MAC: Mines and Communities

China contradictions

Published by MAC on 2005-01-13

China contradictions

There can no longer be any doubts about China's critical role in determining the direction of global mining investment. Recent major boosts in profits for BHPBilliton and Rio Tinto are, to a significant extent, due to sales in the Peoples Republic. At the same time, outward mining-related investment by China has also markedly increased. According to official statistics, more than half of China's FDI (Foreign Direct Investment) last year went into mining ventures, primarily in Latin America and Asia; an example of the latter being the controversial Ramu nickel project in Papua New Guinea.

Can this boom continue? If so, what will be its social and environmental consequences? Recent statements from the Chinese regime appear conflicting. In trying to "cool" an "overheated" economy, the government claims to be cracking down on dubious resource projects. Yet, it is still boosting others (notably in the notoriously dangerous coal sector).

China's premier is also on record as opposing profligate new mining in Tibet. But others in the leadership are waving foreign juniors into the region ­ primarily from Canada.

Ironically, while the Canadian government has failed to criticise - let alone impede - such encroachment, its Industry minister is now worried about a Chinese "grab" of its own mineral resources. The irony is compounded by the fact that, for several months, Canada has backed a bid by China's Minmetals corporation to take over Noranda, Canada's oldest mining company.

It seems that political contradictions are not confined to one country alone. Nor are criticisms of the consequences of minerals-related investment - whether going into China, or coming out. For, as a recent research paper points out, mining companies have little to defend, wherever they are based and whichever communities they exploit.

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