Chinese firms pour billions into resources projects

Chinese activity in the African resources industry is increasing.

by Helene Le Roux

While China is indirectly supporting high commodity prices through its strong demand for minerals, metals and energy, which, in turn, boosts the development of Africa’s resources, the country is also directly investing in resources projects on the continent.

The China Monitor, published by the Centre for Chinese Studies at the University of Stellenbosch, in the Western Cape, reports that China is especially active in Angola, Africa’s second-largest producer of oil.

Driven by its own energy needs, China has been contributing to the reconstruction of the Angolan capi-tal, Luanda, and of another large Angolan city, Cabinda.

China and Angola plan to build a $3-billion oil refinery in the Angolan port of Lobito this year.

It is expected that the refinery will have an output of 200 000 bbl/d.

China plans to spend $22,5-billion on its oil-refining and petroche- micals sector in the next five years.

To ensure sufficient oil supply to keep up with its economic growth, the country will open its first oil reserve later this year and speed up the construction of three others.

Oil supplies for the reserves will mainly come from Sudan, Chad and Nigeria.

Elsewhere in Africa, China has snapped up the first production of crude oil in Mauritania, Africa’s latest oil producer.

In another recent development, Chinese petroleum company Zhonguan Petroleum Exploration Bureau has started drilling for oil in the Gambella basin of Western Ethiopia.

The basin, which is about 19 600 km wide, is an extension of the Melut basin, in the south of Sudan.

China has a 40% share in Sudan’s oil resources.

In the south of Ethiopia, the Ethiopia-China National Complete Plant Import and Export Corporation (Complant) has been contracted to study the potential reserves of urea fertiliser in a coal-mine in Yayu Oromia.

Ethiopia imports about 200 000 t/y of urea fertiliser.

If the outcome of the study is favourable, Complant will construct a manufacturing plant.

Besides these direct interests in African resources projects, Chinese demand is buoying the deve- lopment of many other commo- dities.

For instance, China has overtaken Japan as the largest platinum-jewellery consumer.

Increasing world prices of precious metals has not affected sales, which rose by 10% in China in the 30-day period before and after the lunar new year, which fell on January 29.

The demand for platinum in auto catalysts in the growing automotive market in China also supports the precious metal.

Posted: 4/25/06

Source: engineeringnews.co.za

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