The world’s natural resources are in play and it doesn’t bode well for the environment and humankind. The world’s most voracious user of its human and natural resources – China – is engaged in a feeding frenzy.
Rio Tinto announced today that Aluminum Corporation of China (Chinalco) has received approval from the German government for Chinalco’s proposal to enter into a strategic partnership with Rio Tinto.
This comes on the heels of an announcement yesterday that Australian miner Oz Minerals has agreed to sell most of its assets to China’s Minmetals, just days after the Australian government blocked the deal.
This impact on the world’s natural resources cannot be understated. In order to sustain its rapid economic growth, China must have the raw materials so that its businesses can produce goods in demand by consumer nations. As we have seen in recent years, this huge demand has altered the balance of power and influence across the world. Chinese interests in Africa are a case in point.
While humanitarian and political concerns have tempered post-colonial western interests for natural resources in Africa, this has posed no barrier to China. On the contrary, when U.S. or European countries have shown some restraint with respect to dealing with some of the most extreme kleptocrats and tyrants in the region, the Chinese government has picked up the slack and offered up financial “inducements” to African leaders looking to profit on the backs of ordinary Africans.
On the environmental front, China has not fared any better. It’s own environmental record is appalling. A cursory glance around China’s industrial regions in the southeast part of the country reveals epic environmental degradation. In eastern Africa, clear cutting of hardwood forests are the norm when Chinese timber companies are given a free hand. When it comes to economic growth, the environment has no place at the table in China.
As Chinese interests seek more global resources to feed its economic machine, it must turn to businesses outside of China. A Chinese company’s attempted acquisition of Rio Tinto is not a first for the Australian mining operation. When BHP Billiton took a run at Rio Tinto last year, a Chinese state-owned mining company made a short-lived competing offer for Rio Tinto. In the region, we are seeing Chinese interests engaging in significant transactions with the repressive Myanmar government for oil and natural gas.
It appears that Chinalco and Rio Tinto have cleared regulatory hurdles to their deal. Should the Rio Tinto and Oz Minerals transactions close as planned, we can expect to see further incremental shifts not only in the economic power in the region and globally but possible further environmental and social turns for the worse. As Chinese power consolidates, the risk to humanity and the planet increases.
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