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Assessing Sovereign Risk in Angola: A Nuanced View for Mining and Energy Investors
Sovereign risk in Angola is a legitimate consideration, especially for those familiar with its past under President José Eduardo dos Santos. This was a period defined by opaque governance, elite capture, and arbitrary interventions. Energy majors like ExxonMobil and Total were subjected to repeated fiscal renegotiations, and in one of the most notable cases,
Cobalt International Energy had its offshore licences cancelled — eventually settling with Sonangol for
$500 million.
However, since
João Lourenço assumed office in 2017, Angola has made substantial strides toward reform. His administration has pushed through a revised
Private Investment Law, updated the
Mining Code, and led Angola into the
Extractive Industries Transparency Initiative (EITI). The political purge of the dos Santos-era elite — including the removal of Isabel dos Santos from Sonangol — signalled a move toward a more rules-based approach. While the government has still sought to increase its fiscal take in oil and gas, this has been done through more structured renegotiations rather than coercive expropriation.
In this evolving context, Angola currently holds a
Moody’s sovereign rating of B3 with a stable outlook (as of January 2025). This places it on par with
Nigeria (also B3), and ahead of countries like
Zambia and
Ghana (both Caa2, albeit with positive outlooks), and
Mozambique (Caa2, stable, with its local-currency rating downgraded to Caa3). These ratings frame Angola as a
higher-risk but viable borrower. The stable outlook suggests no imminent downgrade but highlights limited fiscal headroom if external shocks occur. Angola’s rating is supported by fiscal reforms, a more transparent regulatory environment, and its strong commodity base. In short, Angola is still a frontier jurisdiction — but a far cry from the distressed sovereigns of the past.
For resource investors, however,
one additional question must be asked:
Where are the rare earths actually located?The answer increasingly points to Africa. An estimated
30–40% of the world’s critical minerals lie on the continent — and
Angola’s Longonjo deposit is one of the most advanced, accessible, and strategically located rare earth projects in the world.
The Longonjo project, being developed by
Pensana, stands out for its:
- High-grade, shallow monazite-hosted NdPr mineralisation
- Low strip ratio and no overburden
- Direct rail access via the Lobito Corridor
- Clean hydroelectric power
- Sovereign partnership with Angola’s FSDEA, which holds 25% of the parent company and is a co-architect of the project’s structure
Pensana’s Longonjo mine is not speculative — it is
fully funded,
construction-ready, and developed to international ESG standards. It is aligned with Angola’s ambition to retain more value onshore through
local beneficiation, and already benefits from a
35-year mining licence with associated tax incentives.
In sum, Angola still carries political and economic risks — but for projects that align with national development goals, demonstrate ESG compliance, and are underpinned by globally significant geology,
the opportunity now outweighs the risk. The reality is that
some of the most strategic deposits in the world are not in low-risk jurisdictions — and the long-term winners will be those who engage responsibly where the resources actually are.
yTb, with a global ratio of 97 to 3.
