FREE ELECTRONIC LIBRARY - Dissertations, online materials

Pages:   || 2 | 3 | 4 | 5 |   ...   | 9 |

«2009 In Search of Aluminum: China’s Role in the Mekong Region Written by: Kate M. Lazarus Graphic Design by: Peter Stannard Cover images by: Gary ...»

-- [ Page 1 ] --

In Search of Aluminum:

China’s Role in the Mekong Region


In Search of Aluminum:

China’s Role in the Mekong Region

Written by:

Kate M. Lazarus

Graphic Design by:

Peter Stannard

Cover images by:

Gary Milner (left), Karen Rakow (bottom right) and Lorena Molinari (top right)

Courtesy of iStockphoto.com ©

Produced in 2009 with the support of:

Heinrich Böll Stiftung Cambodia #34 Street 222, Sangkat Boeung Raing, Khan Daun Penh P.O. Box 1436, Phnom Penh, Cambodia Tel: (+855) 023 210 535 Fax: (+855) 023 216 482 E-Mail: phnompenh@hbfasia.org Website: www.boell-cambodia.org WWF Denmark Ryesgade 3 F 2200 Copenhagen N Denmark Tel: (+45) 035 36 36 35 Fax: (+45) 035 24 78 68 E-mail: wwf@wwf.dk Website: www.wwf.dk International Institute for Sustainable Development.

161 Portage Avenue East, 6th Floor Winnipeg, Manitoba, R3B 0Y4 Canada Tel: (+1) 0204 958 7700 Fax: (+1) 0204 958 7710 E-mail: info@iisd.ca Website: www.iisd.org, www.tradeknowledgenetwork.net Copyright © 2009 - Heinrich Böll Stiftung, WWF and International Institute for Sustainable Development Table of Contents List of Figures, Tables & Boxes ii Acknowledgements ii Project Description ii Abbreviations & Acronyms iii Glossary iv Executive Summary 1 1 Introduction 6 2 Investment in Bauxite Mining in Cambodia, Laos and Vietnam 7 2.1 Cambodia 7 2.1.1 Mondulkiri province 7 2.1.2 Major investors 8 2.1.3 BHP Billiton and Mitsubishi 9 2.2 Laos 11 2.2.1 Bolaven plateau 11 2.2.2 Major investors 13 2.2.3 Volume of investments 17 2.3 Vietnam 17 2.3.1 Bauxite mining in the Central Highlands 18 2.3.2 Major investors 19 3 Exploring Regional Linkages 22 3.1 China’s strategy in the Mekong region 22 3.2 Physical proximity to the Chinese market

–  –  –

Acknowledgements This study was written by Kate Lazarus. Kate works as a freelance consultant on water resources management and governance in the Mekong region. She currently co-leads the Dialogues Theme and is a member of the steering committee of M-POWER and is working for such organizations as the Mekong River Commission, WWF, IISD, and IDSS Party Ltd. Her main areas of focus are environmental governance, environmental flows, multistakeholder dialogues, and the role of Chinese investment in the Mekong region. She has also worked for such organizations as Oxfam America and the International Union for the Conservation of Nature (IUCN).

This regional report is based on three country studies of Cambodia, Laos and Vietnam. The author would like to thank Sideth Muong (Cambodia), Steeve Daviau (Laos) and Pham Quang Tu (Vietnam) for their extensive research into the status of bauxite exploration and mining in the three countries.

The author would also like to thank Heike Baumüller, Katrin Seidel, Ruth Streicher, John Kornerup Bang, Teak Seng, Colin McQuistan and the many people interviewed for this research for providing relevant information and comments on this report.

Project Description This study is part of a research project entitled Understanding China as an Actor in the Mekong Region, jointly implemented by the Heinrich Böll Stiftung, World Wide Fund for Nature (WWF) and the International Institute for Sustainable Development (IISD). The project aims to shed some light on China’s economic role in Vietnam, Laos and Cambodia as a basis for constructive dialogue among decision makers and other stakeholders in China and the Mekong countries.

This paper builds on a scoping study commissioned for the project which provides an overview of investment, trade and aid flows from China to the three Mekong countries, with a particular focus on the agribusiness, hydropower and mining industries. The scoping study and the executive summary in English, Khmer, Vietnamese, Lao and Chinese are available at www.boell-cambodia.org, www.tradeknowledgenetwork.net and www.wwf.dk.

–  –  –

China has a huge thirst for natural resources and sources them from across the world. Despite a reduction in economic growth from a high of 13 percent in 2007 to 9 percent in 2008, the lowest rate since 2002, China continues to invest overseas to meet its growing need for natural resources. Cash rich China is currently taking advantage of the global financial crisis by becoming a major force driving new lending and investment. In 2008 China’s overseas mergers and acquisitions were worth US$52.1 billion, and in the first two months of 2009 Chinese companies invested US$16.3 billion abroad. These investments include those made by both Chinese corporations and the Chinese government, and in many cases include extractive industries for which costs were once prohibitive, but which are now making economic sense.

