CHINESE investors in Africa are no longer seeking to control resources as they did 10 years ago. They now take smaller stakes and provide financing which still gives them access to the resource without ownership, said the GM for Africa of The Beijing Axis, Dirk Kotze, on Wednesday.

Mr Kotze told the 2013 Jo’burg Indaba: Investing in Resources and Mining in Africa conference in Sandton that investment in resources from private Chinese investors at an equity level was also increasing.

Generally, Chinese investors were favouring mining projects that were quite far advanced rather than greenfields ventures.

Despite perceptions that the Chinese have invested heavily in Africa’s resources sector, Mr Kotze said Chinese investments were far greater in developed countries, where information was available and the risks were lower, particularly Australia, the US and, in the last couple of years, Brazil. The perception stemmed partly from the presence of a large number of Chinese contractors in Africa, on the back of Chinese loans, but this was not direct investment.

Business Leadership South Africa vice-president Michael Spicer said Chinese resources companies in Africa had learnt quickly about mining and human resources management. The value of Chinese trade with Africa last year was $200bn, which had doubled in five years. Of that, $20bn was direct investment and $30bn was loans.

Chief operating officer of Wesizwe Platinum Paul Smith, which is 45% owned by China-Africa Jinchuan, said the development of the company’s Bakubung Platinum Mine near Rustenburg was benefiting from Jinchuan’s leading edge technology. Jinchuan Group, headquartered in Gansu province in northwest China, is the world’s fourth-biggest integrated nickel producer and it also has skills in platinum group metals processing.

Mr Smith said an important area for the South Africans to understand was the strategic intentions of Wesizwe’s Chinese shareholders, which was not easy because of differences in language and business culture. The South African platinum industry was also opaque and a lot of time was spent in discussing the structural constraints in the sector.

"The Chinese take a different view from a Canadian investor, who wants to push up the share price and exit," Mr Smith said. "The Chinese investors’ focus is on the metal."

Mr Kotze said it was impossible to predict how long Chinese demand for resources to feed infrastructural development would continue. But China’s growth rate of 7-8% represented similar volumes of demand for resources to when the economy was growing at 14% several years ago and the long-term growth trajectory remained intact. Despite growing consumption demand in China, it would not replace heavy industrial demand in the near future.

Mr Spicer said political stability in Africa was no longer the biggest concern of foreign investors. Now the risk was economic policy certainty and security of tenure.

In Southern Africa, crime and corruption were particularly concerning as in some countries the criminal justice system had been undermined for political ends.