Nationalism with Chinese Characteristics: How Does it Affect the Competitiveness of South Africa’s Mining Industry?

The document argues that South Africa's mining competitiveness is declining, as evidenced by its 64th place ranking in the 2013 Fraser Institute Survey. It highlights a shift toward partnerships between Chinese state-owned enterprises and the South African Industrial Development Corporation (IDC), such as the acquisition of Palabora Mining Company. The author warns that these opaque arrangements may favor 'predators'—politically connected opportunists—over 'producers' who adhere to the rule of law, potentially leading to revenue mismanagement and asset stripping.

• South Africa's mining industry has experienced a decline in competitiveness, contracting by approximately 1% annually between 2001 and 2008, while its top 20 competitors grew by an average of 5% per year. This is further reflected in the 2013 Fraser Institute Survey of mining exploration investment attractiveness, where South Africa ranked 64th out of 112 jurisdictions, trailing behind Botswana (25th), Namibia (34th), and Ghana (43rd).
• A significant shift in the mining landscape is marked by the entrance of Chinese firms partnering with the state-owned Industrial Development Corporation (IDC), as seen in the acquisition of a 74.5% stake in the Palabora Mining Company (PMC) from Rio Tinto and Anglo American. The consortium included Hebei Iron and Steel Group (35%), General Nice Hong Kong Group (25%), Tewoo Group (20%), and the IDC (20%).
• Chinese investment in South Africa is increasingly focused on minerals and metals to support China's domestic economic expansion, often bundling state-owned enterprise (SOE) investments with aid. Total Chinese investments in South Africa reached $8.74 billion, with 30.5% allocated to minerals or metals.
• The partnership between the IDC and Chinese firms is viewed as a 'marriage of convenience' that aligns China's resource needs with South Africa's goal of increased local beneficiation, potentially emulating China's SOE-driven strategic intervention model to challenge domestic pricing policies of companies like ArcelorMittal SA.
• The author distinguishes between 'producers' (rule-of-law oriented companies subject to security exchange listings) and 'predators' (opportunists with political connections). There is a risk that Chinese firms, who are not constrained by the same regulatory scrutiny as Western listed companies, may partner with local 'opportunists' to bypass policy uncertainty.
• The document cites the case of Aurora Empowerment Systems as an example of 'primitive rent accumulation' and asset stripping by politically connected individuals, including Khulubuse Zuma, who attempted to secure a deal with the Chinese company Shandong Gold that never materialized.

APA

Harvey, R. (2014). Nationalism with Chinese Characteristics: How Does it Affect the Competitiveness of South Africa’s Mining Industry? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2014/05/Policy-Briefing-93.pdf

Chicago

Harvey, Ross. Nationalism with Chinese Characteristics: How Does it Affect the Competitiveness of South Africa’s Mining Industry? South African Institute of International Affairs, 2014. https://saiia.org.za/wp-content/uploads/2014/05/Policy-Briefing-93.pdf.

Wikipedia

{{cite report |last1=Harvey |first1=Ross |title=Nationalism with Chinese Characteristics: How Does it Affect the Competitiveness of South Africa’s Mining Industry? |publisher=South African Institute of International Affairs |date=May 2014 |url=https://saiia.org.za/wp-content/uploads/2014/05/Policy-Briefing-93.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harvey2014nationalism, author = {Harvey, Ross}, title = {{Nationalism with Chinese Characteristics: How Does it Affect the Competitiveness of South Africa’s Mining Industry?}}, institution = {South African Institute of International Affairs}, year = {2014}, month = may, url = {https://saiia.org.za/wp-content/uploads/2014/05/Policy-Briefing-93.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }