Good for China - $5 billion for the DRC
China’s dramatic $5bn plan for the Congo shows up Africa, and its Western buddies, as a bunch of simpering wimps.
Author: Barry Sergeant
Posted: Thursday , 20 Sep 2007
Every man and his dog and chicken has lots to say about how China appears to be overrunning Africa, seemingly at will. This week China, epicentre of global economic growth, announced a draft accord with the Democratic Republic of the Congo (DRC), with a bundled deal of $5bn mentioned. While the draft accord is referred to as a "borrowing" by the DRC, Congolese public works minister Pierre Lumbi made it clear that other kinds of repayment terms were provided for as well.
These terms include, intriguingly, but not surprisingly, mining concessions in the DRC, and toll revenue deals for Chinese firms. There is no question that Chinese interests have seen further than any of the multitude of parties who purport to hold African interests dear and at heart, including Africa itself. Of the $5bn mentioned, $3bn will go towards a 3,200km railway running from Sakania, in the deep south of the minerals rich southern Katanga Province, near the Zambian border, to Matadi, right up in the west near the Congo river and just ahead of the Atlantic Ocean.
The eye-popping fact is that Lubumbashi, capital of Katanga Province and smack in the heart of one of the richest copper-cobalt provinces in the world, has been linked by rail to Johannesburg and points south for decades. The line has long been collectively inoperable, given the lack of imagination and leadership in sub-Saharan Africa. Nowhere is there even a hint that the line is to be rehabilitated, in order to open up a southern passage for copper and cobalt, and a northern passage for construction materials and the numerous other goods associated with development.
Lubumbashi is also connected by rail to the west to the port of Lobito in Angola. For many months now, a Chinese consortium, supported by the DRC government, has been in the process of rehabilitating the Benguela rail network in Angola. The Benguela rail system was traditionally used to transport the riches of Katanga Province to the coasts of Africa. It is via the Katanga link that the Benguela system connects through exchanges in Zambia to connections to Mozambique's port of Beira, and Tanzania's Dar es Salaam, also on the Indian Ocean.
In order to accommodate the realities of being on this continent, the new $3bn Chinese line proposed for the DRC will be exclusively on Congolese soil. Part of the $5bn proposed is earmarked for a road link of 3,500km linking Kisangani in the northeast to Lubumbashi, and running through to Kasumbalesa, a major customs point on the border with Zambia. The balance of Beijing's $5bn is to fund some 31 hospitals, 145 health centres, two large international-standard universities, and 5,000 government housing units.
There will still be hundreds of millions of dollars available to rehabilitate Katanga Province's crumbling mining infrastructure, and establishing joint ventures in the resources sector, as envisaged in the draft accord. If the $5bn loan is fully disbursed, it would be one of China's biggest commitments in Africa. In recent years China, the world's biggest user of raw materials, has happily invested billions of dollars across the continent, in projects that include energy, mining and infrastructure, from Algeria to Angola.
Some small howls of protest have already been heard from the likes of the International Monetary Fund, which oversees $8bn worth of DRC debt inherited from decades of dictatorial rule under Mobutu Sese Seko. There will be more howls of protest, to be sure, but one day the rolling stock will thunder through the rain forests as the Chinese look on as Lubumbashi once again becomes one of the world's richest small cities, as it was in colonial times.
Congo Eyes Chinese Charity for New Harbor
Monday, March 3rd, 2008
Of course, China will get its kickbacks. In real terms, China’s government will get a piece of every new loan, every ATM fee, every credit card, etc. taken from Standard Bank.
And China knows it. Congo is one of several African countries China is investing billions in - investments that secure a large piece of Africa’s growing resources.
I don't think CSGH should have any problems
getting the min up and runing.
If you look through the old 10 QSB CSGH is paying for the min with colbalt
The parties agreed that the purchase price would be US$2,000,000 and that DLX would give Shengbao 20% of its monthly ore production each month for the payment of the purchase price.
Material Commitments for Capital Expenditures
Currently, we have bought the prospecting and mining rights of a cobalt mine in Congo. We plan to start the construction of a processing plant in Congo in the third quarter of the 2008 fiscal year. We plan to finance $5,000,000 in total for the project, of which $2,000,000 was used to acquire the mining right of the cobalt mine, $2,000,000 will be used to set up the processing plant and $ 1,000,000 will be used as the operational fund.
On June 9, 2007, DLX entered into an African Mining Project Contract of Cooperation (the “Purchase Agreement”) with Shengbao Group, and South African Shengbao Mining Enterprises (together referred to as “Shengbao”), pursuant to which DLX purchased the prospecting and mining rights of a cobalt ore mine that is owned by Shengbao in the Congo area, Africa. The parties agreed that the purchase price would be US$2,000,000 and that DLX would give Shengbao 20% of its monthly ore production each month for the payment of the purchase price. Pursuant to the Purchase Agreement, Shengbao will provide DLX a mine of approximately 35 sq. km in the Congo area to prospect and mine. DLX would provide the necessary funding, equipment and engineering staff for the mining and would produce no less than twenty (20) tons of ore per day. With regard to the product ownership, DLX would own eighty percent (80%) of the mining products, and Shengbao would own twenty percent (20%). Shengbao agreed to bear the risk of losing part or all of the US$2,000,000 if the mining production fails.
