China To Help Fund Power Project In Zambia

Lundi, novembre 9th, 2009

Zambia is facing a severe power deficit and is trying to find ways to meet its shortfall. This would mean substantial investments in the power sector. According to the acting managing director of Zesco Cyprian Chitundu, China’s large Exim Bank will provide $420 million once Zesco is able to get $60 million from the Development Bank of South Africa (DBSA) for the Kariba North Bank Power Expansion Project. The project is aimed at plugging the power shortfall in the country making rapid strides in the economic field and having a huge demand for power for its mines and other industrial projects.

At present, the Kariba North Bank plant has the capacity to generate 720 MW of power that feeds the copper and cobalt mines of Zambia. The expansion plan aims at increasing the power generation by another 360 MW in a span of three years, by 2012, once the plan is finished. Zambia’s present power generation capacity is 1400 MW and it consumes 800 MW of electricity during the day, but its demand shoots up to 1500 MW at night, when the shortfall becomes evident.

Zambia is Africa’s largest producer of copper and has approached the DBSA of South Africa to provide $60 million to part finance the project. The deal is almost through and the final papers ready to be signed. China’s Sinohydro has been engaged to start the Kariba North bank expansion project and $18 million already spent on it. An untoward incident led to a fire there that killed two workers and also damaged the plant two weeks ago.

According to Chitundu, Zesco is planning to take $220 million from the Africa Development Bank and the European Investment Bank for developing its 120 MW Ithezi-Tezhi power project. These investments are essential at this stage since power supply shortfalls are hampering industrial growth and proving to be a barrier for overseas investors in other projects.

Source : Agricultural Machine

China Is One of Many Countries Acquiring Land For Agriculture

Mercredi, juillet 22nd, 2009

For centuries, agricultural output has been exported by countries with surplus produce and imported by countries that could not grow adequate amounts of food grain and other naturally grown foods. The current trend is an alternative to import of food grain. This is accomplished by taking foreign farmlands on long lease to grow food grains needed in one’s country. Many countries with limited supply of cultivable land but ever increasing populations have found thousands of acres of unutilized fertile land in African countries. These countries include Saudi Arabia and China to name only two. The outcome is a positive impact on both the countries, where the agricultural activity is initiated and also where the agricultural produce is consumed. The poor nations need the capital the lease of land will get even though they may have starving millions in their own countries. This easily procured capital would help make crucial investments in developmental projects. The leasing countries justify their entry into agriculture in foreign lands by stating that they bring in new hybrid varieties of seeds, newest agricultural techniques that have been successful in their own countries, and employment to the local labor force as well. A section of foreign experts perceive this to be a policy of ‘land grab’.

China has been seriously pursuing agricultural activities in Africa. It has been revealed that China will be sending 1 million farm workers to Africa in the course of the year. China will be starting the world’s largest palm oil plantation in Congo. Covering an area of 2.8 million hectares, the palm oil plantation would be used for bio-fuels. Next in line for China is Zambia where it is in the process of finalizing a deal to grow bio-fuels on 2 million hectares of land. Besides growing crops for its own country, China is helping African agriculture to develop for its own progress. It is teaching newest techniques of farming, shifting from subsistence agriculture to growing cash crops that will ensure greater financial returns, and also providing education in the field by setting up Agricultural institutes in reputed universities.

Agriculture is the third in the row of economic activities that have scaled borders to make the world a unified market place. It started with the exchange and outsourcing of technological innovations, followed by outsourcing of information technology skills. Agriculture is being pursued abroad by both private and government-owned companies.

Source : Chinafrica

China’s Agricultural Inroads Into Africa

Samedi, mai 30th, 2009

China’s population is highly dependent on natural foods like rice, vegetables and meats. Since its own cultivable land is limited, it needs to supplement its food output from other countries or else there may be a severe food crisis waiting in the wings with its large population. But China has its strategies in place well before a crisis occurs. It has found its solution Africa, which besides its rich reserves of natural resources also has hundreds of acres of arable land that it is not averse to leasing out for long-term lease. This fits in perfectly with China’s plans as its urbanization has also depleted it cultivable land resources. Statistical figures reveal that China lost 8.9 million hectares of cultivable land between 1995 and 2007.

