Kevin Rudd is Australian Minister for Foreign Affairs
AFRICA is starting to surprise us. We have known for some time that the continent is changing. After the “lost decade” of the 1980s, many African governments have been democratising and liberalising their economies.
But when we find that, today, six of the 10 fastest growing economies in the world are from Africa, it’s worth taking a much closer look.
When we do, we see not only Africa’s growth, but the remarkable transformation of Australian business in Africa, particularly in the mining sector. Rewind 20 years, and the involvement of Australian resource companies in Africa was almost non-existent.
Now, about 40 per cent of all Australian overseas mining projects are in Africa. At least 230 Australian companies are active in the resource sector on the African continent. Between them, they are pursuing 650 individual projects in 42 countries. Their total investment is estimated at a whopping $24 billion.
And that investment figure is growing fast. About 20 companies and 100 projects have been added just since the beginning of 2011. And Intierra Resource Intelligence estimates that the capital expenditure for new projects in the pipeline is about $23bn.
Part of the reason for this growth is because Africa is where the resources are: 30 per cent of global mining resources are in Africa (while only 5 per cent of global exploration expenditure takes place there).
But in large part, it is because of the skills and business expertise of Australian miners. This is an industry where Australians are truly world class.
Our global miners are can-do people, who make things happen in operating environments that are often difficult. They bring hi-tech equipment together with a world-class level of industry-specific skill.
Character also matters. Australians’ instinctive egalitarianism and sense of a fair go works well in Africa. In a continent where the colonial experience still rankles, Australians’ fundamental values are a comparative advantage.
And Africans are starting to see the benefits of the way our industry works. Through decades of experience, Australian companies have developed high standards for labour relations, community development and environmental management. Africans are seeing that, in the mining sector, short cuts don’t work. The Australian way of doing things is different to others, and more likely to be effective in the long term.
West Australians have been at the forefront of the development of this industry.
Many of the Australian businesses that are leading the effort in Africa are based in the west. Companies such as Paladin, Resolute Resources, Genalysis, Lycopodium and Equinox. In fact, three quarters of the Australian mining and oil and gas companies operating in Africa are from the west, and 70 per cent of the top 10 growing companies in the west have African assets.
For the rest of this column, please go to the Australian website: http://www.theaustralian.com.au/national-affairs/opinion/africa-provides-a-rich-seam-for-resources-sector/story-e6frgd0x-1226174509918