800 Chinese State-owned enterprises active in Africa, covering every country

[Polly]

China’s thrust is for commodities and oil,” affirms Alden. “It’s about purchasing and extracting resources.”
“China’s focus is minerals and resources, which it needs to fuel its economy,” agrees Corkin. “But China came to this stage of development late, and needed to look for regions where there are not already strongly entrenched interests, and Africa, especially with regard to oil, still has space for the Chinese.

“There seems to be an emerging pattern. China offers African states soft loans and technical assistance to develop infrastructure and, in return, China gets access to minerals,” she highlights. “These projects generally involve several different Chinese SoEs from different sectors, such as banking, construction, and petroleum or mining.”

A key institution in this regard is the China Export-Import Bank (Eximbank). “A China Eximbank loan of $4-billion to Angola spearheaded the entry of Chinese construction firms into that country – while 50% of Eximbank loans must, in principle, be spent on buying goods and/or services from Chinese companies, 70% of the construction contracts financed by these concessional loans must go to Chinese com- panies,” she cites. Since 2000, Chinese companies have built eight middle- and large-scale power stations, more than 6 000 km of road in Africa, as well as refurbishing railway lines.

It is estimated that some 800 Chinese SoEs are active in Africa today, covering every country, although this figure includes provincially owned as well as nationally owned companies, as well as companies that are trading, not investing, and companies whose activities have nothing to do with natural resources or China’s strategy for obtaining these resources.

.............

“If you look at the trade and investment patterns, the intensity of Chinese involvement is primarily in commodities, especially energy commodities,” says Alden. “China’s main objectives are oil, iron-ore, copper – all industrial metals, and any kind of raw material required by industry, in fact,” asserts Corkin.

“Oil is the big story,” affirms Alves, “but equally important is the range of metals and minerals which are needed as inputs into Chinese industry, such as cobalt, bauxite, copper, zinc, nickel, iron-ore and precious metals – Chinese mining companies are interested in anything Africa has.”

In 2005, oil accounted for 70% of all African exports to China.
“African oil countries have received the biggest Chinese investments – Angola, Nigeria, Sudan,” points out Corkin. “Outside oil, the biggest recipients of Chinese investment have been Zambia (copper) and Gabon (iron-ore).”

“In energy, the Chinese are doing two things – in countries like Angola, where oil production is well established, the Chinese are buyers; in places like Sudan, where oil production is not established, they are investing in getting the oil out of the ground, refining it, and then shipping it to China,” explains Alden. “Their investment is totally geared to supplying the Chinese market.”

“China has invested in the Angolan oil sector, but Angola doesn’t allow any single country or company to dominate its oil, and China is a junior player in that country,” elucidates Alves. “But China entered Sudan in the mid-1990s, when Western companies left, and China now dominates the Sudanese oil sector.”

African governments have generally welcomed China’s latest approach to Africa – the country is providing appreciated aid, trade, and especially investment, without seeking to influence or alter their domestic policies and behaviour, as most other major investor countries now do.

But Chinese investment has been accom-panied by the creation of Chinese communities across the continent, and the establishment of small Chinese businesses which are competing with local small enterprises, and signs of popular resentment against the Chinese have been emerging, most notably in Zambia where, in the 2006 Presidential elections, the opposition candidate ran on an explicitly xenophobic anti-Chinese ticket.

http://www.miningweekly.co.za/article.php?a_id=116966

[Polly]

.......

At China’s disposal is an army of state operated enterprises (SOEs). Long a backbone of a previous, more socialistically inclined, era, the more effective SOEs have subsequently embraced a world of initial public offerings (IPOs), international acquisitions and foreign contracts.

China’s ruling party has entrusted them with a mandate to pursue resources deemed to be of strategic national interest -- iron ore, nickel, zinc, oil and gas and copper, among others. The SOEs have political backing, massive credit lines from local banking institutions and increasing international business acumen.

A sign of things to come is the Belinga Project in Gabon. Purported to be the largest untapped iron-ore reserves in the world, a Chinese consortium came head to head in the contract bidding with Brazil’s CVRD -- the world’s largest iron-ore producer.

