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Banking

Bidding wars intensify for Africa’s key assets

Africa has much to tempt a growing economy, and China has the money to pay for access to the resources it needs and wants. But it is not the only country with an eye on the continent. Nick Kochan reports.

CHINA IS STRIKING out and striving hard in Africa in its quest for metals. In the past it trod softly around the continent, staying below the radar where possible and buying companies privately. But that time has gone. Now the Chinese are boldly going where no one thought they would and making hostile bids.

The announcement in early April of a $6.54 billion bid by Minmetals Resources for Australia-Canada-listed Equinox Minerals, which mines copper in Zambia, not only put a top dollar price tag on African copper but also indicated the new aggression of Chinese companies operating in Africa. In fact, no sooner had Minmetals made its bid than Canadian company Barrick came with a rival offer in late April, trumping the Chinese. Barrick made a higher cash bid for Equinox, which the company has accepted.

The Chinese are seeking to muscle in on a sector where asset prices at record or near record levels are critical to the new enthusiasm. David Ellwood, chief executive and founder of South African commodity trading and mining finance company Metmar Minerals, says: "All the different sources of capital are firing at the moment and that is driving commodity prices up more than anything.

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