Australia to fuel China's growing hunger for resources

[Azog 150]

http://www.guardian.co.uk/world/2011...ning-iron-coal

China is leasing huge areas of land in Australia to secure a vital source of mineral resources, the latest sign of its acquisitive approach to the commodities trade.

No longer satisfied with buying iron ore and coal from Australian mining companies, Rio Tinto and BHP Billiton, China is developing its own mining operations, funding a port with a mile-long breakwater jutting into the Indian Ocean.

Citic Pacific's Sino Iron project, in the Pilbara region in the north-west of Australia, illustrates the scale of Beijing's ambitions. China expects to mine at least 2bn tonnes of ore from Sino Iron over the next 25 years. The open cast mine, which will become fully operational this year, promises to be the biggest magnetite iron ore mine in the world. The ore will be processed on site and brought to China on a fleet of purpose-built container ships

In return, Australia, already China's biggest overseas supplier of iron ore, is guaranteed a steady stream of royalties and taxes. The project will also generate thousands of Australian jobs – China will provide finance and management, but not labour.

The deal's biggest winner will be Clive Palmer, the larger-than-life Australian entrepreneur who holds the lease on the mine. His partnership with Citic Pacific is one big reason why he is close to the top of Australia's rich list.

According to Palmer, his mining alliance with the Chinese has barely begun. He claims to control the mining rights to land which contains 160bn tonnes of iron ore – 100 times greater than the entire global output of iron ore last year.

If China's steel mills maintain current level of demand, Palmer is set to become an "Aussie oligarch" to rival Russia's richest resource billionaires, a suggestion to which he responds with a smile. "I hope I'm nicer," he says.

Palmer commutes between Australia and his other home in Beijing by private jet, and boasts of friends at top levels in the Chinese government. Chinese banks seem to trust him. Last year, the Import-Export Bank of China made a $5bn loan to a Palmer-backed Queensland coal project which is supposed to deliver China's power industry 1bn tonnes of coal in the next 30 years.

But China's arrival has raised hackles. After Rio Tinto came close to accepting a major large investment from a the Chinese metals giantcompany Chinalco, Barnaby Joyce, senate leader of the opposition National party, has railed against "Australia's prime sources of wealth being hijacked by a foreign government". Palmer, himself one of the biggest financial supporters of the conservative opposition, dismisses such criticism. He said: "China is the only country willing and able to invest the billions needed to develop these projects. Three hundred million people are moving from the countryside to the cities. The demand is in the People's Republic of China."

But there are good economic reasons for Australians to worry. The windfall from the country's mineral exports has strengthened the Australian dollar to a point where manufacturing bosses say their exports are becoming uncompetitive.

In Perth, Australia's mining capital, there are signs of a bubble economy. Restaurants and farms are struggling to find labour as unskilled workers flock to the mines, where the average annual wage is A$108,000 (£69,000). A truck driver in the mines can earn more than a surgeon.

Meanwhile, Australia's prime minister, Julia Gillard, is committed to imposing a carbon tax and cutting greenhouse gases, goals that sit uneasily with the boom in the energy-intensive mining sector.

Beijing seems to be treading carefully. Sinosteel, another Chinese-owned metals conglomerate, has plans to develop a massive opencast iron ore mine in the Weld range, a ridge of hills 400 miles north-east of Perth. Geologists believe it will yield up to 300m tons of high-grade iron ore over 20 years. But it is a sensitive project. The red-tinged rock is not just rich in iron oxide, it contains archaeological evidence from thousands of years of Aboriginal life.

Colin Hamlett, an elder of the Wajarri people, is leading a campaign to prevent Sinosteel digging up his ancestors' sacred places. His great-grandmother was buried at a site designated as dump for mine tailings. The plan has since been changed. "This land tells the story of my people," Hamlett said. "Our songlines, our camps, our relics, they're all here."

