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First Post
06-07-2025
- Business
- First Post
Overseas mining acquisitions by Chinese firms at highest level in over a decade; here's why
China's immense demand for raw materials as the world's top consumer of most key minerals. It has long driven its firms to pursue assets abroad read more A mining machine is seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China. File photo/Reuters Chinese mining companies have stepped up acquisitions abroad, reaching their highest level in more than a decade as they seek to secure vital raw materials amid rising geopolitical tensions. There were 10 overseas mining deals by Chinese firms worth more than $100 million in 2023, the most since 2013, according to an analysis of data from S&P and Mergermarket. Separate research from the Griffith Asia Institute also found that last year marked the busiest period for Chinese overseas mining investment and construction since at least 2013. STORY CONTINUES BELOW THIS AD China's immense demand for raw materials as the world's top consumer of most key minerals. It has long driven its firms to pursue assets abroad. Analysts say the recent rise in dealmaking reflects efforts by Chinese groups to accelerate acquisitions before global political tensions restrict such activity, Financial Times reported. Michael Scherb, founder of private equity firm Appian Capital Advisory, said there had been 'more activity in the past 12 months because Chinese groups believe they have this near-term window … They're trying to get a lot of M&A done before geopolitics get difficult.' The momentum has continued into 2024. Zijin Mining of China recently announced a $1.2 billion deal to acquire a gold mine in Kazakhstan, while in April, Appian sold its Mineração Vale Verde copper and gold mine in Brazil to Baiyin Nonferrous Group for $420 million. 'In the next few years we are likely to continue to see a healthy level of dealmaking activity from Chinese mining companies,' said Richard Horrocks-Taylor, global head of metals and mining at Standard Chartered. Christoph Nedopil, director of the Griffith Asia Institute and a specialist in Chinese overseas investment, said that unlike transport and infrastructure projects under the Belt and Road Initiative — which have tended to be smaller — mining and resource deals have remained substantial. He said this shift aligns with China's emphasis on high-tech manufacturing, particularly in sectors such as batteries and renewable energy. STORY CONTINUES BELOW THIS AD China maintains a dominant position in processing critical minerals such as lithium, cobalt and rare earths, but still depends on imports for many raw materials. The United States and several European nations are working to reduce reliance on Chinese supply chains for these materials, which are vital for electric vehicles, semiconductors and green technologies. Western countries including Canada and Australia have grown 'increasingly wary' of Chinese investment in domestic mining operations due to the 'strategic nature of a lot of these minerals,' said Adam Webb, head of battery raw materials at Benchmark Mineral Intelligence. Analysts say Chinese firms have grown more adept at acquiring mining assets from western rivals, often willing to take longer-term views on value and invest in riskier locations. 'There has been a [growing] sophistication of Chinese buyers' outbound M&A strategies,' said Scherb. 'The Chinese government used to select one buyer per asset sale process and back that group. What's evolved over the past three to four years is the government allowing Chinese groups to compete with one another. That implies they don't fear losing to the west anymore.' STORY CONTINUES BELOW THIS AD John Meyer, an analyst at SP Angel, said Chinese groups were 'actively' acquiring resources 'to keep the west out of certain critical materials which they dominate'. He added, 'Every time someone gets close to mining lithium, the Chinese come running with a cheque book.' Among the most active players in overseas deals are CMOC, MMG and Zijin Mining. Meanwhile, Chinese financial institutions have issued billions of dollars in loans for mining and mineral processing projects in developing countries. Timothy Foden, co-head of the international arbitration group at law firm Boies Schiller Flexner, said Chinese firms were also benefiting from a rise in resource nationalism, particularly in African countries such as Mali. Some military-led governments have taken over western-owned mining assets and demanded increased royalties. Chinese companies are often willing to accept lower returns in exchange for operating control of such assets, Foden said.
