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South Africa - China's scramble for resources is breaking new ground on South Africa's platinum belt.
As older and less profitable shafts face closure, Chinese money is bankrolling one of a handful of new platinum mines being built in South Africa, which sits on about 80% of known global resources of the white metal.
Wesizwe Platinum's Bakubung mine, which aims to start production in 2018 and churn out 350 000 ounces of platinum group metals a year by 2023, is China's first direct investment in the sector and it likely won't be the last.
A Chinese consortium headed by mining giant Jinchuan has a 45% stake in Wesizwe and the China Development Bank (CDB) last week provided a $650m loan, providing the project with the capital needed to complete the mine.
Platinum is primarily used for catalytic converters in motor engines and for jewelry. Demand for both is seen soaring in China as its car production goes into overdrive and its burgeoning middle class consumes luxury items.
The rugged hills of the Pilanesberg Game Reserve rise up just to the east of the site, where bulldozers move earth and shafts slowly sink toward the reef which lies between 600 and 800 metres below.
In some ways, this Chinese foray into Africa's resource sector follows a similar pattern.
Wesizwe's chief operating officer Paul Smith told Reuters the loan's interest is Libor plus 350 basis points - an exceptionally low rate for a South African company that highlights one advantage of having Chinese shareholders.
At current Libor rates, this would be around 3.8% against the 8% or more South African companies would normally expect, especially in the wake of the country's sovereign credit ratings downgrades triggered in part by a wave of mine labour unrest Last year.
"I think this is typical of the Chinese model. The terms and conditions they are offering are extremely generous and competitive. And they would be looking for some long-term benefit for their outlay at the moment," said Gary van Staden, a political analyst with NKC Independent Economists.
Competitive debt conditions are the norm for Chinese financing when it comes to resource-related projects in the region. Examples include the soft loans China has provided to Angola, Africa's second-largest oil producer.
Smith also told reporters who visited the mine site this week that Wesizwe would "make use of the Chinese supply base" - which follows a well-worn script of companies from there sourcing equipment from their home base.
New patterns
Wesizwe also represents a departure from other Chinese approaches to Africa, as Jinchuan has partnered with local investors and is making use of domestic expertise.
The prevailing stereotype of Chinese investment in Africa is that its companies snap up the assets and then bring in their own skilled labour forces to get the stuff out of the ground.
But if you want to mine platinum, then it is best to have South African accents on your engineering team, as few other countries have experience in this area for obvious reasons.
This was driven home in Zimbabwe, where South Africa's Impala Platinum acquired Zimplats and made a success out of platinum assets in the country after companies such as BHP Billiton were stymied by the geology.
Chinese companies also have tended to swallow assets in Africa and then de-list them, which was the case when Jinchuan acquired Johannesburg-listed cobalt and copper producer Metorex.
Smith told reporters who visited the Wesizwe mine site this week "there is no way we are going to de-list," so that approach is off the table for the moment.
The mine is one of the few being built in South Africa's platinum belt at a time when Anglo Platinum [JSE:AMS], the world's top producer of the precious metal, is planning to mothball two unprofitable operations and cut 14 000 jobs in the face of stiff government and union resistance.
"People are shutting shafts on old ore bodies, but here we have a virgin ore body," Smith told reporters.
Amplats is also tentatively planning to sell its Union mine as part of a restructuring process to return to profit and Smith said Wesizwe and its shareholders would "look at it" if it came up for sale.
