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Belt and Road Monitor: Top Developments


Source: RWR Advisory Group

 🏹 Top Developments 

 ✔  Zijin Mining’s Serbian Copper Smelter Suspended, Firm Sued by Mayor
On September 26, Zijin Mining’s RTB Bor copper smelter in Serbia was suspended over excessive sulfur dioxide emissions that caused weeks of air pollution. Recent protests against the pollution began on September 19, with residents of Bor taking to the streets to voice their anger over the emissions. Bor mayor Aleksandar Milikić filed criminal charges against Zijin Mining on September 14 for the pollution. The company claimed that the reason for emissions was equipment failure, and that it would inspect the relevant equipment to solve the issue. The smelter is planned to be overhauled by December 2022. 

 ✔  Germany Reportedly Imposing Restrictions on Huawei Involvement in 5G
On September 29, German business newspaper Handelsblatt stated that the German government would reportedly be severely restricting the use of Huawei equipment in its 5G network, although they would not institute an outright ban. Huawei products will be subject to technical and political tests. The restrictions would be similar to earlier decisions by European governments on Huawei’s involvement in their 5G networks, such as by the UK and France. The German government has yet to make an official statement on the decision. 

✔  Australian Opposition Calls for Probe into CRRC Changchun’s Melbourne Train Contract
On October 5, the Australian opposition public transport spokesman David Davis asked the Auditor-General and Victoria’s anti-corruption agency Independent Broad-based Anti-corruption Commission to probe a $2.3 billion contract, signed with a consortium including CRRC Changchun Railway Vehicles in 2016, to build 65 electric trains for Melbourne’s rail network. The delivery of the trains is currently 18 months late, and there is no completion date for the rail network. Davis also called into question the probity of the contracted firms, citing the US Department of Defense’s flagging of CRRC as a potential security threat, CRRC’s known use of Uighur labor, and potential government connections to consortium member, Downer EDI. 

✔  Jingye Group Considering Buying UK’s Tata Steel 
On October 5, multiple sources stated that Chinese conglomerate Jingye Group was considering acquiring Britain’s largest steel producer, Tata Steel UK. The acquisition would mark further consolidation of Chinese control over Britain’s steel industry, as in March 2020, Jingye purchased British Steel after the firm had entered the insolvency process in the spring of 2019. If the potential deal is formalized, Jingye would own the UK’s two largest steel plants, Port Talbot (currently under ownership of Tata Steel) and Scunthorpe steelworks (previously owned by British Steel). Jingye’s interest is reportedly tentative at this point, and British media has speculated that the deal would likely elicit political scrutiny. 

 ✔ Serbian President Warns Railway Contract Will Go to China If EU Grant Request Rejected
On October 6, Serbian President Aleksandar Vucic asked the European Union for a grant covering 50 percent of the construction of the Belgrade-Nis high-speed railway, stating that if it were not provided, the contract would go to China Road and Bridge Corporation (CBRC). A memorandum of understanding between the Serbian government and CRBC for the railway modernization was signed in 2018. He stated that Chinese Ambassador to Serbia Chen Bo had agreed to expedite a loan from the Export-Import Bank of China for the project. The railroad is estimated to cost $2.3 billion. 

✔  Huawei to Deploy Telecom Sites in Rural Ghana
On September 29, Ghana’s Ministry of Communications and the Ghana Investment Fund for Electronic Communications (GIFEC) signed an agreement with the Export-Import Bank of China to deploy 2,000 new telecom sites in rural areas of the country, with Huawei serving as the construction contractor. After completion, expected in September 2021, the new facilities will be leased to national operators. 

✔  Kenya’s Parliament Concludes SGR Loans from China Need to Be Renegotiated
On September 25, Kenya’s parliamentary transport committee released a report inquiry into the China Communications Construction Company (CCCC)-contracted Standard Gauge Railway (SGR) project, determining that the country should renegotiate the entire $4.5 billion loan framework due to the negative economic impact of COVID-19. Kenya owes railway operator China Road and Bridge Corporation (CRBC), a subsidiary of CCCC, $380 million through its operating firm Africa Star and has failed to pay the monthly operating payment for 21 months. The railroad has yet to make a profit

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