The two organizations signed a MoU to strengthen regional trade and investment.
During the BRICS summit in Johannesburg, the Industrial Development Corporation of South Africa (IDC) and the Bank of China (BIC) signed a memorandum of understanding to explore opportunities for joint financing of potential future business ventures. BRICS is a grouping of the world economies of Brazil, Russia, India, China, and South Africa.
As part of the agreement, the BOC and IDC are finalizing a R10bn ($533 million) funding package over the next five years. According to a statement by the IDC, the package is aimed to develop and fund projects in the energy, infrastructure, manufacturing, agriculture, and mining sectors. In addition, the agreement includes strengthening the partnership between the two organizations, including increased cooperation on funding initiatives, especially Chinese foreign direct investment into South Africa.
South Africa is one of the world’s leading mining and mineral-processing countries. The country has vast mineral resources. It accounts for 75 percent of the world reserves of the platinum group metals (PGM), which include platinum, palladium, rhodium, iridium, osmium, and ruthenium. For instance, in 2016, South Africa accounted for 79 percent of the world’s mined platinum, according to estimates by the U.S. Geological Survey (PDF). But the African country also holds extensive resources of other critical minerals such as copper, rare earths, chromium, zircon, manganese, vanadium, and gold, making the country’s mining and mineral-processing sectors important targets for foreign investments.
China Extends Sphere of Influence
Earlier this month, a report by the Fanhai International School of Finance (FISF) at Fudan University in Shanghai argued that Chinese investment into foreign mining and metals sectors is at a record high. Funded by China’s four state-owned banks, the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China, the Belt and Road Initiative, so far, has poured $1 trillion into infrastructure projects around the globe, bolstering Beijing’s economic and political influence. The Bank of China is the oldest bank in the People’s Republic and the first Chinese bank to have a presence in South Africa.
Photo: iStock/Oleksii Liskonih