Sinosteel's top executive has assured Hamlett that sites sacred to the Wajarri will remain untouched. Top of his list is an unremarkable-looking hill known as Wilgie Mia. "This is where we get our ochre," Hamlett said. "You see it in paintings hundreds of miles away."

According to archaeologists, Wilgie Mia could be the oldest continuously worked mine in the world, proof that for 10,000 years, indigenous Australians have been digging holes in search of mineral riches. Now the Chinese are on a similar quest.

So what do our Australian members think of this move? A good thing that will bring Australia lots of jobs and investment, or a sign of growing Chinese dominance and power that you would rather do without?

Its very interesting to see the ways in which China is resource grabbing. Couple this with big Chinese investment in Bangladesh, Sri Lanka, Pakistan, Africa and even the USA's 'backyard' with China planning to build deep water ports in Brazil and Peru, as well as plans for a rail line through Colombia as an alternative to the Panama canal and we can see China making very real strides to branch out its economic power and influence and secure those all important resources

[Dubh the dark]

The Chinese certainly are thinking big aren't they. This kind of development of resources is going to massively increase Chinese power in the future. I wonder though will the US respond in kind. The African Command was reactivated not so long ago, as China has begun to make inroads there seeking opportunities. I can see another Cold War developing, all over resources.

[Imperial]

I wonder though will the US respond in kind.

Not very well.

The US as invested a lot of time and money in Australia.

[Finnduil]

Yes, they are expanding to Africa as well and once the Americans shot down their own satellite to show off their capacity but then the Chinese did the same and a major butthurt ensued. It will be interesting to see how the things turn out, even if we all are going to inevitably die in the Resource Wars sometime in the future.

[Menelik_I]

Very interesting thing there, but aren't the Australians, like the South American and African, actually getting something out of these kind of deal ?

If so then why all the butthurt reaction over it ?

I won't be naive to forget that in some case, in African and South America mainly, the governing elite will reap most profits, but in Australia case I'm pretty sure they will get something good out of it.

[Finnduil]

I'm pretty sure they will get something good out of it.

A lifetime supply of Chinese-made vegemite?

[Menelik_I]

A lifetime supply of Chinese-made vegemite?

You Sir, live in another century at best

ETA: In am more charitable tone : Chinese pay money, money can be used to buy lots of funny things al over the world.

ETA2:

@Azog 150:

Wasn't calling you butthurt, but the general narrative around China is always that they are ''making smart imperialism'' of some sort and that Cold War is upon us.

[Dr. Croccer]

Very interesting thing there, but aren't the Australians, like the South American and African, actually getting something out of these kind of deal ?

If so then why all the butthurt reaction over it ?.

I think that one of the worries is that the US will be butthurt, as the Chinese are encroaching in territory in which they have obvious economic interests as well.

[Exarch]

http://www.guardian.co.uk/world/2011...ning-iron-coal





So what do our Australian members think of this move? A good thing that will bring Australia lots of jobs and investment, or a sign of growing Chinese dominance and power that you would rather do without?

actually i think it's great. $$$ for the coffers and closer relations between the 2 countries.
they are the regional superpower whether our former colonial masters like it or not.
they have money, we have what they want: minerals, iron ore, coal etc etc
not to mention all their investments are vetted by the Gov.
in fact if u look at it, China isn't even australia's biggest investor, simply the most prominent because of this whole china fear syndrome

Its very interesting to see the ways in which China is resource grabbing. Couple this with big Chinese investment in Bangladesh, Sri Lanka, Pakistan, Africa and even the USA's 'backyard' with China planning to build deep water ports in Brazil and Peru, as well as plans for a rail line through Colombia as an alternative to the Panama canal and we can see China making very real strides to branch out its economic power and influence and secure those all important resources

ah the same old, sinophobic they must be investing therefore they're invading logic
never gets old.
by that stupid logic, chinese investment in american factories eg chicago must equate to Red Dawn.

i don't see chinese ppl getting all nationalistic like when british or american companies invest in Chinese companies or real estate, so tell me again why the extra suspicion and fear when chinese investors invest?

