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Speech to the Australia-India Energy and Minerals Forum, Perth.



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Australia-India Energy and Minerals Forum

Speech by Stephen Smith MP

Sheraton Hotel, Perth

7 June 2010

Introduction

I'm pleased to open the inaugural Australia-India Energy and Minerals Forum.

I extend a particularly warm welcome to our guests from India, in particular India's Minister for Power,

Minister Shinde.

Australia and India have much to offer each other, and much to learn from each other.

When it comes to energy and minerals, our basic goals are fundamentally the same — energy security and

sustainable economic growth.

Events like these help us address our common challenges and also explore mutually beneficial

opportunities.

The Australia-India relationship

India, the world's largest democracy, has emerged in recent years as a significant global power, both

politically and economically.

Australia sees in India a country that combines a remarkable pace of domestic development with an active

and constructive role on the regional and world stage.

India and Australia share a common democratic heritage and a commitment to pluralism, human rights and

the rule of law.

Recognising the importance of India's rise for Australia's national interests, Australia has moved to place

India firmly in the front rank of Australia's international partnerships.

In my first speech as Foreign Minister in December 2007, I said that Australia needed to do much more

with India.

We have made significant progress in the last two years.

In November last year, Prime Minister Rudd and Prime Minister Singh agreed to lift our engagement to the

level of a strategic partnership, to reflect the strong convergence of interests and values that we share.

Our Strategic Partnership includes co-operation on trade and investment, security, climate change,

science, education and resources and energy.

An unprecedented number of high-level visits between Australia and India have given added impetus to the

relationship.

I have visited India three times since becoming Foreign Minister and there have been a total of 12

Australian Ministerial visits to India, plus the visit of the Prime Minister to India last November.

In return, we have welcomed 12 Indian Ministers to Australia since 2008. The visit here by Minister Shinde

adds to that, and we also look forward to a visit by the Indian Minister of Overseas Indian Affairs, Minister

Ravi, in the coming days.

India is Australia's fastest-growing major two-way trading partner, with two-way trade growing more than

50% to nearly $22 billion in 2008-09.

It is soon to become Australia's third largest export market after China and Japan.

India's projected energy needs and resources requirements are enormous as the world's sixth-largest

energy consumer.

Australia is a key supplier of resources and energy to fuel India's future economic growth.

Energy and minerals

The resources and energy sector is at the core of the strategic partnership that our two prime ministers

unveiled in November last year.

Australia's first ever long-term LNG contract with India between ExxonMobil and Petronet LNG is great

news for both countries.

Equally, increasing Indian investment in Australia's energy and resources sector is a positive indicator

toward more such contracts being agreed in the future.

Indian companies have invested in copper and coal mines and in new and renewable energy as well as

downstream gas processing.

For example, Tata's investment in Geodynamics is developing one of three Australian projects to create the

first commercial-scale hot rock geothermal energy project in the world.

Other Indian companies are making equally important contributions.

In the other direction, Australian mining expertise stands ready to make a real difference in India.

Our mining technology services sector is at the forefront of cutting-edge mining technologies.

These technologies help develop resources in a safe, innovative and sustainable way.

Australia is a leader in mine safety and in the development of newer techniques such as for the extraction

of coal seam methane.

Our two countries are already working together on jointly funded research initiatives under the $65 million

Australia-India Strategic Research Fund.

The Australian Minister for Industry and Innovation recently announced a further eight collaborative

research projects under the fund and an additional $2.4 million in funding to be matched by the Indian

Government.

The Government looks forward to more joint research projects and ongoing cooperation.

I commend the numerous initiatives being put in place to bring this about, including initiatives such as this

forum.

To encourage further co-operation, five strategic action plans have been put in place between the

Australia's Department of Resources and Energy and the Indian Ministries of:

• Coal;

• Mining;

• Petroleum and natural gas;

• New and renewable energy; and

• Power.

These action plans are the cornerstone of the strategic partnership in energy and minerals that brings us

here today.

Sustainable development

Energy security and economic development should not come at the expense of sustainable development.

Both India and Australia know this very well.

Clean air, clean water, fertile soil and clean energy supplies are all important development goals.

That's why LNG is such an important source of power.

It's a transitional fuel, a cleaner-burning alternative to coal.

LNG has the potential to make a substantial contribution to India's future energy security and sustainable

economic growth.

There is no better example of this potential in practice than the $43 billion Gorgon project.

I am sure we will continue to see the LNG relationship with India grow as further Australian LNG projects

come on stream over the coming decade.

Australia and India are also working together on:

• Second-generation biofuels;

• LPG for vehicles;

• Hydrogen fuel cells;

• Geothermal energy;

• Low-emissions coal; and

• Carbon capture, use and storage.

We both have a strong interest in exploring other potential energy sources for the future.

Australia's potential

Just as we share the goal of sustainable growth, we also share responsibility for energy security at home.

India is a big producer of energy and minerals for domestic use.

Yet growing demand means India is casting the net wider to satisfy its energy needs.

Across the region, finding reliable suppliers is becoming harder, not easier.

Globally, more and more resources are tied up through long-term contracts, investments, joint ventures and

acquisitions.

More than ever, energy security is a political and strategic imperative, not just an economic one.

Countries around the Indian Ocean rim will see intense production and competition for resources.

Some of the specific challenges Australia is currently dealing with include setting up operations far away

from water, skilled workers or suitable infrastructure.

Having an environmentally and socially responsible sector, one that engages with local and indigenous

communities, is a continuing challenge.

Despite such challenges, Australia has a proven track record as a reliable supplier of minerals and energy

commodities.

That will continue well into the future, long after the current debate about the Government's proposed new

taxation arrangements for the resources sector, matters on which the Government is consulting with the

industry to get the design details right.

We have built a competitive and highly productive resources sector.

It's one that is constantly changing and improving.

We adopt the latest technologies and encourage the movement of foreign capital to Australia to help unlock

our resource wealth.

To give you just one example, we offer world-class geological data through Geoscience Australia — at little

or no cost to industry — to encourage exploration.

Australia is ready to help fuel India's economic growth for decades to come.

We want Australia to be a key supplier of energy resources in the Asia Pacific region.

We have ample resources and a highly skilled workforce to extract them.

Overseas capital investment

Taxation is just a part of a bigger picture for investment.

When investors look to Australia, they see more than headline rates of tax.

They see a stable political system with transparent and competitive markets.

They see sound regulation, robust financial services and good governance underpinning a resilient

economy.

They also see skilled workers and satisfied customers.

In the past 20 years, Australia's ratio of foreign direct investment to GDP has risen by one-third — well

above the average for comparable developed economies.

The World Economic Forum ranked Australia 2nd among 55 of the world's leading financial systems and

capital markets.

Of the world's nine largest banking groups rated AA or better, four are Australian.

The regional headquarters for around 900 multi-national companies are here.

Australia was the only advanced IMF economy to report positive through-the-year growth in the midst of the

global financial crisis.

Australia will continue to remain an attractive place for overseas capital investment.

Conclusion

The strategic partnership between India and Australia is made for the long term.

Both our countries are committed to securing our energy futures, and putting us on the path to sustainable

economic growth.

This inaugural forum is a small but significant step in defining our partnership for the 21st Century.

Thank you for attending. I wish both the Indian and Australian industries every success.