INTRODUCTION


The African Opportunity


the opportunity to sell its heavy engineering production capability, and of course the operating environment for Chinese companies in Africa is less challenging as they are able to deploy a greater proportion of their own workforce. Importantly, much of the activity in Africa by China is by large State Owned Enterprises (SOEs). This means that there is extensive government-to-government dialogue, and China has delivered a great deal in Africa. China has invested massively in infrastructure projects, with investments this year including: “ Shandong Iron and Steel’s US$1.5 billion investment in UK listed African Minerals, which will secure a 10 million tons per annum iron ore offtake supply.


“ Jinchuan Nickel’s acquisition of a controlling stake in a South African platinum mine for US$227 million.


“China can not only provide the debt funding needed, but China can bring in labour solutions in-country that can significantly reduce project costs and project timelines”


Sundance Resources:


Diamond drilling and hematite sample


Many new


projects are a long way from power sources, transport lines and port facilities. Often


“ Chinese investors will fund at least 25per cent of a US$8 billion oil refinery in Lagos, Nigeria, with China Development Bank providing an accompanying debt package. Importantly, China often invests without the conditions attached to Western finance into Africa. This level of engagement and investment and cultural affinity means that China has a large and powerful voice in Africa. A small Australian resources


or energy company operating to develop a project in Africa can be vulnerable to sovereign risk and even project expropriation. If that same company is operating in joint venture or in collaboration with a Chinese SOE, then those political and sovereign risks are significantly reduced.


billions of dollars needs to be spent to create the infrastructure pathways necessary for commodities to travel from mine to market. China can not only provide the debt funding needed, but China can bring in labour solutions in-country that can significantly reduce project costs and project timelines. One example of where this is


being explored is the Mbalam iron ore project being developed in Cameroon by Sundance Resources. Sundance have appointed a Chinese investment back to assist in securing project finance and are working with Chinese construction companies to develop cost effective infrastructure solutions. Sundance Resources is perhaps


the best-known Australian company active in Africa. It is perhaps not surprising that Sundance recruited


20 Australia China: BEYOND TOMORROW


Giulio Casello as CEO from Sinosteel Midwest, bringing in further expertise in dealing with Chinese SOEs to complement the contacts and experience in China of the returning Chairman and legendary mining figure, George Jones. Guinea is potentially a globally significant iron ore province and is comparable in many respects to the Pilbara 40 years ago. Rio Tinto is developing the massive Simandou iron ore project in Guinea, which will produce 70 million tonnes of iron ore per annum. Rio Tinto has brought in its largest shareholder, Chinalco, in joint venture to harness the strengths of China in Africa to help to co-develop the project. With Australian companies so


active in Africa and with so many compelling reasons for Australian companies to partner with Chinese companies in developing resources and energy projects successfully, the Australia China Business Council is keen to use its networks to assist its members to develop these partnerships. 


Duncan Calder Founding National Chairman KPMG Australia’s China Business Practice, President of the Australia China Business Council W.A.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164  |  Page 165  |  Page 166  |  Page 167  |  Page 168  |  Page 169  |  Page 170  |  Page 171  |  Page 172  |  Page 173  |  Page 174  |  Page 175  |  Page 176  |  Page 177  |  Page 178  |  Page 179  |  Page 180