They look to snatch a profit of around $42 billion… and we can all have a taste
What if I told you I could show you a place where resources were plentiful, labour is cheap, foreign money flows like water… and the investment potential is limitless?
And what if I then told you it was in Africa?
Imagine the scene…
Two figures are walking along a dusty bush trail deep in the Congo interior. The man in front wears a broad-rimmed sun hat and bush jacket… the deferential African porter trudges along behind him, laden down with exploration equipment. It could be scene from a Conrad or Somerset Maugham story…
They stop and the man in the hat seats himself down on a rock beside the trail. His servant pulls out a thermos flask and pours him a cup of tea. No sugar or milk, of course… they don’t go very well with green tea
The year isn’t 1908... it’s 2008.
And the man in the straw hat isn’t a Dr. Livingstone or Mr. Kurtz, he’s Mr. Chen… an engineer from Guandong province in China… and he is here on a very important mission. He is here to help secure the mineral wealth that China needs in order to feed its vast industrial complex.
Mr. Chen is part of the advance guard of Chinese engineers, surveyors and miners who will soon be descending on the Congo as part of China’s biggest deal on the continent so far.
Here comes the Dragon
You see, the Chinese have now reached an agreement with the Democratic Republic of Congo where China will invest $9 billion dollars in reviving the country’s war-ravaged infrastructure and mines. In return they will get access to the African giant’s vast mineral wealth. A massive $6 billion of that is going to be spent on desperately needed infrastructure. The impact on the country is going to be huge…about 2,400 miles of new roads, 2,000 miles of railway, 32 hospitals, 145 health centres and two universities.
The Chinese aren’t doing any of this out of the goodness of their hearts though. In return for all that investment, they will get access to a slice of the Congo's mineral wealth. Well, actually, calling it a slice is a bit of an understatement. They will get access to up to 10 million tonnes of copper and 400,000 tonnes of cobalt. To put that in perspective, China could make a profit of up to $42 billion on the deal. And that’s after Even after the $9 billion they will have to spend.
Congo is set for take-off
Congo ’s economy grew by about 6.5% last year and could grow by 8.4% this year. If the mining and infrastructure spending takes-off as planned, the country might hit double-digit growth by 2010-11. They have got the resources for it. Congo produced about 500,000 tonnes of copper in 1989 – that was down to just 23,030 tonnes last year. The Congo government had a budget of just so $1.3 billion last year. So, China’s investment is going to give this economy a shot in the arm. The Congo looks set for take-off. In fact, it’s receiving so much investment into its mining industry that it is beginning to look like the new Canada.
How to profit from it
We are already positioned to profit from what’s happening in the Congo through our investment in a certain pan-African conglomerate. This company is setting up a hotel in a mining boomtown – right in the heart of Katanga province, where the bulk of the Congo’s mineral wealth is located. And they’ve got a water bottling plant close by as well – both vital support for the region’s booming mining industry.
The growth story here is so exciting that we are just putting the final touches to an in-depth investment report showing you how you could win big in the region. We’ll be issuing this report to all our regular readers as soon as possible.
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