The countries where China are mainly in South Africa including Mozambique, Tanzania, Malawi and currently Angola. The agricultural land story began with Zambia in 1995 when Zhongkan Farm, a private Chinese company invested $22,000 in a farm project. By the end of 2007, the number of farm projects across Africa had increased to 63. Mozambique has received $800 million from China for modernizing its agricultural sector. This will be used to increase rice production in the country from 200,000 tons to 500,000 tons. Teams from the Chinese Hunan Hybrid Rice Institute and at least 100 specialists are stationed in Mozambique.

Similarly, Tanzania received millions of dollars to modernize its own agricultural sector. The idea behind this was to help create a green revolution in Africa. In the entire African continent, 1134 agricultural specialists have come from China to teach and see the implementation of agricultural modernization policies.

Angola is increasingly becoming the most sought after country for Chinese investment. It is already China’s biggest trading partner, and is now going to benefit through agriculture. Angola offers the best environment for beef production, coffee, spices, fruits, sugar and cotton.

The agricultural revolution gradually taking place in Africa is not just beneficial for China alone, it is also helping the African countries as an employment generating industry and providing larger food supplies for its starving millions. It is a win-win situation for both.

Source : Chinafrica

Conferences at Johannesburg

Mardi, mai 26th, 2009

The fact that China is scurrying to mop up asset bases and gain control over crucial mineral resource reserves has become a topic of serious discussion at seminars and conferences, the latest one being held at Johannesburg two days ago. China has an edge over western nations and western countries interested in these resources, firstly because China has gained popularity with African governments due to its economic support for infrastructure building and overall development, and secondly because it has vast cash reserves to fund the acquisitions. On the other hand, the onset of the global financial crisis had seen Western nations withdraw aid and support to Africa as they themselves were reeling under immense pressure. These nations are unable to match the numbers or raise funds needed for the acquisitions. It is a race they are likely to lose to the Chinese.

For China the timing is most favorable as the recession has also led to a slump in prices, therefore, it is the right time to clinch deals. Most of the Chinese companies expressing interest in making these acquisitions, are state-supported, so they need not worry about the need to placate shareholders who may object.

China has been cautiously reformulating its Africa policy and trying to wriggle out of investments unlikely to yield results or those that are threatened due to political instability. It is proceeding ahead with only those ventures that are viable and beneficial. China has a contract with Guinea where it is developing infrastructure facilities in exchange for bauxite and has signed a $9 billion deal with Congo to develop its roads, schools, hospitals, and railways, and in return gain access to its copper and cobalt reserves. These minerals are crucial for China’s consistent industrialization and advancement. Zambia has also selected the NFC Africa, a subsidiary of China Non-Ferrous Metals Corporation, to run its Luanshya Copper Mines that are being reopened after being shut during the beginning of the recession.

Another sector where China has extended support is the banking sector, besides writing off African debt to the tune of millions of dollars.

It is difficult to gauge or exactly state who benefits more, China or Africa. The only known fact that the world sees is that both sides are happy, Africa with what it is getting in terms of economic elevation, and China, with all the resources it so desperately needs.

Source : Suppliers Africa

China Zambia ties strengthen with Luanshya Copper Mine

Mardi, mai 12th, 2009

Zambia is a poor country in Africa that is rich in natural resources. It is rich in copper and the worldwide decline in copper prices plunged it into abject poverty in the 1970s. It was only with the privatization of the copper mines in 2000 that its economic conditions began to improve as there were investments in plant rehabilitation, expansion, exploration and higher prices consequently. The recent global financial crisis has again made cooper prices plunge and Zambia is among the worst affected. Copper brings in over 60% of Zambia’s foreign exchange earnings. Nonetheless, its Luanshya Copper mines are scheduled to restart production in the last week of May, and the responsibility of running the mine has been given to the Chinese firm NFC Africa or China Nonferrous Metals Mining. NFCA has acquired 85% shares in the Zambian copper mine. Copper mining had been stopped and the mine shut in the aftermath of the current financial crisis that led to declining prices and losses subsequently.

