China eyes Namibia's minerals

After two decades of ever-closer relations with Namibia, China has finally thrown its hat into the local mining ring, closing a contract to buy 100 000 tonnes of coal a year from the African country and offering to buy up all marble produced by a struggling local stone plant.

It is seemingly no obstacle that the coal is still buried deep under the Kalahari Desert’s sands and that the local marble was deemed inadequate for use in Namibia’s new, Chinese-funded State House.

The deals, signed after a visit by Jiang Qinglin, chairperson of the Chinese Communist Party’s People’s Consultative Conference, appear to have overtly political aims.

A perusal of applications with Namibia’s ministry of mines and energy showed that Chinese mining interests hold or have applied for about 70 exclusive prospecting licences, mostly for iron, manganese and copper, but also for lithium and uranium.

These have been sought under various names, but an investigation into their directors and shareholders shows that they emanate from one or two Chinese state enterprises, believed to be securing supplies for China’s ravenous smelting industry.

This appears to be a change in strategy in the quest to keep raw materials flowing to China’s coastal “special autonomous zones”. After Namibia politely rebuffed China’s 2006 offer of generous loans for mineral concessions, Beijing changed tack and started entering into local joint ventures with politically connected “tenderpreneurs” in the mining sector.

The chequebook diplomacy reached new heights last year, when Beijing dished out two dozen “scholarships” to children of Namibia’s political elite, including of the president, the home affairs minister and almost all the top mining ministry officials.

This came shortly after Anti-Corruption Commission investigators arrested two local business personalities and their Chinese partner for allegedly setting up a massive kick-back scheme under a Chinese Exim Bank-funded deal to supply R550-million worth of industrial Xray scanners to Namibia.

The “Teko Trio” protested their innocence, but eyebrows were raised because the Chinese company—which signed the “deal-inside-the-deal” contracts—was headed by Hu Haifeng, son of Chinese President Hu Jintao.

At a press conference called to defend the scholarship scheme, former education minister Nangolo Mbumba claimed that “you cannot bribe with a bursary”.

This did little to convince local business people, who want to curb the tidal wave of about 700 “China shops” that have sprung up across Namibia.

In a nod to their concerns Trade and Industry Minister Hage Geingob announced that only Namibians would be allowed to participate in certain activities, such as keeping shops or hairdressing salons. The Chinese embassy has emphasised that it discourages its citizens from entering the overcrowded trading sector.

The Chinese push for Namibian minerals follows heavy cuts in exploration spending by Western companies in the wake of the world credit crisis.

Polite and deferential Chinese geologists and officials are now thronging the mining ministry’s corridors, hunting for possible deals on offer from cash-distressed local exploration companies.

Privately, local mining executives are scathing about China’s mining interests, pointing out the Asian country has the world’s worst record of mining accidents and environmental degradation and little experience of mining anything but coal.
But one conceded that “we will close one or both eyes, as long as the cash comes in”.

Whether this will be in Namibia’s long-term interest remains to be seen. Chinese businessmen have been widely accused of predatory practices elsewhere in Africa, including the illegal export of precious minerals from the eastern Democratic Republic of Congo.

In many instances the corrupting of local, poorly paid officials has played a major role. In a recent report, Transparency International said Chinese businesses are the world’s second-biggest bribe-payers, after their Indian competitors.

This is of major concern to the local mining industry, while several local newspapers and magazines have called for alleged corruption in the mining commissioner’s office to be rooted out. Most of the alleged graft was closely related to deals punted by Namibian “tenderpreneurs” who the Chinese appeared to be targeting.

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