AU Financial Review
06-07-2025
- Business
- AU Financial Review
China snaps up mines around the world in rush to secure resources
London/Shanghai | Chinese mining acquisitions overseas have hit their highest level in more than a decade as companies race to secure the raw materials that underpin the global economy in the face of mounting geopolitical tension. There were 10 deals worth more than $US100 million last year – the highest since 2013, according to an analysis of S&P and Mergermarket data. Separate research by the Griffith Asia Institute found that last year was the most active for Chinese overseas mining investment and construction since at least 2013.
ABC News
23-05-2025
- Politics
- ABC News
Australia's foreign minister wraps up Pacific tour
Over the past week, Australia's Foreign Minister Penny Wong has been on a three-nation Pacific tour visiting Fiji, Tonga, and Vanuatu. Her trip comes just two weeks after the Australian federal election, which saw the Labor party sweep back into power for a second back-to-back term. As part of her visits, Senator Wong has re-emphasised Australia's commitment to climate action in Fiji, funding health reform in Tonga and reviving a bilateral partnership with Vanuatu. Dr Tess Newton Cain, adjunct Associate Professor at the Griffith Asia Institute, said there's no denying the amount of work that's gone into building relations with the Pacific, including listening to regional concerns. 'I think it's a process, not a product. You can't kind of tick he box and say, "Okay, we've done the listening now," said Dr Cain. She said the key now is whether the Australian government can sustain the pace it set in the first term. Dr Newton Cain also expects the face representing Australia in the region to change, with Assistant Minister Matt Thistlethwaite taking up a more prominent role. 'Given everything else that's going on in the world, we may not see uh Senator Wong in the region very often.' 'So, it's good for him (Assistant Minister Thistlethwaite) to get a chance to get his feet on the ground and meet some of the people that he's going to be dealing with,' said Dr Newton Cain.
CNA
15-05-2025
- Politics
- CNA
Dr Peter Layton on Russia-Ukraine talks
Confusion surrounds Russia-Ukraine talks in Turkiye, with both sides trading insults and Russian President Putin's no-show. The Istanbul meeting is just the latest diplomatic back and forth between the warring countries. Efforts to mediate an acceptable resolution began well before Russia's invasion of 2022. We look back at the different negotiations that have taken place. CNA also speaks to Dr Peter Layton from Griffith Asia Institute at Griffith University.
Zawya
07-04-2025
- Business
- Zawya
China's BRI remains strategic and agile amid global uncertainty
China's Belt and Road Initiative (BRI) marked a record-breaking year in 2024, with over $70.7 billion in construction contracts and $51 billion in investments, according to China Belt and Road Initiative Investment Report 2024 co-published by the Griffith Asia Institute (GAI), part of Australia-based Griffith University and the Green Finance & Development Centre (GFDC) of Fanhai International School of Finance (FISF), China. The report highlights the Middle East as the top regional recipient of Chinese BRI engagement, securing $39 billion across key sectors such as fossil fuels, infrastructure, and renewable energy. Dr. Christoph Nedopil, founding director of the Green Finance & Development Centre and Professor and Director of GAI, shared his insights with Zawya Projects on the driving forces behind this surge, evolving investment patterns, and the growing shift towards greener, technology-driven projects under the BRI. 'In 2024, we identified BRI projects totaling over $120 billion—a record high since the initiative's launch in 2013. This surge might seem surprising given the slower growth of the global economy, including China's, compared to the early years of the BRI,' he said. Nedopil said that given China's economy is now nearly twice the size it was in 2013, with numerous world-leading companies emerging — especially in technology and infrastructure — the continued global expansion of Chinese businesses, including those within the Belt and Road Initiative framework, is a "natural progression." He emphasised that despite global market uncertainties, Chinese businesses are expected to remain agile and strategic. 