CIC Makes a Play in South Africa’s Shanduka Group

South Africa has been a key investment destination for China due to its natural resources, lower political risk profile compared to other African nations, and growing demographics. In fact, the China-Africa Development Fund has been an active investor in the country. The China Investment Corporation (CIC) will purchase a 25% stake in the Shanduka Group for 2 billion rand (US$ 245 million). Johannesburg-based Shanduka is led by former secretary-general of the ruling African National Congress Cyril Ramaphosa and has investments in McDonald’s franchises and coal. It is an unlisted holding company. Recently, the Shanduka Group gained majority control of a coal venture that it operates with Glencore. It increased its stake in Shanduka Coal from 30% to 50.01%, giving it control. Shanduka’s coal mining operations include Springlake, Middleburg Townlands, and Graspan.

The CIC is buying the shares mostly from Investec and Old Mutual Private Equity. Standard Bank was the exclusive financial advisor for the Shanduka Group.

“This partnership will allow us to jointly explore future investment opportunities in South Africa and other parts of Africa,” Ramaphosa said in the statement regarding the recent transaction.

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