China’s Insatiable Demand for Minerals and Oil

This article will give you a feel for why my dollars are invested in commodity stocks. China’s demand for Copper, Zinc, Nickel, Silver, Oil and don’t forget clean water will not subside in the foreseeable future.  Read the Week in Review to find out which stocks are benefiting from this trend.

by Joseph Kahama
President of Tanzanian American Development 2000 Inc.
11/22/2006
JS Mineset . com 

After traveling for more than 19 hours between Tanzania and The Peoples Republic of China, I have now arrived. It is a few minutes past midnight now here in the Capital of Beijing and yet the activities by way of trade, commerce and construction are continuing throughout the night as if it is daylight.

On my way to China I had ample time during my flight to read Ted C. Fishman’s book, “China Inc.” (The Relentless Rise of the Great Superpower). I can ascertain that what I read in Fishman’s book is true.

Thousands of construction projects are relentlessly and simultaneously being undertaken in China. From state-of-the art highways to airports, skyscrapers and sports stadiums. This has been the case in two cities that I visited, Beijing and Chang Chung. The story repeats itself in Guangzhou, Guangdong Province, Shanghai, Tianjin and many other cities and towns. China has 160 cities with more than 1 million people. Beijing itself has more than 20 million inhabitants during daytime. I also had the opportunity to visit the Olympic Village 2008 and the mega construction projects being undertaken there, as well as the stadium for the Asian Winter Games 2006, both of which China will be hosting. With many billions of dollars being spent every year on construction, technology and electronics including aircraft fittings and manufacturing by China, it is no wonder there is a great demand for minerals and oil by China. It is driving China’s appetite for the acquisition of these raw materials from Africa. Africa has always been China’s great friend, especially Tanzania. I was traveling at the invitation and encouragement of the President of the United Republic of Tanzania, H.E. Jakaya Mrisho Kikwete, who led an entourage of Tanzanian Business people to seek partnership and investment opportunities with the Chinese.

I took a few geological maps of prospecting licenses in Tanzania for base and precious metals. These were gone within days, having been taken by wealthy individuals and companies in China showing heightened interest in associating with Tanzanian projects in gold and base metals exploration. Nickel, cobalt and copper are only going to increase in value as the nation heading towards becoming the next great superpower is not giving up its drive for development.

The Chinese are buying everything and want to be and build the best and largest of everything. They need minerals. For those who have not yet heard, a Chinese tycoon by the name of Larry Yung has recently bought a 1.13 percent stake of the mining giant, Anglo American. The stake was bought from the Oppenheimer family for US$806 million. This has added to the recent speculation of a takeover bid. If this is going to be the case, the bid too may come from China.

banner ad