Small-scale resources projects in Western Australia should be able to attract majority or even 100 per cent foreign shareholding without facing bureaucratic challenges, the Premier of Western Australia Colin Barnett said today.
He told delegates at the In The Zone conference at The University of Western Australia that while Australia had a right and a responsibility to look after national interests, it was important not ‘to sweat the small stuff'.
"It would be good if foreign investment was kept to a fairly small, stable level in big projects, similar to the model of Japanese investment in the 1960s. But do we really mind or care if China, India or Japan looked to buy a major or 100 per cent interest in a small low-grade deposit in the state's mid-west? I suggest not," he said.
Mr Barnett said Australia's Asian trading partners required clarification of foreign investment review processes. He said the past two to three years had seen some confusion about investment, particularly in China as the pace of development increased.
Mr Barnett highlighted the importance of Western Australia as a key supplier to countries ‘in the zone', with the state accounting for 33 per cent of Australian exports to Japan, 66 per cent to China and 42 per cent to India.
He said the Global Financial Crisis had served to draw Western Australia even closer to its trading partners, particularly with the shortage of credit from traditional sources such as the US and Europe.
"For the next five years, government-to-government relations are going to be more important than people realise. The rise of modern Asia gives Western Australia an extraordinary ride over the next 20 years. It won't always be a smooth and easy ride, but it's a ride we have to take," he said.
Speaking alongside Premier Barnett, the Chief Executive of Rio Tinto, Tom Albanese, called for proper ground rules for resources development.
"Sensible development relies on proper ground rules, widely known and well accepted, covering everything from project approvals, environment protection standards, local community participation and appropriate sharing of risks associated with any development," he said.
"Mining, like politics, is the art of the possible. Without the proper political support provided by the foresight of governments in the region, the continuing response we have seen to strong demand would not have been possible."
Mr Albanese said leveraging the maximum value from assets would be critical to ensuring success. "A key feature of this will be the proposed production joint venture with BHP Billiton. The joint venture will bring together the Western Australian iron ore assets of both companies, while keeping marketing arrangements totally separate within each company," he said.
He said Rio Tinto was strongly committed to Western Australia and its role in the zone, and highlighted the company's recently-opened Operations Centre in Perth as an example of a local cutting-edge initiative. The integrated planning and control centre, near Perth airport, used powerful computers and global positioning systems to direct operations at mines and infrastructure up to 1,500 kilometres away.
Mr Albanese said Australia had the opportunity to position itself uniquely for a mutually rewarding relationship that could define the next few decades.
He said that by forging a deeper engagement with China, enduring export markets could be established at a time when alternative markets for some products were few.
"Because China has huge commodity needs for the future, it will buy and develop assets that are in competition with Australia if we fail to attract and encourage their investment," Mr Albanese said.
He said Rio Tinto had a strong trading history with China and was one of the first western companies to develop closer relationships there. "Rio Tinto's lengthy trading history with China underpins our long term confidence in that market, and provides us with the impetus to maintain our expansion plans in the Pilbara and elsewhere."
Mr Albanese said that despite the lack of finalisation of the proposed transaction with China's leading resources group, Chinalco, earlier this year, Rio Tinto was still keen to work with Chinalco on future projects of mutual benefit.
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