Lonrho Plc (AIM: LONR), the conglomerate with a structured portfolio of African investments, is pleased to announce that it has signed an agreement to develop an aggregate project in the Province of Bengo, Angola to supply the growing Angolan construction industry.
The project area consists of a 75 hectare resource and is located in the area of Quinzenze / Mussenga in the Municipality of Dande and is registered with the Ministry of Geology and Mines and by the National Directorate for Mining Licensing and Register as concession number 0629/71/T.E./DNLCM/2006.
A new company, Lonrho Aggregates Angola, ( LAA ), will be established. Lonrho will own 51%,of LLA in conjunction with its local Angolan partner, Project Net Lda which will own 14%, and the Angolan owner of the resource, Golden Market SA, which will own the remaining 35%.
The project will be funded by a combination of shareholder loans to the new company and local bank debt and is forecast to cost in the region of US$ 5 million, with 65% being funded by local banks. A detailed resource and implementation plan for the project are being developed.
Angola is in the midst of a large scale construction boom and the demand for aggregates for local consumption is significantly outstripping supply. The importation of building materials in Angola is subject to significant delays due to ongoing congestion at all Angola's major ports. This has lead to growing demand for materials to be supplied on the domestic market, to increase time and cost efficiencies.
Tests that have been carried out on the aggregate indicate the resource is of an excellent quality.
David Lenigas, Lonrho's Executive Chairman commented:
"We are excited about the opportunities this will bring for Lonrho. Angola is a key developing market in Africa, with significant potential and numerous growth opportunities. The requirement for quality aggregates in Luanda and the surrounding market is being driven by the major infrastructure and commercial projects under construction. The location of this resource body is ideal as it is situated to the north of Luanda, where it can supply the new road and infrastructure developments being constructed for New Luanda City, and by barge, the US$ 4.5 billion Soyo LNG refinery being constructed by Bechtel.
"The project demonstrates numerous synergies with Lonrho's other projects in that it secures a supply of aggregate for the various Lonrho projects under development in Angola, including the Enditrade Logistics Terminal and the Lonrho water bottling factory."
