoration in Angola; 20,000 km of roads development; the construction of 100,000 housing units; and over 50 hospitals in the country. Recent investments include Chinese construction firm China Road and Bridge Corporation winning a $2.5 billion deal in July 2024 to construct Angola’s first motorway. The 1,400 km project will connect the northern and southern regions of the country, including connections to Namibia and the DRC. Construction is expected to begin in late 2025 or early 2026.

In the energy sector, Chinese engineering firm China National Chemical Engineering secured a contract to develop the 200,000 bpd Lobito Refinery in Angola in October 2023. The facility aligns with national efforts to increase refining capacity while supporting regional distribution. Additionally, Chinese construction firm Gezhouba Group is developing the 2 GW Caculo Cabaça hydropower plant in Angola. Construction will be complete by 2026 with commissioning expected by 2028. 

Mining

China is seeing a growing reliance on critical mineral imports to support industrial projects in the country. In 2019 alone, the country imported $10 billion worth of minerals from sub-Saharan Africa – a figure which is set to increase rapidly as global demand for battery-powered technologies grows. In Angola, Chinese companies have stakes in various diamond, copper and gold mines.

Chinese mining company Sinomine signed an offtake agreement in June 2023 for the Namibe Lithium project in Angola. Sinomine is investing $21.3 to support exploration and development activities at the project. Additionally, the Mavoio-Tetelo copper project – developed by Chinese mining firm Shining Star – expects production to start in 2025 while Chinese mineral company Niobonga expects to start biobium exploration at the Angola Bongo mine in 2025.

Telecommunications

China’s telecommunications sector is valued at $491.9 billion and is projected to reach $562.3 billion by 2029. As such, Angola’s Ministry of Telecommunications, Information Technologies and Social Communication is strengthening ties with China to modernize the country’s telecommunications industry. Earlier this month, the ministry toured ICT infrastructure developer Huawei’s factories and innovation centers in China to learn more about Chinese technology and production lines. Huawei signed an MoU with Angolan internet service provider Angola Telecom in June to enhance mobile coverage and telecommunications infrastructure in Angola.

As China’s appetite for Angolan oil, gas and minerals grows, the Angola Oil & Gas (AOG) 2024 conference – scheduled for October 2-3 in Luanda – serves as platform for the two nations to foster and strengthen ties across the industry. A delegation of Chinese companies is expected to participate at this year’s conference, highlighting opportunities for Angolan players to sign deals and drive projects forward.

AOG is the largest oil and gas event in Angola. Taking place with the full support of the Ministry of Mineral Resources, Oil and Gas; national oil company Sonangol; the National Oil, Gas and Biofuels Agency; the African Energy Chamber; and the Petroleum Derivatives Regulatory Institute, the event is a platform to sign deals and advance Angola’s oil and gas industry. To sponsor or participate as a delegate, please contact [email protected].

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