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MNB3701 REPORT 1 AND 2 2024 (ZHC-AFRICA)
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- University Of South Africa (Unisa)
MNB3701 REPORT 1 AND 2 2024 (ZHC-AFRICA)
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Executive summary
This report is based on the operations of Zhejiang Huayou Cobalt (ZHC). ZHC is a
Chinese mining giant that has been kingpin in African mining sector. The company
which has been so visible in countries like Democratic Republic of Congo has
expanded its footprint down the African continent to Zimbabwe. The resource-rich
Zimbabwe has been impoverished years. This is the country that has also been
suffocating under economic and political sanctions from the West, like China.
Zimbabwe has been for years awaiting investors in its most lucrative, promising and
untapped mining sector. The coming in of ZHC from Zimbabwe’s long-time ally China,
is a prayer answered for Zimbabwe. It is from this that ZHC has received a positive
welcome in Zimbabwe with the support of Zimbabwean political, legal and economic
systems (Zhang & Dai, 2022). However, it is only from an informal institutional
perspective that the company has faced some hard rock. Nonetheless, with high
positive influence of formal institutions, the company has a successful story in
Zimbabwe, despite minor hardships. The discussion proceeds in the second report to
present the contribution of resources towards the success of ZHC, where most of the
resources are crucially strategic as they give the company a strategic competitive
advantage, except for bad reputation dye to the company’s practice in DRC.
Page 3 of 33
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Table of Contents
Executive summary ................................................................................................................................. 2
Literature search ..................................................................................................................................... 6
Background ............................................................................................................................................. 9
REPORT ONE ......................................................................................................................................... 12
Institutions ............................................................................................................................................ 12
Formal institutions ................................................................................................................................ 12
Economic policies.............................................................................................................................. 12
Legislature ......................................................................................................................................... 14
Political system ................................................................................................................................. 14
Implications for management ............................................................................................................... 16
Informal institutions ............................................................................................................................. 16
Religion ............................................................................................................................................. 17
Education .......................................................................................................................................... 18
Corporate Language .......................................................................................................................... 18
Implications for management ............................................................................................................... 19
REPORT TWO ........................................................................................................................................ 20
Resource-based view ............................................................................................................................ 20
Finance .............................................................................................................................................. 20
Mining equipment ............................................................................................................................ 21
Technology ........................................................................................................................................ 21
Human resources .............................................................................................................................. 22
Reputation ........................................................................................................................................ 22
VRIO ANALYSIS .................................................................................................................................. 23
Implication for management ................................................................................................................ 23
Challenges trading internationally ........................................................................................................ 23
Resistance and doubt by local interest groups and communities .................................................... 24
Cultural distance ............................................................................................................................... 24
Economic policies and strategies ...................................................................................................... 25
Indenisation and local beneficiation initiative .................................................................................. 25
Implications for management ............................................................................................................... 26
Foreign direct investment ..................................................................................................................... 26
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