Africa is changing as the continent’s markets become more sophisticated and open, especially in the mining sector. And Australian companies are there – trading, investing and providing expertise the continent needs, while creating jobs at home.
In 2015, two-way trade in goods and services between Australia and Africa totalled $7.6 billion, $2.1 billion of that in services. This will continue to grow.
Investing in Africa is a win-win. It builds capacity for both the Australian and African partners, increases efficiency and promotes growth. Australian companies gain experience and investment returns while transferring expertise to Africa.
This connection was on display this month at the Africa Down Under mining conference in Perth, which attracted 1000 delegates. I addressed the conference and engaged Africans and Australians on the continent’s future.
Africa produces more than 60 metal and mineral products. It is a leader in crude oil and natural gas exports. It holds about 30 per cent of the world’s mineral resources overall and even higher shares of diamonds, bauxite, vanadium, manganese, platinum, cobalt, gold and zirconium.
Despite this natural endowment, Africa accounts for only about 8 per cent of global mineral production. Boosting this will require considerable foreign investment.
Africa is already the largest investment market for Australian extractives companies outside Australia with an estimated $30 billion invested. More than 200 Australian companies with about 700 projects are active in 35 countries. Much of this activity is in exploration – especially for gold. The future is promising, especially as we come out of a period of low commodity prices.
Africa wants more investment. Fifteen African delegations, 10 headed by Ministers, spoke of the opportunities in countries ranging from South Africa to Sudan and from Madagascar to Mali. The message was consistent: we are open for business, and welcome Australian investment, products and expertise.
Australian companies have an edge over their competitors and are taken seriously in Africa for good reason. We are a large, resource-rich country with a relatively high demand for capital and a relatively small population. This means foreign investment – especially in the extractives sector – has been crucial for our development.
Australia has a long history of managing foreign investment successfully. At the end of 2015, the total value of foreign investment in Australia stood at $3 trillion. Of this, $295 billion was invested in our extractives industry.
It is this experience and success that Australia can bring to Africa and that African leaders are keen to emulate.
This is why we see Australian companies such as Base Resources Ltd working with Kenya to develop the Kwale Mineral Sands project, a project enthusiastically supported by the impressive Kenyan Minister Dan Kazungu. Likewise, we see Hugh Morgan looking to extract nickel in Nigeria, a development welcomed by the reform-minded Nigerian Minister Dr Kayode Fayemi.
While mining underpins our economic engagement in Africa, it is not the whole picture. The Advisory Group on Australia-Africa Relations, chaired by Woodside’s Peter Coleman, has developed the concept of Australia-Africa Week, combining Africa Down Under with a range of other events.
Education was a key part of Australia-Africa Week. After the extractives sector, education is the most important area of our engagement, with 7,400 African students in Australian institutions in 2014-15. Also this year, 450 African middle managers will benefit from Australia Awards short courses and masters programs in education, agriculture and public policy, helping to develop their nations and our connections.
Other Australia-Africa Week activities this week included the Africa Oil, Energy and Gas Conference and the Africa-Australia Technology + Infrastructure Conference, focused on power.
Australia-Africa Week has reinforced the importance of doing business with Africa for Australia’s future prosperity. Our shared ambition to grow our respective economies and create new jobs will bolster our existing ties. Africa is part of Australia’s future.
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