This has only increased the Chinese influence in the world of metals with the prospects of rising prices, as an economic recovery is likely in the future. Luanshya’s units, Chambishi Metals Plc and Baluba have both been shut due to losses, and he result was job losses as well. Copper is used for construction and the prospect of an increase in its price will lead to an economic recovery for Zambia. Once the mines begin to full-scale production, developmental work for expansion will also be undertaken, creating multiple jobs for the locals.

This fits in perfectly with China’s endeavor to secure its position in the metals, minerals and oil sectors. China Nonferrous Metal Mining and Yunnan Copper Industry will be commissioning the Chambishi Copper smelter and take production to 150,000 million tons annually. Besides NFCA, other Chinese companies are also willing to invest in the copper mining sector. This will lead to improved conditions for the local Zambian population.

Source : China Africa

China’s Assistance to African Countries During the Recession

Vendredi, mai 1st, 2009

The Zambian Minister of Finance, Situmbeko Musokotwane, has lauded China for all the help it has provided to African economies during the current turbulent time of an economic downturn. The present crisis is comparable to the great Depression of the 1930s, and the African economies have been struggling to cope with the Europe and American withdrawal from their markets. AT such a time it is China that has come forward with assurances that there would be no layoffs, no factory or project closures, and additionally, China has been willing to provide loans at low interest rates.

Musokotwane was talking to reporters in Washington, during his visit to attend the annual spring session of the International Monetary Fund and the World Bank, two days ago. The Chinese mining company operating in Zambia has tried to save jobs of Zambians, and the country has also received low-interest loans from China. The mining industry has been very badly affected by the world financial crisis, which has jeopardized their financial stability, and shook the entire Zambian economy, which is so dependent on this industry. Mining has been the chief industry of Zambia since the 1930s and other metal and non-metal resources have been tapped fairly recently. Its main exports include copper and cobalt.

The relationship between China and Zambia strengthened after China constructed the 1860-km railway line between Zambia and Tanzania during the 1970s, as this helped the landlocked Zambia enhance its trading volumes and gain better access to world markets.

Next, China helped Zambia in improving its system of agriculture and set up a good telecommunication network. China has the distinction of being the world’s largest user of copper, and therefore, has a huge demand for Zambian copper as it is needed for everything from electrical wires, to the manufacture of cars and computers. Zambia’s copper wealth is being mined by Chinese companies, and as yet, Zambia has not been able to start using its copper for producing finished goods.

The minister feels that Africa is a hapless victim of the recession and finds itself drained of its resources. Had it not been for the helping hand extended by China, the African people would have been worse off.

Source : Suppliers Africa

Chinese in Africa

Mardi, avril 21st, 2009

Africa has a large population of Chinese. The Chinese here consist of two communities – ones which came here in the 20th century and the ones who migrated here after apartheid was over. It was the gold mines in Johannesburg that attracted the Chinese immigrants in 1870s. The number kept building throughout the 1800s. However, after the Anglo Boer War, some of the Chinese population was pushed to places like Port Elizabeth and East London.

Once the apartheid was over in 1994, more Chinese started immigrating to South Africa. Presently the Chinese population in South Africa stands in the range of 200,000 – 300,000. A new Chinatown has come up in Johannesburg. Of lately China has been maintaining stronger ties with the African nations. According to a survey in August 2007, 750,000 Chinese nationals have been living or working in African nations. There is an estimated influx of 40,000 Chinese in Chad according to a survey. There is a presence of around 40,000 Chinese in Namibia (2006), 80,000 in Zambia and 50,000 in Nigeria. Around 100,000 Chinese are living or working in Angola.

The Chinese that are based in South Africa have established their business in commerce industries. Other occupations that Chinese are into include medicine, art and academia.

In Madagascar alone the Chinese form the third largest overseas population in an African country and there are around 40,000 – 60,000 inhabitants living there. The first immigrant came to Madagascar in 1862 in the port of Tamatave. After this in the following years, more Chinese labourers arrived here that was part of an initiative by French General Joseph Gallieni. They were basically brought to work on a railway project. However, most of the Chinese perished and ones which lived went back to China. In 1904, a small population of 452 Chinese was left. Apart from coming as labourers, Chinese also entered Madagascar as free migrants. And 1957 official statistics showed presence of 7,349 Chinese flourishing in Madagascar. At present the number has swelled to 40,000. Apart from this there are approximately 10,000 expatriates from the People’s Republic of China that are a part of the Chinese community over here. The popular business over here among this community included products like coffee, cloves and vanilla beans.

