China Digital Times

China news tagged with: natural resources (64)

• China to Build Oil and Gas Pipeline to Myanmar

  

  China will begin building a long oil and gas pipeline to Myanmar in September.  From The Times of India:

  China begins lying a gigantic 1,100 km long gas and oil pipeline to Myanmar in September; the official media said a day before the visit of Burmese leaders beginning Wednesday. It will cut transportation costs by shortening the journey for crude from the Middle East and Africa.

  The move has serious strategic and political implications for both India and China, which has vetoed every United Nations resolution against Myanmar. It comes soon after China beat India in winning a 30-year concession from Yangoon’s military junta besides launching construction of hydroelectric dams in that country.

  [...]“The section of the pipelines in Myanmar will be built under the name of CNPC but whether CNPC or PetroChina undertakes the construction of the domestic section has not been decided,” the official China Securities Journal reported.

  » Read more
  • June 16, 2009 12:27 PM

• China to Push Ahead With ‘Go Abroad’ Policy - Ministry

  

  After being blocked from purchasing an Australian mining company, China has decided to push forward. From Reuters:

  China will steadily push its long time policy of ‘go abroad’, despite risks caused by the financial crisis, its Commerce Ministry said on Thursday, a week after Rio Tinto scrapped a planned tie-up with Chinalco.

  ‘Opportunities to invest in high-quality enterprises and assets have increased, investment costs have declined and transaction conditions have improved,’ the ministry said in a statement posted on its website.

  Industry players and analysts are worried Rio’s decision to scrap the deal would dampen the interest of Chinese companies in overseas expansion.

  See also the anger sparked by the rebuff from the Wall Street Journal and from Radio Australia, that states discrimination against Chinese companies from these large overseas deals.

  See also Reuters for more details about Rio/Chinalco merger.

  » Read more
  • June 11, 2009 12:43 AM

• Brazil Turns to China to Help Finance Oil Projects

  

  The Wall Street Journal reports on Brazilian President Luiz Inacio Lula da Silva’s visit to Beijing and prospects for China-Brazilian relations:

  Brazilian President Luiz Inácio Lula da Silva was set to arrive in Beijing Monday to meet with Chinese President Hu Jintao, who is expected to unleash billions of dollars of credit to help Brazil exploit its massive oil reserves. Brazil will return the favor by guaranteeing oil shipments to Chinese companies.

  The nations are being thrust together by the global financial crisis. Brazil’s state-controlled oil giant, Petroleo Brasileiro SA, wants to spend $174 billion over the next five years to elevate Brazil into the major leagues of oil-producing nations. With international capital markets on life support, China is among the few remaining sources of cash.

  Petrobras, as the company is known, is turning to China at a time when China’s appetite for raw materials has lifted economies across commodity-rich Latin America, blunting the impact of the global downturn. In March, China passed the U.S. as Brazil’s biggest trade partner.

  » Read more
  • May 18, 2009 10:42 PM

• China Deal for Australian Miner

  

  At the end of March, China’s initial bid for the Australian mining company OZ Minerals was rejected. However, a renegotiated deal has reopened possibilities for the acquisition by China Minmetals Corporation. From BBC News:

  The renegotiated deal worth $1.2bn (£0.84bn) should satisfy security concerns raised by the original offer.

  The deal would help rescue the world’s second-biggest zinc miner from its debt crisis and secure its future.

  [...]The Oz Minerals takeover still requires regulatory and shareholder approval.

  The Australian government rejected Minmetal’s $1.7bn bid last week because one of Oz Minerals’ key mines was located near a weapons-testing range in the outback.

  » Read more
  • April 1, 2009 1:37 PM

• Australia Defends Ties with Beijing, Calls Critics ‘Absurd’

  

  Opposition politicians in Australia are questioning the propriety of the government’s ties to Beijing.  From the AP and AFP via Taipei Times:

  Australia’s deputy prime minister defended the government yesterday against suggestions it is too close to Beijing, calling the opposition’s attacks “absurd.”

  Last week, Defense Minister Joel Fitzgibbon admitted that he had failed to declare two trips to China that were paid for by businesswoman Helen Liu, a ­Chinese-Australian property developer who is also a long-standing friend, as he is required to do under parliamentary rules.

