China puts Zambia mine investment on hold over Taiwan

China puts Zambia mine investment on hold over Taiwan

By Shapi Shacinda, LUSAKA (Reuters)

5th September 2006

Chinese firms have suspended investments in Zambia's copper mines and will cut diplomatic ties with the African country if main opposition leader Michael Sata wins the September 28 presidential elections, state media reported on Tuesday.

Sata has sparked a diplomatic row between Zambia and China by saying during his campaign meetings that he will expel Chinese investors, and over his stance towards Taiwan.

Zambian state media quoted Li Baodong, Chinese ambassador to Zambia, as saying that Chinese firms had suspended further investments in mining, construction and tourism sectors due to threats posed by Sata to China's relations with Zambia.

Sata, the leader of the Patriotic Front (PF) and President Levy Mwanawasa's strongest challenger, also claimed during campaign meetings that Chinese investors and managers were exploiting Zambian workers.

"Chinese investors in mining, construction and tourism have put on hold further investments in Zambia until the uncertainty surrounding our bilateral relationship with Zambia is cleared," the state-owned Zambia Daily Mail quoted Li as saying.

Last week state media said Mwanawasa had written to apologise to China over Sata's remarks concerning the Chinese. There was no immediate comment from the government.

Li said China also had proof that Sata had signed an agreement with Taiwan to recognise it as an independent state if he wins the September 28 presidential elections.

"How can we continue supporting Zambia's development projects, when our bilateral relationship with this country has been threatened?" Li said, but he gave no further details.

Sata said he was not bothered by China's protests and reiterated his claims of poor treatment, saying in an interview on privately-owned Radio Phoenix that he would go ahead with plans to scrutinise Chinese investments in Zambia.

"They ill-treat our people (and) that is unacceptable. We are not going to condone exploiting investors because this country belongs to Zambians," Sata said in the radio interview.

Chinese investors have in the last few months also come under attack from leaders of Zambia workers' unions who accuse them of exploiting workers.

Data from the Chinese embassy indicated that Chinese firms have invested more than $300 million in copper mines and other industries.

In July, six miners were shot and wounded at Chambishi copper mine after mineworkers rioted over delayed wages.

China Nonferrous Metal Mining (Group) Co. Ltd. has mined copper from the Zambian mine since 2003. Currently, it produces 25,000 to 30,000 tonnes of copper in ore a year.