Through these investments, China is playing an important role in providing readily available cash to pull mining companies out of debt around the world. In recent years, China has become the world’s largest user of almost all metals. In 2002 it became the world’s chief consumer of copper, and it is now one of the largest consumers of alumina, zinc and nickel. As a result, China is playing an increasingly important role in global metals markets by driving demand and boosting global commodity prices (although recently most of these prices have slumped due to the 2008/09 global financial crisis).

China’s economic relationship with the world also continues to undergo a rapid transformation.

The 10th Five Year Plan for National Economic and Social Development (2001–05) set out a strategy for China to proactively make use of overseas natural resources, driven by its 2004 ‘Going Global’ (or ‘Going Out’) strategy. This strategy, which intends to meet the country’s growing demand for natural resources, both regionally and globally, aims to spur outward investment by subsidizing investment by Chinese companies in the acquisition of natural resources overseas.

China’s insufficient domestic mineral resources necessitate overseas investments Chinese mining firms are strategically looking for opportunities abroad to invest in joint ventures, acquire mining projects and companies, and secure long-term contracts at set price levels. In order for China to maintain a steady supply of mineral and metals for its economy, strong growth in its foreign direct investment is necessary, given that its domestic exploration and expansion of existing mines has not been sufficient to balance depletion and maintain growth. The Chinese government has encouraged the formation of bigger economic corporations through the merger of domestic companies and the acquisition or buying of shares in foreign companies. In the early to late 1990s China began investing in various mining projects overseas, and by the 2000s that investment had increased significantly.

China continued on this path until late 2008, when the government issued a directive to mainland mining and mineral processing companies to freeze all overseas investments until they see a rally in global demand. This move was a response to a rapid deceleration in domestic demand, and the government saw a need to shift the focus to investing in resources domestically. This came at a time when many companies were buying or planning to buy overseas mining assets at top of the market prices. In early 2009, with its longer term need for resource imports barely diminishing, China had once again resumed negotiations for investments in international companies such as Rio Tinto1 and OZ Minerals.

1 The deal between Rio Tinto and Chinalco was called off in June 2009. Rio Tinto announced instead a $15.2 billion rights offering and a large joint venture with competitor BHP Billiton.

In Search of Aluminum:

1 China’s Role in the Mekong Region Executive Summary Bauxite, the source of aluminum Bauxite, the chief material used in the production of aluminum, is one of the economically most important minerals. According to the U.S. Geological Survey, global bauxite reserves are estimated at about 55–75 billion tons (pure ore), of which South America contains 33 percent, Africa 27 percent, Asia 17 percent, Oceania 13 percent and other areas 10 percent. With the current speed of exploitation, it is expected that bauxite reserves can meet the needs of the aluminum industry for the next 170 years. At present, there are 24 countries exploiting bauxite both locally and in other countries around the world, of which the 12 most productive countries produce 97 percent of total bauxite production. China’s alumina2 output reached 19.46 million tons in 2007, accounting for one fourth of the world’s total output; electrolytic aluminum output was 12.56 million tons, 32.8 percent of the world’s total; and processed aluminum products were 11.76 million tons. China consumed 26.12 million tons of alumina in 2007, accounting for 35 percent of total world consumption; and 12.1 million tons of electrolytic alumina, 32 percent of the world’s total.

Due to the increasing demand for aluminum, the scale of bauxite exploitation globally has grown by 6.5 percent per year in recent years. Presently, the world’s aluminum market has been moving to China, where there is high demand for high-tech manufactured goods such as aircrafts and automobiles. Chinese aluminum and alumina consumption has a direct influence on global alumina market trends. In the mid-2000s, the level of China’s aluminum use increased, exceeding its domestic production, which resulted in a growing need to import alumina or aluminum. It is also estimated that in the next ten years, with booming construction, transportation and packaging industries in China, demand for aluminum and alumina will increase even more strongly.

In the aluminum sector, the Aluminum Corporation of China (Chinalco) is the largest aluminum company in China and is a financially powerful corporation globally in the mining sector. Chinalco proved its financial potential after merging with and acquiring many domestic companies and expanding into the international market. For example, in 2008 it announced plans to invest US$19.5 billion in the Rio Tinto Corporation, one of the world’s largest mining companies. In 2007 the Aluminum Corporation of China Ltd (Chalco) – a joint stock limited company formed in 2001 – bought 7 percent of the shares in U.S. company Alcoa Corporation.

