MercoPress. South Atlantic News Agency
China buys cash one of Peru's largest copper mines operated by Glencore Xstrata
Chinese consortium is buying Glencore Xstrata's copper mine in Peru in a 6bn dollars all-cash deal, marking one of China's largest mining acquisitions. The consortium is led by MMG Limited and includes China's Citic Metal. Read full article
Comments
Disclaimer & comment rulesI hope some 'research centre' somewhere is plotting the change of ownerships of the big corporations of the world - especially those operating in developing countries - to see the spread of the Chinese tentacles.
Apr 15th, 2014 - 11:01 am - Link - Report abuse 0The food and raw materials of the whole world will move just one way - to China. Then the possibility of other parts of the world to industrialise and re-industrialise will be forever lost. The thousands of years of Chinese 'slave states' will continue unabated and ever accelerating.
Yes, it worries me.
China is currently the largest FDI in Africa. Fact.
Apr 15th, 2014 - 11:56 am - Link - Report abuse 0Soon to be in Latin America too?
Is that canal still going ahead?
They don't come cheap. ..
@1 Geoff
Apr 15th, 2014 - 12:41 pm - Link - Report abuse 0I see you are still worried by the Chinese.
What is the problem with China buying productive enterprises in other countries? The Peruvian mine in question was previously owned by Glencore Xstrata a Swiss holding. Were you worried at the prospect of the Swiss buying up Peru?
You would probably find that there is more Chilean capital in Peru than Chinese. Is that a threat?
You have got to get over your irrational fear of China.
Thanks for your concern, Condor.
Apr 15th, 2014 - 08:24 pm - Link - Report abuse 0But I have played Monopoly and I know what happens when one player owns all the key properties.
There becomes a terrible inevitability of dominance and subservience.
In today's globalised world, this is faster and more extreme than ever happened in earlier 'empires'.
Geoff,
Apr 15th, 2014 - 10:03 pm - Link - Report abuse 0But they don't own all the key properties or anything near that. In fact all they have is a pile of US IOUs.
If Peru nationalised the mine tomorrow there is very little China could do. Same goes for all the other properties they hold.
Is nationalising foreign owned property worth it in the long term?
Apr 15th, 2014 - 10:46 pm - Link - Report abuse 0Discuss.
@6
Apr 16th, 2014 - 12:34 am - Link - Report abuse 0It is fine if the correct compensation is paid to the owner.
The point I am making to Geoff is that the Chinese are just another nation. Their foreign assets are as vulnerable as everyone else's and their wealth is just US paper.
@7
Apr 16th, 2014 - 12:51 am - Link - Report abuse 0Point made. Very good point.
Thanks for the clarification.
I do also understand why Geoff is worried about a change in the status quo.
I actually welcome a new financial power in Latin America. Anything to kick them up the arse!!!! ( meaning VeneCuba, Argentina etc. Not Pacific Alliance).
Foreign Direct Investment Overseas (FDI) http://en.wikipedia.org/wiki/List_of_countries_by_FDI_abroad
Apr 16th, 2014 - 11:48 am - Link - Report abuse 0The CIA Yearbook places China/Hong Kong third after the USA and the UK (2012) ... and rising fast.
China's investment abroad is incredibly STRATEGIC.
The aim is to sequester rare and essential materials - both to remove them from use by competitor nations (remember the Rare Earths), and to husband their use by/for the Chinese.
They do this 'because they can' and because they have a long-sighted vision of the way to make the world they way they want it to be - a globalised world of servant nations serving the sino-state.
I see no other nation with this sort of world-strategic-vision, willing to buy up and buy into non-first world nations to control the flows and fluxes of essential materials.
We in 'the West' have *created* this situation by the tactics of Least-Production-Cost, transferring the bulk of our production to China.
The outcome was totally and terribly predictable; the 'necessity' of China to now sequester its 'feed-stocks' from across the world is just that - necessary.
If China avoids the traps and pitfalls of rapid development - and it IS possible - in a totally controlled state, the likes of Indonesia, the Phillipines and the BRICS, etc cannot take over in their turn ... essentially because the items they would need for their own massive, low-cost expansions are owned by China in countries that are 'controlled' by China.
In Peru, China simply needs to control through ownership Copper and Gold production.
This makes Peru in thrall to China.
Simple 'Monopoly'
... watch it happen, both here and everywhere else in the world.
@Geoff
Apr 16th, 2014 - 12:12 pm - Link - Report abuse 0Ownership of a Peruvian mine just means that there is a piece of paper in Peru that says “this mine belongs to China” on it. The Peruvian state can take it back at any time.
China is a resource poor nation with very limited military projection and even fewer friends. Uncle Sam still owns the Monopoly set.
Sleep easy.
