Africa Benefitting From China’s Determination to Move Away From Australian Commodity Suppliers

China appears willing to pay higher financial and environmental costs if it means ending its dependence on Australian commodities including iron ore and coal. China has been steadily diversifying its sourcing of key commodities that it once depended on Australia to provide, even if new suppliers in places like South Africa and Guinea don’t offer the same benefits. 

China-Australia ties have deteriorated considerably over the past year due to a number of factors including Huawei, China’s territorial claims in the South China Sea, and Canberra’s call for an independent investigation into the origin of COVID-19.  

China has responded furiously, blocking imports of a number of Australian products ranging from wine to wheat to coal. Now, China’s looking to other parts of the world to replace Australian suppliers and several African countries are well-positioned to benefit.

• SOUTH AFRICA: China is importing more coal from South Africa even though South African coal is more expensive and of lower quality than Australia’s. With 57% of China’s thermal coal imported from Australia in 2019, the upside growth potential for South African exporters is potentially quite large. (SOUTH CHINA MORNING POST)

• GUINEA:  China currently relies on Australia to provide 60% of its iron ore supplies and, at least so far, that figure appears to be holding steady. However, Chinese mining companies are apparently working hard to bring the enormous Simandou mine in Guinea online in the next 4-5 years, with an eye on ending Beijing’s dependence on Australia. (NIKKEI ASIA)

SUGGESTED READING:

• South China Morning Post: China-Australia relations: more than 11,000 litres of wine detained in Shenzhen as ban continues by Su-Lin Tan
• CNBC: China should consider alternatives for Australian iron ore as trade tensions simmer, analyst says by Weizhen Tan
• Nikkei Asia: Despite China feud, Australia resource exports to hit record by value by Fumi Matsumoto and Iori Kawate

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The post Africa Benefitting From China’s Determination to Move Away From Australian Commodity Suppliers appeared first on The China Africa Project.

source https://chinaafricaproject.com/2021/03/31/africa-benefitting-from-chinas-determination-to-move-away-from-australian-commodity-suppliers/