THE WEST AUSTRALIAN
Thursday, 22 November 2012 08:14
China's most senior government official in WA has delivered a blunt assessment of the relationship between the state's miners and the Middle Kingdom, warning that "new difficulties and challenges are increasingly facing us".
In a speech at the Mid West International Mining conference that was broadly optimistic about future relations, Consul-General Wang Yiner also said many Chinese investors in Australia had been on a "steep learning curve", and warned escalating iron ore prices and the burden of local regulation could harm both sides.
"Investors who are not familiar with local procedures have to spend considerable time to become familiar with the local investment climate. This, projects are generally delayed and costs greatly escalate," she said.
"The carbon tax and rental tax for mining resources will further increase the load placed on the shoulders of mining investors."
Chinese companies have invested heavily in Mid West projects, led by AnSteel's successful backing of Gindalbie Metals' $2.6 billion Karara magnetite project. But wrangling over the Oakajee Port and Rail project has left many other investments stranded without a route to market.
Australia China Business Council WA president Duncan Calder, who led a local investment team in Australia advising a Chinese syndicate on an investment in Oakajee, said Australia faced competition for the Chinese investment dollar.
Mr Calder said Chinese investment in Australia had been falling since a 2010 peak, and China was being massively outspent by US and British investors.
He said resolving infrastructure issues such as Oakajee was important to strengthen the relationship. His comments were echoed by Madame Wang, who said many Chinese investors had not had a happy experience in Australia.
"Some investors have worked hard for years, and as a result achieved nothing but huge losses. Some investors are caught in a dilemma, because of the failure to provide the required infrastructure and so the project has failed to progress," she said.
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