  [...]“China has a vested interest in acquiring our natural resources at low prices,” [opposition leader Malcolm Turnbull] said. “The question is how much has Mr Fitzgibbon not told us.”

  » Read more
  • March 29, 2009 2:51 PM

• Australia Blocks China’s Purchase of Mining Company

  

  China’s plan to buy an Australian mining company has stalled, according to the New York Times:

  The decision to block the purchase of OZ Minerals, a mining company, by state-owned China Minmetals Corporation, coincides with a heated debate concerning a much larger investment that the Chinese metals company Chinalco is planning to make in the British-Australian mining group Rio Tinto.

  Two weeks ago, Chinese antitrust authorities blocked a move by Coca-Cola to take over Huiyuan Juice Group, a Chinese juice manufacturer, for $2.4 billion — a decision that caused widespread concern about China’s attitude to foreign takeovers of local companies.

  Australia’s treasurer, Wayne Swan, said on Friday that he decided to block the OZ Minerals transaction because the company’s Prominent Hill gold and copper mine, its core asset, is near a sensitive military facility.

  See also “OZ in shock after ban on China” from The Age. Meanwhile, Australian Prime Minister Kevin Rudd, who speaks fluent Mandarin, and his Labor Party have been criticized for cozying up to China. From Courier Mail:

  A day after Defence Minister Joel Fitzgibbon admitted he had failed to reveal two trips to China paid by a Chinese businesswoman, the Opposition reignited its attack over Labor’s links with Australia’s biggest trading partner.

  Opposition Leader Malcolm Turnbull accused Mandarin-speaking Prime Minister Kevin Rudd of running around overseas like a “roving ambassador” for China.

  But senior Labor Minister Anthony Albanese dismissed the attacks, saying the Opposition was “ringing the old bell about the red hordes coming down”.

  » Read more
  • March 27, 2009 12:34 PM

• China’s Copper Mine Project in Peru Reflects its Economic Power

  

  The Los Angeles Times is the latest to report on China taking advantage of their cash flow to buy up natural resources around the world. They report from Peru on a copper mining project:

  The open-pit mine is expected to produce a quarter of a million tons of copper a year and is one of five major Chinese mining projects planned for Peru that appear to be advancing despite the darkening economic climate. The reason? The Asian giant’s insatiable need for raw materials.

  Erica S. Downs, a China expert at the Brookings Institution in Washington, said Chinese mining companies are aggressively expanding worldwide, often through mergers and acquisitions that target companies that have been laid low by the crisis. An example is Chinalco’s bid to acquire control of Rio Tinto, a giant Australian-British mining company.

  “When the economy was booming, there were fewer attractive assets for sale, and often stiff competition for those that were available,” Downs said. “Today, Chinese firms are finding the opportunities for international mergers and acquisitions to be much more plentiful.”

  Meanwhile, Reuters reports that a Peruvian investigation has found police officers guilty of torturing opponents of a mining project run by a British-Chinese company.

  » Read more
  • March 22, 2009 3:42 PM

• A Focus of Tibetan Ire: Mining

  

  The Washington Post reports on another source of tension between Tibetans and the Han Chinese who are doing business in Tibet:

  The Chinese government is on high alert this week, bracing for the possibility of protests as Tibetans mark the 50th anniversary of a failed uprising. Communist Party officials have left nothing to chance, deploying paramilitary troops and plainclothes security, shutting down the Internet and text-messaging services, and stepping up propaganda against the Dalai Lama, the exiled Tibetan spiritual leader they brand a dangerous separatist. Last year at this time, monks in Lhasa, the capital of the Tibet Autonomous Region, staged protests that prompted a crackdown. More than 200 people were killed.

  But as the government focuses on suppressing political dissent this week, Tibetans are struggling with the economic conditions that help fuel their anger. Mining operations in Tibet and other nearby areas have been booming since the arrival of the Qinghai-Tibet rail line in 2006, bringing wealth to local governments and Chinese mine owners. But they have provided little benefit to local Tibetan farmers and nomads who say the mines scar mountains they consider sacred and kill the yaks and sheep they need in order to make a living. Protests by Tibetans against China’s billion-dollar mining industry are expected to rise as mines closed for the winter begin to reopen as early as next week.
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  “Last year, eight of my yaks died. They just fell down, foaming at the mouth,” said Gompo Dondrup, a nomad and farmer in Bathang county in western Sichuan province, whose family has lost more than 60 percent of its herd. “At first we didn’t know why. Later, the veterinarians told us it was because of the mine. We protested, but the mine continues to operate. They said they gave compensation to the government, but the government never gave us any.”

