A more than twenty-five fold jump in investment in fewer than 10 years. That’s how fast China is gaining control over Africa’s mining industry. And Beijing’s push is not ending any time soon.
China’s growing economy is thirsty for sustainable supplies of mineral resources. Despite being the number one mining nation in the world, China is facing a rapid depletion of its local mineral resources.
Reserves-to-production (R/P) ratio that represents the “burn rate” of proven reserves of mineral commodities when applying current levels of domestic mine production shows that China is in the “red zone” for future supplies of nearly all crucial minerals.
In order to overcome shortages of essential mineral commodities, as well as to secure long-term sustainable supplies for its ambitious economic development strategy, the Government of China empowered and encouraged a number of domestic state-owned and private companies to actively pursue mining deals throughout the world.
Since this strategy, also known as “Two Resources, Two Markets”, launched in 2006, Africa quickly became the most desirable region for China and Hong Kong-based companies hunting for mining deals globally.
The scale of China’s expansion in Africa is just a mind blowing. In less than 10 years since Chinese authorities called for mineral resources diversification globally, the number of major mining/mineral processing assets in Africa with China-headquartered companies interest, increased from only a handful in 2006 to more than one hundred and twenty in 2015 (Figure 2).
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