Speech - Signing Ceremony Extension Hill Iron Ore Project
Tuesday 26 October 2010, Chongqing
Mayor Huang, distinguished guests, ladies and gentlemen.
It gives me great pleasure to attend today’s signing ceremony for CCMD’s investment in Asia Iron, owner of the Extension Hill Iron Ore Project in Western Australia. I warmly congratulate the parties.
This major investment, the largest overseas investment by a Chongqing company, will help further cement the Australia-China relationship in the iron ore and steel sector.
I was in the Embassy in the mid 1980s when China made its first ever investment in Australia. That was in the Mount Channar mine in Western Australia. It was China’s biggest overseas investment at the time.
Iron ore is a critical component of bilateral trade between our two countries, accounting for over half of Australia’s merchandise exports to China.
Australia has long been a stable, competitive supplier of iron ore to China.
We are committed to upholding this position over the long-term, and we are confident in our ability to provide the resources needed to help power China’s economy in the future.
To that end, the Australian Government strongly supports the development of new, alternative sources of iron ore such as the Extension Hill Iron Ore Project.
This includes through investing in the infrastructure needed to service the mining industry and support new mining regions, such as the mid-west region of Western Australia.
It also includes welcoming foreign investment in our iron ore industry.
Australia welcomes and encourages foreign direct investment because of the benefits that it provides our economy.
Australia has historically relied on significant international finance to open new investment opportunities and to develop our natural endowments.
In recent years, there has been a substantial increase in Chinese investment in the Australia.
In 2009 alone, Chinese investment in Australia grew 151 percent to reach A$9.2 billion. Much of this investment was undertaken by Chinese state-owned enterprises in the resources sector.
Chinese investment is particularly important in the development of Australia’s magnetite iron ore resources. Today’s signing ceremony is another important example of this trend.
The Chinese steel sector has long experience in the use of magnetite ores, but until Chinese enterprises showed an interest in this type of material its development potential was not being considered in Australia.
Chinese investment and technology are the driving force behind the development of these resources.
These projects have involved the introduction of process technologies little used in Australia, and a high level of collaboration between Australian and Chinese mining and metallurgical engineers.
This has led to Australia becoming a significant market for Chinese mining, processing, and associated infrastructure equipment.
The market for these goods is worth billions of dollars in total, and is growing strongly.
I have no doubt the Extension Hill Project will also source a significant amount of equipment from China, bringing further benefits to China’s heavy industry and engineering sector, and contributing to the shared value chain between our two economies.
In conclusion, I would like to congratulate all the parties involved in today’s signing ceremony.
The cooperation between the companies present here today represents another milestone in the Australia-China economic relationship, and I wish you every success in the future.