Chinafs scramble for resources in Africa

Clive Emdon
CHINAfS 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 Chinafs 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 Chinafs needs for oil and raw materials. He gives examples: œ A $1 billion (R7.76bn) investment through a soft loan, to repair Nigeriafs 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 integrityh. He cites Sudan and Zimbabwe as examples of ggovernments that have troubled relationships with the Westh where China provides gan alternative axis of investmenth. 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 Guineafs energy sector. œ China is the worldfs 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.