JOHANNESBURG – 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 yesterday.
Report by Miningweekly
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.
“This head-on collision is at an economic front,” Solomon told the well-attended conference in the auditorium of South Africa’s State-owned Industrial Development Corporation.
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 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.
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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 to long-term value growth.
