Governing Natural Resources for Africa NSI Ottawa Forum, May 9 10 2013
The Enabling Environment: Infrastructure, Health, Education, etc. Method and Approach Resource for Infrastructure: or Governance /CSR Issues The Enabling Environment : Infrastructure, Health, Education, etc. Method and Approach Infrastructure Needs : Roads and Electricity Resource Issues Governance /CSR Issues
Liberia China:. Same Methodology and Approach
Liberia February 1977 - official relationship October 1989 over recognition of Taiwan ROC offered $200M for education and infrastructure August 1993 1997 Charles Taylor recognized two Chinas 1997 over recognition of Taiwan October 2003 and broke relationship with Taiwan October 2009 Chinese Embassy Economic and Technical Cooperation (ECT) Agreements FOCAC; 130 Chinese companies
Roads and Bridges Power Buildings: Ministerial Complex, etc.
Leveraging comparative advantage Affordable capital and other factors (labor, tech., etc.) Direct Intervention/advocacy for Chinese businesses Collective pursuit of common interest
Close correlation of Chinese investment in infrastructure for Africa and her need for resources to meet her demands. DRC, Zimbabwe, Zambia, SA, Ghana etc. boast some of the largest endowment of recourses Volumes and/or Strategic resources DRC, Zimbabwe, Zambia, SA, Ghana, etc.: targets of China s largest infrastructure investments Infrastructure in Africa or for resources
Deposits Country Investment ($Billion) Infrastructure Ghana 12.87 Infrastructure DRC 6.4 Mining Zambia 0.6 Mining South Africa 1.2 Infrastructure Zimbabwe 0.4 Infrastructure Mozambique 400 Source: IMF, Frontier
or in governance and CSR issues Mainly government-driven What government wants Slow but increasing recognition of the importance of CSR
Infrastructure Roads and Bridges Power Buildings: Ministerial Complex, etc. Health Education Agriculture Chinese Amb, Liberia
The News TO BE BUILT $60M Mega-Ministerial Complex Second Largest Building in Africa Second only to AU building in Addis, Ethiopia Cost: $60 Million Host 10 ministries and agencies
All major companies with state ownership Leveraging comparative advantage Affordable capital and other factors (labor, tech., etc.) Amb. routinely visit Pres. with list Direct Intervention/advocacy for Chinese businesses Collective pursuit of common interest $15M BHP vs China Union - Social Development Fund
Liberia desperately needs Infrastructure Roads Power China needs Resources One Mining concession- Iron ore One pending application Iron ore A strong push for the LAST and LARGEST known deposit WOLOGIZI ALL with some STATE involvement
No. Road Segment Length- (km ) Border Est. Cost ($M) 1.0 Monrovia Ganta-Guinea 220 Guinea 308.0 2.0 Gbarnga- Menekoma 172 Guinea 240.8 3.0 Ganta- Harper Cavalla River 490 Ivory Coast 686.0 4.0 Ganta - Louguatuo 88 Ivory Coast 123.2 5.0 Ganta- Zwedru-Toe Town 285 Ivory Coast 399.0 6.0 Zwedru Fishtown Harper 264 Ivory Coast 369.6 6.0 Monrovia- Bo Waterside 139 Sierra Leone 194.6 8.0 Buchana - Greenville 381 N/A 533.4 9.0 Yarpar Town- Cestos 154 N/A 215.6 7.0 Monrovia- Buchana 138 N/A N/A TOTAL 2,331KM $2,700M
TWACH OTHER LINKS
$0.60 $0.50 $0.57 Electricity Tariff $0.40 $0.30 $0.28 $0.20 $0.10 $0.12 $0.15 $0.18 $0.00 Liberia Ghana Ivory Coast Guinea Sierra Leone
80% 70% 60% 50% 40% 30% 20% 10% 0% 2% Electricity Coverage 76% 71% Liberia Ghana Ivory Coast 11% Guinea 30% Sierra Leone
Loss > $200M per yr Loss: > $200M per yr Loss:??? Millions A Strangulating Impact on Economic Growth and Social Development
Several Issues with this approach West/Donors: and take LONG Gov. of Liberia: funding capital projects from budget Current SOURCE of funds to fund long-term USE of fund Very limited borrowing space
MAJOR IRON ORE DEPOSITS OF LIBERIA ³ 0 25 50 Kilometers MANO RIVER RANGE WOLOGISI RANGE Mt. TOKADI NIMBA RANGE BEA Mts. BOMI RANGE BONG RANGE Mt. KITOMO GOE FANTRO RANGE Legend Magnetic Intensity Value Magnetic High PUTU RANGE Magnetic Low Faults and Fracture zones Compiled By:E.O.Sherman Jan. 30, 2007
Deposits Status Estimate Resources (Mt) Ore Grade (%) Mount Nimba Concession 500 50-65 Bomi Hills Concession 40-45 50-60 Mano River Concession 140 40-50 Bong Mines Concession 290 35-45 Putu Range Concession 200 40-45 Bea Mountain Concession 400 35-40 Wologizi Range Open 1000 35-40
Largest and remaining iron ore mine More than 50 unsolicited Expression of Interest Very interest from the Chinese The Chinese have offered various PROPOSALS to both Power and Road Challenge in EXCNAHGE for WOLOGIZI. India has also expressed interest and made offers No decision yet.
Three Possible Tensions with Chinese inroads:
Specifically, Infrastructure: Roads and Bridges road and bridge projects won by the Chinese Development Partner: Chinese: Volume of Aid? Direction of Aid? EU will not fund road maintenance anymore EU companies or Chinese quality??
More Generally, Programs and Projects Development Partners: Important BUT i.e. USA, Norway, Germany to people Chinese: Important AND to people Volume of Aid? Direction of Aid? Relative Stature?
Exchange between President Sirleaf and NDRC Vice Chairman Zhang Mr. Zhang Xiao, Vice Chairman of the National Development and Reform Commission He said that China, a world leader in power generation,. He proposed that the Liberian Government and China should sign the relevant documents for Mount Coffee as soon as possible and discuss financial plans for cooperation. H.E. Ellen Johnson Sirleaf, President, Republic of Liberia Responding, President Sirleaf said that in agriculture, the Chinese had provided assistance in the area of rice production at CARI; she wanted to see that project move quickly. There was already a Chinese company operating in the mining sector, and the sooner they could move the ore, the better for everyone., she said that
Mr. Zhang Xiao, Vice Chairman of the National Development and Reform Commission Returning to the topic of Vice Chairman Zhang said that because of the many demands, in getting the Mount Coffee project started, that could take up to a year. He called for agreement on a priority projects, like Mount Coffee, and to move quickly. He and would not solve the country's power shortage. If the two governments and relevant institutions could reach agreement, China could, as well as the, and after Liberia would have power. H.E. Ellen Johnson Sirleaf, President, Republic of Liberia, Again responding, President Sirleaf suggested that if the Chinese would agree to with a capacity of up to 1,000 megawatts then the talks could commence right away. She reiterated that She pointed out that Chinese companies already on the ground, they would be in a good position., and with The Vice Chairman also mentioned that another Chinese entity was holding talks with relevant ministries concerning, said to be the, and inquired whether that mining contract would be subject
Given China s abundant state resources, her aggressive push for resources, her lack of interest in governance, the compelling and urgent infrastructure needs of most African countries and the relative weak institutions, can we maintain the gains in Resource Governance?