China ‘wary, but still interested in SA’

CHINESE mining companies were spooked by the Marikana massacre last year and other labour unrest in SA.

But the companies from the world’s second-biggest economy are still hungry for projects in SA, even if other parts of Africa offer alternatives, according to political risk and labour consultancy Executive Research Associates.

Yesterday, the firm launched a report titled Chinese Mining Challenge in Africa.

The report highlighted that poor relations between business and labour had damped Chinese investor sentiment, but companies there were still analysing opportunities in SA.

“China’s entry into Africa’s natural resource market may be late, but it is certainly no less dramatic than those preceding it,” Executive Research Associates said at the launch. “Since the emergence of a ‘go-out-and-buy’ strategy in the 2000s, China’s mining footprint has grown at an astounding rate,” the firm said.

Chinese group Jinchuan bought then JSE-listed South African copper and cobalt miner Metorex in 2011. Metorex now operates in Zambia, not SA.

The Chinese are also invested in platinum. China’s first direct investment in the sector was in Wesizwe Platinum, made by a consortium headed by Jinchuan.

The consortium has a 45% stake in Wesizwe and, in February, gave a $650m loan, providing the capital needed to complete the Bakubung mine.

Dirk Kotze, SA’s director for The Beijing Axis — a Chinafocused international advisory and procurement firm — said yesterday it was difficult to measure how much money the Chinese had invested and how many jobs they had created in SA’s mining sector.