Looming China/Africa head-on collision – Solomon
J&J Group executive director Michael Solomon tells Mining Weekly Online’s Martin Creamer that of the need to bridge the gap between Chinese investment imperatives and African local value-add aspirations. Cameraperson: Nicholas Boyd. Video Editor: Darlene Creamer.
JOHANNESBURG (miningweekly.com) – An economic head-on collision was looming between Chinese business imperatives and Africa’s aspirations to derive more benefit from their continent’s minerals, J&J Group executive director Michael Solomon warned on Wednesday.
Speaking at the Frontier Advisory China-Africa Business Summit, Solomon said that while Chinese investment was premised on the offtake of raw materials needed to drive China’s thriving economy, where costs were lower, Africans were wanting to see not only primary benefits from mineral resources but also minerals-based secondary and tertiary development.
He told the well-attended conference - see video attached - in the auditorium of South Africa’s State-owned Industrial Development Corporation that Africans were expecting participation of their own people in not only mining but also local value addition and sustainability of investments.
“That tension is not simple. It goes into different dimensions, and we need to appreciate that,” said Solomon, who took part in a panel discussion together with Dr Liu Dong, MD of the China-owned Sinosteel Tubatse Chrome, a long-standing Southern African producer of chrome and ferrochrome, which employs 6 500 Southern Africans and only 20 Chinese expatriates; Frontier Rare Earths South Africa senior project manager Gan Shengfei and Webber Wentzel partner Jonathan Veeran.
Solomon told the conference, which was moderated by MoneyWeb’s Hilton Tarrant, that he did not believe that the tension was necessarily conflictual.
But at the same time he was not seeing the attainment of the necessary balance.
The current Chinese investment in Africa was not that different from the European push of 100 years ago, except that today’s world demanded far greater transparency.
There was also tension between the Western imperative for short-term value growth and the Chinese imperative to long-term value growth.
Shengfei said that Africa would have to create a better investment environment if it wanted a greater inflow of Chinese investment.
Veeran said that South Africa needed to deal with its legislative, labour and electricity issues to encourage more investment.
Dong said Sinosteel Tubatse, which mined a million tons of chrome a year and produced 380 000 t/y of ferrochrome locally, had opted to employ local people, even though it would be able to recruit Chinese personnel at a fraction of the cost.
Tarrant made the point that Africa had the world’s highest transport cost per unit, which presented an opportunity for the provision of competitively priced infrastructure.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation