[miningmx.com] – THE loan agreement between Transnet and the Chinese Development Bank could be extended to other state-owned enterprises, Clayson Monyela, spokesperson at the Department of International Relations and Cooperation told Miningmx.
“For us this is a major boost because of the huge infrastructure development projects in this country, but beyond this investment there are opportunities for skills transfers that will go a long way,’ he said.
“Discussions are under way to see if we could extend this to other parastatals, but for now we’re just happy with the agreement that has been signed.’
The collaboration with Transnet also raised the question if China could become part of South Africa’s downstream steel strategy.
Garth Strachan, acting deputy director-general at the department of trade and industry (DTI), reiterated that South Africa intends to establish a new steel producer which would create competition in the market where one player currently has dominance.
“We’ve made significant progress on a feasibility study to set up a steel manufacturer,’ he told Miningmx. “We’re talking to a number of overseas investors which would include the Chinese.’
China’s investment in Africa doesn’t come without any strings attached, political analyst Daniel Silke warned. “This may very well be the biggest loan to a state institution and shows the burgeoning relationship between South Africa and China.’
Silke is of the view that China will certainly be looking at expanding their footprint in South Africa’s metals and minerals sector.
“This may well be a harbinger of further access to resources within the South African context,’ he said. “The synergy between Transnet and servicing the broad-based metals industry in South Africa is also important and where China has a direct stake in developing the transport network it may also look at more investment in South Africa’s mining industry, particularly in the light of Western mining houses who find it extremely difficult to operate in South Africa.’
Silke believes the loan agreement opens the door for further Chinese involvement in other state-owned enterprises, especially where there’s “sluggishness from the West to come to the party’, Silke says.
Stanley Subramoney, PriceWaterHouse’s (PWC) strategy leader for Southern Africa who is attending the BRICS summit in Durban, said there’s no reason to doubt China’s intentions for granting the loan to Transnet.
“This is great for South Africa and fantastic for Transnet,’ he told Miningmx. “Talking to delegates here I get the sense that the Chinese have good intentions. They want this partnership to work; they want to see South Africa succeed.
“So my view is this is strictly commercial and one shouldn’t read too much in their intentions. It’s a gesture from a powerful nation and they’re sending a strong signal that they’re committed to the partnership,’ he said.