'We are likely to see strategic investments in BRI countries, including efforts to navigate export restrictions, support 'new-age friend-shoring,' or seize opportunities left open by other partners — particularly in natural resources,' he added. Excerpts from the interview: The Middle East led Chinese BRI engagement with $39 billion in investments and construction deals. What is driving this focus, and which sectors benefit most? China's strong engagement in the Middle East has been driven largely by the fossil fuel sector, particularly gas. Major construction deals include oil processing projects in Iraq, gas-related infrastructure such as pipelines and a gas-fired power plant in Saudi Arabia. Other massive deals include the Saudi subway construction. Chinese companies have also invested in renewable energy in the region, as well as in steel and energy technology, particularly in Saudi Arabia. The report highlights China's greenest energy investments yet, with renewable projects hitting $11.8 billion. What's driving this shift, and how does it compare to past BRI trends? BRI energy investments have become increasingly green, particularly following China's decision to halt overseas coal financing in 2021. In 2024, this trend reached a new high, especially in energy generation projects. Additionally, investments extended to the establishment of solar PV and battery manufacturing plants. This shift is driven by two key factors. On the supply side, Chinese companies have become global leaders in green energy technologies, enabling their expansion abroad. On the demand side, green energy remains highly attractive due to its economic benefits—lower electricity costs for industry and households, alignment with low-carbon development goals, and job creation. While BRI construction deal sizes are growing, investment deal sizes are shrinking. What does this indicate about China's evolving investment strategy under the BRI? The trend of rising construction deal sizes alongside shrinking investment deal sizes should be interpreted with caution. A few exceptionally large construction deals in 2024, particularly in the Middle East, have skewed the overall figures. That said, this trend does indicate that Chinese companies remain highly competitive and capable of delivering multi-billion-dollar mega-projects. On the investment side, the data suggests a broader participation of Chinese companies in BRI countries, even if on a smaller scale per project. China's BRI strategy appears to be shifting from large infrastructure projects to 'soft' sectors like technology, digital connectivity, and financial services. What's driving this change, and how does it support China's long-term economic goals? The BRI has gradually shifted from a focus on public infrastructure, such as transport projects, toward revenue-backed projects. Large-scale fossil fuel projects, such as in the Middle East, offer clear revenue streams, providing Chinese developers with greater confidence in cost recovery. This contrasts with public infrastructure such as road projects, which often rely on government fiscal strength, creating more uncertainty in emerging economies. Additionally, China's rapid advancements in technology have fuelled greater engagement by Chinese tech companies in BRI markets. This aligns with China's long-term economic goals of enhancing global competitiveness in high-tech industries and digital infrastructure. Given escalating U.S.-China trade tensions, including increased tariffs and investment restrictions, how do you see these developments shaping China's BRI strategies—both in seeking alternative markets and adjusting investment focuses? Geopolitical uncertainty affects all players, but the fundamental goal of businesses remains unchanged: to generate commercial opportunities. Companies will seek sectors and markets where they feel confident in managing risks. If Middle Eastern countries continue to provide a stable environment for Chinese partners, there is little to prevent Chinese businesses from deepening their engagement in the region. The ability to navigate trade restrictions and build alternative supply chains will likely reinforce this trend. Earlier reports predicted BRI investments in 2023 would pivot toward green energy, digital infrastructure, and increased regional engagement. Looking back, which of these trends materialised as expected — and were there any surprises in how BRI investments unfolded? Looking back at my 2023 predictions, I recognise that forecasts are always subject to change. However, the data confirm increased engagement in green energy and technology, as expected. Additionally, there has been a shift toward investment in countries with stronger economic fundamentals and lower sovereign debt. For example, China's engagement in Pakistan reached its lowest level yet. What did surprise me was the strong resurgence of fossil fuel projects, particularly in the Middle East, as well as the rapid pace of investment in new energy vehicles and battery technologies. Looking ahead, what key trends or challenges do you foresee shaping BRI investments in 2025, particularly in the Middle East? Are there specific areas where we should expect increased Chinese engagement? In the Middle East, Chinese business opportunities will likely remain strong, driven by robust regional growth prospects, clear political strategies to diversify economies, and an ongoing construction boom. This will continue to fuel infrastructure-related investments, for example in energy generation and transportation. Additionally, I see great potential for joint project development between Middle Eastern and Chinese financial and commercial partners in third markets, such as Africa and Asia. (Reporting by SA Kader; Editing by Anoop Menon)