Because Gabon’s iron-ore reserves are situated deep in equatorial forests, massive infrastructural costs have excluded previous iron-ore suitors. Enter the Chinese consortium, which offered to a) build a new railway line 560km into the jungle, b) construct a deep-water harbour from which to export the iron ore, c) develop a hydro-electric dam to supply electricity to the project, d) finance the initiative, e) bring in Chinese labourers to build it and f) offer to buy the entire mined output.

Not surprisingly, CVRD got blown out of the water in the bidding process -- few companies on Earth would be able to compete with such a comprehensive undertaking.

A recent “secret” meeting at the World Economic Forum in Davos, Switzerland, was held between the heads of more than a dozen of the world’s largest mining companies. The six-hour think tank highlighted what a growing concern Chinese encroachment in Africa was becoming. The group -- ironically given the colonialesque title of “the governors” -- sought to find ways of curtailing China’s immense interest in Africa, which is rapidly displacing their exposure on the continent. They are considering appealing to the World Bank and United Nations for help. What “the governors” are rapidly realising is that competing with government-backed Chinese companies is beyond their capacity. The World Bank estimates that, last year alone, China spent more than $10-billion on infrastructural projects in Africa as part of its capacity­for-resources exchange.

..........

http://www.mg.co.za/articlePage.aspx?articleid=298761&area=/insight/insight__comment_and_analysis/

[Polly]

http://www.slate.com/id/2185853/

[Polly]

Africans are extracting better and better deals from us

http://ipsnews.net/news.asp?idnews=41125

[Polly]

Gabon Urges China to Accelerate Development of Iron-Ore Project
Share | Email | Print | A A A

By Antoine Lawson

Jan. 29 (Bloomberg) -- Gabon urged China to accelerate the development of an iron-ore project in the Central African country, which has been delayed by the global financial crisis, Mining and Oil Minister Casimir Oye Mba said.

“We need to finalize this project because we expect the creation of 20,000 jobs for the country,” Mba said in remarks broadcast on state-owned Radio Television Gabonaise in the capital, Libreville, yesterday.

China’s Ambassador to Gabon, Xue Wei Jin, on Jan. 22 held talks with Georgette Koko, Gabon’s deputy prime minister in charge of the environment, to review the progress of an environmental study before work on the site, known as Belinga, starts. The project is situated 500 kilometers (300 miles) east of Libreville.

China National Machinery and Equipment Import and Export Corp. announced in July it signed a 25-year accord with Gabon’s government to build and operate a mine producing as much as 30 million metric tons a year of the steelmaking ingredient. The state-owned contracting company, known as Sinomach, will also build a 500-kilometer railway, a port and a water power station.

The total cost of the mine will exceed $790 million, according to China Daily.

[Polly]

BEIJING/SYDNEY (Reuters) - China backed down on iron ore prices, signing up to the same 33 percent price cut agreed by Asian rivals but only for a six-month period rather than a full year, the China Business News said on Wednesday, citing informed sources it did not name.

The deal, which could not be immediately confirmed, would conclude some nine months of tense negotiations that threatened to scupper the decades-old annual pricing ritual, and which took an unexpected turn this week when four Rio Tinto employees in Shanghai were detained by Chinese authorities.

The four, including Stern Hu, an Australian citizen and the head of iron ore marketing in China, were part of Rio Tinto's iron ore sales team, an industry source said.

The arrests come at a sensitive time as Rio Tinto snubbed a $19.5 billion investment plan by China's state-owned metals firm Chinalco last month, frustrating its efforts to wield more clout on global commodity markets, even where it is the dominant buyer, such as iron ore.

But some traders said the dention of Rio officials appeared coincidental rather than a bargaining ploy deployed by China, which arrested base metal traders a few years ago over its investigation into an alleged trade scam.

China's Foreign Ministry and Shanghai police gave no reasons for the arrests, while a spokesman for China's embassy in Canberra also declined to comment.

