Govt backs energy, mining investment in Africa


The government has reiterated its backing of Chinese companies investing in Africa, particularly in energy and mining industries where jobs can be created and local communities improved.

Zhong Manying, director general of the Department of West Asian and African Affairs of the Ministry of Commerce, said on Wednesday that during the recent visit to the continent by President Xi Jinping, more than 20 economic and trade cooperation agreements were sealed with African countries.

Chinese financial institutions and companies also finalized around 10 commercial contracts, in sectors including agriculture, machinery, power, ports, energy and mining resources.

"In the past, China imported minerals and crude oil directly from Africa - but now we are investing more in downstream mineral processing businesses there, in order to bring more jobs to local people and improve local economies," Zhong said.

According to the China Institute of International Studies, energy exploration technology levels remain relatively low in Africa, and much of the prospecting is still done by foreign companies.

Currently, around 400 foreign oil firms have oil and gas exploration rights in Africa, covering about 80 percent of the available blocks.

"Developed countries have acquired many high-quality oil and gas blocks in Africa, but they do not develop the resources fast enough, and African countries have learned from that," said Zhong.

As a result, African governments are imposing stricter requirements on new energy and mining resource contracts signed with foreign developers.

Wang Wei, a senior researcher at CIIS, said that in Angola, for instance, local laws require foreign contractors to invest at least $35 million in the first three years of any oil and gas exploration contract.

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