  See more posts abut development issues in Tibet, via CDT.

  » Read more
  • March 10, 2009 1:38 PM

• China’s Thirst for Copper Could Hold Key to Afghanistan’s Future

  

  While much attention has focused on China’s exploitation of natural resources on the African continent, McClatchy reports that the country is turning to Afghanistan for its copper reserves, and is getting some unintended assistance from the American troops there:

  U.S. troops set up bases last month along a dirt track that a Chinese firm is paving as part of a $3 billion project to gain access to the Aynak copper reserves. Some troops made camp outside a compound built for the Chinese road crews, who are about to return from winter break. American forces also have expanded their presence in neighboring Logar province, where the Aynak deposit is.

  The U.S. deployment wasn’t intended to protect the Chinese investment — the largest in Afghanistan’s history — but to strangle Taliban infiltration into the capital of Kabul. But if the mission provides the security that a project to revive Afghanistan’s economy needs, the synergy will be welcome.

  [...] Beijing faces enormous challenges in completing the project and gaining access to the estimated 240 million tons of copper ore that are accessible through surface mining. Taliban-led insurgents operate in large parts of Logar and Wardak; the area is sown with mines; and China must complete an ambitious set of infrastructure projects, including Afghanistan’s first national railway, as part of the deal.

  China’s willingness to gamble so much in one of the world’s poorest and riskiest nations testifies to its determination to acquire the commodities it needs to maintain its economic growth and social stability.

  » Read more
  • March 8, 2009 9:54 PM

• China, Taking Advantage of Global Recession, Goes on a Buying Spree

  

  China’s recent bid for a 18% stake in Australian mining giant Rio Tinto is just one example. From the Christian Science Monitor:

  Squeezed between falling profits and the credit crunch, a growing number of troubled corporations and countries are turning to cash-rich China for a bailout. And with foreign assets cheaper than they have been for years, Beijing is going on an international spending spree.

  “The international financial crisis … is equally a challenge and an opportunity,” China’s energy czar, Zhang Guobao, wrote recently in the official newspaper People’s Daily. “The slowdown … has reduced the price of international energy resources and assets and favors our search for overseas resources.”

  So far, the government has concentrated on natural-resource deals, securing supplies of oil and minerals in return for large amounts of cash. But private Chinese firms are also taking advantage of the crisis in other sectors: Diesel-engine giant Weichai Power is expected to buy a French plant that GM is selling off in its struggle to survive.

  » Read more
  • February 20, 2009 1:50 PM

• The Curse of Leopold

  

  An opinion piece in Britain’s Prospect Magazine argues that China’s exploitation of the Democratic Republic of Congo’s natural resources is behind the violence and turmoil in the country:

  History is mocking the people of Congo. In early November they should have been celebrating a milestone in international human rights, one of the very first occasions that campaigners from around the world united to protest on a mass scale.

  Exactly 100 years ago the behaviour of colonial agents of Belgian King Leopold II provoked just that. Then, Congo was “the issue,” igniting a publicity firestorm from Europe to the US that drew vast crowds to public debates to condemn the behaviour of Leopold’s representatives as they pillaged the Congo river basin for natural rubber. Today, history is repeating itself, with China, not Belgium, leading the exploitation of the country.

  [...] The appetite of China’s economy has created tension across Africa, with Chinese businessmen willing to spend vast sums for scarce raw materials. Countries like Zambia or Sierra Leone, long used to relying on aid, have found themselves with unprecedented revenues. Details of the contracts, and lucrative bribes and backhanders, are scant. But the scale became clear when, two years ago, China promised Congo $5bn in exchange for rights to much of its copper, cobalt, tin and other minerals.

  This massive cash pot has stirred up the disenfranchised masses in Congo’s regions who won’t see a penny from Kinshasa as things stand.

  Read and participate in a discussion on this article here.