Australian Climate Change Minister Greg Combet said the government was making "every effort" to find out why the four China-based employees had been held.

"Once we ascertain through the appropriate channels what exactly is going on and what the reasons for this detention involve ... we'll have something to say," Combet told reporters.

IRON ORE DEAL IMMINENT

Several Chinese steel officials contacted by Reuters on Wednesday said they were unaware of any settlement, though two sources not directly involved in the discussions said they had heard of a possible agreement, but could not confirm it.

"All news should be subject to the statement from CISA and Baosteel. I have nothing to say about the news," Chen Xianwen, head of the market research department at the China Iron and Steel Association industry body, told Reuters.

The Shanghai-based China Business News, backed by a local government agency, said China had agreed to pay $0.97 per dry metric tonne unit for Pilbara blend fines and $1.12 per dmtu for Pilbara Blend lump, but only for April through October. It said negotiations were already underway for the following period.

But the newspaper said its sources could not say which of the big iron ore suppliers had signed the deal.

A 33 percent cut would be in line with what analysts have been expecting as Rio Tinto showed no inclination to relax its "take it or leave it" stance on the initial deal, and an economic recovery lifted spot market prices above new contract levels, leaving China with little leverage.

"It's a report but it is certainly the deal that we expect to be done. It always seemed likely that the outcome would be no change from Japanese settlement," said Mark Pervan, a senior commodities analyst at ANZ.

"The mills have started to preempt this move; Baosteel kept its (steel) prices on hold for its main products so they were obviously preparing for this outcome."

If confirmed, the deal would mean China's steel sector had conceded to the same price that Japanese and South Korean rivals accepted from Rio and BHP Billiton, but for only half the time, giving China's mills the chance to argue for cheaper rates if a tentative economic recovery that has revived steel prices falters.

The deal, however, will also expose China to a risk of repricing iron ore potentially at higher costs later this year when demand from elsewhere, especially Europe, is set to recover and tighten market conditions, driving up iron ore prices.

China, the world's biggest steel producer and buyer of more than half of all traded iron ore, had initially sought a bigger price cut of up to 45 percent versus 2008, but last week softened those demands after the June 30 deadline for agreeing terms lapsed, giving miners the right to suspend term deals.

An agreement will provide more certainty for miners' revenues and are likely to come as something of a relief to Chinese mills such as Baosteel and Hebei that had feared paying rising prices on a fickle spot market.

With a mechanism to review prices more frequently, the vast 800 million tonne a year trade in iron ore moves a small step toward becoming a more liquid commodity market, which would give miners more opportunity to profit from rising prices and open up trading and hedging opportunities for global banks.

Spot iron ore prices are already at four-month high of above $82 a tonne delivered in China. That is equivalent to around $65 free-on-board, above the benchmark price of some $61 that Japanese, South Korean and Taiwanese mills pay.

[Polly]

1 billion tonnes of iron ore to be exploited by a Chinese private enterprise in Russia:

民企将在俄全资开发10亿吨铁矿 已获发改委核准
http://finance.sina.com.cn/chanj ... 7/03296491667.shtml
　　就在中国与三大矿山铁矿石价格谈判处于胶着状态的时候，一家中国民营企业开始悄悄筹划着开发自己全资拥有的10亿吨俄罗斯露天大铁矿。

　　7月10日，中国证券报记者与中方投资人辽宁西洋集团一同对该矿进行了实地调查，公司董事长周福仁透露，明年4月，铁矿将正式开工建设，同时在矿区新建400万吨规模钢铁厂。项目分两期完成，一期项目33亿元，建设周期为4年，2012年末全部完工。该项目也是目前中国在俄罗斯最大的投资项目，项目建成后将成为俄罗斯远东地区规模最大的钢铁企业。

　　10亿吨露天大铁矿

　　周福仁告诉中国证券报记者，“2007年8月6日，西洋集团从赤塔鲁能矿业公司手中收购了俄罗斯别列佐夫铁矿矿权，西洋集团将独资开采别列佐夫铁矿。尽管当时铁矿石价格还没有暴涨，但我们对该矿的前景是非常看好的。”

