REGULATORY JURISDICTIONS
REGULATORY JURISDICTIONS Recently we’ve seen President Ramaphosa’s announcements and sentiments to support the agreement and with us being one of the important economies on this continent, the support by our government is key. To actually materialise the benefits of that agreement for other African states is key to unlocking the value that the agreement is intended to unlock. Intra-African trade between African nations compared to comparative figures for Europe and Asia is at a much lower level. Yet we have a wealth of resources on this continent, and skills and knowledge. Would you welcome some sort of a flattening out of the legal framework across the continent? Absolutely yes, to assist future Africa trade. Would the Secretariat of the AU be involved? The African Union has been promoting the agreement. The true test of whether that agreement actually works across the continent is going to come from the commitments of the various governments to actually apply the principles and the intent and the spirit behind it. What that means is that you’ve got to get some regulatory certainty across jurisdictions which is not easy. We are not one Africa: we have different languages, we have different pasts, we have different reasons for why certain legislation exists. But at least there is a SADC and the other regional blocks. There are regional blocks but some of the success of this agreement is going to depend on us being able to navigate some of those differences in legislation between ourselves. The success of it is going to depend on being able to create mechanisms for dispute resolution between different states. Then it’s the commitment to make it work, which might come at a cost to your own fiscus. Does that mean you can’t have campaigns to Buy Local? Exactly. It comes down to your allowing goods to come into your country and levying very little import tax. Goods leaving your country would be levied very little export tax. All of these things have a fiscus implication. Where you have the developing needs of a country to weigh that against a lower revenue we’re going to have to have very mature governments to be able to adopt that and embrace that. And you are not just talking from a strictly legal point of view, you’re talking about trade and the whole scenario. As a mergers and acquisition lawyer there are the parameters of the legal framework that we follow, but actually what drives a lot of what we do is being able to negotiate and broker commercial arrangements that make sense to both parties. Thika Law Courts forms part of the Kenyan judicial system. Aligning the continent’s legal practices will help trade. Biography Deepa Vallabh has over 22 years’ experience in corporate and commercial practice and has in-depth knowledge in a number of legal areas, including mergers and acquisitions (both domestic and cross-border), capital market transactions, BEE transactions, corporate reorganisations and restructurings with a particular focus on cross-border M&A transactions into Africa. Deepa has experience in a variety of sectors which includes mining and resources, technology, telecommunications, media and communications, FMCG, insurance, agriculture, manufacturing and private equity. Deepa Vallabh, partner at Hogan Lovells. 10
MINING INVESTMENT SIMANDOU HAS BEEN SIGNED OFF OThe legal complexities of Africa’s biggest mining and infrastructure project have been finalised in a massive deal involving China, the Republic of Guinea and several consortiums. On 30 July 2024, Hogan Lovells announced in Johannesburg that the huge deal on which the law firm was advising its Chinese steelmaking client had been closed. After years of strenuous negotiations and a pressing work schedule, the codevelopment of the landmark Simandou mining and infrastructure project in the Republic of Guinea is finally a reality. Global law firm Hogan Lovells has advised its longstanding client, the world’s largest steelmaker, China Baowu Steel Group (Baowu), on all aspects of its investment in the mining and infrastructure the world. components of the project. The closing of Baowu’s investment occurred on 19 June 2024, followed by the closing of Simfer’s investment on 17 July 2024. Simandou is the world’s largest undeveloped, high-grade iron ore reserve. The Simandou project stands as the largest mining and infrastructure project in and Poland. Africa and in the world with a total required investment of reportedly -billion to -billion. It encompasses four mining blocks, two ports and a railway line of more than 600km railway line crossing the entire country connecting the mines to the ports. The multi-user railway infrastructure is expected to provide connectivity to passengers, small businesses and other industrial users across the country and will have a transformative impact on the Guinean economy. The owners of the mines and the co-developers of the infrastructure are, on the one hand, a joint venture between Baowu and Winning Consortium Simandou (WCS, a consortium comprising Asian investors including Winning International Group and Shandong Weiqiao Pioneering Group) and, on the other hand, Simfer (a joint venture between mining giant Rio Tinto and a consortium of Chinese investors led by Chinalco, the world’s largest aluminium producer). As a strategic project between China and the Republic of Guinea, Simandou is planned to produce 120-million tons of high-grade iron ore annually. Its successful development will have a transformative impact on the Guinean economy and its people and bring green solutions to the steel-making industry in China and around To assist Baowu on this deal, Hogan Lovells have deployed a global crosspractice and cross-office team comprising dozens of lawyers led by Liang Xu (M&A partner, Beijing) from the firm’s Beijing, Shanghai, Hong Kong, Singapore, London, Paris and Washington DC offices, supported also by colleagues from Germany Liang Xu commented: “We are very proud to have supported Baowu in achieving the closing of its investment in the Simandou project, which represents a historical achievement for the Simandou project and the Republic of Guinea. Our cross-practice, cross-office team looks forward to continuing supporting Baowu and its partners to complete the construction of the project and put it into operation. We feel immensely grateful to have had the opportunity to work on this transformative project.” This deal, and the composition of the Hogan Lovells team, is a testament to the firm’s ability to work seamlessly as a single integrated team across offices and practice groups. It also fits within the firm’s strategy and vision in China and Africa, with the mining and infrastructure sectors at its core. In 2023, Winning Consortium Simandou (WCS) and Rio Tinto Simfer signed investment agreements regarding the Trans-Guinean railway and related port infrastructure. PHOTO: Rio Tinto 11
