* Africa lagging in China’s mining investments * World Bank “optimistic” over mining sector recovery
By Wendell Roelf
CAPE TOWN, Feb 3 (Reuters) - China’s mining investments favoured Australia and Canada, although Africa was gaining ground as Beijing pushed to secure minerals for its booming economy, a senior World Bank official said on Wednesday. China has invested billions of dollars in mining projects across the world’s poorest continent. Trade between Africa and China is growing about 30 percent a year, climbing to $107 billion in 2008 to overtake the United States link for the first time. However, Paulo de Sa, the World Bank’s manager of its oil, gas and mining policy division, said China’s foreign direct investment in Africa’s mining sector remained “relatively minor” in terms of China’s overall flow of investments.
“Australia and Canada are clearly still the most important targets for Chinese companies and where most of the investments are taking place,” De Sa told Reuters on the sidelines of a mining conference in Cape Town.
Spurred by relative proximity, China has been buying Australian assets to secure supplies to fuel the world’s fastest growing economy, and besides mining companies was also targeting agricultural and food companies. [ID:nSGE60Q00V]
“I don’t think that in terms of destination of (Chinese) foreign investment that Africa will become the No 1 destination in the next two or three years,” De Sa said. However, he said Australia had realised the growing importance of Africa and was positioning its companies to take advantage of future commodities booms.
“I’m seeing as a potential trend... we could see more joint investments between Chinese and Australian companies in Africa,” De Sa said.
Major global miners BHP Billiton (BHP.N) and Rio Tinto (RIO.L) already have large presence in Africa, where South Africa is the world’s largest platinum producer and Botswana the top diamond producer.
The global credit crunch has hit Africa hard as its struggles to diversify its manufacturing base away from mining.
De Sa said the World Bank was “very optimistic” in its mining sector outlook and the impact it will have on Africa.
“We believe that over the next three to five years the prices of mineral commodities will continue to be strong... and believe minerals will continue to play a major role in the development of African countries over the medium term,” he said.
However, he said while the global economic recovery was being driven by strong demand from emerging economies such as China, Brazil and India, demand for commodities remained weaker in the West.
“So the overall mix of our perspective for global growth is still bearish. There’s still a lot of fragilities in the financial system,” he said. (Reporting by Wendell Roelf; Editing by James Macharia)