Beijing - South Africa wants to become a mineral processing hub for the continent, which would strengthen both the country's economy and position as a middleman between China and Africa, its foreign minister said on Thursday.
An agreement that will provide a framework for Chinese investment in processing plants as well as increased diplomatic and economic ties would be signed during an upcoming visit by South African President Jacob Zuma to China, Minister Maite Nkoana-Mashabane said after meetings in Beijing.
South Africa is now China's fourth-largest iron ore supplier, and a conduit for cobalt and other minerals from central Africa.
But it has been developing a policy of "beneficiation" or value-added processing, to try and retain jobs and revenue from its own, and its neighbours', mineral resources.
"What's in this for us? It's a lot. If you sell raw material and there's no processing or beneficiation, you get less for the precious minerals that are not infinite," Nkoana-Mashabane said.
"You don't want to be left with just big holes."
Nkoana-Mashabane said the new agreement will provide incentives and training to facilitate investment from China, which sees South Africa as a stepping stone for investment into the continent, because of its mature financial industry.
In 2007, Industrial and Commercial Bank of China bought a 20 percent stake in South Africa's Standard Bank, a move that will allow it to tap that bank's financing experience while channelling Chinese commercial investment to African projects.
South African policy banks will also partner with China to integrate transnational African infrastructure, especially roads, a project Chinese firms were initially hesitant about, she said.
From politics to economics
China's Communist Party long supported South Africa's African National Congress in its struggle against apartheid, but the two countries' economic ties have also strengthened in recent years, part of a deepening engagement with all of Africa.
Also on Thursday, China announced a mining accord with Zambia during a visit by that country's president.
China's growth has driven investments in the continent's natural resources in particular. Oil now accounts for 62 percent of African exports to China, and ores and metals 17 percent, according to an op ed in the China Daily this week.
Its firms are also active in road, port and rail construction, but South Africa wants to see them do more now than just extract ores and crude. State owned steel trader Sinosteel is the type of investor that Nkoana-Mashabane is wooing.
It bought into Zimbabwe's Zimasco Ltd in 2007 and runs a chrome mine and ferrochrome smelter in South Africa's Limpopo province, making steel products for export to Germany and Japan.
Diplomatically, South Africa has allied with China on issues ranging from increasing large developing countries' weight in international trade and finance deliberations to climate change.
"The relationship has matured to the level where we can now elevate it to a comprehensive, strategic partnership agreement," she said. "It's a right and desirable political statement that we are here to work with China."
- Reuters