"We are moving towards stabilization and growth. I think now is the best moment to invest in Angola. Everything is moving towards the exploitation of Angola's wealth potential to benefit its citizens and, at the same time, those who invest here."
What were your major accomplishments and challenges in the last couple of years?
Catoca had to overcome many obstacles, mostly in consequence of the global economic recession, in the last couple of years. Luckily, it did not have a huge impact on Catoca’s production. Nevertheless, it did have an impact on the expansion plans in our new concessions and related investments.
The new concessions, such as Luaxe, did not go through, because of the difficulty of accessing the financial markets. This was aggravated by the pandemic. The operation in Luaxe has been delayed, contradicting the expectations of starting the production in 2020.
37% of world diamond production was disrupted due to pandemic. How did Catoca respond to the Covid-19 outbreak in Angola?
Our company was a victim of the pandemic, like everybody else. Protection measures have been implemented in our offices and operational mines in order to assure our employees’ safety. Unlike other employers, we did not reduce our workforce during this period, which is our greatest accomplishment. Instead, we embraced remote work.
From March to September, the global diamond market was stagnant, therefore a management mode was implemented in order to survive the pandemic while profits fell. Production plans for 2020 decreased by about 30%; only vital investments were kept.
Despite the huge impact of this pandemic, we are proud of not letting down our stakeholders: we continue paying taxes to the government, we did not dismiss any of our employees and we are in a position to pay our shareholders’ dividends.
When do you foresee the recovery of the market now that the lockdown measures are softening?
We are looking forward to resuming operations at full capacity as soon as possible. However, the consequences of the pandemic must be considered. Hopefully a vaccine will be finalized in 2021 first quarter, stabilizing the global markets and allowing new ways of interaction.
While Endiama is preparing for an IPO to float 30% of its shares, what are Catoca’s provisional plans to align its strategy with its new shareholders?
There is no doubt about the impact all the transformations going on in Endiama as a public company that holds the State's stake will have on Sociedade Mineira de Catoca. Nevertheless, Catoca's plans are essentially anchored to the guidelines arising from the deliberations of its general assembly, mainly harmonized with the National Development Plan of Angola and the business consolidation and expansion strategy.
I want to clarify that even if Endiama, due to the implementation of the expected IPO, will have new partners, in the scope of Catoca, the relationship will not be with the new partners of Endiama in an isolated way, but always with Endiama as Catoca’s partner, as a single entity. This relationship is perfectly regulated by the statutes of the Sociedade Mineira de Catoca and in compliance with the law.
To what extent is the mining sector in Angola more transparent today than it was three years ago?
In terms of transparency we are evolving well. Concerning the implementation of new policies in the field of diamond trading and in the field of restructuring the mining sector, the clarification of taxation and observing the rules of transparency and compliance for commercial transactions of ores at the level of bank payments are being implemented.
Despite having a long way to go, we are definitely much better than we were three years ago.
How will the announced New Governance Model in the sector benefit the industry?
The benefits can be derived from the correct interpretation of legal instruments, starting with the Presidential Decree that creates the National Agency for Mineral Resources, giving it the competences of a national concessionaire and reinforcing the industrial productive vocation of Endiama and Ferrangol.
Do you have a final message for our international readers?
Angola is a country with an enormous mining potential. There is an effort by the State to make bureaucracy more flexible and provide incentives to attract investments. Our recent history that tainted many sectors of the country's economy, unfortunately affected us, delaying the process of relaunching large investments in the economy. We are moving towards stabilization and growth. I think now is the best moment to invest in Angola. Everything is moving towards the exploitation of Angola's wealth potential to benefit its citizens and, at the same time, those who invest here.