Chinafs scramble for resources in Africa

Clive Emdon CHINAfS hunt for resources in Africa is a waiting game. Its investments in infrastructure will serve it well in the long-run, says Alex Vines, head of the Africa Programme at the Royal Institute of International Affairs, London. He says Chinafs readiness to engage in large-scale investments in Africa that include the refurbishment of road and rail and ports, makes it a preferred partner for the West. gChinese firms are less risk-averse than Western firms, because they take a long-term view on investment return.h Many large projects by Chinese businesses gare more likely to lose money rather than to profit,h says Vines. gFinancial loss, however is compensated by political gain.h Writing in the South African Journal of International Affairs, Vines says China has a $40 billion a year trade with Africa and suggests this underpins Chinafs needs for oil and raw materials. He gives examples: œ A $1 billion (R7.76bn) investment through a soft loan, to repair Nigeriafs old railway lines and install new rolling stock and equipment, while it has taken two major stakes in Nigerian oilfields, including a 45% stake in the underdeveloped Akpo field for $2.27 billion (R17.6bn); œ China gets 7% of its oil imports from Sudan where it has invested $4 billion, and 14% from Angola where it is busy refurbishing rail and port infrastructure; œ In June China signed an agreement with Zimbabwe to mine coal and build two coal-fired electricity stations in deals worth an estimated $1.3 billion (R10bn). œ China has invested $170 million (R1.32bn) in the mining sector of Zambia mainly linked to copper. Vines says China is often seen to be ga natural development partner in Africa, given the fragility of many African states and their emphasis on state sovereignty and territorial integrityh. He cites Sudan and Zimbabwe as examples of ggovernments that have troubled relationships with the Westh where China provides gan alternative axis of investmenth. Pointers on resources: œ The US receives 15% of its oil exports from Africa. By 2010 this could reach 20%. In this decade, it will invest $50 billion (R388bn) in the Gulf of Guineafs energy sector. œ China is the worldfs second largest importer of oil and imports 28% of its needs from Africa, mostly from Sudan, Angola, Congo and Nigeria. Chinese demand is forecast to more than double by 2025 to 14.2 million barrels a day from the current 7 million barrels a day.