Africa as a compelling new source of coal?

Map here

FT full-pager on coal rush into Africa.

Turns out Africa has got a lot of coal, and lots of the best kinds, in locations that are relatively cheap to mine.

Why not done up to now?  Coal is fairly dispersed globally, so until emerging economies start running through their own instead of exporting to the advanced West, apparently the economic impetus just wasn’t there.

But now it’s there in spades (pun intended).

So as part of the everybody-is-coming-to-Africa meme, coal is a rising quotient of activity.  This comes on top of all of the other minerals and gas and oil.

This is why, “The growth rates achieved during the past 17 years are comparable to those of the east Asian economies in the 1970s and early 1980s.”

This is why I call globalization the gift that keeps on giving.  Europe gave it to us in the 1900s (screwing everybody else with colonialism), and after the tumult of the first half of the 20^th century, we gave it to East Asia.  Now Asia is doing the same to much of the Gap but especially to Africa.  America doesn’t create that international liberal trade order (first just in the West) after World War II, this doesn’t happen.

Good thing America can’t do grand strategy, eh?

Story focuses a lot on Tete in Mozambique, where everybody in the emerging economy universe is there with cash in hand for one of the biggest and best coal deposits in the world.

You want to spot a Cold War peace dividend, this is part of it.

In 1989, US trade with Africa was about 13% of the continent’s total trade, and what China, India, Brazil, Korea and Malaysia managed  in total was maybe 5%.  Now China’s total (closer to 12%) is more than America’s (just over 10%) and the other four are closing in—cumulatively—on another 10%.

So African trade with the quintet goes from about 5% in 1989 to more almost one-quarter of the continent’s total trade, while America’s share holds steady.

More generally, Eurozone trade decreases from about one-third of Africa’s total to more like one-quarter, while emerging economies’s share goes from basically nowhere to close to half over the two-decade period since Cold War’s end. 

That’s a big infusion of new demand and new investment, with hundreds of thousands of entrepreneurs arriving as part of that slipstream—mainly from China.

No, it’s not all good, but in aggregate, it beats the hell out of the past, because the West’s draw on resources—at best—created booms and busts as part of those regions’ business cycle.  Now we’re seeing sustained boom-times demand from a far larger portion of the global consumption base that has very long term infrastructure development and energy consumptions trajectories.

A lot of experts fret over a globalization “unraveling” from a Western perspective, but the larger truth is a globalization on steroids for the rising New Core and those Gap regions that get immediately tied into that stunning growth and the emergent middle class it creates.