Out of Africa, Successful Bet for Sinosteel

(Johannesburg) – The glitter of mineral-rich South Africa caught the eye of corporate Japan during a hunt for overseas investment opportunities in the mid-1990s. But a closer look at the investment landscape revealed political risks, and the Japanese pulled out.

China's largest metals trader, Sinosteel Group, saw something more – and bet on South Africa for the long haul. The state-owned Chinese concern teamed up with a local company and formed what is today ASA Metals Pty Ltd., a profitable chromite ore miner and producer of ferrochrome, which is needed to make stainless steel.

By the time ASA fired up its first ferrochrome furnace in 1997, the Japanese companies were less worried about risk, so they tried to return to South Africa. Marubeni Corp., for example, offered a high price for a stake in ASA.