Chinese State-owned China Nonferrous Metal Mining Company (CNMC) could invest at least R14-billion in South Africa in the next two to three years, creating more than 13 000 jobs, president and GM Luo Tao divulged in an interview following the Brics summit in Durban last week.
As part of a delegation accompanying recently appointed Chinese president Xi Jinping on his first visit to Africa, which is taking in Tanzania, South Africa and the Democratic Republic of Congo (DRC), Luo said CNMC was engaged in negotiations with a South African partner.
The company, whose interests span the development of nonferrous metal mineral resources, construction, engineering and related trade and technological services, had already invested billions in Zambia and the DRC and would replicate these successful models in South Africa if investment conditions proved appealing, he said.
However, both Luo and Li Xiaoying, deputy GM, international trade and commerce, said there were challenges, alluding to both foreign-exchange and labour-related issues. Nevertheless, studies were under way to determine the feasibility of three possible ventures – the establishment of a laboratory in South Africa, the introduction of a division supplying equipment and technology to local companies as well as providing after-sales service, and the establishment of mines and related processing plants.
They pointed out that processing, rather than simply shipping out concentrate, enabled CNMC to circumvent infrastructural bottlenecks and reduce high logistical costs associated with operating in Africa.
Li cautioned that it was still early days but said that projects could be under way in two to three years, provided studies indicated they were viable. She pointed out that 15 years’ experience in Zambia gave CNMC a distinct competitive advantage in Africa. She also hinted that investments in South Africa could be higher than those in Zambia and the DRC.
The company’s nonferrous metal mining interests in Zambia include the Chambishi copper mine, as well as a 150 000 t copper smelter, a leach plant and a sulfuric acid plant. Projects in progress include the development of a Zambia–China economic and trade cooperation zone and mining of the Chambishi mine’s western orebody.
A key opportunity in South Africa was supplying technology and skills transfer associated with the processing of nonferrous metals. “We know this is important in South Africa, especially when it comes to mining equipment and technology transfer for smelting. This is our focus at present,” she said.
Another example she gave was the sale of flotation reagents. Currently, Chinese products account for 60% of the total African market.
Luo stressed that CNMC’s investment in South Africa would definitely be long term.
He added that media reports had been unnecessarily prejudiced against Chinese investment in Africa as a whole. “We began investing in Africa in 1998. In Zambia and the DRC alone, our total investment is more than $2-billion. We haven’t shipped the concentrate out. We have mines, processing plants and smelters and we participate in the complete production chain.
“In these two countries, we have created 13 000 jobs for local people. These are big figures. Job creation is just one of our contributions. We also generate taxes, undertake corporate social investment projects and adopt the best technologies to help protect the environment wherever we operate,” he said.
He said that the opening of a Johannesburg office in October last year had been an important step for CNMC, as this would not only facilitate investment in South Africa but act as a platform for future investment in both Southern and Central Africa where significant mineral and energy resources presented significant opportunities for the company.
“This is only the beginning. It is not a case of coming in today and going out tomorrow. We are a trustworthy company because we are a State-owned enterprise and we will follow the instructions of the Chinese government to make long-term investments in Africa so that all will benefit. The final objective is to create a win-win scenario,” he said.