China is making another big bet on copper in the Democratic Republic of the Congo (DR Congo), deepening its presence in a nation that has proved difficult for Western business.
Congo holds huge reserves of copper, but is also one of the hardest countries to navigate, with problems with security, transparency and infrastructure.
A case in point is Glencore PLC, the biggest producer of copper in the DR Congo. The company is facing three court cases and a possible UK bribery probe related to its dealings there, as well as a tax hike and tougher mining laws.
Citic Metal Co (中信金?), a Chinese conglomerate, on Monday agreed to spend about US$555 million for a 20 percent stake in Ivanhoe Mines Ltd, which holds the Kipushi zinc and Kamoa-Kakula copper projects.
China’s Zijin Mining Group Co (紫金礦業) already owns almost 10 percent of Ivanhoe.
The investment shows how China, the world’s biggest commodity consumer, is looking to Africa to secure natural resource supplies and how it is positioning industry to take advantage of the move to battery and electric-car technology.
Electric vehicles and renewable applications use four times more copper than traditional cars and energy sources, according to Freeport-McMoRan Inc.
“This is China in the ascendancy,” said Paul Gait, an analyst at Sanford C Bernstein & Co in London. “The West is losing its tolerance and appetite for securing what is necessary to power an economy.”
However, it is not easy to mine in the DR Congo, which is the world’s sixth-biggest source of copper. In the past 10 years, other major competitors, such as Rio Tinto Group and BHP Billiton Ltd, turned away from the DR Congo’s rich resources, while China’s influence is on the rise.
China Molybdenum Co (洛陽欒川鉬業) last year bought a stake in one of the DR Congo’s biggest copper and cobalt mine, Tenke Fungurume, as part of a US$3.8 billion deal, and Freeport-McMoRan has left the country.
China’s Zhejiang Huayou Cobalt Co Ltd (浙江華友鈷業) is developing a copper mine near Kolwezi in the nation’s southeast.
In March, Glencore agreed to sell about one-third of its cobalt output to GEM Co (格林美), a Chinese supplier of battery chemicals.
The DR Congo last week approved the final parts of a new mining law that would make it more expensive for mining companies to operate and give the government a bigger stake.
The law has faced fierce criticism from the biggest miners in the nation, including Glencore and Randgold Resources Ltd, which say it would reduce investment.
Citic’s investment in Ivanhoe could help Glencore reassure investors that its Congolese assets still have value, Gait said.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
RSS