[Imperial]

i don't see chinese ppl getting all nationalistic like when british or american companies invest in Chinese companies or real estat

Well, how many Chinese people troll the TWC?

[Exarch]

Well, how many Chinese people troll the TWC?

i was referring to media reaction when Chinese companies offer to buy specific australian companies;
come to think of it, i think the journalists are in general economic nationalists; they were highly critical of a deal to merge the ASX with the singapore exchange which i thought was interesting but this underlines the power that uninformed media has in affecting economic deals.

China isn't just a major investor in australia; the second largest group of migrants migrating to oz happen to be Chinese (the first are british case you're interested) and a lot of Chinese students come to oz to study. Any politician/leader worth his/her salt would do right in enhancing relations between the 2 countries.

[Imperial]

i was referring to media reaction when Chinese companies offer to buy specific australian companies;
come to think of it, i think the journalists are in general economic nationalists; they were highly critical of a deal to merge the ASX with the singapore exchange which i thought was interesting but this underlines the power that uninformed media has in affecting economic deals.

China isn't just a major investor in australia; the second largest group of migrants migrating to oz happen to be Chinese (the first are british case you're interested) and a lot of Chinese students come to oz to study. Any politician/leader worth his/her salt would do right in enhancing relations between the 2 countries.

The land of oz sounds like a wonderful place, indeed.

[Azog 150]

I am not sure where people have got this idea I am 'butthurt'. I think its a good thing for Australia, and a very interesting move by China. I admire Chinese pragmatism.

[Exarch]

I am not sure where people have got this idea I am 'butthurt'. I think its a good thing for Australia, and a very interesting move by China. I admire Chinese pragmatism.

i wasn't attacking you, i was simply addressing a rather prejudicial viewpoint often given by australian media, particularly when it comes to Chinese investment.

the trade relationship with Australia is of course ideal for China when it comes to raw materials; it's closer than brazil or africa and closer relations will hopefully exorcise the yellow peril mentality so endemic in the australian national consciousness.

when i think about it, and given the amount of $$$$$ we're making off minerals, the government should've never caved into the resources tax. we've lost a coupla $bln in the watered down version, $$$ that could've gone into modernising our own infrastructure

[Babur]

i wasn't attacking you, i was simply addressing a rather prejudicial viewpoint often given by australian media, particularly when it comes to Chinese investment.

the trade relationship with Australia is of course ideal for China when it comes to raw materials; it's closer than brazil or africa and closer relations will hopefully exorcise the yellow peril mentality so endemic in the australian national consciousness.

when i think about it, and given the amount of $$$$$ we're making off minerals, the government should've never caved into the resources tax. we've lost a coupla $bln in the watered down version, $$$ that could've gone into modernising our own infrastructure

building the Chinese empire

[Exarch]

indeed, except for the wicked witch of course
since we're in a desert, we can never get enough water to throw on her

[Haldred]

How will the Chinese deal with the Crocodiles, Kangaroos, and Koalas?

[Angrychris]

will someone please think of the dingos

[Menelik_I]

will someone please think of the dingos

It is all about the Dingo Meat

[mrmouth]

It's just amazing to me that this is how the world works. A country that does nothing for anyone aside from exporting cheap goods, is allowed to turn a blind eye to (and greatly exacerbate) the issues in Africa while they make inroads there, secure contracts in Afghanistan while doing nothing to help the effort that is in their interests - it goes on and on.

I guess it pays to export technology to rogue regimes, ally yourselves with others, and not lift a finger to help anyone on the world stage.

And it goes well beyond money. It is a clear reaction towards US dominance, and apparently nobody cares to think about what leveling the playing field would bring. You take money out of the US' pocket, and you take money out of your pocket. Do you really see China taking up the slack or playing nicely with others?

The US props up economies, rebuilds railroads, fly aid missions while being shot at by the same people they are trying to keep fed and watered...whats the ing point? Let them have China. Have fun with that.