On May 7, Xi Jinping, general secretary of the Communist Party of China, personally called the president of the small West African country of Sierra Leone, promising to provide support and help for Sierra Leone in fighting the epidemic and stressing that both sides should “expand mutually beneficial cooperation”. It is speculated that this move is related to the country’s rich mineral resources.
China is the world’s largest steel producer, but because of the low quality of domestic iron ore and far from being able to meet the needs of steel production, 80% of its iron ore raw materials rely on imports, the vast majority of which come from Australia and Brazil.
Since the Australian government called for an independent international investigation into the source of the Chinese Communist virus (Covid-19) last year, a stealth trade war between the two countries has been underway. In an attempt to break away from its dependence on Australia, Beijing had introduced an unofficial ban urging the Chinese steel industry to switch to the relatively lower quality Brazilian iron ore.
This year, however, extreme rainstorms hit Brazilian mines, resulting in reduced shipments and short supplies from iron ore yards. In addition to production problems, relations between the Chinese Communist Party and Brazil have also been problematic recently. Brazilian President Jair Bolsonaro hinted on May 5 that the CCP virus could be a CCP biological weapon.
For these reasons, the Chinese Communist Party is turning to India and mineral-rich Africa.
The Chinese Communist Party has spared no expense to grab iron ore in Africa
Late last year, both Congo and Cameroon took back Australian Sundance’s rights to the massive 5.64-billion-ton Mbalam-Nabeba iron ore mine, which spans both countries, and turned over parts of the mine to Chinese companies.
Sundance signed agreements with the Cameroonian and Congolese governments to develop the iron ore mine back in 2012 and 2014, respectively. At the time, the company planned to invest $8.7 billion in the construction of a 510-kilometer (about 361 miles) long railroad and an iron ore terminal.
And the aforementioned Sierra Leone, located on the west coast of Africa, is rich in iron ore. Chinese companies have been operating there for about 10 years, and last year began restarting an iron ore project that had ceased production.
The iron ore mine, called Don Cleary, has total resources of about 13.7 billion tons. Since 2011, Communist Party state-owned Shandong Iron and Steel Company has been operating there and exporting iron ore to China. The highest export volume reached 19.03 million tons in 2014, but after 2017, the Don Cleary project was shut down due to the Ebola virus epidemic and low iron ore prices. from 2018, Sierra Leone’s annual iron ore exports to China plummeted to less than 1 million tons, and in 2020 to zero altogether.
Since September 23 last year, China’s Qing Hua Investment Co. Ltd. has taken over this iron ore mine, continued its investment and operation, and sent its first shipment of iron ore to China on January 29 this year.
In addition, the Chinese Communist Party also invested a huge $14 billion in Guinea to get the mining rights of its Simandou iron ore mine, which has more than 2.25 billion tons of iron ore reserves but is located in a remote mountainous area.
Chinese companies are now actively building a railroad in Guinea to prepare for the development of the Simandou project. It is expected to take at least 5-7 years for the Simandou iron ore mine to start producing.
A study by Australian think tank Lowy Institute for International Policy in July last year said that the Chinese Communist Party’s iron ore strategy in Africa is long-term and at any cost.
“Chinese state-owned and private companies have already invested heavily in African iron ore. So even if the newly developed African iron ore mines take years and require a lot of money to develop, it won’t stop China (CCP), which knows how to play the long game (play the long game).”
In a report released last month, the China-Africa Trade Research Center, a Chinese Communist Party think tank, declared that the CCP has a variety of options in Africa, so “even if new investments in African iron ore deposits take years and require large capital injections, this will not stop China (the CCP) from investing.”
According to US-based China expert Li Yanming, Xi’s personal contact with African countries shows a determination to get rid of Australia, but also indicates that China’s iron ore imports are in serious trouble. The Chinese Communist Party wants to use Africa as an option to avoid being “stuck” in geopolitics.