　　他说，“别列佐夫铁矿位于赤塔州涅尔琴斯克－扎沃得区(简称涅区)，南距中国室韦口岸(国家一类口岸)距离只有20公里，探明储量7.47亿吨，远景储量超10亿吨，开采条件良好。该矿品位最高达到65%，平均在40%－55%。”

　　西洋集团提供的资料显示，别列佐夫铁矿矿区面积220平方公里，目前只勘探了12平方公里，矿山水文地质条件简单，大部分在浸水面以上，70%以上的矿石可以露天开采。

　　记者在矿区现场发现，覆盖在矿体表面上是一层薄薄的绿色植被，大部分地区不需要拨岩，直接可以露天开采。该矿距中国境内的莫尔道嘎火车站90公里，与俄境内铁路线相距100公里。

　　周福仁表示，2008年11月初中俄双方达成新修中国到俄罗斯的铁路线经过该矿区。西洋集团与中国铁路建设总公司已经达成协议，修建中方路段，双方出资比例分别为30%和70%。

　　西洋集团的海外扩张

　　周福仁说，“由于民营企业在国内建钢厂门槛很高，西洋集团要发展，我们下狠心向海外拓展生存空间。”

　　周福仁向记者坦承，进军俄罗斯，西洋集团是经过深思熟虑的。俄罗斯远东地区铁矿资源丰富，但人口稀少，而铁矿石的市场又在中国。西洋集团收购这个铁矿成功的把握非常高。不过，俄方要求该铁矿资源必须精加工才能出口，因此公司在矿区附近建钢厂。新钢厂计划生产规模为年产400万吨钢坯，分二期建设，第一期200万吨钢坯，第二期200万吨钢坯。项目建设周期为4年，2012年末完成。一期总投资预计为33亿元。

　　媒体公开报道显示，西洋集团1988年在辽宁海城注册成立，以耐火材料、肥料、煤化工、钢铁、贸易为支柱产业，2008年销售收入200多亿元，实现利润15亿元，实现税收6.5亿元。公司旗下的钢铁资产主要包括辽宁海城钢厂、选矿厂，辽阳选矿厂以及沈阳钢厂等。

　　西洋集团副总经理、分管俄罗斯铁矿业务的仇广纯告诉记者，别列佐夫铁矿储量大、埋藏浅、易开采、易还原，是西洋集团海外矿业发展的重要组成部分。该项目在2004年获得商务部颁发的对外投资批准证书，2005年10月委托中冶北方工程技术公司(鞍山设计院)完成项目可研报告。2006年2月28日获国家发改委核准。

　　俄罗斯的风险与机会

　　“在国外投资建设这么大规模的钢厂，对一家民企来讲，首先的问题是资金能不能跟得上，技术力量有没有保证；而在俄罗斯，项目会不会有法律风险与文化冲突？”

　　对于记者一连串的问题，西洋集团董事长周福仁显得成竹在胸。他表示，项目在俄罗斯进展顺利。矿山开发与环评都是由俄罗斯联邦自然科学院赤塔州分院来做。目前，项目取得建筑施工资质以及俄联邦建设许可证。矿山设计工作大部分已完成。从法律上来看，矿山开发已经没有障碍。而与矿山及钢厂开工相关的土地使用、劳务人员进入等问题，目前正在与俄方沟通。

　　7月10日，中俄双方为该项目的推进进行了少有的高层面对面沟通。俄方由赤塔州副州长别洛泽罗夫、涅区区长伊万洛夫带队，中方主要有投资人西洋集团高管团队以及中方考察团。

　　对于西洋集团的投资，俄方表现出了高度重视，别洛泽罗夫表示，只要不违背俄罗斯法律，俄方愿意提供一切帮助，保证项目的顺利开工建设。同时向西洋集团透露，项目建设所需要的24公顷用地已经获批，只等中方签字生效。

