www.STRADEproject.eu Luleå Luleå University of Technology present situation and future trends situation future present and Magnus Ericsson/ Cooperation Cooperation in China African

STRADE on Sustainable Raw China and Europe for MaterialsSustainable Raw on - seminar 27Beijing September 2017 seminar 孟瑞松

RMG Consulting Olof Löf

–

of the European Union of European the Programme 2020 Horizon the by Funded

Funded by the Horizon 2020 Programme AGENDA of the European Union

● Global background www.STRADEproject.eu ● Chinese mining investments globally ● Chinese mining investments in Africa ● Chinese companies abroad ● Conclusions

2 www.STRADEproject.eu MINING IN THE WORLD THE IN MINING

Source: Source: Raw Materials Data of the European Union of European the Programme 2020 Horizon the by Funded

Funded by the Horizon 2020 Programme GLOBAL PRODUCTION VALUE of the European Union

Billion USD

1800 www.STRADEproject.eu 1600 Other 1400 1200 India 1000 Russia 800 600 USA 400 Australia 200 0 China

4

Funded by the Horizon 2020 Programme CHINA REMAINS CENTRAL of the European Union

60

Aluminium www.STRADEproject.eu 50 China remains central 40 30 20

Steel % consumption total of % 10 GDP(PPP) 0 1990 1995 2000 2005 2010 2015

Source: DAIECON, IMF, WBMS.,

5

Funded by the Horizon 2020 Programme AGENDA of the European Union

● Global background www.STRADEproject.eu ● Chinese mining investments globally ● Chinese mining investments in Africa ● Chinese companies abroad ● Conclusions

6

Funded by the CHINESE OVERSEAS MINING INVESTMENTS Horizon 2020 Programme of the European Union

Billion USD

25 www.STRADEproject.eu

20

15

10

5

0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: NBS

7

Funded by the Horizon 2020 Programme MAJOR CHINESE OVERSEAS MINING M&A of the European Union

Acquirer Target Country Comm Seller Price Status

Tianqi Lithium Greenbushes (51%) Australia Lithium Talison $0.5 bn Completed May 2014

Minmetals-led Las Bambas (100%) Peru Copper Glencore $7.0 bn Completed Aug 2014 consortium

www.STRADEproject.eu Shangdong & Sierra African Tonkolili (100%) Iron ore $170 M Completed Apr 2015 Leone Laos, Guangdong Rising 2 mines and projects PanAus $0.9 bn Completed Jun 2015 PNG Barrick Porgera PNG Gold $0.3 bn Completed Aug 2015 (50%)

Zijin Mining Kamoa project (40%) DR Congo Copper Ivanhoe $0.4 bn Completed Dec 2015

Bystrinsky project Chinese investors Russia Copper Norilsk Nickel $100 M Dec 2015 (13%)

Chinalco Simandou (50%) Guinea Iron ore Rio Tinto $1.3 bn Agreed Oct 2016

Nióbio, Fosfatos Anglo Brazil Nb, K2O $1.5 bn Completed Oct 2016 Brasil (100%) American Tenke-Fungurume Copper, China Molybdenum DR Congo Freeport $3.8 bn Completed Jan 2017 (80%) $2.45 Yancoal & Allied (100%) Australia Coal Rio Tinto Agreed Jan 2017 bn $0.96 Shandong Gold Veladero (50%) Argentina Gold Barrick Agreed Apr 2017 bn $0.89 Fosun, Hainan Mining Polyus gold (10%) Russia Gold Polyus Agreed May 2017 bn Source: DAIECON, Various

8 SELECTED MAJOR CHINESE

Funded by the Horizon 2020 Programme MINE DEVELOPMENTS of the European Union

Billion USD www.STRADEproject.eu

Kolwezi Toromocho Zijin Mining Chinalco Completed Operating/Expansion 2017

Bakubung 3.5+1.3 0.7 Jinchuan Husab Complete 2018 China National 2 Las Bambas 7 Nuclear 1.64 Minmetals Completed Operating 2016 2017 Palabora 9 HBIS Group New mine level Uranium Copper PGM -2030 Source: Various

9 CHINESE CONTROL OF

Funded by the Horizon 2020 Programme OVERSEAS MINING of the European Union

Chinese mining companies (excl ASM) control output outside China to a value of 11 billion USD 2014.

