Australia's estimated $24 billion investment in Africa's resources sector is expected to face increasing competition for project involvement and financing, from international mining investment houses. The view was floated ahead of a three-day global summit in Perth this week - the 2012 Paydirt Africa Downunder conference - aimed to expand Australian-African resources investment, project development and government to government co-operation between the two continents. Convenor, Bill Repard, said that Australian exploration, mining expertise and resources investment had carved a substantial bridge between Australia and Africa over the past 15 years because of their similar mineralised geological structures, mining challenges and like-minded equities market support.
"However, post GFC, modernising super economies, their hunger for sustainable sources of mineral and energy supply, and their depth of investment reserves, mean that Australia's own capital adequacy to invest in and compete in Africa's mining upside, is under competitive pressure," Repard said.
"It should be no surprise to anyone that Africa is increasingly a keen bidder for China-based resources funds while the flipside is also increasingly evident - China, India and other mineral hungry economies are looking to secure or build a foothold in the substantial mineral opportunity continuing to present throughout most of the African continent. Whereas once Australia's explorers and miners were sector leaders in Africa's resources investment, mine development, and assisting with associated infrastructure and social and community growth, some of that space is now being commanded by overseas players.
"China for example, is already exhibiting a higher profile than Australia in Africa's value-adding mining opportunities such as downstream processing compared to simple mine development and ore extraction."
Australia, Repard said, could bolster its already strong reputation among Africa's more than 50 mining countries by strengthening the level of government interface between the two continents, building on the business and investment links already pioneered there by Australia's major, mid tier and even small cap resources houses.
More than 280 Australian resources and supplier companies are currently represented across African mining projects with current and planned Australian investment in Africa, primarily mining, conservatively estimated by market analysts at around $24 billion.
Repard said Australian government and trade expertise could assist Africa's resources sector counter one of its biggest internal challenges, dismantling barriers to cross-border trading within Africa, an economic issue highlighted by a recent World Bank report.
"There is a push for an African-wide free-trade area by 2017 and such a zone could potentially enhance its mining growth by dissolving issues such as disparate levels of sovereign risk, mining royalties, taxation and infrastructure investment. This more borderless environment would make Africa as a whole a more fertile ground for joint Australian-African resources investment," Repard said.
"Certainly, a barrier to Africa's mining sector growth is poor infrastructure in the key areas of road, rail, water and power - yet that is an area in which Australian expertise excels - so potential economies of scale for mining-related infrastructure could be achieved through removing inter-country barriers to such project investment."
Repard said Africa recognised that Australia had helped the country diversify its minerals profile from the original staples of gold, copper and uranium to additional opportunities such as tin, potash, manganese, coal, iron ore, rare earths, phosphate and graphite.
"Critically, Australia has been pivotal in helping our African mining allies over 10 years revamp their mining codes and evolve more appealing investment regimes - so we need to now ensure these existing partnerships continue to evolve."
The Africa Downunder conference has attracted 2,500 delegates, including 17 African Resources Ministers and mining department heads.
It will be opened on Wednesday morning by Australia's Foreign Affairs Minister, The Hon. Senator Bob Carr with representations by three other senior cabinet members - Defence Minister Stephen Smith, Resources Minister Martin Ferguson and Special Minister of State, Gary Gray. Former Prime Minister and Foreign Affairs Minister, Kevin Rudd, is also to speak - on Thursday.
The program - the largest African business summit globally outside of that continent and now in its 10th year - has grown so substantially in recent years that adjoining venues - the Pan Pacific Perth and Novotel Langley in Perth, are to be used for the 2012 schedule, from August 29-31.
Australian resources companies now have interests in 42 of the 56 countries in Africa with ASX-listed miners and explorers active there numbering 180. In addition, more than 200 Australian mining services companies have carved out a niche on the continent, making Australia one of the biggest players in the burgeoning resources destination.
There will be more than 80 presentations over the three days, supported by a capacity 170 corporate booths.
The conference has been bolstered this year by the second Africa Australia Research Forum, to be held on Tuesday. Hosted by Australia's Paydirt and Murdoch University in partnership with the International Mining for Development Centre at the University of Western Australia and the University of Queensland; and the Western Australian School of Mines at Curtin University - the forum's theme will be Maximising the value and minimising the harm of Africa's extractive industries. The forum will bring together African nationals, Australian and African mining companies, Australian and African academics, NGOs, and government representatives to explore selected aspects of the African Union's "Africa Mining Vision" policy and how Australian entities can engage with their African counterparts to undertake research that will support the execution of the action plan.