HAN­NI­BAL

The Africa Report - - CONTENTS -

Where oth­ers fear to tread

The tra­di­tional dif­fi­cul­ties of in­vest­ing in the Demo­cratic Repub­lic of Congo (DRC) have not fazed Chi­nese in­vestors, ever keen to take a greater slice. State-run firm CITIC agreed in June to buy a 20% stake of Ivan­hoe Mines, which is de­vel­op­ing Africa’s largest cop­per de­posit. CITIC was not vis­i­bly wor­ried that Ivan­hoe has been vo­cal about Kin­shasa’s min­ing re­forms (see below) and says it will take the gov­ern­ment to court. With the new dig­i­tal econ­omy de­pen­dent on cobalt-pow­ered smart­phones and cop­per-hun­gry re­new­able energy, China sees a strate­gic ad­van­tage in se­cur­ing min­eral stocks. And, while many West­ern com­pa­nies back away, Chi­nese in­vestors are pil­ing in, lock­ing in sup­ply con­tracts and min­ing eq­uity. Glen­core, for ex­am­ple, agreed in March to sell a third of its cobalt output to Chi­nese bat­tery maker GEM.

Min­ing whin­ing

There may be trou­ble ahead. Some of the min­ers in­volved may pre­tend they will not lit­i­gate… We’ll just face the mu­sic and dance, sug­gests min­ing min­is­ter Martin Kab­welulu. “The code will be ap­plied as it was pro­mul­gated!”, he barked at Reuters in a text mes­sage. Tax hikes for sev­eral big min­ing houses are now due af­ter the code was signed by Prime Min­is­ter Bruno Tshibala on 15 June. We hear the lawyers are sharp­en­ing their quills as we speak, with tra­di­tional hand­wring­ing about ‘eco­nomic na­tion­al­ism’ com­ing to the fore. South African miner Rand­gold leads the fight­back against the changes to the min­ing code, which in­dus­try play­ers say will re­duce for­eign in­vest­ment in the sec­tor as the gov­ern­ment gets a big­ger take.

Dis­rupt­ing lu­cra­tive net­works

A few thou­sand kilo­me­tres to the east, other min­ers are also un­der pres­sure. Morocco’s phos­phate min­ing and fer­tiliser gi­ant OCP has dis­rupted the Kenyan fer­tiliser im­port barons with a much cheaper prod­uct. But the barons are push­ing back: in Jan­uary, a cargo was ac­cused of be­ing con­tam­i­nated with mer­cury. An in­sider at OCP claims this is a di­ver­sion­ary tac­tic, and that the fer­tiliser in ques­tion was ac­tu­ally cre­ated in con­junc­tion with Kenya’s own in­sti­tute of agro­nomic re­search. The cash gen­er­ated from the fer­tiliser im­port busi­ness is said to run right up into the strato­sphere of Kenyan po­lit­i­cal power.

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