Chinese companies are to build and control power and port facilities, roads, rail and bridges on Guadalcanal in the Solomon Islands, as part of an US$825 million deal to revive an abandoned gold mine, according to new contract details.
The gold project agreement, described by Chinese Ambassador to Papua New Guinea Xue Bing (薛冰) as an “early harvest” of the new diplomatic tie-up between Beijing and Honiara, gives Chinese interests an increased foothold in the Pacific, long under the influence of the US and its allies.
While locals initially expressed fears that the Gold Ridge Mine deal would saddle the island nation with debt, those attending a weekend ceremony at the mine site were told that the Solomons would not pay for the project infrastructure, according to a recording of proceedings.
Photo: Reuters
However, the Solomons would not own the infrastructure.
A company majority-owned by Hong Kong-listed Wanguo International Mining Group (萬國國際礦業), which has the project rights, would retain ownership of any project infrastructure, according to the project terms presented to attendees.
Wanguo has contracted state-owned China State Railway Group Co Ltd (中國國家鐵路集團) US$825 million to complete the work over several phases.
Those attending the ceremony at the mine site, about 30km south of Honiara, were told that the large contract would involve a significant infrastructure component beyond the immediate mine site.
“Only China, proceeding from the friendship and well-being of the local people, is ready to overcome all obstacles to undertake this project by planning to build roads, bridges, mining facilities and a hydropower station,” Xue said, according to the recording.
A separate announcement from China Rail last month also said that the contract included port work.
The infrastructure is to be built in and around Honiara on the island of Guadalcanal, a strategic Pacific location that saw fierce fighting in World War II.
While the Solomons government, China Rail and the project operators have denied any political involvement in the mining deal, it was presented at the project ceremony as an example of what the new relationship between China and Solomons can deliver.
The agreement was announced in the middle of last month, coinciding with a decision by the Solomons government to switch diplomatic ties from Taipei to Beijing.
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