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Chinese companies are diversifying their
exploitation of iron ore in Africa at a record pace amid soaring prices and
strained relations with Australia, which experts said signals that China is
reducing reliance on "unfriendly" Australia for this key resource.
They urged Australia to correct its
mistakes and steer the worst-ever relationship with China back to normal for
its own long-term benefit.
A consortium of three Chinese companies
signed a memorandum of understanding with Algerian National Iron and Steel Co
on March 30 to exploit iron ore in the North African country, the Xinhua News
Agency reported.
The consortium, composed of Metallurgical
Corp of China, China International Water and Electric Corp and Hunan Heyday
Solar Corp, will carry out a feasibility study on the exploitation of the Gara
Djebilet iron ore deposit in western Algeria.
Apart from Algeria, it's reported that the
Republic of Congo has signed two mining deals with a Chinese company named
Sangha Mining to exploit iron ore on licenses that the government of Congo
withdrew from Australian miners last year.
With an investment of about $10 billion,
Sangha plans to start exports in 2023 and eventually produce more than 100
million tons of iron ore every year, Reuters reported.
These are just some examples of Chinese
companies expanding their exploitation of iron ore in Africa, Wang Guoqing,
research director at the Beijing Lange Steel Information Research Centre, told
the Global Times on Monday, pointing to the first shipment of iron ore from the
Chinese-funded New Tonkolili Iron Ore Project in Sierra Leone in January.
She said that it usually takes two to three
years or more to achieve exports of iron ore from a project in Africa, as
investment in local roads, railways and ports is needed.
"Although it's more difficult and
requires more investment to exploit iron ore in Africa, diversification yields
long-term benefits in terms of the security of resources," Wang said.
Iron ore is an important raw material of
steel. Most of the iron ore China needs comes from Australia and Brazil,
accounting for about 60 percent and 20 percent of total imports, respectively.
China imported 1.17 billion tons of iron
ore in 2020, an increase of 9.5 percent year-on-year, data from China's General
Administration of Customs showed.
However, China's iron ore imports from
Australia as a share of the market dropped about 1.3 percentage points
year-on-year last year, reflecting increased purchases from other countries,
Wang said.
Closely following the US' anti-China
campaign, Australia launched a series of ferocious attacks on China. It took
the lead to impose a blanket ban on Huawei, curbing China's technological
development, while cooperating with former US president Donald Trump's
blame-shifting tactics, in calling for an "independent inquiry" into
the origin and spread of the COVID-19 pandemic.
Even if there was no friction between China
and Australia, Chinese companies would still make the reasonable choice of
diversifying their supply of the key raw material to ensure safety, Chen Hong,
a professor and director of the Australian Studies Center at East China Normal
University, told the Global Times.
"Australia's move of coordinating with
the US to contain China and constantly politicize economic and trade problems
with China - including discrimination against Chinese investment - has
seriously lowered Chinese companies' favorable assessment of Australia,"
Chen said.
He said that Australia's erroneous remarks
and actions concerning a raft of issues that involve China have shattered
China's confidence in being a trade partner of Australia, and therefore China
has started to look for other friendly and welcoming partners.
"The China-Australia economic and
trade relationship has worsened to its lowest level in history," Chen
said, urging Australia to steer the bilateral relationship back to normal and
reasonable conditions, in a bid to join hands with China to contribute to
regional economic recovery during the post-COVID-19 era.