Chinalco also boosted its global expansion by buying some mineral mines in Australia, Canada and Peru, and the Chinese state-owned company Minmetals is purchasing OZ Minerals, which operates the Sepon gold and copper mine in Laos, for US$1.2 billion.

The Mekong region: A new source of bauxite Cambodia, Laos and Vietnam are rich in mineral resources; however, the exploitation of these resources has typically been on a small scale and long delayed due to conflict, lack of foreign investment, and limited capital and capacity to establish extensive mining operations.

The regulatory framework in the three countries has also hindered investment because of bureaucratic inefficiency and lack of implementation, which has complicated the process of obtaining concessions and permission for mining operations. Mining laws in the region are generally lacking in terms of clear tax regulations and royalty structures (often these are calculated on a project basis), and regulatory systems are complicated. In part, this is because the region’s governments have little experience with foreign investment in this sector: Laos’s first mine went into operation at Sepon in 2002; Vietnam’s first large scale mine was only recently established; and Cambodia’s mineral resources are not well explored and no large scale mining is occurring in the country. Furthermore, in the region’s centralized economies, where mineral resources are owned by the state, there is often reluctance to transfer natural resource rights to foreign investors. This has led to a variety of mechanisms for retaining some 2 Alumina is the product of bauxite processing; aluminum is electrolyzed from alumina.

In Search of Aluminum:

2 China’s Role in the Mekong Region Executive Summary state control, such as required partnership with state-owned enterprises or government ownership of shares. Vietnam, where state-owned enterprises are expected to be involved in any large-scale resource extraction, is less attractive in this regard for foreign investors than Cambodia and Laos, where there is no competition from government industries.

In all three countries, public disclosure of information is severely lacking, making it difficult to fully assess how companies plan to mitigate the environmental and social impacts of their activities. And where there is a plan, government capacity and will to regulate the industry and ensure compliance by the companies are minimal. The fact that the Government of Laos provided Sino-Lao Corporation Ltd (Slaco) with comments on its environmental impact assessment (EIA), which had raised significant concerns about 50 items, is an improvement in this regard. Sino-Lao Corporation Ltd is registered as a private Lao company currently comprising Chalco (51 percent), Ruouy Chai International Group (RCI)/Italian Thai Public Co.

(ITD) (39 percent), and Lao Services Co. Ltd (LSI) (10 percent). How the company is planning to address these concerns is not clear, however. In Vietnam, experience has shown that EIAs carried out are only prepared to meet the minimal government requirements and environmental issues are only mentioned in a general sense, implementation is not monitored closely, and environmental restoration plans and improvement projects do not always accompany the EIA. A clear example of a conflict of interest is the case of the first alumina project in Lam Dong province, where a company controlled by the investor, the Vietnam National Coal, Mineral Industries Group (Vinacomin) (a state-owned Vietnamese company), conducted the EIA.

Pages:   || 2 | 3 | 4 | 5 |   ...   | 9 |

Similar works:

«Student Taster Manuals – Property of Discovery Learning UK.INTRODUCTION TO MMA @PT_Courses DiscoveryLearningUK Student Taster Manuals – Property of Discovery Learning UK. Introduction MMA Fitness training is a fantastic way to add a new level of intensity and fun to the workout regime and can be used on a 1-2-1 basis or in a group setting. It makes use of the training methods of a high performance sport and opens it to the fitness enthusiast in a non-combative environment. Aim of this...»

«Special Volume 3 (2012), pp. 135–142 Angus Graham – Kristian D. Strutt – Morag Hunter – Sarah Jones – Aurélia Masson – Marie Millet – Benjamin Pennington Reconstructing Landscapes and Waterscapes in Thebes, Egypt in Wiebke Bebermeier – Robert Hebenstreit – Elke Kaiser – Jan Krause (eds.), Landscape Archaeology. Proceedings of the International Conference Held in Berlin, 6th – 8th June 2012 Edited by Gerd Graßhoff and Michael Meyer, Excellence Cluster Topoi, Berlin eTopoi...»

«ISSN: 2319-8753 International Journal of Innovative Research in Science, Engineering and Technology (An ISO 3297: 2007 Certified Organization) Vol. 2, Issue 12, December 2013 Linear Regression And Correlation Analysis Of Water Quality Parameters: A Case STudy Of River Kosi at District Rampur, India Megha Agarwal 1, Animesh Agarwal 2 Assistant Professor, Department of Applied Sciences & Humanities, Moradabad Institute of Technology, Moradabad, Uttar Pradesh, India1 Associate Professor,...»