China Drills Into Africa with $5.4 Billion Investment
By Mike Caggeso
An overwhelming majority of South Africa’s Standard Bank Group Ltd. (JNB:SBK) shareholders approved the sale of 20% of the bank’s assets to state-owned Industrial and Commercial Bank of China Ltd. (HKG:1398) - a $5.4 billion purchase, making it China’s largest overseas investment.
More than 95% of Standard Bank shareholders approved the sale of new shares at 104.58 rand ($15.32) per share and the sale of existing shares at 136 rand ($19.92) per share to ICBC, Reuters reported. The banks made the deal in late October, but shareholders hadn’t given it the rubber stamp until now.
Standard Bank is Africa’s largest lender, servicing 18 sub-Saharan countries. Meanwhile, ICBC is the world’s largest bank by market value.
"This agreement is definitely of economic interest to both parties, as well as a catalyst to cement the economic and trade ties between China and Africa," ICBC chairman Jiang Jianqing said in an October statement.
China’s Interest in Africa
African Business reports that trade between Africa and China grew at a rate of 40% a year since 2001. Last year, bilateral trade between the two was $50 billion.
While China has initiated trade with Africa in a wide range of sectors, its principle interest seems to be oil. China is growing at record rates and it needs commodities to sustain its pace. Sub-Saharan Africa has scores of oil and mineral reserves, and those reserves are in countries in dire need of infrastructure to elevate their economies and public image, above that of abject poverty.
Already, 14% of China’s oil imports come from Angola. About 60% of Sudan’s oil goes to China. The copper industries of Zambia and the Congo are flush with Chinese investments, as are the timber industries of Cameroon, Mozambique and Liberia.
This latest deal aligns China’s government with the largest bank in Africa, paving an inroad to the long-term, commodity-driven economic growth economists are calling for - beginning with a joint $1 billion global mining fund to invest in natural-resource projects between the two banks, Bloomberg reported.
In real terms, China’s government will get a piece of every new loan, every ATM fee, every credit card, etc. taken from Standard Bank.
And Standard Bank is doing its best to invest its latest mountain of cash into areas of growth:
"We will try to keep almost all the money that we can outside of South Africa because it is earmarked for growth in Africa and growth outside of Africa," Jacko Maree, Standard Bank CEO, told Reuters.
Capital Resource Funding Signs Purchasing Contract With Japanese Company Projected to Generate $12.6 Million in Revenues Over 12-Months http://www.sys-con.com/read/386840.htm
LIAONING PROVINCE, CHINA -- (MARKET WIRE) -- 06/08/07 -- Capital Resource Funding Corp. (OTCBB: CRFU), soon to be known as China Sun Group High-Tech Co., the second largest cobalt series production capacity in China,* announced today that it has signed a contract with the Japanese company Honjo Chemical Co. to supply them with a fixed amount of 20 tons of cobaltosic oxide every month, for 12-months, beginning July 2007.
The price of the cobaltosic oxide to be purchased will be based on the London Metal Bulletin (MB) (http://www.lme.co.uk). Capital Resource projects the order will deliver monthly sales of approximately $1,050,000 per month, resulting in total revenues of approximately $12.6 million in 12-months. Revenues are calculated based on London MB's price as of the quarter ended March 31, 2007, the exchange rate of one US dollar to RMB, and the proportion of cobalt in the Company's product. All three of these factors may fluctuate during the course of the contract, which could have a material effect on the Company's total sales projection.
"We are very pleased to welcome Honjo Chemical Co. as a customer. This contract demonstrates our ability to attract key manufacturing agreements where current demand for cobaltosic oxide exceeds its supply. Honjo will join our growing list of customers, including Shanshan Technology Group, Hunan Ruixiang Technology Development Co., Ltd. and Citic Guoan Group," said Wang Bin, Chairman and CEO of Capital Resource Funding.
I do not see this company on there customer list on there last financial statement. I am Thinking that this should show up on there next quarter.
(Lubumbashi Democratic Republic of Congo)
Dalian Xinyang HighTech Development Co., Ltd. ("DLX") that has the second largest cobalt series production capacity in China*, has signed a cooperation contract with Shengbao Group and South African Shengbao Mining Enterprises ("Shengbao") to purchase the prospecting and mining rights of a cobalt mine in Lubumbashi, Katanga, Democratic Republic of Congo. According to the agreement, DLX will own the rights to 80% of the mined cobalt, while Shengbao will own the remaining 20%. Shengbao will also be given a right to purchase any surplus cobalt mined, once DLX has filled its backlog of orders.