TOKYO, May 29 (Reuters) – A Japanese government drive to secure access to resources in Africa has sputtered as some companies shy away from investing due to slumping commodity prices and worries over political stability, helping China as it races to import raw materials from the continent.
Around two years ago, Japan said it would provide about $2 billion mainly to back African commodity projects by its firms as part of a move to secure supplies of materials such as coking coal and copper it needs to churn out steel and electronic components.
But worries over the stability of the investment environment in some African nations, along with falling commodity prices, have sapped momentum from that push, Japanese firms said at a mining conference on Thursday and Friday.
A lack of infrastructure and concerns over resource nationalism were also cited as reasons.
“To invest in mine development, it is necessary to see an improvement in Africa’s investment environment so it is politically, sociologically and economically stable,” Shigeru Oi, president of JX Nippon Mining & Metals Corp, Japan’s top copper refiner, said in a speech.
“If those things improve, Africa, which is rich in promising mineral resources, will certainly become an attractive investment target.”
Resource-poor Japan wants to diversify its supplies of key commodities. For example, around 70 percent of its copper supply currently comes from South America.
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