Japan Pledges $2 Billion for African Projects
TOKYO - Japan is pledging $2 billion for energy and mineral projects in Africa, capping a conference with government resource officials from across the continent as it seeks to catch up with years of Chinese investment.
Japan needs to secure long-term reliable sources of natural materials. It is also eager to provide its technologies to build roads, railways and utilities, providing a competitive alternative to the Chinese state-owned companies that have helped the Asian giant become Africa's dominant investor.
The government funding will be used for direct loans, underwriting of debt offerings and equity stakes in projects covering crude-oil, natural-gas, coal and mineral projects over the next five years.
"This conference has put in place the building blocks to encourage investment from Japanese companies and to help create Africa's sustainable growth," Toshimitsu Motegi, minister of economy, trade and industry, said at a Saturday news conference after a meeting with representatives from 15 African countries that followed the two-day J-SUMIT conference.
Japan put together the conference in hopes of demonstrating the appeal of the long-term approach typical of Japanese companies as many African countries begin to complain about what they see as the heavy-handed approach of China's investments.
Delegates to the conference appeared receptive to the overtures.
John Bande, minister of mining for Malawi, said he had expressions of interest ranging from trading companies such as Marubeni Corp. to auto maker Toyota Motor Corp.
"The idea is that we want to encourage more faithful investors like those from Japan," he said, adding that he admired Japan's reputation for honesty and willingness to provide technical assistance and long-term investments.
For many Japanese industrial companies, the reasons for the increased level of interest is clear--the need to secure resources.
"The competition for acquiring coking coal has begun," Shinichi Fujiwara, a managing executive officer for Nippon Steel & Sumitomo Metal Corp., told the conference.
He said the nation's largest steelmaker is especially interested in getting coking coal, a key ingredient in iron production, from Mozambique.
That is good news for companies such as Baobab Resources PLC (a London-based mineral-exploration group that is seeking investment for its iron project in Mozambique's Tete province.
Baobab officials and others also spoke of the growing interest in completing more of the value-added steps in the production process within the countries holding the resources, instead of just shipping raw materials overseas.
"We're quite cognizant of the opportunity here to take this right the way to steel," said Managing Director Ben James.
For Congo, one of the largest producers of copper in Africa, this drive to keep more of the value at home has taken the form of a coming ban on copper concentrate exports.
Mining Minister Martin Kabwelulu said the government wanted to stop the current export of unprocessed copper because of the lower tax revenue generated.
"On that, the government was making nothing," he said, adding that it wants the copper refined domestically.
Attendees also said that the Japanese overture was more than welcome and that the continent's dependence on China was because of necessity, not necessarily by choice.
"When you have no friends, any friend is a good friend," said Zimbabwe's deputy minister of mines and mining development, Gift Chimanikire. "China came in when Zimbabwe was shunned by the rest of the world."
For Japan, the resources conference also was something of a curtain-raiser for a summit-level international conference on African development that will take place next month in Yokohama.
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