Return to Stories

Mining for Mao

Chinese investment in Africa is a hot topic that is splitting opinion in surprising ways. Some commentators are up in arms, warning of ruthless exploitation of natural resources for the good of Chinese investors and a kleptocratic few local potentates. Others point out that Chinese investment in infrastructure is transforming some of the most underdeveloped parts of the continent, bringing huge benefits to some of the poorest people. Whichever angle taken on this growing phenomenon, it leaves few Africa watchers cold. From a tiny base two decades ago, China has become Africa's biggest trading partner with a whopping USD 200 billion worth of goods flowing freely between the two in 2012 helping Africa to an average GDP growth of 5.5 % over the past 10 years. The vast majority of Africa's exports to China are raw materials needed to sustain the vast infrastructure projects and construction industry through its boom years. Though China's demand for raw materials has started to fall slightly with a refocusing of the economy toward consumer-led growth, its involvement in many of the continent's countries now is deep enough to remain vital for African growth in the long term.

One of the most frequently levelled criticisms at Sino-African deals is that Chinese state investors ask no questions about the provenance of the materials they buy and are happy to cosy up to repressive, corrupt regimes, thus perpetuating crises and civil wars in unstable, resource-rich countries. But the situation is not as cut and dry as suggested by some.

Zambia is a classic example of intense Chinese involvement in a resource rich African country. Investment in Zambia has grown from USD 100 million in 2000 to USD 2.8 billion in 2012, 90 % of which has been sunk into the mining sector taking advantage of Zambia's vast copper and cobalt resources. The country's ruling Movement for Multi-Party Democracy hopes that a GDP growth rate of 7.6 % in 2012 will convince voters to return it to power in upcoming elections.

But complaints about working conditions in Chinese-run companies have been increasing in number with reports of workers being paid below the minimum wage. Frustration has also been building up over the fact that Chinese workers are routinely given work permits to carry out jobs on building sites which could easily be done by Zambians.

Edward Lange, Zambia co-ordinator of Southern Africa Resource Watch, a South-Africa based NGO, points out that "We're not saying Chinese investment is bad but the manner in which they are doing business leaves a lot to be desired." He worries that "Chinese investors seem to be almost above the law and don't have to pay the same taxes as other people."

Sven Torfinn visited the facilities of Non-Ferrous Company Africa (NFCA), a Chinese company which operates several mines and plants in Zambia's Copperbelt, to get a sense of the merits and pitfalls of large scale Chinese investment in Africa.
powered by