Ministers, diplomats, delegates, friends of Australia, friends of Africa and African countries. Welcome to day three of Africa Down Under in my home town of Perth, the beautiful city here on the west coast of Australia, Australia’s Indian Ocean capital, our mining and energy capital.
Ladies and gentlemen, the future is bright for mining - the resources and energy sector will continue to be central to global prosperity, and in fact will continue to underpin economic growth.
The world’s population is growing and living standards across the globe are rising. Nowhere is this more obvious than in the region in which we live. The OECD estimates that the Asian middle class, from India through to China, will surge to more than 3 billion people by 2030. This is increasing the worldwide reliance on resources and there is no doubt that renewable energy alone cannot cater to this demand.
For example, many of the world’s fastest growing economies rely heavily on coal to generate electricity. Low emissions coal technologies are being developed to make coal more environmentally sustainable. In Japan, Denmark and Germany, ultra-supercritical technology - that potentially cuts greenhouse gas emissions by up to 50 per cent - is being used at coal fired power stations.
This is not to ignore the fact that renewable energy is becoming more competitive. However it is clear that mining will continue to provide the vast bulk of the world energy for decades, at least.
Australia and Africa are both well placed to benefit from these trends and the opportunities for us to work together are growing fast.
Today, the relationship between Australia and Africa has matured well beyond aid and development. Now flows of trade and investment in a wide variety of sectors underpin a burgeoning economic relationship.
At its peak in 2012 Australian aid to Africa amounted to 0.7 of the total aid budget. For historic and geographic reasons Australia’s focus lies in our region, the Pacific and South East Asia. But we estimate that this year Australia’s aid program, via the Africa program, the NGO program, regional and global programs, multilateral organisations will total over $320 million. In addition, Australia’s funding contribution for United Nations peacekeeping operations in Africa is over $160 million. So close to half a billion is being provided to Africa to support Africa’s development and security.
We recognise that Africa continues to face significant challenges – conflict continues to wreak havoc in some communities and millions of people remain in poverty – but security, economic activity and governance in the great bulk of countries has improved in recent years.
Africa is undoubtedly a continent on the rise. It is home to many of the world’s fastest growing economies and a genuine middle class is emerging. As African nations urbanise and economies take off, there’s a belt of prosperity across the middle of the continent that is driving economic growth.
We all know Africa’s big cities – Johannesburg, Nairobi but soon, expect to hear more about Abidjan, Ibadan, Kano, Addis Ababa and Kinshasa, all of which are projected to have populations of 10 million or more in the years ahead. In fact, Kinshasa, the capital of DRC, is expected to overtake Paris by 2020 as the largest French-speaking city in the world.
Africa’s demographics also work in its favour – 50 per cent of Africa’s 1.2 billion people are aged 19 and under; 60 per cent are under 25. These are all good reasons to be optimistic about trade and investment opportunities.
Australia’s investment in Africa is thriving. In 2014, total trade with African countries was $10 billion, up from $7 billion in 2009. It is the mining industry that is leading the way.
Africa is home to 30 per cent of the world’s mineral resources – mining companies have been scaling up their investments in Africa for many years now.
There are more than 200 Australian Stock Exchange-listed companies with mining and exploration interests in Africa. These companies are involved in some 770 projects across 35 countries. The total value of this investment is in the order of tens of billions of dollars.
Africa is now firmly embedded in the global portfolio of many of Australia’s internationally-focused mining companies. An exciting emerging opportunity for both Africa and Australia relates to the mining equipment, technology and services sector. Australia is a world leader in mining services and can bring much-needed expertise to local operations overseas. Many Australian companies in this sector identify sub-Saharan Africa as their top export destination, which will help Africans make the most of their natural resources.
The Australian Government is working to ensure that these partnerships continue to prosper in the years ahead, in large part because of the contribution that Australian mining companies are making to African economies.
Australian companies have a global reputation for fairness and transparency, and adopting best practice policies on worker safety and environmental protection. Australian mining investment is an important source of capital in many countries. Importantly, Australian investment flows to Africa vastly outweigh any aid flows that could possibly be envisaged.
Business is vital for the health of our societies – it creates jobs and delivers economic growth. The Coalition Government is doing what we can to support business, trade, investment and growth and to build prosperity in Australia, in our region and globally. It’s an approach we call ‘economic diplomacy’ and it’s changing the way our government engages with business.
As Foreign Minister, I am creating new partnerships with the private sector to drive prosperity in partner countries. Given the private sector globally generates 90 per cent of jobs, 80 per cent of capital flows, 60 per cent of GDP and funds over 60 per cent of investment in developing countries this is the smart thing to do. A strong private sector delivers higher growth, more jobs and will help reduce poverty.
Early this week I addressed 170 business leaders in Sydney from across Australia and our region to call for greater collaboration between Government and the private sector on development cooperation.