  » Read more
  • November 26, 2008 6:56 PM

• BHP to Send Fewer Ships to China as Ore Demand Falls

  

  China’s economic woes are slowing demand for natural resources, and mining giants, like BHP Billiton, are slowing production as a result. From the Sydney Morning Herald:

  “There will be less ships than before,” Frank Zhang, a representative of Wilhelmsen Ship Service in Port Hedland, told the Herald. “There are [already] less ships than the previous months. Also, a lot of ships have to wait for a letter of credit before they can be loaded.”

  Brazil’s Vale, Rio Tinto and Fortescue Metals have each slashed production forecasts by 10 per cent this month amid lower demand for iron ore in China, but BHP has maintained its production plans.

  BHP’s shipments in October fell to the lowest level since February and the Herald understands the miner expects its November numbers will also be weak - but for operational reasons rather than lack of demand.

  » Read more
  • November 12, 2008 10:07 PM

• How Slow Can China Go?

  

  Forbes looks at how a slowdown in the Chinese economy is impacting those who supply China with the resources that have fueled the country’s economic growth:

  On Wednesday, Rio Tinto Chief Executive Tom Albanese said the Chinese economy is “pausing for breath” amid global turmoil, which will mean softer demand for Rio’s minerals.

  The warning, delivered in the Anglo-Aussie miner’s third-quarter operations review Wednesday, hit China-linked mining stocks hard in London, Sydney and New York trading. On the New York Stock Exchange, Rio Tinto (nyse: RTP - news - people ) shares tumbled 20.5%, or $39.72, to $154.27, while its would-be acquirer and rival BHP Billiton (nyse: BBL - news - people ) plunged 19.3%, or $7.23, to $30.17.

  The Baltic Dry Index of shipping rates also tumbled.

  Yet, according to an editorial in the Economist (via the Seattle Post-Intelligencer), China is well-situated to survive the worst of the global financial crisis:

  China’s banks should also be able to withstand falling house prices better than their American counterparts. In America it was easy to get a mortgage for 100 percent or more of the value of a home, but Chinese buyers must put down a minimum deposit of 20-30 percent, depending on the home’s size, and as much as 40 percent on second homes. This provides banks with a large buffer as prices fall.

  Loans to property developers are riskier and banks’ profits will be hurt as developers go bust. But according to Wang Tao, an economist at UBS, these loans account for only 7 percent of total bank lending.

  More generally, China’s banks should be better insulated from the global credit crunch than Western banks because the country’s system is funded through deposits rather than capital markets. Chinese banks’ loans amount to only 65 percent of their deposits, compared with far higher ratios in America and Western Europe.

  See also “Exporters come to terms with global slowdown” from China Daily.

  » Read more
  • October 15, 2008 9:05 PM

• Illegal Export of Logs Prevented

  

  Mozambican authorities have uncovered logs that were ready to be illegally shipped to China. From Agencia de Informacao de Mocambique:

  According to a statement from the Tax Authority, the customs services in the northern province of Cabo Delgado, seized the logs in the small port of Mocimboa da Praia. They filled 52 containers, and were owned by a company called TM International.

  All the logs were ironwood, one of Mozambique’s best known species of precious hardwoods.

  The export of unprocessed hardwoods is illegal, but it continues with the connivance of corrupt forest wardens and staff in the ports. In most of the cases that have been uncovered the destination of these illegal cargos is China.

  Read more about illegal logging to feed China’s economic boom, via CDT, here, here and here.

  » Read more
  • October 2, 2008 9:55 PM

• China Boom Falters as Steel Softens

  

  After the chairman of China’s leading steel manufacturer expressed doubt about the growth of the industry in China’s current economic situation, Australia lost hope that China would save it from the global economic crisis. From The Age:

  The comments by Baosteel chairman Xu Lejiang coincide with evidence that a contraction in Chinese building construction is seriously crimping demand for key Australian commodities, like iron ore.

  [...] China has recently emerged as the key engine of the global economy after seven years of uninterrupted, accelerating growth.

  Australia has been a particular beneficiary because of the resource-intensive nature of China’s urbanisation and industrialisation.

  But this year’s severe credit rationing by the Chinese Government, which has helped quell an inflation breakout, has coincided with the worsening global financial crisis to smash the confidence of Chinese real estate investors and the building plans of residential construction companies.

  Read more about China’s hunger for Australian resources, in better economic times, via CDT.

  » Read more
  • September 29, 2008 10:11 AM

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