The Chairman of one of the world's largest steel producers has warned of the serious implications of oligopolies in the resources industry.
Mr Akio Mimura, Chairman of Nippon Steel, today told the In the Zone conference at The University of Western Australia that international reorganisation and integration was a feature of the global economy, including the steel industry.
"Corporate integration provides the advantages of greater efficiency and profitability on a microscopic level of individual enterprises. However, if taken too far, integration might trigger the development of oligopolies, which have a negative impact on the market mechanism; becoming an impediment to the macro-level economic growth," he said.
"Many of the global resource industries have already long reached the oligopolistic stages. It is vital to ensure that self restraint is exercised by resource companies and that the monitoring and regulatory responsibilities are taken on by the governments of the relevant countries."
Mr Mimura listed as a grave risk in the resource industry the potential for oligopolies to "siphon off the world's wealth", using the term "resource imperialism" to describe the threat.
"I am a firm believer in the market economy and place my trust in the fairness of the redistribution of wealth through the market mechanism." He called for relevant authorities to maintain an open and competitive marketplace and crack down on potential oligopolies across all industries.
Mr Mimura said Japan's relationship with Australia was built on a shared history over the past 50 years, and a common commitment to freedom and democracy.
"We have a long-term, stable relationship and that is through the combined efforts of the public and private sectors," he said, adding that the relationship went beyond a trading arrangement.
Mr Mimura said the past decade had seen enormous growth imports and exports between the two countries, with iron ore and coal accounting for half of the total Australian exports to Japan, and the export of steel-related products from Japan increasing.
Sir Rod Eddington, Non-Executive Chairman of JP Morgan Australia and New Zealand, said it was important to recognise that a lot of Australia's current prosperity stemmed from a successful economic relationship with Japan.
"Japan is still our largest export market. In terms of two-way trade, Japan is also still number one, although neck and neck with China," he said.
"But it is not a question of China or Japan; it is a case of China and Japan," Sir Rod said.
IN THE ZONE is a major public policy conference initiated by The University of Western Australia positioning Western Australia as a thought leader within the time zone it shares with 60 per cent of the world's population and the nations which promise the greatest economic growth for the 21st century.
2009 marks the inaugural IN THE ZONE Conference. This will become a biennial event and a strategic meeting point for the Australian and wider regional community to engage in dialogue about the zone we inhabit and to deepen the policy, trade and investment relationships.
Information about In the Zone, including the conference program: http://www.zone.uwa.edu.au
NB: MEDIA REPRESENTATIVES MUST REGISTER TO COVER THE CONFERENCE. GO TO: http://www.zone.uwa.edu.au/news/media_registration