　　周福仁心里算过笔账，涅区人口不到10万人，基本没有工业项目，属于俄欠发达地区。项目的实施给俄方带来的税收巨大，有助于改变该地区的落后面貌。俄方没有理由不支持项目的实施。

　　而最让周福仁放心的是，尽管俄罗斯远东地区铁矿资源丰富，但由于地理位置的因素，离开中国市场，它的成本优势将失去，由中国企业来开发这个矿山事实上是俄方唯一的选择。

　　而作为一家民营企业来运作这么大的项目，资金来源也是西洋集团重要的考虑。周福仁告诉记者，“目前项目的运作主要靠公司自有资金。不过，西洋集团还是有合作伙伴参与。对于中国国内民营钢厂的介入，公司还是有兴趣的。”

[Polly]

Chinese miner to tap large iron ore deposit in Kyrgyzstan
Friday, 17 Apr 2009
Interfax China reported that Mylin Resources Group, a mineral subsidiary of privately owned Chinese company Mylin Holding Group, recently inked a memorandum of understanding with the Kyrgyzstani government to prospect and develops a large sized iron ore deposit in Kyrgyzstan.

According to a People.com.cn report, the Dzhetym iron ore deposit is located near the border between Kyrgyzstan and China's Xinjiang Uyghur Autonomous Region, and covers an area of over 260 square kilometers. The deposit is estimated to contain approximately 5.4 billion tonnes of iron ore reserves which will make it Asia's largest.

The report said Mylin Resources has already secured exploration rights to the Dzhetym deposit. Mylin Resources declined to comment when reached by Interfax on April 15th. The report along with the signing of the MoU, Kyrgyzstan's Prime Minister Mr Igor Chudinov welcomed Chinese investment in Kyrgyzstan's coalmining, nonferrous, precious metals and infrastructure industries.

The exploration rights to the Dzhetym iron ore deposit were previously owned by a joint venture between the Xinjiang Nonferrous Metals Exploration Bureau and three privately owned companies including Gansu Jianxin Industry Group.

An anonymous employee with the Xinjiang Nonferrous Bureau told Interfax that the joint venture had carried out short-term preliminary prospecting work at the deposit until the exploration rights were reclaimed by the Kyrgyzstani government.

(Sourced from Interfax-China)

[The Smoking Man]

Speaking of Rio Tinto ...

Looks like BRIBERY is Business as Usual in China:

More than 9,000 officials guilty of corruption: SPP
By Xie Chuanjiao
Published: Jul 17 2009 9:11

CHANGCHUN: The Supreme People's Procuratorate (SPP) revealed yesterday that more than 9,000 officials were found guilty of corruption in the first six months of the year and said it had investigated 6,277 industrial bribery cases.

Qiu Xueqiang, SPP deputy procurator general, told a conference of procuratorate chiefs that the industrial bribery cases involved 6,842 people.

In the second half of the year, he said, prosecutors plan to crack down on commercial bribery, dereliction of duty in large, national and local investment projects, and target misconduct that damages energy resources and the environment.

Qiu said the 9,158 corrupt officials were found guilty of offences including embezzlement, bribery, dereliction of duty and rights violations in the first half of the year.

They were among more than 24,000 officials investigated by the SPP in connection with 20,000 cases.

Some 1,679 cases of dereliction of duty leading to harm to energy resources and the ecological environment were filed and investigated in the first half of the year. They involved 1,949 people.

In future, prosecutors also plan to target officials who bend the law for the benefit of relatives or friends and will attempt to uncover negligence, the abuse of judicial power and the shielding of mafia-like gangs, as well as the covering up of serious crimes and infringements upon human rights.

Overall, the quantity of job-related crimes fell by 14 percent in April, May and June compared to the same period last year. Qiu said that was due, in part, to the global financial crisis.

Cao Jianming, SPP procurator general, vowed that all prosecutors nationwide would receive training aimed at improving their political, professional and moral capacity.

"To intensify prosecution education and training is an urgent demand for comprehensively improving prosecutors' capacity," Cao told the conference.

