Copper-bottomed excuse

Friends now? Sata and China envoy

Readers probably won’t be surprised to hear that Saudi Arabia, owner of the largest reserves of oil, is also China’s biggest supplier of crude. But a more unexpected name ranks second on the list, Angola, which provided 15.8% of China’s oil imports in 2010, according to ChinaOilWeb.

Sudan is another big supplier, with 6% of the total.

The rankings serve as a reminder of Africa’s growing status as a resource provider to China, with both partners seeking to benefit from burgeoning commercial ties.

Events in Zambia this year show that Chinese companies can also become targets for resentment as they dig deeper into the continent’s untapped resources.

In Zambia, the story is copper. China Non-Ferrous Metals Mining Corporation (CNMC) has been working in the country since 1998, when it bought the Chambishi mine for its subsidiary Non-Ferrous China Africa (NFCA).

Last month, miners at Chambishi downed tools, the latest in a series of stoppages at Chinese employers. Workers have been demanding better safety conditions, as well as improved wages.

Striking is risky business, it seems. In 2006, Chinese managers shot six miners at Chambishi during a wage dispute, reports the Wall Street Journal. And at least 13 miners were shot during unrest at another Chinese-owned mine last year.

One can only wonder at the response if foreign managers ever took potshots at workers on a factory line within Chinese borders (although admittedly such stuff routtinely happened a century ago).

But what made the latest Chambishi strike stand out from those before it is that it followed the election of new Zambian president Michael Sata.

He was elected after a campaign including promises to force Chinese investors to comply with local safety regulations, as well as pay higher wages to workers. The strike also coincided with the publication of a report by Human Rights Watch, an international NGO, that detailed miserable conditions at Zambian mines under Chinese bosses.

“They just consider production, not safety,” a local miner told Human Rights Watch. “If someone dies, he can be replaced tomorrow.”

That isn’t necessarily discriminatory to the Zambian workforce, sounding like a view shared by more than a few mining bosses back in China itself (although the Chinese Embassy in Zambia hit back quickly, saying that the charges were “not faithful to the truth”).

Still, NFCA shows few signs of relenting to Zambian demands for higher wages, after firing more than 1,000 workers for failing to obey an order to return to work following the resumption of wage negotiations, reports the Wall Street Journal. The chief executive at NFCA, Wang Chunlai, then told Century Weekly that giving in on pay would push the company to “the verge of bankruptcy”.

The decision looked as though it would provoke a fight between NFCA and the new government. But Sata failed to live up to his anti-Chinese rhetoric, taking a much more conciliatory tone towards Chinese investors at a forum late last month.

“They are going to sort me out and so we are going to use them to develop,” he told attendees, before pledging to tighten relations between the two countries. The Chinese ambassador was pleased with the new line, before blaming the international media for stirring up trouble in a country in which China was “investing massive amounts of money”. Sata’s anti-Chinese spiel was also a thing of the past, the ambassador now thought. “I was the first diplomat he called to the State House after he was sworn in and he said to me ‘let’s open a new page and work together’,” he told Zambia’s Daily Mail.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.