beyondbrics

Like Britain and France a century ago, China is finding that its push into Africa is running into a few local difficulties. Even when Beijing arrives offering gifts in return for the mineral resources it covets, it discovers that money isn’t everything. Its emissaries must still manage to identify the right movers and shakers to cosy up to.

Take Niger, for example. The impoverished country’s uranium deposits are world-class. But keeping your grip on the mines is anything but easy.

Coup brings uncertainty over mining permits

The Chinese-built bridge over the River Niger looks sturdy enough but Beijing’s relations with Niamey have been disturbed of late. Last week the military junta that seized power in February’s coup d’etat was working out the details of an audit of all mining permits granted under Mamadou Tandja, Niger’s Sinophile ex-president.

The soldiers have been at pains to stress that they have no intention of booting out investors, Chinese or otherwise. But the exercise could have implications for China’s intermediaries in Niger, weaken its previously intimate relations with the national leadership and hold lessons for its engagements elsewhere on the continent.

China’s acquisition of mining rights at Azelik in late 2007 helped to break the 40-year de facto monopoly of Areva, France’s state-owned nuclear group, on the country’s bounteous stocks of the metal.

A $300m signature bonus, coupled with an infrastructure blitz that includes the bridge, a refinery and a hydroelectric barrage, helped to win China National Petroleum Corporation the rights to the Agadem oil block and its estimated 320m barrels of crude reserves. CNPC is spending something in the region of $5bn – by far the biggest investment in Niger’s history – to develop it.

For all that, Beijing may be regretting its choice of friends. Members of the Tandja family served as intermediaries for its mining and oil companies, people familiar with the sectors say. Tandja associates who acted as go-betweens are expected to be the principal targets of the audit into contracts that transparency campaigners and opposition politicians denounce as opaque.

Flush with cash and boasting new friends from the east, Tandja steamrollered the former French colony’s institutions as he extended his rule beyond its two-term limit last year. The backlash came when junior officers ejected him from the presidential palace in February and placed him under lock and key.

The junta has indicated that it has no plans to turn its back on Beijing. Quite right too, suggest businessmen in Niamey, the capital where camels lumber along sandy roads. It would be rash in the extreme, they argue, to spurn such an unprecedented rush of investment and infrastructure (even if there are concerns that some of Beijing’s promises might prove hollow in the end).

China’s imposing new embassy in Niamey is further evidence that it is here to stay. Beijing will not be swayed by one of Africa’s more gentle coups. Even south of the border in Nigeria, where earlier engagements ended in recriminations and cancelled concessions, China has not been deterred from seeking to buy a whopping 6bn barrels of oil reserves via its state-owned energy group CNOOC.

Xia Huang, China’s new ambassador to Niger, says the Niamey bridge – which adds a second crossing over the river as it snakes through the capital – serves as the symbol of his country’s tangible connection to the country. It has been inaugurated with much fanfare although motorists and goatherds are still waiting for it to be connected to roads at each end.

Across the continent, China’s influence is broadening, but it will need to overcome complaints about poor working conditions in Chinese projects and questions about the value of some of its infrastructure ventures.

The audit in Niger could be uncomfortable. But Beijing is thinking in decades. Expect Niger to demonstrate the enduring nature of China’s African adventure.

Related reading:
FT in depth Africa and China.
China’s Africa play, CBS News.