 In terms of number of projects, South Africa currently ranks joint second among African countries regarding Chinese investment in mining.
There are five mining projects in this country with greater or lesser degrees of Chinese investment.
Top of the list is the Democratic Republic of Congo, with six projects, while Zambia also has five, and Zimbabwe has four. South Africa and these three countries combined account for 20 out of a total of 33 African mining projects involving Chinese investment.
“The focus has been on Southern African Development Community (SADC) countries, which are mineral-rich,” points out consultancy China Frontier Advisory (a division of Fron-tier Advisory) senior manager for research Hannah Edinger. “Africa has about one-third of the world’s mineral wealth, including many untouched resources, and the continent has been experiencing greater political and economic stability in recent years.
“China has been a net importer of primary minerals since 1993 and is both the world’s top resource consumer and the fastest-growing consumer of resources,” she explains. “China’s National Develop- ment Reform Commission has instructed Chinese resource companies to go global and make investments in, or acquire, foreign mining companies.” The Chinese companies involved in South African mining are Sinosteel, East Asia Metals Investment (a subsidiary of Sinosteel), Jiuquan Iron & Steel (Jisco), Minmetals and Zijin Mining.
Sinosteel has acquired 50% of the Twee-fontein chrome mine and Tubatse ferrochrome smelter for a reported $230-million, creating a joint venture with Samancor, known as Tubatse Chrome. This deal was signed in 2006, at the Forum on China-Africa Cooperation, in Beijing. Tubatse Chrome is situated at Steelpoort, in the province of Mpumalanga, and has a ferrochrome production capacity of 280 000 t/y to 300 000 t/y.
It sells charge chrome to the highest bidder on the international market.
East Asia Metals owns 60% of Asa Metals, the other 40% being held by Limpopo Economic Devel-opment Enterprise. In turn, Asa Metals owns 100% of the Dilokong chrome mine, which lies 125 km south of Polok-wane, on the eastern rim of the Bushveld Complex.
Dilokong currently produces more than 400 000 t/y of chrome ore and has reserves of 50-million tons; it also has two smelters with a production capacity of 130 000 t/y. This ferrochrome plant is in the process of being expanded with the construction of two additional furnaces, which will take production to 240 000 t/y. The operation exports to Europe, Japan, Korea and Taiwan as well as to China.
Jisco’s involvement in South African mining comes through a $30-million purchase of 26,1% of International Ferro Metals (IFM). IFM owns the Buffelsfontein chromite mine and smelter, located on the western limb of the Bushveld Complex, in the Brits area.
Buffelsfontein has both openpit and underground operations, with two blast fur- naces, and has an annual ferrochrome production capacity of 267 000 t. The mine has a life of another 16 years, and expansion – which will see the construction of three new blast furnaces – is planned. Jisco will receive 50% of the ferrochrome production and will also have the marketing rights.
For $6,5-million, Minmetals subsidiary National Minerals bought the exploration rights for the Naboom chrome pro-ject from Mission Point and Versatex. The Naboom project is sited at the northern tip of the eastern limb of the Bushveld Complex.
Zijin, in late 2006, bought 29,9% of London-listed Ridge Mining for $16-million. Ridge has two projects in South Africa, both in Mpumalanga and on the eastern limb of the Bushveld Complex – Blue Ridge and Sheba’s Ridge. Blue Ridge is scheduled to start mining in the last quarter of this year and will produce mainly platinum-group metals (PGMs) – platinum and palladium – with some gold and silver as by-products.
Reserves total 51-million tons of ore and initial annual production will be 125 000 oz of PGMs, rising to 700 000 oz; the life-of-mine is 18 years. Construction of Sheba’s Ridge will start next year and it will be an openpit operation with nickel as its primary product.
Nickel reserves total 1,4-million tons, copper reserves 540 000 t, and PGM reserves 596 t.
“China seeks to ensure continued long-term resource supplies and to prevent monopoly pricing,” explains Edinger.
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