China’s Economic Statecraft and African Mineral Resources: Changing Modes of Engagement

The document analyzes the evolution of China's strategies to secure mineral resources in Africa, moving from a primary reliance on 'infrastructure-for-resources' loans to a more diversified approach emphasizing mergers and acquisitions (M&A). While infrastructure-for-resources deals have been effective in locking in long-term supply, they have often failed to secure hard equity assets due to project delays and political instability. In contrast, the 2008-09 global financial crisis enabled Chinese state-owned enterprises (SOEs) to use their high liquidity to acquire significant mining and oil assets through M&As, particularly in the mining sector. The author concludes that while the Chinese state remains a critical financier, the strategy has shifted toward more market-oriented, direct acquisitions to reduce reliance on foreign suppliers and gain control over commodity prices.

• China's demand for strategic minerals—including chromium, cobalt, copper, iron ore, manganese, nickel, petroleum, platinum group metals, and potash—exceeds its domestic supply, making it a net importer of these materials.
• Africa's share of China's mineral imports grew 14 times over the decade leading up to 2010, with mineral commodities accounting for 64% of China's total imports in 2010, valued at $375 billion.
• China utilizes 'positive economic statecraft' through the 'infrastructure-for-resources' model, where concessional loans for infrastructure are secured by the borrowing country's future oil or mineral exports to Chinese state-owned enterprises (SOEs).
• Infrastructure-for-resources loans are typically concessional, with interest rates between 1.5% and 3%, and are tied to the procurement of at least 50% of services, goods, and labour from China.
• Early infrastructure-for-resources deals in oil-rich countries like Angola and Nigeria were successful in locking in supply, but the model faced failures in mining projects in the DRC and Gabon due to renegotiations, environmental issues, and political instability.
• The 2008-09 global financial crisis shifted China's strategy toward mergers and acquisitions (M&A), as Chinese SOEs leveraged their high liquidity to acquire assets from distressed international developers.
• Sinopec's 2009 acquisition of Addax Petroleum was the largest successful overseas acquisition by a Chinese company, providing access to oil and gas reserves primarily in Nigeria (72%), Gabon (20%), and Iraq (8%).
• Chinese mining SOEs have aggressively targeted iron ore in West Africa (Guinea, Sierra Leone) and copper/cobalt in the Copperbelt Region (Zambia, DRC) to reduce dependence on the 'three mining moguls' (Vale, BHP Billiton, and Rio Tinto).
• Chinese SOEs have struggled to penetrate the South African mining sector due to its liberalized structure, strong labour unions, and regulations that conflict with China's procurement model.
• Recent infrastructure-for-oil loans (2011-2012) in Ghana, Angola, and Nigeria indicate a shift toward oil-rich countries and a more flexible financing approach, including the use of the China Development Bank (CDB) for non-concessional loans.

APA

Alves, A. C. (2013). China’s Economic Statecraft and African Mineral Resources: Changing Modes of Engagement. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/01/Occasional-Paper-131.pdf

Chicago

Alves, Ana Cristina. China’s Economic Statecraft and African Mineral Resources: Changing Modes of Engagement. South African Institute of International Affairs, 2013. https://saiia.org.za/wp-content/uploads/2013/01/Occasional-Paper-131.pdf.

Wikipedia

{{cite report |last1=Alves |first1=Ana Cristina |title=China’s Economic Statecraft and African Mineral Resources: Changing Modes of Engagement |publisher=South African Institute of International Affairs |date=January 2013 |url=https://saiia.org.za/wp-content/uploads/2013/01/Occasional-Paper-131.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{alves2013chinas, author = {Alves, Ana Cristina}, title = {{China’s Economic Statecraft and African Mineral Resources: Changing Modes of Engagement}}, institution = {South African Institute of International Affairs}, year = {2013}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2013/01/Occasional-Paper-131.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }