Australian mining sees light on the Dark Continent
A BIG STORY: Hillary Clinton’s recent tour of Africa may well been seen as a consequential step for the future of Australian mining on the resources-rich continent.
For, while the story of Chinese mining ambitions in Africa is well-known, it is becoming apparent that Australia also has an important role to play.
The United States is becoming increasingly concerned over China’s growing interest in Africa, which is home to seven of the world’s 10 fastest-growing economies, thanks partly to massive injections of Chinese cash, such as the $20 billion in loans just announced by Chinese President Hu Jintao.
During the US Secretary of State’s 11-day swing around the continent, one of her major themes was the nature of foreign investment.
Without mentioning China by name, Clinton urged African leaders to carefully consider foreign-sponsored projects.
China’s involvement in Africa is usually characterised as having devastating consequences for the populations of impoverished countries in terms of harsh labour conditions, corruption, human rights abuses and economic exploitation.
Certainly Chinese investment often comes at a cost.
African resources are dug out of the ground and shipped to China for processing and value-addition.
Infrastructure projects, which sometimes collapse or need to be closed within a few years, often employ entirely Chinese workforces.
And loans are nearly always tied – meaning the money can only be spent with Chinese companies.
Zambia has been a particular flashpoint in Sino-African relations, with a Chinese mine manager killed last week by workers in a riot over labour conditions that have allegedly led to dozens of deaths through poor safety, beatings, summary dismissals, non-payment of wages and, in at least one instance, mine security staff firing into crowds of unruly employees.
Australia’s approach, on the other hand, has been markedly understated and so far reasonably successful.
At the African Union Summit, held in Addis Ababa last month, the Australian Government was singled out for praise in helping African countries with improvement to their mining governance.
The Federal Government is engaging with their African counterparts to assist with transparent mining regulations, contract reviews and – ironically, perhaps – mineral taxation policies.
According to the ABC News, South Africa’s African National Congress party sent a delegation to Australia to study the Mineral Resources Rent Tax.
And last April the Prime Minister’s newly-appointed special envoy to Africa, Joanna Hewitt, signed an agreement with the Liberian government to provide $700,000 to help set up a natural resource taxation unit.
Her visit received no media attention in Australia, but Liberian officials appreciated Australia’s support.
There are currently more than 220 ASX-listed exploration and mining companies that have a combined market capitalisation in excess of $250 billion with interests in Africa, according to the Australia-Africa Mining Industry Group (AAMIG), which is a Federal government-assisted body.
With more than $50 billion so far invested in African mining and an understated diplomatic approach to providing assistance, it could be that Australia emerges as the quiet achiever over coming decades.
By Steven Jones of Corporate Zest
steve@corporatezest.com.au
This article first is published courtesy of Symposium and Corporate Zest
http://www.symposium.net.au/blog.html
