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SA in talks to swap minerals for new factories with China

Cape Town - The South African and Chinese governments are in talks to move some Chinese manufacturing to South Africa in return for the Asian powerhouse gaining greater access to this country's minerals.

Deputy president Phumzile Mlambo-Ngcuka made the talks public yesterday, saying the pollution problem in China would give added impetus to the talks. However, she stressed that stricter environmental regulation here would address harmful emissions.

"China needs to send some of its polluting industries elsewhere because it is choking on them," Mlambo-Ngcuka said after returning from talks with Chinese counterparts last week. "We have the capacity to manage emissions and want to regulate that agreement."

She added that a team comprising the two governments had been established to pursue the agreement.

The deputy president's spokesperson, Thabang Chiloane, said the talks had focused primarily on iron ore, but also included manganese and platinum group metals.

Chiloane said the fast-growing Chinese economy had major stainless steel demand. Other resources would depend on Chinese needs.

There are growing calls for China to cut greenhouse gas emissions. Rapid industrialisation is leading to unprecedented pollution in China, which has moved to clean up Beijing's air ahead of the 2008 Olympics.

The South African government has a policy to add greater value to export minerals but little has been achieved in this regard.

Chiloane said: "We don't think we are fishing in the dark and are confident that the talks will move. We have seen the reaction of vice-president Zeng Qinghong and ministers."

The deputy president noted that the Chinese government had already been persuaded to cut textile and clothing exports to South Africa for a limited period. She said a new manufacturing agreement aimed to include commodity exports from other African countries as well as Chinese investment in them.

Mlambo-Ngcuka was speaking at the official opening of the Atlantis gas-fired power station. It and a similar plant in Mossel Bay are the first new power stations built since the advent of democracy in 1994.

Mlambo-Ngcuka said the aim of the talks with China was to avoid a "deindustrialisation" of Africa, where commodities were exported only for finished products to be imported back into the continent.

Chiloane said the goal was "a win-win" outcome for both sides on terms that were not dictated by China. He noted that since 2004 the relationship with Beijing had been upgraded from a simple bi-national one to a strategic relationship "of good standing".

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