Source : Manufacturers Africa

China Africa history

Jeudi, mars 5th, 2009

China’s interest and commitment in African development is evident from its trading patterns as well as the frequent visits of its top leaders, who consistently reiterate their support to these developing countries. Public and private Chinese enterprises have been involved in mergers and acquisitions, some already acquired and some in the process of doing so. Chinese firms have expressed interest in acquiring Zambia’s Luanshya Copper mines, the country’s biggest cobalt producer. The Chinese company, China Non-Ferrous Metals Corporation is in the process of opening a copper smelter in the Zambian town of Chambishi. Elsewhere, China Union is going to develop the Bong iron ore deposit in Liberia. Nigeria is likely to get a 3000-megawatt power plant, being built by China’s Shenzhen Energy Group.

Chinese companies are also buying timber from multiple sources in African countries like Gabon, Mozambique, Liberia, Cameroon and Equatorial Guinea. Even China’s largest telecom equipment manufacturer, Huawei Technologies, is expanding operations in southern parts of Africa, after having established itself in North Africa. Governmental initiatives continue from both sides. In Zambia, close to its capital, Lusaka, a second economic zone has been opened for Chinese companies to manufacture electrical goods for the export market, especially high volume goods like television sets and cell phones.

The surge in demand seen in African oil, copper and platinum is due to China. On the supply side, China has flooded African markets with cheap t-shirts, household goods, utensils and motor cycles, and the common man pays a lot less for them than before when they were imported from other countries. Two companies will be selling cheap Chinese automobiles in African markets.

A recently released book ”The Forum on China-Africa Cooperation: A Strategic Opportunity” delineates the history of relations between the two countries, both political and economic. It also explains the mutual benefits for the countries. Coauthored by Garth Shelton, a professor at the University of Witwatersrand, the book focuses more on Africa’s perception of the Chinese involvement and contribution to the African continent. Much has been said about China’s viewpoint and that of the African politicians, but little or nothing has been written about the views of the African common man’s opinions about the subject.

Source : China Africa

China invest in African mining

Mardi, mars 3rd, 2009

The African mining industry has seen a lot of Chinese participation over the years and other countries that are showing interest in African mines now find themselves dealing with Chinese companies involved in those mines. However, the mining industry is also facing prospects of reduced demand and prices hitting all-time low levels and the worst affected countries include Botswana, Zambia, the Democratic Republic of Congo, and South Africa. All this is being attributed to the decline rather than growth in demand for base metals in China. This is incidentally the best time for China to consider merger and acquisitions in the mining sector of Africa. Though the world is facing an economic slowdown China has billions of dollars to spare, and acquisitions in this sector will provide stability to the Chinese economy. This is the view echoed by at least Africa based economists.

China’s relations with Angola will be analyzed and will be the focus of discussions that will take place at the ‘China in Africa’ Conference that will be held on 2nd March in Luanda. The central themes for the discussion will be –China in Africa-Developments and Challenges and secondly, “The Crossroads of Chinas Angolan Relations”.

An encouraging development has been the opening of a direct air link between Beijing and Algeria. This is the first direct link between China and West Africa. The direct flight will further promote trade and economic ties, diplomatic and cultural exchanges between China and Algeria. This will lead to furthering the development process. The flight from Algiers is being operated by Air Algeria. Algeria is already benefiting from the presence of over forty Chinese companies.

Africa happens to be one of the few places where construction potential can be converted into concrete projects. With China interested in investing in this sector, the economy will grow. This is in contrast to the construction industry facing all time lows in other countries in the times of global recession.

Chinese companies today are more multinational than any other, and they are gradually but consistently strengthening their position in African countries. China can see the development potential in Africa and is ensuring that it gets to participate in it by taking every opportunity available for investment. The stamp of China is already visible in Africa.

Source : Manufacturers suppliers