Chinese miners in pole position on African iron ore projects stripped from Australian and British companies


Beijing’s attempt to transform its iron ore supply chain from Australia to Africa is a large contract that could allow China-related mining company Aust Sino access to a large Mbalam-Nabeba iron ore project. It seems that it is shaped by the signing of.

The deal takes place seven months after Australian and British mining companies were suddenly stripped of their mining licenses for the same project under “illegal and arbitrary” circumstances.

Mbalam-Naveba, which straddles Cameroon and the Republic of the Congo, promises to supply 100 million tonnes of iron ore annually.

A memorandum of understanding (MOU) signed between three entities, including Austin, Bestway Finance, and the Cameroonian government, which were recently delisted from the Australian Stock Exchange, will allow companies linked to China to have rail and port infrastructure. Is placed in the construction pole position to connect. According to the statement, a mine to the seaside town of Kribi (pdf) June 26th.

Ownership problematic history

Both Aust Sino and Sundance are based in Perth, Australia and helped develop Mbalam-Nabeba in 2018.

Sundance’s claim in the statementpdf) On June 27, 2021, we introduced Austin and its Chinese partners to government officials in Cameroon and the Republic of the Congo (ROC).

Partners of AustSino included major Chinese companies, Shenzhen Yantian Harbor Holdings, China Railway Construction Corporation International, Hong Kong Treasure Peak International and Shanghai Qingshan Minerals.

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On October 11, 2007, a worker pouring hot metal at the Chengde Steel Works in Chengde City, Hebei Province, China. (Feng Li / Getty Images)

In November 2020, Sundance terminated its partnership after discovering that Austin Sino would not offer the promised $ 29 million investment to support the development of Mbalam-Nabeba.

A month later, the Government of the Republic of China suddenly withdrew its mining license from Sundance and its Australian companions Equator and Britain-based Abima. Instead, the license has been granted to a mysterious new entity called Sangha Mining Development Sasu, but has no track record of mining activity to date.

The equator described the move as “illegal and arbitrary.”

“The ROC government’s actions in granting multiple licenses to Sangha Mining are unprecedented, illegal and unfair,” the company said in an investor announcement.pdf).

Investors announced by Abima that Sanga was later found to be 100% owned by Bestway and had connections with President Congo’s family (“pdf).

Cameroon, Congolese government facing multi-billion dollar proceedings

Giulio Casello, CEO of Sundance Resources, immediately issued a statement in response to the news of the MOU signing.

“In particular, we are shocked by these latest developments as Australian company Austin Sino, which has implemented the Mbalam-Nabeba iron ore project, is trying to profit from the illegal expropriation of Sundance’s iron ore assets.” Mr. Casero said in an investor statement. (((pdf).

“Sundance has always fulfilled all licensing obligations and surpassed it in both Cameroon and Congo, so we are determined to challenge this illegal expropriation through an ongoing process, the International Court,” he said. I added.

Both Sundance and Abima have filed proceedings in the International Chamber of Commerce’s International Arbitration Court against the Government of the Republic of China for US $ 8.76 billion and US $ 27 billion, respectively.

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Abandoned mine in Central Africa (Marc Jourdier / AFP via Getty Images)

In June, Sundance launched a further proceeding against Cameroon at the International Chamber of Commerce in Paris.

Avima has accused Sangha Mining of lacking experience, funding, or track record of bringing the Mbalam-Nabela project online.

“Sangha Mining’s attempt to market Avima licenses shows that management doesn’t understand the industry and its problems, and such companies face when trying to sell illegally acquired assets. That’s it, “said Avima Chairman Socrates Vasiliades (pdf).

“Neither the Congolese government nor the Sanga mining industry was aware that iron ore was not just a commodity in the black market,” he added.

He said the project spending reached millions and struggled to attract the attention of international investment.

“Customers will not invest this level of capital without substantive due diligence. This includes the political and economic stability of the host country, the background and capabilities of the owner and operator, And due diligence on the licensing process. “He added.

“These actions will be devastating to the future of the country.”

China’s African division

The news comes from Beijing’s continued expansion into Africa to find new supply chains for precious metals such as rare earths and iron ore as relations with democracies deteriorate.

2018, China won the right to develop a Shimandu iron ore project $ 14 billion consortium is in Guinea to help, leader Xi Jinping of China went a continuous dialogue with the leaders of Africa. Analysts believe it is an attempt to strengthen the supply chain of the future. Minimize dependence on Western countries like Australia.

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The Simandu mine is the largest (red oval) in Africa. Source Rio Tinto.

The Chinese Communist Party (CCP) has been engaged in an ongoing trade war with Australia for the past year, including iron ore, beef, barley, lobster, wood, lamb, and cotton.

Still, iron ore remains a major problem.

Due to China’s huge demand for high quality iron ore and the lack of alternative markets, 80% of China’s coal imports come from Australia.

Since the start of the trade war in April 2020, mineral prices have risen even further from around US $ 80 per ton (April 2020). US $ 200 per ton (July 2021).

Michael Schubridge, director of defense at the Australian Strategic Policy Institute, said China’s demand for high-quality iron ore would ensure that the CCP’s diversification would continue for years to come. It was.

“The reliability and scale of other producers cannot match that of Australian suppliers, many of which are unlikely to change rapidly. Sovereign risk in many African states remains a permanent problem. “He told The Epoch Times in an email.

“Australia’s comparative advantage due to the nature of the deposits and the advanced technology of the mining companies makes Australia the most iron ore producer and the most competitive producer in the world. It’s a lasting advantage, backed by a lucrative investment, “he added.

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