David Landry, of the Duke Kunshan University (China) & Johns Hopkins University (USA) has done us a great service by producing for the first time (that I’ve seen something like this anyhow) a comprehensive analysis of where China is digging, and for what, around the world.
Every so often stories flare up suggesting China ‘secretly’ pulling resources out of poorly monitored and run facilities and there’s perhaps an agenda to corner this-or-that vital commodity via ownership.
The paper sets the record straight and addresses the reality of China’s global mining efforts and highlights three important points:
- The majority of China’s mining assets are in Australia and,
- The biggest commodity China is interested in is copper
- The majority of Chinese mining companies are State Owned Enterprises (SOEs)
The high concentration of SOEs gives Chinese companies an edge in terms of access to competitively priced funding and connections with China’s overseas diplomatic network which is the world’s largest.
This leads to riskier ventures such as those in the DRC and a preference for exploration type assets rather than established producers.
What the author of the paper doesn’t find is any ‘gun boat diplomacy’ with Chinese mining acquisitions being a quid pro quo for aid or governmental financial assistance (no ‘debt-traps’ here, sorry).
All the assets surveyed for the paper were acquired fairly and squarely. The obvious caveat being that cheap funding and nearby diplomatic assistance give China’s SOEs an advantage over more established legacy operators.
You can read the paper in full via this link Chinese mining investment globally.
Happy Sunday