Hi Condor,
Apr 16th, 2014 - 12:27 pm - Link - Report abuse 0it's nice to have a good conversation without the trolls taking over.
I don't sleep uneasily, it's just that with age comes the ability to see the future because you have seen the past; things repeat themselves - like China is doing what the USA attempted over my lifetime, and what the UK did across much of the globe in my parent's lifetime.
But I DO worry because many poor nations will not have the strength to say no to China, nor the military might in their various groupings to stand against China - because China will not fight that sort of fight. When you 'own' a country you do not need to fight, and “taking it back at any time” is a false hope.
The Monopoly set is made in China these days, and if Uncle Sam isn't allowed to play because he has 'pissed off' nations across the world, then the game goes to the rising star with the deepest pockets.
Geoff, yes the absence of trolls is very welcome.
Apr 16th, 2014 - 08:04 pm - Link - Report abuse 0I can't see any evidence for this leverage that you think China has over countries in which they have assets. Sure it is a powerful country, but its foreign investments run the same risk as everyone else's.
If a sovereign state wishes to nationalise a corporation's assets, there is very little the business can do other than push for fare compensation through international tribunals. Of course the state will suffer the consequences of scaring of investment, but it is their prerogative.
A great example of this was Gabon vs Sinopec last year. The tiny African nation with the GDP of a small corner shop confiscated the Chinese state oil giant's assets and withdrew their permission to operate an oilfield that had been awarded to them.
So what happened to Gabon? Were they crushed and sent back to the stone age by a mysterious cyber attack? Not at all. It went to international tribunal, China were ordered to pay $400 million in fines if they wanted back in.
In short China were schooled by an African midget. China has been beaten out of oil/ mineral rights by smaller players the globe over.
Countries have laws that protect their resources and if they don't have them, they can make them up. For the Chinese, or anyone else, owning / operating a mine in Peru is conditional on the country's ground rules. you mess up, you get fined, you really mess up, you lose your license.
Look at Barrick in Chile. If Barrick were Chinese the outcome would have been the same.
If you have a look at the past you will see that China is not doing what the US or the UK did. China is doing what China did before the British smacked them back 100 years. No one went to their aid then and no one would aid them now.
Interesting thread guys. Thanks.
Apr 17th, 2014 - 10:21 am - Link - Report abuse 0Last post:
Apr 17th, 2014 - 08:32 pm - Link - Report abuse 0Like your example. Spain/Repsol, Burmah Oil, etc are other examples.
But this happens because we are not yet in the monopoly end-game.
My uneasy sleep begins when we get to the end-game. That's why I asked if anybody knows if there is any (government) research institute monitoring the ownerships and trends.
[Everybody gets really 'ratty' when, whatever they do, the sheer inevitability of dominance causes the other players to say “Well, that's the last time I'm playing Monopoly”! How true.]
Second last post :)
Apr 21st, 2014 - 12:20 pm - Link - Report abuse 0@Geoff, like you said above the USA leads the world in foreign held assets, which would mean that we have already been in an “end game” with out anyone throwing the monopoly board off the table.
In recent years the world has become more multi-polar, in other words there are more players at the table not less.
OK, 3rd last post:
Apr 22nd, 2014 - 01:06 pm - Link - Report abuse 0Hi, Condor,
US trade is big, big, EU and China trade is big, and there are many minnows - some growing, others shrinking. But most of the US and EU is already 'developed' and its huge populations are big consumers already.
China, the new kid on the block has the huge population and the key difference is the 'big consumer of first world goods'.
As the Chinese billions become consumers of advanced goods there will be some scope to sell to China from the USA and the EU, but mostly it will produce the goods itself. Their internal economy may succeed in developing stability and in avoiding 'double dip recessions' etc, but their global economy is both sequestering raw materials from developing and under-developed nations but also replacing the basic indigenous industries. This destroys the skills-base of nations and makes them reliant on continuity of imports from China.
[I have even seen the destruction of the Brasilian bikini industry and its replacement by cheaper-but-good Chinese imports! Now it is hard to find the old (iconic) brasilian bikinis.]
Can Indonesian/Phillipino/'Indian' goods get a look in? It appears that the answer - across most classes of goods - is 'No'.
3rd from penultimate post :)
Apr 22nd, 2014 - 06:07 pm - Link - Report abuse 0Geoff,
I just can't see it that way. You say “sequestering” where what they are doing is “purchasing”. Most of our copper goes to China. We sell it to them., just like we do to the EU, US, India, etc.
In what way does that destroy our skill base. In fact it allows us to build up reserves. They don't own any mine here in Chile and if they did, by law, they would only be operating it with kind permission of the government. The same is true in Peru.
Foreign held commercial assets give you no stake in sovereignty.
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