I launched a new $5 million Business Partnership Initiative to bring the private sector in as a core partner in Australia’s aid program. A new $1 million partnership with the Global Reporting Initiative, that’s the world’s pre-eminent sustainability reporting forum, was also established to help assist businesses in their efforts to improve reporting on social and environmental issues.
I also announced a partnership with the Global Compact, the world’s largest corporate sustainability initiative through which businesses commit to principles in the areas of human rights, labour rights, environmental standards and corruption prevention. The Australian Government will continue to support industry to seek profit with a purpose.
In Africa, we are strengthening trade, business and investment partnerships to build a brighter future. We have established ties to the African Union, and the region’s other influential bodies – the Economic Community of West African States, the Southern African Development Community, the League of Arab States and the Organisation of the Islamic Conference.
I was pleased to announce, yesterday in fact, the reappointment of Mr Ahmed Fahour as Australia’s Special envoy to the Organisation of Islamic Cooperation. The appointment of Mr Fahour, an eminent Australian businessman, reflects Australia’s firm commitment to our relationship with the OIC and its members, including countries from across the Indo-Pacific and the Middle East.
For the last two years Australia has chaired the Indian Ocean Rim Association which includes eight African countries within the 20 member nations. During this time we have advanced inter-regional cooperation on trade and investment, maritime safety and security, women’s economic empowerment, and driving the blue economy.
This weekend we are hosting a dialogue for IORA members here in Perth to focus on maritime transnational crime, regional defence cooperation, illegal fishing and disaster response. So there are many ways that Australia interacts with Africa and individual African countries.
Today, I am also pleased to announce the creation of a new body, the Advisory Group on Australia-Africa Relations, which will be chaired by the CEO of Woodside, Peter Coleman. This group of eminent representatives from business, civil society and the public sector will inform the Australian Government’s thinking and policies on Africa. The expansion of trade and investment links between Australia and Africa will continue to be underpinned by our investment in mining.
Australia’s aid program in Africa has been reshaped in line with our belief that the best way to help countries grow their economies and improve living standards is to focus on prosperity. Mining has made, and will continue to make, a substantial contribution to economic development and poverty alleviation in Africa. A well-managed mining sector can help drive sustainable growth and poverty reduction.
In 2013, global consulting firm McKinsey forecast that 540 million people globally in countries with potential mining and energy resources could be lifted out of poverty by the effective development and use of extractive reserves.
In recent years, Australia’s mining-related development assistance in Africa has achieved some significant results. We have awarded more than 450 extractives-related Masters and post-graduate short courses to African students in the last few years since 2011. The mining industry in Africa will remain a target sector for our flagship Australia Awards scholarship program. Australia is working to help bridge the gap between what industry needs and what training and educational providers deliver.
Over the past year, more than 900 officials from the region have participated in capacity building and training activities. Hundreds of African officials have been exposed to Australian regulatory frameworks, systems, mining operations and processes through mining governance study tours in both Australia and Africa.
Australia is supporting partnerships between communities, companies, governments and local businesses to mitigate the risks and maximise the development and livelihood opportunities from mining.
We also believe in improving the business enabling environment, which is critical to attract the right kind of quality investment that Africa needs to grow its economies. We are providing assistance to tighten up fiscal regimes and make more transparent the awarding of mining licenses. We are also focused on helping country’s bridge the infrastructure gap.
Thanks to Australian support, Columbia University’s Center on Sustainable Development last year released a Framework to help facilitate shared use of mining-related infrastructure, like rail, ports, power, water, internet and telecommunications. Australia, and in particular our world-leading mining sector, has the expertise to help African countries in these areas. Infrastructure, skills, these are all crucial capabilities for Africa to develop further so it can continue to attract foreign investment and grow its economies.
Finally, at the conclusion of the work of the International Mining for Development Centre, Australia is designing a brand new centre through which we can provide mining-related assistance to developing countries that need a helping hand. We know there is great demand from resource-rich developing countries to leverage our mining expertise.
I want this new centre to help developing countries get the most from their economic resources. I want to engage industry, government and NGOs so the centre can offer a broad range of services. It should be capable of accessing the very best expertise that Australia has to offer from wherever it exists. Clearly, I would like the centre to be commercially viable in the longer term so the private sector will be pivotal to its success. I am confident that this will give Australia another avenue to share our mining expertise with our international partners.
Ladies and gentlemen, Australia and Africa do have a bright future together. Africa has an abundance of human and natural resources and its economies are poised to continue their rapid growth in the years ahead. Our mining companies have been awake to the growing opportunities in Africa for a long time. Africa Down Under provides an excellent opportunity for us to share ideas and expertise on mining issues. Together, we can explore solutions to some of the industry’s more significant challenges.
The Australian Government is committed to making sure our partnership with the countries of Africa continues to grow and that we are providing the kind of help that supports your aspirations for peace and prosperity. I thank you for joining us at this conference today.
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