!"# $ Presented by Hon. Richard Court AC, Chairman, GRD Minproc Limited Tuesday 22 September 2009
Bullet 1 - Bullet 2 Bullet 3 2
% Brazil and Australia have much in common Both in the Southern Hemisphere. Both rich in minerals. Both have benefited from the post World War II economic miracles of Japan, Korea, Taiwan and now China and India. Both countries have discovered significant petroleum/gas reserves in recent times. The main difference between Brazil and Australia is the population size. Australia is a large country with only 22 million people. Brazil is slightly larger but with close to 200 million people. 3
& Main driver of resource exports with the exception of coal. Fifty years ago export of iron ore from Australia was banned. Federal Government wanted to protect what was thought to have been limited reserves for the domestic steel industry. Today Western Australia exports in excess of 350 million tonnes per year of iron ore and supplies 40% of China s iron ore imports. Fifty years ago Western Australia was a weak mendicant State. On the back of resource development is the major driver of the Australian economy. With only 10% of the Australian population produces 40% of the Nations export income. Western Australia accounts for 65% of Australia s exports to China. 4
1969 5
2009 6
'() *+,-.--/0 (12 3!*+,-.--/0 350 Source: DMP and ABARE 300 Million Tonnes Milhões de Toneladas 250 200 150 100 50 1960 65 70 75 80 85 90 95 2000 05 7
'() *+,-.--40 (12 3!*+,-.--40 350 Source: USGS 300 Million Tonnes Milhões de Toneladas 250 200 150 100 50 1960 65 70 75 80 85 90 95 2000 05 8
56() *+,-.--40 (12152*+,-.--40 500 Source: USGS 400 Million Tonnes Milhões de Toneladas 300 200 150 100 50 1960 65 70 75 80 85 90 95 2000 05 9
766() *+,-.--40 (12187 *+,-.--40 500 Source: USGS 400 Million Tonnes Milhões de Toneladas 300 200 150 100 50 1960 65 70 75 80 85 90 95 2000 05 10
6() *+,-.--40 (121 *+,-.--40 500 Source: USGS 400 Million Tonnes Milhões de Toneladas 300 200 150 100 50 1960 65 70 75 80 85 90 95 2000 05 11
() *+,-.--4%.--/0 (12 9 *+,-.--4%.--/0 20 Source: DMP and ABARE (Australia), USGS (Brazil) Million Tonnes Milhões de Toneladas 15 10 5 Brazil 1960 65 70 75 80 85 90 95 2000 05 12
7 () *+:;.--/0 (127< *+:;.--/0 70 Source: www.uranium1.com Thousand Tonnes Mil Toneladas 60 50 40 30 20 Reactor Requirements Requisitos Reatores 10 1945 50 55 60 65 70 75 80 85 90 95 2000 05 13
!)6)) What are the main factors for that success in Western Australia? How could such a relatively small population (only 2 million people in the State) produce such great mineral wealth? What mistakes have been made? What failures have there been in the process that will guide future strategies? 14
(!)6)) Government involvement Lack of Government interference. Role of the State - To develop Agreement Acts giving companies access to large mineral deposits, clearly defining the responsibilities of the Government and Private Sector. Mineral deposits development Key infrastructure, railways, ports, etc developed by the private industry. Taxation - States have set up realistic royalty regimes and work cooperatively with companies. Federal taxation regimes have also been realistic encouraging long term investments. Exploration Mining laws evolved since 1800 s when gold was the main target. Customer Relations Development of close commercial and social alliances. Industrial Relations/Labour Market Until 1990 s highly centralized Industrial Relations system. In 1990 s changes with new Industrial Relations laws, deregulating the labour market. 15
# )=)) Value adding Initial iron ore Agreements had specific value adding obligations ; an area of disappointment. To meet obligations some companies built pellet plants dependent on oil prior to the massive gas reserves being discovered. Plants had to close. Regional communities Lack of investment in developing strong regional communities near major projects. Concept of Fly In Fly Out. Aboriginal people Involvement of aboriginal people in mining developments had a poor start. Native title legislation. 16
Bullet 1 - Bullet 2 Bullet 3 17
$ ) > )? China s Direct Investment in Africa (2007) Investimento Direto da China na África (2007) 0 200 400 600 800 Algeria 393.89 Sudan 574.85 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 South Africa Nigeria Sudan Zambia Algeria Niger Egypt Mauritius Tanzania Ethiopia Congo DR Angola Madagascar Libya Guinea Congo Zimbabwe Gabon Kenya Eq. Guinea Milhões de US$ USD Million Nigeria 630.32 Zambia 429.36 South Africa 702.37 Source: Chinese Statistical Bulletin of OFDI; TBA Analysis 18
$ ) > ) China s Total Foreign Investment in Africa (2003-2007) Investimento Estrangeiro Total da China na África (2003-2007) 1,800 1,500 US$ Million Milhões de US$ 1,200 900 600 300 2003 04 05 06 07 Source: Chinese Statistical Bulletin of OFDI; TBA Analysis 19