Free fax: 00 77 Mining in SA. Key mining facts: In the mining sector contributed R billion to the South African gross domestic product GDP A total of , people were employed in the mining sector in Each person employed in the mining sector has up to nine indirect dependants The mining sector has, for many years, attracted valuable foreign direct investment to South Africa.
Platinum In South Africa the discovery of the first platinum nuggets dates back to Commercial coal mining began 12 years later, with the construction of a mine in the Eastern Cape that would also see a settlement constructed around it, the town of Molteno. It was established by George Vice, the local-born son of an Englishman. He found the process of white Europeans moving to South Africa to set up mining operations, staffed predominantly by black workers. This trend would characterise later generations of South African mining.
Diamond and platinum rushes In the s, two notable diamonds were unearthed; The carat Eureka diamond and the carat Star of South Africa, inspiring a diamond rush in the region aided by the more established coal industry. In , the Orange Free State government-commissioned English-born George William Stow to uncover coal deposits; he would later move to Kimberley , the famous Big Hole diamond mine site.
Telephone: To promote, facilitate and regulate exploration and sustainable development of oil and gas in South Africa. It is not obvious how the Chinese investments into the transport sector has affected its control over African or global mineral production, nor are they simple to evaluate and quantify.
Often, these infrastructure projects connect Chinese-owned projects to export markets and hence do not add much control to what is already exercised through ownership. The Chinese control through ownership of cobalt production in the DRC is amplified by vertical integration and further downstream processing of cobalt ores and concentrates in China.
This additional control is difficult to differentiate from the power stemming out of the market knowledge it is closely associated with. Together, these two factors strengthen the ownership control Chinese companies exert over the cobalt industries.
In lithium, a similar situation could possibly develop in the future. The most important additional ways to control mine production used by Chinese companies and government are financial and political support to countries in particular in Africa. Between and , Chinese loans to African governments and state-owned enterprises amounted to billion USD. Until , loans to resource extraction were The original 9 billion to DRC was renegotiated and reduced to 6 billion, and only 1. The amounts loaned were increasing until and has since then gradually gone down except for a peak in Hwang et al.
These two control mechanisms are difficult to measure and quantify. Without the financial support given to Chinese companies, their expansion would most probably have been slower than it has been. The policy background to and implications of Chinese aid and geopolitical ambitions have been the focus of a range of studies for a review see Konijn There are no direct links between Chinese aid and loan policies and host country policies unlike the practices of the IMF and the World Bank and other donors.
Some of the indirect ways of controlling mine production are employed by Chinese companies and government, others are not. But in particular, the financial support given to Chinese companies and the building of transport infrastructure to ship metals and minerals are important ways of increasing Chinese control.
Chinese control over global and African mine production could hence be higher than what the ownership share indicates, but it is not possible to quantify their importance. We have not found clear evidence supporting the hypothesis that these additional control methods would increase Chinese control substantially in comparison with its ownership shares.
Chinese investments in African mining have contributed to the growth of African mine production. An important hypothetical question is, for African host governments and metal consumers around the world: if other investors would have stepped in had the Chinese not been as active as they have been? Be that as it may, we can only note that as a result of the Chinese investments Africa has been among those regions of the world where mine production has grown and where mining has made the largest contribution to national economies.
Part of the explanation for the attractiveness of Chinese investors to African host countries is simply that they have been prepared to invest, and they have also offered relatively favourable conditions, at least on paper. At the same time, it is clear that the Chinese companies have had the same basis for their investments as the traditional major mining companies: to extract minerals and export as much as possible as fast as possible and with a profit.
The overseas mining activities of Chinese companies have affected global metal markets, host countries and competing mining companies. But, equally importantly, the Chinese companies are gradually also changing their behaviour reacting to pressures from the markets.
Another important follow-up question is: What effects have the Chinese push into global minerals and metals market had? It would certainly be interesting to see a follow-up study. Chinese companies listed on foreign exchanges have to follow their rules in order to get access to international financial markets.
If Chinese banks get more restrictive, an increasing number of Chinese companies will turn to overseas financial markets. These lenders will put additional demands on the way Chinese companies run their foreign operations. Given result of recent research, it seems as if this gap has at least not widened since then Ali et al. Another question is: To what extent will operating outside of China initiate development and change in operational practices and routines of the Chinese companies in their mines in China?
Health and safety, environmental protection and transparency are areas where such influences could potentially push for important changes in the operations of Chinese companies also in China Farooki and Kaplinsky ; ILO ; Tang et al.
Chinese companies are far from taking control over African mining and even less so over global mine production. Their influence could continue to increase, albeit probably not at the same speed as during the end of the past decade.
The Chinese companies will possibly face increasing political disadvantages due to increasing geopolitical tensions in particular in Southeast Asia between the USA and China. The competition for the world class deposits in Central Africa will probably increase with the successes of the Chinese companies. The Chinese companies will still need access to the top of the range equipment and best available practices and technologies from non-Chinese manufacturers.
The Chinese companies will have to fine-tune their offering to African governments to avoid the criticisms levelled against them in some host countries. There is thus still time for African countries to negotiate better deals for the extraction of their mineral resources.
It will remain crucial for African governments to create a competitive situation between Chinese companies and the traditional transnational mining companies whether from Europe, North America or Australia. A study of perceptions of Chinese FDI in Canada showed that it was common with an overestimate of the size of Chinese investments Li et al. This could also be the case in the mining industry globally. In the following text, project means development projects including all stages of the development ladder such as scoping, pre-feasibility, feasibility, engineering and construction, but excluding early green field exploration.
It can be discussed in which category to place uranium. We include uranium, and also industrial minerals and diamonds. Presumably meaning that taking back proceeds from selling foreign operations and companies by Chinese companies were higher than outward. It is unclear what this negative figure really means. Both these mines are operated by Rio Tinto but jointly owned with the Chinese partners. There are also projects, which did not involve any ownership or investment by the Chinese partner, such as the Wheelarra joint venture between BHP Billiton and Wuhan Iron and Steel Group in Such projects without an ownership share are not included in our calculations.
The USD 43 billion includes also steel industry investments and the billion both aluminium and steel; the figures are hence not exactly comparable but useful. Full names of the companies are found in Table 3. For a list of iron ore projects including both successful and failed ones please see Wilson The price of manganese ore is not transparent, and hence, we are not fully confident in the results when applying our standard methodology of calculating the value of manganese production at the mine stage.
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