“Australian foreign relations with African States are influenced by its position as a leading trading nation and as a significant donor of humanitarian aid. AAMEG’s key concerns include free trade, anti-terrorism, anti bribery and corruption, human rights and economic co-operation with Africa.”
Can you briefly introduce the mission of AAMEG and highlight the origins of the strong tradition of Australian involvement in the African mining scene that has inspired the need for such an organization?
AAMEG was born from the need for Australian companies to have a platform where issues that come up in regards to operating in Africa could be addressed, both with our home government and the governments in other nations. To accomplish this, we have a three-pronged approach: we conduct policy research, host networking events, and lobby both in Australia and Africa to advocate our position (i.e. insights, advocacy and connections).
Australia’s involvement in Africa truly began when the gold price took off in the early 1980s and we saw many Australians venturing to countries like Zimbabwe and Zambia, in particular. In the 1990s, there was also a significant influx following the change of many governmental regimes that ushered in an era where state-owned companies and mining giants like AngloAmerican and Gold Fields no longer held a stranglehold over the industry. Modern exploration techniques such as airborne geophysics and gold processing technology were developed in Australia and subsequently brought to Africa. There were also many in the African diaspora that had left the continent for Australia and began go back to invest in the opportunities in their home-countries.
Can you elaborate on how AAMEG builds a network for Australian companies working in Africa and the advantage of belonging to such a group?
The network we have based in Australia is principally located in Perth, where AAMEG hosts events two to three times a month. Perth has excellent proximity to Africa — six hours away with the option for a direct flight — and about 80% of Australian resources activity in Africa is operated from Perth. We do also have members in Melbourne and Sydney, and part of our current objective is to increase our footprint in Australia and within the Africa continent where many companies have sub-offices.
There are a few chances each year for people to meet, including the Mining Indaba, Africa Down Under (ADU) in Perth, IMARC in Melbourne and to some extent Diggers and Dealers in Kalgoorlie. However, we believe it is important given the geographies and vast distances involved in operating in Africa that people have the opportunity to catch up with friends, swap stories and experiences, and potentially collaborate together.
What do you believe is inspiring the recent trend in resource nationalism and how can Australian companies react accordingly in the current climate?
Resource nationalism is not a new concept; in the 1950s and 1960s we saw a lot of nationalization in countries around the world. When times are good and commodity prices are high, countries often call on the industry to share more of the profits — which is sometimes justified. However, it does not make sense when countries change the fiscal settings so much that they make mining a deposit becomes an unprofitable endeavor or completely discourages foreign investment. We are also witnessing a worldwide swing back to an anti-globalization sentiment, and at AAMEG we are working to communicate a broad agenda that demonstrates that countries should get a fair share of the wealth offered by their resources, and that mining is a great way to accomplish social and economic development in African countries.
In which countries have you seen particularly worrying signs of a tendency towards resource nationalist policies?
Tanzania is obviously the country where there has been a lot of discussion about this topic, and we have concerns about Zambia where we have also seen large ambit claims being handed out to companies. Changes to the legislation in the DRC have made many people wait to see how those changes are going to be implemented on the ground. Nonetheless, we have seen some countries that have traditionally been difficult actually improving the environment for investment, such as Mali, Burkina Faso, and Namibia.
Which commodities and geographies do you see being the focus for Australian companies heading into the 2019 year?
There has been a lot of media over battery materials such as graphite, lithium and cobalt, however, I believe the main drive and opportunities are still in gold, copper and petroleum. Gold has always been seen as a stable market with relatively small price fluctuations. It is also easy to transport. Copper is becoming increasingly important because there will be a supply fall as mines in Chile are depleted. People will keep pursuing copper opportunities in the DRC because of its rich geology, and in gold we are recently seeing interest in Sudan, Egypt, and also Ethiopia if it can work through its issues. There has been renewed interest in Zimbabwe where we are seeing the return of many expats, but we will need to wait and see if there are any real changes as the political environment evolves. Angola has undergone several changes and begun to tender its diamond concessions, making it an interesting place to be as well.
Can you elaborate on how you lobby the Australian government on behalf of members?
Australian foreign relations with African States are influenced by its position as a leading trading nation and as a significant donor of humanitarian aid. AAMEG’s key concerns include free trade, anti-terrorism, anti bribery and corruption, human rights and economic co-operation with Africa. Australia is active in the United Nations and has a history of starting and supporting important global initiatives, As Australia is now a signatory to many UN Global contracts that combat issues such as modern slavey, bribery and corruption, and the sustainable development goals. Much of the recent Australian government legislation that our members operate under has been introduced to alignh Australias domestic laws with its international agreements require submissions, and on these issues we engage closely.
We recently contributed to a senate enquiry about Australia’s business relations with Africa to make sure they understand the scale and importance of the trade between our country and the continent. This is a challenge as Australia is currently Asia-Pacific focused.
How does the growing Chinese presence in Africa impact the interests of countries like Australia that have traditionally been significant investors?
Certainly China is often involved in many conversations given its increasing influence in Africa and the lessening influence of countries like the US, France, and the UK. Companies developing mines in Africa tend to be competitive, whether its over tenements or buying a mine. In that vein, China is a competitor; however Chinese companies often also fund Australian companies, sign offtake agreements or buy the companies outright. Through its “One Belt, One Road” policy, China has put a lot of effort in securing natural resources. It is difficult to compete because China sometimes operates as one large entity and it has a size advantage through massive investments in roads, ports and other key infrastructure.
What is your vision and objectives for AAMEG heading into the 2019 year?
We would like to see more Australian companies working successfully on the African continent and achieving strong commercial outcomes, by improving their relationships with host governments and positive sustainable outcomes for the people in those countries. We would also like to keep increasing our membership and see continuing positive results from our efforts both at home and across the African continent.