Eurasian Resources Group, which has operations in Kazakhstan, Africa and Brazil, has had a long-term strategic partnership with the People’s Republic of China.
The Fourth Industrial Revolution, or Industry 4.0, refers to the recent revolutionisation of the industrial world through the application of new technologies – including the introduction of smart systems, the internet of things, cyber-physical systems, cognitive computing, cloud computing, the industrial internet of things and artificial intelligence – to manufacturing processes.
The ongoing collaboration between ERG and China has already taken many forms, including engineering, procurement and construction, equity partnerships, off take and sales agreements and financing. China currently accounts for between 20% and 25% of ERG’s total sales volumes and the partnership is now seeking to build on that momentum.
The Chinese government is leading the way in the global push to switch to electric vehicles, looking to dominate this market. By 2020, the Chinese government desires around 12% of overall vehicle sales to be comprised of EVs. This drive to transition to a greener, more sustainable economy will lead to a demand for more key battery components and raw materials, which include copper and cobalt. ERG mines copper and cobalt ore and produces copper and cobalt in the Democratic Republic of the Congo, and China also has strong demand for other metals including alumina, iron ore and ferrochrome, which form a key part of ERG mining operations worldwide.
ERG, and the businesses it operates now, have co-operated with strategic partners in China for many years. In the mid to late 2000s, these collaborations began to escalate. The Kazakhstan Aluminium Smelter, which is the first production facility for aluminium in the country, was launched in 2007. It is now owned by ERG and was developed in record time in conjunction with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd. The smelter was completed in just 27 months.
In the DRC, collaboration between China and ERG resulted in the delivery of another project, the Metalkol RTR facility. This operation has a target capacity of 120kt of copper and 24kt of cobalt per annum. When working to full target capacity, this project has the potential to make ERG one of the largest cobalt suppliers to China and to the rest of the world. Metalkol RTR applies the Clean Cobalt Framework initiative of ERG, which aims to enhance responsible cobalt production through transparency in the supply chain. ERG is piloting a blockchain technology system in support of this initiative.
The Chinese government provides financial and infrastructural support to many key international initiatives and projects in Kazakhstan in collaboration with ERG, as well as generating significant benefits for the country in investment and trade. This includes the establishment of a series of dedicated networking platforms to facilitate and increase co-operation.
Forward-looking reforms in China, combined with a rapidly developing economy, will deliver multiple opportunities for the country, for ERG, and other international partners.