By Samantha James
September 3, 2015
PREMIER Colin Barnett told more than 1000 delegates at the thirteenth annual Africa Down Under conference in Perth that he believed markets had bottomed and a recovery could be expected next year.
Opening the conference, which hosted ministers and delegates from across Africa, Mr Barnett told delegates to keep faith in the next round of development. He called commentators predicting the end of the mining boom “naive and wrong.”
“If China has slowed from 12 per cent growth to 7 per cent, that will do me and I think that will do you too,” he said.
“As soon as prices dip back to more normal levels … suddenly the industry seems to be discarded as though the boom days are over. This is naive and wrong; the mining industry is a dominant industry [in WA], worth $114 billion.
“The next 12 months will be a period of some risk, some things will work out, some won’t.
“But I would expect when we are back for the next Africa Down Under, there will be a lot more enthusiasm and we will start to see growth in demand and growing confidence throughout the industry.”
The conference, served as a setting to further a memorandum of understanding (MoU) signed between WA and the Common Market for Eastern & Southern Africa (COMESA) member countries in 2014.
Mines and petroleum minister Bill Marmion said that, under the MoU, WA would provide assistance in developing regulations and legislation, through a measure aimed at promoting co-operation in the fields of agriculture, mineral and petroleum resources, vocational education and capacity building.
“This will help ensure the benefits from resources development in COMESA countries flow through to their communities, and also help provide opportunities for the WA resources sector and service providers,” Mr Marmion said.
COMESA comprises Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
COMESA secretary general Sindiso Ngwenya said the Africa Down Under conference was important in “strengthen[ing] partnerships focussed on how minerals and other natural resources should be exploited for broader socio-economic development in COMESA, Africa as a whole and in WA”.
“Australia has become a key player in financing minerals exploration and mine development the world over and thus Africa looks at Africa Down Under as an opportunity to showcase geological potential and the prospectivity for certain minerals in its diverse geology,” he said.
Around 120 WA companies were operating in more than 420 projects across 30 African nations as of August 2015, accounting for two-thirds of the Australian mining companies operating in Africa; however investment there had stalled.
Mr Ngwenya in said that although a joint working group had been implementing the MoU since January 2014, a “lack of finance to support key activities” had resulted in some difficulties.
“The current retreat in mineral prices or the dissipation of the commodity super-cycle is expected to result in a further decline in global mineral exploration spending, mainly grassroots, by an estimated 10 to 15 per cent in 2015 alone,” Mr Ngwengya said.
“This anticipated decline will be the third consecutive annual fall and will put global spending at its lowest level since 2009.
“However, expert opinion asserts that mineral prices will rebound during the latter part of the year and thus restore confidence.
“The experience of Australia in using its resource base as a springboard for socio-economic transformation continues to draw African countries to Australia to seek optimal ways to exploit the continent’s vast mineral resources to underpin development.”
Mr Barnett said that Africa represented an expanding market for WA goods and services.
“With our long history of responsible resources development, WA is well placed to assist African countries to develop transparent, stable and mutually beneficial regulations for their resources sector,” he said.
Australia’s mining industry was also tipped to play a key role in helping Africa meet the United Nations’ Sustainable Development Goals (SDGs) launched in New York in late September, according to the Australia-Africa Mining Industry Group (AAMIG).
AAMIG chief executive Trish O’Reilly said Australian mining companies’ track record of investment in Africa meant the industry could play a lead role in meeting the SDGs, which would assist investment and economic development across Africa in the next 15 years.
“In-ground discoveries made by Australian companies in Africa amount to $687 billion, and it is this mineral wealth that Australia can help unlock and translate into socio-economic growth, benefitting Africa’s people,” she said.
“The predicted investment by Australian companies in mining, and the resulting jobs growth, training, tax revenue and infrastructure will be vital in efforts to permanently lift millions of people out of poverty.
“In this sense, the Australian resources industry’s future investment in Africa is a potential game changer.”