«Core Principles for Effective Banking Supervision: Self-Assessment for Australia Information Paper April 2001 CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION: SELF-ASSESSMENT FOR AUSTRALIA Information Paper APRIL 2001 Australian Prudential Regulation Authority PREAMBLE This document outlines APRA’s self-assessment of its supervisory policies and practices against the Core Principles for Effective Banking Supervision, issued by the Basel Committee on Banking Supervision in October 1999 1....»

«1 Edwin Hubble’s Silence Don Lago A few years ago I visited the hometown of V.M. Slipher, Frankfort, Indiana. On the Frankfort town square there’s a mural showing the most famous people who came from Frankfort. There’s Will Brimley, the actor, and there’s the lady who created the Dick and Jane books. There’s no V.M. Slipher. I went to the county historical society, which is housed in the old high school that VM Slipher attended. There are no exhibits about V.M. Slipher. When I asked...»

«      ‘Seeming Would Be Quite Enough’ Melodrama and Authenticity in Little Dorrit Helle Kathrine Løchen Knutsen A Thesis Presented to The Department of Literature, Area Studies and European Languages University of Oslo In Partial Fulfillment of the Requirements for the MA Degree Spring Term 2013 Supervisor: Tore Rem Acknowledgements     I  grasp  the  opportunity  to  heartily  thank  my  supervisor  Professor  Tore  Rem,  whose   critical  comments  and...»

«Transcript of Stephen Hawking’s second Reith lecture Lecture broadcast on 02.02.2016 With annotations by BBC Science Editor David Shukman Stephen Hawking, the world's most famous scientist is giving this year's BBC Reith Lectures. As a guide for the interested but perplexed, I have added a few notes (in italics below) to the transcript of Prof Hawking's second lecture, in the same way I did last week. _ In my previous lecture I left you on a cliffhanger: a paradox about the nature of black...»

«Clinical (Volume 11) Restraint Minimisation and Safe Practice Restraint Minimisation and Safe Practice Table of Contents Policy Purpose Scope/Audience Associated documents Definitions Restraint Episode of Restraint Chemical Restraint Categories of Restraint Personal Restraint Physical Restraint Environmental Restraint Seclusion Exclusions to this Policy Clinical Responsibilities Divisional Responsibilities Corporate Responsibilities Measurement/Evaluation References –  –  – The...»

«Environmental Humanities, vol. 5, 2014, pp. 277-281 www.environmentalhumanities.org ISSN: 2201-1919 Becoming-With Living Lexicon for the Environmental Humanities Kate Wright School of Arts, University of New England, Armidale, Australia L E X I C O N Figure 1 Sean and Michael McQuilken becoming-lightning at Moro Rock, California (1975). Photograph © Michael McQuilken This photograph of two brothers was taken on 20 August, 1975 at Moro Rock in California. Sean and Michael McQuilken (aged 12 and...»

«D. R. DOSSETOR LECTURE “Home Ownership A Dream Worth Fighting For” Friday 2nd April, 2004 Sydney Bob Day AO Home Australia When John D Rockefeller died in 1937 he was reputedly the richest man in the world. As you’d expect, at his funeral were a huge number of people – family, friends, employees from all his companies and a large contingent from the press. Seeing Rockefeller’s chief accountant in the crowd, a young journalist approached the accountant after the funeral. “Weren’t...»

«MARŠRUTU APRAKSTI REĢIONĀLĀS NOZĪMES MARŠRUTU TĪKLA DAĻĀ „LATGALE” LOTĒ „PREIĻI” Nr.5484 Preiļi Znotiņi Apšenieki Preiļi Preiļi: Pieturas: Preiļu AO Brīvības iela Autoceļš P63 Līvāni-Preiļi Pietura: Moskvino Autoceļš V752 Preiļi-Raunieši Rožupe Pieturas: Ančkini, Znotiņi, Tiltova, Raunieši, Kārļi. Autoceļš P63 Līvāni-Preiļi Pieturas: Apšenieki, Sutri, Moskvino. Preiļi: Brīvības iela Pieturas: Preiļu AO Nr.5487 Preiļi Rudzāti – Turki...»

«SOCIAL IMPACT OF THE OK TEDI MINE ON THE YONGGOM VILLAGES OF THE NORTH FLY, 1992 OK-FLY SOCIAL MONITORING PROJECT REPORT No. 5 for Ok Tedi Mining Limited Original publication details: Reprint publication details: Stuart Kirsch Stuart Kirsch Department of Anthropology Department of Sociology and Anthropology 207A West Hall Mount Holyoke College 550 East University Ave. South Hadley University of Michigan Massachusetts Ann Arbor, MI 48109 USA 01075-1461 USA General editor: General editor: John...»

<<  HOME   |    CONTACTS
2016 www.dissertation.xlibx.info - Dissertations, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.