Shadow Minister for Resources Gary Gray has spoken at the annual
Africa Downunder Conference,
which began in Perth yesterday.
The minister reflected on the progress that has been made in
developing African natural resources, and the economic and social benefits
flowing to the people.
“Just as WA has thrived from mining, this opportunity has
presented itself to Africa, where an estimated 30 per cent of global mineral
reserves reside” Gray said.
“We’ve seen some of the largest gas finds in decades off the
coast of Mozambique and Tanzania, as well as significant onshore oil
discoveries in Kenya and Uganda.
“Expectations for the hydrocarbons industry across East Africa
are high and there is a real hope that discoveries will be commercialised, but
there are still many challenges that need to be overcome.
“As a former Minister for Resources I encouraged Australian
business to engage with the Extractive Industries Transparency Initiative
(EITI) because good governance, transparency and goodwill eventually overcome
the maleficent few who may seek to defraud.
“Importantly our combined efforts can do most to ensure
efficient and effective resource development for the good of all citizens; it
is essential in order to encourage foreign direct investment in African
DLA Piper head of mining Rob Edel told visitors to the
conference that Australian explorers and miners looking to increase their
footprint in Africa’s resources riches have been encouraged to increasingly
push for stabilisation clauses in all new contracts.
Edel said such clauses are fundamental to attracting increased
investment in African mining projects.
“Australian miners have to manage the risk of investing in
Africa and the optimal way to achieve that is to help contribute to a stable
investment regime,” he said.
“The key risks to such a stable investment environment include
any increase in taxes after a project enters the development phase, changed
environmental regulations, minimum wage laws, a licence review which revokes or
requires a renegotiation of a mining licence, or changing company ownership
“This could be at two levels – increased state participation or
requirements to increase the local ownership content of a project.
“Nationalisation or expropriation for assets remains the other
outstanding top investment risk.”
World ebola expert Professor David Heymann will address the
conference this morning to discuss the ebola outbreak and ongoing medical crisis
in Ghana and West Africa.
Mining companies have been evacuating staff from the affected regions, which has affected various operations.
The Africa Downunder Conference
has been running for a decade and has coincided with a substantial increase in
the political, diplomatic, commercial, strategic, and cultural ties between
Australia and the African continent.