Copper is the dominant and Oceania main region. www.STRADEproject.eu By By region Other Lead 3% Gold 3% Africa 10% 22% Copper Iron ore 11 billion 38% 11 billion 13% USD Oceania USD 51% Asia 16% Zinc 13% Latin Europe North Coal America 1% America 20% 10% 0%

Source: Raw Materials Data

10

Funded by the Horizon 2020 Programme

CHINESE CONTROL OPERATING MINES 2011 of the European Union www.STRADEproject.eu

Source: Raw Materials Data

11

Funded by the Horizon 2020 Programme

CHINESE CONTROL OPERATING MINES 2014 of the European Union www.STRADEproject.eu

Source: Raw Materials Data

12

Funded by the Horizon 2020 Programme AGENDA of the European Union

● Global background www.STRADEproject.eu ● Chinese mining investments globally ● Chinese mining investments in Africa ● Chinese companies abroad ● Conclusions

13 CHINESE CONTROL OF

Funded by the Horizon 2020 Programme AFRICAN MINE PRODUCTION 2011 of the European Union

Contro Mine Company l

1 Awaso Mine Bosai Minerals 80%

www.STRADEproject.eu 2 Ruashi Copper Mine 75% 1 3 Chambishi Copper Mine CNMC 85% Chibuluma South Copper 4 Mine Jinchuan Group 85%

2,3,4,5,6,7 5 Baluba Copper Mine China nonferrous 85%

2011 6 Muliashi Copper Mine China nonferrous Metals 85% China 8 7 Kolwezi Copper Mine Railway, 48% former Zimasco Chrome 8 Mines 86% 9,10 9 Dilokong Chrome Mine Sinosteel 60%

10 Vergenoeg Fluorspar Mine Jinchuan Group 70% Source: Raw Materials Data

Gold Copper Iron Nickel Other

14 CHINESE CONTROL OF

Funded by the Horizon 2020 Programme AFRICAN MINE PRODUCTION 2014 of the European Union

Mine Company Control 4 1 Tonkolili Iron Ore Mine* Shandong Iron and Steel 100% 1 2 Bong Iron Ore Mine* Wugang, China Union 100% www.STRADEproject.eu 2 3 Awaso Bauxite Mine Bosai Minerals 80% 3 4 Zara Gold Mine* China SFECO Group 60% 5 Bembele Manganese Mine* CITIC HK 51% 6 Kinsevere Copper/Cobalt Mine* 95% 5 7 Ruashi Copper Mine Jinchuan Group 75% 8 Chambishi Copper Mine China Nonferrous Metals 85% 9 Chibuluma South Copper Mine Jinchuan Group 85% 2017 10 Baluba Copper/Cobalt Mine China Nonferrous Metals 85% 6,7,8,9,10,11,18,20 11 Muliashi Copper Mine China Nonferrous Metals 85% 12 former Zimasco Chrome Mines Sinosteel 86% 13 Husab Uranimum Mine* China National Nuclear 90% 14 Dilokong Chrome Mine Sinosteel 60% 12 15 Vergenoeg Fluorspar Mine Jinchuan Group 70% 13 16 Palabora UG Copper Mine* Hebei Steel 75% 19 14,15,16,17,21 17 Petrex Gold Mines* Baiyin NMG, CADFund 90% 18 Tenke Fungurume Copper Mine* China Molybdenum Co 80% 19 Langer Heinrich Uranimum Mine* China National Nuclear 20% 20 Kolwezi Copper Mine China Railway,SINOHYDRO 48% 21 Modder East Gold Mine* Baiyin NMG, CADFund 90% Note * = new mine compared to 2011 Gold Copper Iron Platinum Aluminium Nickel Other Source: Raw Materials Data

