Next week Perth in Western Australia is hosting the first Australia-Africa Week, starting on 5 September 2016. At least twelve mining ministers from Africa, including Deputy Minister for Mines and Mining Development, Hon. Fred Moyo, are taking part in the events throughout the week. They will be joined by a substantial group of representatives of Australia’s mining and extractive industry: company executives; investors; financiers; suppliers; and mining service providers.
Australia-Africa Week is built around the nucleus of Africa Down Under conference and brings together a range of events – including the Australia-Africa Universities Network Forum, the Africa Oil, Energy and Gas Conference, and the Australia-Africa Technology and Infrastructure Conference.
The level of participation at the Australia-Africa Week is recognition of the substantive economic engagement between Australia and many of the countries of Africa. For instance, in 2015, two-way trade in goods and services between Australia and Africa totalled AUD $7.6 billion, AUD $2.1 billion of that was in services.
Australian investment in the African extractives industry is even more substantial. Australian companies have an estimated $30 billion and rising invested in extractives projects in Africa. There are more than 200 Australian companies with about 700 projects in 35 countries. Much of this is in exploration activity – especially in gold. As such, the future is promising, especially as we come out of a period of particularly low commodity prices.
Africa is the largest investment market for Australian extractives companies outside Australia. And while it has not reached the level of investment from some other countries, there are many reasons why Australian companies have an edge over their competitors – and why they should be taken seriously in Africa.
On the surface – or rather, below the surface – Australia and Africa have much in common. We share a rich endowment of natural resources.
The continent of Africa currently produces more than 60 metal and mineral products. And it’s a leader in the export of crude oil and natural gas. Africa has about 30 per cent of the world’s mineral resources. And its share of the world’s diamonds, bauxite, vanadium, manganese, platinum, cobalt, gold and zirconium is even higher.
But despite this natural endowment, Africa accounts for only about 8 per cent of global mineral production. Boosting this production will require considerable foreign investment.
Australia is a large, resource-rich country with a relatively high demand for capital and a relatively small population. This means foreign investment – especially in the extractives sector – has been crucial for our development.
Australia is also a safe, low-risk environment in which to do business. Foreign investment must be carefully managed, but well-managed investment brings many benefits. Australia has a long history of managing foreign investment successfully. So much so that at the end of 2015, the total value of foreign investment in Australia stood at AUD $3 trillion. Of this, AUD $295 billion was investment in our extractives industry.
It is this experience and success that Australian investment can bring to Africa. And the Australian government is doing what it can to assist African countries attract foreign investment. We are making a real and lasting contribution to the development of the extractives industry in Africa.
The Australia Awards scholarship program is focused on three priorities – one of which is governance in the extractives sector. The others are agricultural productivity and public policy – other areas in which Australia has particular expertise.
In the past five years, more than 450 African students have studied extractives-related Masters and post-graduate short courses as part of the wider Australia Awards program.
Hundreds of officials from the continent have participated in capacity-building and training activities, learning about Australia’s regulatory frameworks and mining operations and systems. This program will continue in 2015-16, with more than 400 African students expected to be offered placements.