All procuratorate chiefs at county- and district-level, as well as middle-level officials of higher-level procuratorates, will received at least 110 class-hours of training every year, Cao said. Other procuratorial staff will get at least 100 class-hours. The work conference on prosecution education and training yesterday also heard that procuratorates at the provincial level must ensure at least one-quarter of their staff receive training each year.

Because western Chinese provinces are short of prosecutorial professionals, SPP also plans to offer more training support to professionals in Tibet and Xinjiang, in part by fostering the development of bilingual Uygur-Chinese and Mongolian-Chinese procuratorial staff, said Cao.

He added that some prosecutors need to improve their knowledge of law enforcement, legal concepts, occupation morality and disciplinary style.

Awareness of law and policy among some staff members remains low, he said, and professional knowledge is at times outdated.

"Procuratoral staff are facing more risks of all kinds of temptation and erosion, and the public is also looking for higher standards of prosecutors' morality level," Cao added.

Mu Xincheng, deputy attorney general and secretary of the anti-corruption bureau of Fanzhi county, Shanxi Province, was detained in May for alleged financial impropriety, China Youth Daily reported last week.

His assets exceeded 100 million yuan ($14.6 million), the report said. Five of his cars were said to be worth 1 million yuan each. The case is still under investigation.

So how many of them were charged with Stealing State Secrets???

It's also ironic that the Xincheng is in charge of investigating corruption. I wonder who in the party he pissed off?

[Polly]

Anyway, the share price of Rio Tinto has plunged by 30%.  Served them right .

Be warned the Chinese government does not make a move until they have a comprehensive game plan, so there are bound to be consequences.

It's just sad for Hu and unfortunate for his company that, in his relentless attempt to be an Australian international citizen, aka banana, he has so completely forgotten his culture and root and how to deal with the yellow people, and it backfires.

One more traitor blowing his cover.  Good riddance.

[The Smoking Man]

Problem ... Dealing with Chinese companies REQUIRES that you conform to the way they do business.

After all, WHO do you think that all those people got bribes FROM!?

And as far as Rio Tinto... Do you think that the fact the merger got quashed had anything to do with it? Did China decide to go off in a snit???

And as far as Hu being a traitor. What drugs are you smoking? Joining another country does not a traitor make. I was born in the UK and moved to Canada and became a Canadian. Am I a 'traitor'. You Chinese are so 'fucked up' when it comes to your judgemental attitude ... Especially when it comes to a person who's father fled the mainland to work in HK and only by accident finds herself now handed back to China... With a British education, no less. Aren't you a 'traitor' to your mother and father's beliefs?

[Polly]

Ha.  Unlike Hu I have never stolen any state secret in order to squeeze the Chinese and line the pockets of both my new master and mine.

Basically he is trying to slaughter the duck that lays gold eggs lest it shall wonder off elsewhere.  What greed infested mind.  What heartlessness and short-sightedness.   

If you don't leave an exit for others to fall back on, if year after year the counterparty of a negotiation has to succumb to your bargain, and lose their reson d'etre which is to counte bargain the price, do you not think they will pounce on you and bite?  They have no reason to exist for god's sake.

[The Smoking Man]

Well, that looks like psychobabble.

9,000 Chinese officials just got nailed for corruption including 6,000 for accepting bribes.

Now you are centreing on ONE Chinese who went to Australia to work for a large company.

So it doesn't offend you that the guy in charge of investigatin corruption in China is guilty of corruption himself???

Seems to me that the Chinese need to clean up their own house before they start crawling around in other's houses.

China set the standard years ago when they used to steal luxury cars in HK and ship them across to Shenzhen for the use of official party members.

The party members are still doing it.

When a party member who isn't in favour with the head of the current government in China needs to be removed, they start an investigation into corruption. All are guilty in some way. It's just that the ones in favour are protected.

Try taking a look at what happened in Shanghai to the mayor and his cohorts.

Then tell me how the guy who owns Chateau Zhang Laffitte in Champing survives when his crimes have been documented as far away as in the NY Times.