15 CHINESE CONTROL

Funded by the Horizon 2020 Programme

AFRICAN MINE PROJECTS 2014 of the European Union www.STRADEproject.eu

Gold Copper Iron Platinum Aluminium Nickel Source: Raw Materials Data

16 CHINESE CONTROL IN AFRICA

Funded by the Horizon 2020 Programme IN PERSPECTIVE of the European Union

Copper production in Africa Gold production in Africa

2014, total 2069 kt 2014, total 610 ton www.STRADEproject.eu

2% Australian Australian 4% companies companies 17% 24% Canadian Canadian companies Copper companies Gold 1% 61% 13% Chinese Chinese companies companies 78%

Other Other

Source: Raw Materials Data

17 CHINESE CONTROL OF FUTURE

Funded by the Horizon 2020 Programme AFRICAN COPPER MINING of the European Union

China to control ~

30-35% of copper www.STRADEproject.eu production in 13% Africa 2018 China 2014

12% Tenke Fungurume

Kolwezi 5% 2% Kamoa 68% Other

Source: Raw Materials Data

18 CHINESE CONTROL OF

Funded by the Horizon 2020 Programme AFRICAN MINING 1 of the European Union

Control of African mining 2014, total value 100 billion USD www.STRADEproject.eu Chinese companies Anglo American 2.4% Glencore Anglogold Ashanti 6,1% 12,6% Exxaro OCP

Sibanye Gold First Quantum 4,1% 3,7% Impala Platinum African Rainbow 100 billion 2,5% Randgold Barrick USD 2,1% 2,0% Harmony Gold Fields 48,9% Newmont Vedanta

ENRC SeverStal

Kinross Freeport-McMoRan

Other Artisinal gold Source: Raw Materials Data

19 CHINESE CONTROL OF

Funded by the Horizon 2020 Programme AFRICAN MINING 2 of the European Union

1,5% 2.4% www.STRADEproject.eu 7,4% Australian companies

12,6% Canadian companies Chinese companies 4,1% Anglo American

Glencore 71,9% Other

Source: Raw Materials Data

20

Funded by the Horizon 2020 Programme AGENDA of the European Union

● Global background www.STRADEproject.eu ● Chinese mining investments globally ● Chinese mining investments in Africa ● Chinese companies abroad ● Conclusions

21

Funded by the Horizon 2020 Programme MAJOR CHINESE COMPANIES (OVERSEAS) of the European Union

China Minmetals (MMG) in expansion. Las Bambas opened 2016.

www.STRADEproject.eu Zijin in expansion phase. Acquried 47% in Porgera PNG, 51% in Kolwezi DRC (in production July 2017), 40% Kamoa DRC. Rio blanco Peru development.

Jinchuan in expansion phase. Bakubung platinum mine in operation 2018. Kinsenda DRC development.

Chinalco, world leading aluminium producer. 10% owner of Rio Tinto. Expansion in base metals. Toromocho mine in Peru, developing Simandou iron ore mine in Guinea.

HBIS Group Co. Ltd. (formerly Hebei Iron & Steel Group), is China's second largest iron and steel producer and third largest in the world. Developing Palabora copper mine.

Bayin owner of Gold One, largest shareholder (20%) in Sibanye.

China molybdenum. Take over of Tenke Fungurume in DRC and Nióbio, Fosfatos Brazil. Source: Various

22

Funded by the Horizon 2020 Programme AGENDA of the European Union

● Global background www.STRADEproject.eu ● Chinese mining investments globally ● Chinese mining investments in Africa ● Chinese companies abroad ● Conclusions

23

Funded by the Horizon 2020 Programme MYTHS AND FACTS of the European Union

• China is still a minor player in global mining outside of China.

• China has NOT taken control of Africa’s mineral resources. www.STRADEproject.eu • China is increasing its presence in Africa, BUT from a low level. • China is in control of 2.4% of Africa’s mining output 2014. One company: Anglo American is in control of 12.6%. • Copper is the single most important commodity for China. • Chinese investors range from small-scale operators to large state-owned companies. They behave differently. It is not possible to treat them all as one. • Chinese investments into Africa create competition and give African governments an alternative to traditional investors and the possibility to chose.

24 www.STRADEproject.eu E Magnus Ericsson - mail: [email protected] Phone: +46 Thank you for your attention! you for Thank

- 70 - 558 0065

of the European Union of European the Programme 2020 Horizon the by Funded