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Speech at the Business Club Australia: Australia-China mining and minerals industry dinner.



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Minister for Resources and Energy, Minister for Tourism

BUSINESS CLUB AUSTRALIA: AUSTRALIA-CHINA MINING AND MINERALS INDUSTRY DINNER

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Your Excellency, Major General Jeffrey, distinguished guests, ladies and gentlemen.

It is a privilege to be here tonight as we come to the close of one of the most spectacular events the world has seen in some time.

As we all know, Sydney hosted the 2000 Olympic Games so as Australians, we can appreciate the magnitude of the task.

Like everyone else, I have taken great interest in the remarkable achievements of the past weeks. China is to be commended for the outstanding quality of these Games.

But as Australians we are not surprised by what has been achieved, as we know China well - our friendship is not a new one.

The past 10 years have seen enormous changes in China and growth beyond all expectation, but Australia's relationship goes back much further.

Australia's original mining boom - the gold rush of the 1850s - had a huge effect on Australia and our development as a nation.

It is fair to say that much of the growth of this period could be attributed to the enormous contribution of Chinese immigrants, who by 1861 made up 3.3 per cent of the total Australian population.

Through their ingenuity and hard work, these immigrants made a significant contribution to our nation - as do their many descendants who today call Australia home.

As these Olympic Games have shown, Australia is more than a friend of China; we are a trusted partner.

Many Australian firms have helped provide the backdrop to these Games through their contribution of design and architectural services for many of China's Olympic venues, including:

· the stunning Water Cube

· the Olympic Village

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· the main stadium

· the equestrian facilities in Hong Kong

· the new football stadium in Tianjin.

A good deal of the Australian input to the Beijing 2008 Olympic infrastructure can be traced back to the Sydney Games.

Chinese firms sought Australian companies to build on their knowledge and experience from Sydney 2000 and other major international sporting events for which Australia is world-renowned.

But our countries' economic relationship extends far beyond the sporting realm.

It may come as a surprise to many here that China is Australia’s fifth largest tourism market in terms of visitor arrivals - and fourth in terms of economic value.

The Chinese market is incredibly important for the Australian economy.

In 2007, the Chinese visitors contributed almost 9 per cent of Australia’s total inbound economic value (TIEV), spending approximately $2 billion.

This was an increase of 16 per cent on 2006 figures.

I am also very pleased to see strong growth is expected for the next ten years, with an average annual growth rate of 12 per cent forecast.

By 2017 - more than 1.1 million Chinese visitors are expected to be travelling to Australia annually.

Of course, China is already the largest single market for Australian iron ore - iron ore that has helped build China's new cities and vital transport infrastructure.

China is also the second largest buyer of Australian copper and the third largest destination for iron and steel products.

Australia is a significant supplier of zinc, nickel, lead and numerous other minerals which contribute every day to the Chinese powerhouse.

Indeed, by value, around 20 per cent of Australia's 2006-07 resources exports were bound for China - trade which was worth almost $14 billion.

On the energy front, Australia’s coal exports to China have increased more than six fold since 2000, making us China’s largest external coal supplier.

China is an important emerging market for Australian uranium and liquefied natural gas (LNG) - both clean sources of energy demanded in our carbon-constrained world.

This strong resources trade relationship is built not only on Australia’s high-grade resource base, but also built on the reputation of Australian suppliers for efficiency and reliability.

But this is not something we can take for granted.

As a nation, we must ensure future investment in the infrastructure necessary to maintain and

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improve the efficiency and reliability of our export supply chains.

Our regulatory frameworks must encourage this investment.

We must also continue to build our investment in skills, training and greater workforce participation.

When it comes to resources and energy, the partnership between our countries is one the Australian Government - like the companies in this room - takes very seriously.

As a country rich in both mineral and energy resources, we have a responsibility to secure not only our own future needs, but the needs of our developing neighbours as their economies grow and living standards rise.

In this regard, Australia is committed to open and transparent global trade and investment frameworks to underpin resources and energy markets.

As well as being a major trading partner, China is a significant and growing source of investment for the Australian resources sector.

We are a country built on foreign investment and we are delighted foreign companies want to invest in Australia, particularly when it is in our national interest and facilitates the development of Australia’s resources for the benefit of Australians.

Our policy is long-standing and non-discriminatory and the Australian Government has sought to more clearly define our foreign investment guidelines.

I hope the growing investment flows between Australia and China will continue in a mutually beneficial way to allow the development of our resources sector and to help meet the growing needs of the Chinese economy for our resources.

One of the biggest challenges facing our two countries is the response to global concerns about climate change.

Carbon constraints will put increasing pressure on traditional energy sources, such as coal.

Australia and China have been working collaboratively on low emission coal technologies on a number of fronts.

We have established the Australia-China Joint Coordination Group on Clean Coal Technology, and both nations are involved in both the Carbon Sequestration Leadership Forum and the Asia Pacific Partnership to develop low emission technologies.

Australia is also benefiting from Chinese involvement in projects such as the proposed 400 Megawatt Integrated Drying Gasification Cycle power station project in Victoria's Latrobe Valley.

The development and deployment of low emission coal technologies, particularly carbon capture and storage, is a major priority for the Australian Government.

The Australian Government is contributing $500 million to support a $1.5 billion investment by governments and industry in further research, development and demonstration of low emission coal technologies.

The Asia Pacific Partnership has been a great vehicle for clean energy technology sharing with the

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Australian Government committing more than $45 million to clean development projects involving China.

This includes four projects in the cement sector - and this relationship is very important given China accounts for half of the world’s total cement production.

We are also working together on low emissions coal technologies including the demonstration of post combustion capture at the Gaobeidian power station near Beijing.

In addition, one of our great achievements is the Coal Mine Health and Safety project which has led to a Memorandum of Understanding between Australian and China and a coal mine safety demonstration project at Xuandong.

This project will showcase world’s best practice in emergency response systems, technology, training and education in risk management and gas monitoring.

Our cooperation on developing low emissions coal technologies acknowledges that Australia and China face similar challenges arising from our reliance on coal-fired power generation.

This relationship will be further enhanced at the upcoming Australia-China Ministerial Dialogue on climate change to be held later this year in Canberra.

The Australian Prime Minister, the Honourable Kevin Rudd, has indicated a major focus of the discussions will be on strengthening bilateral cooperation on low emissions coal technologies.

I hope that Australia’s increasingly important role as a supplier of clean energy resources such as LNG, uranium and renewable technologies will also be part of our ongoing discussions.

Australia’s North West Shelf Project already supplies China’s only operating LNG terminal, in Guangdong Province.

Since shipments to Guangdong commenced in 2006, China has become Australia’s second largest export market for LNG.

Australia’s LNG deal with China will reduce China’s emissions by seven million tonnes per year, a significant contribution to greenhouse gas abatement.

Interestingly, this abatement alone is more than the total annual emissions (six million tonnes) produced by the North West Shelf Project in Australia.

Australia’s LNG trade with China is set to grow in the next decade, with announcements earlier this year of supply deals with PetroChina by Woodside Energy and Shell.

Australia is home to around 27 per cent of the world’s economically recoverable uranium.

The Australian Government’s uranium policy is that uranium exploration and mining be approved subject to strict environmental, safety and regulatory requirements.

Uranium sales will only be made for peaceful purposes and only to countries which are a party to the Nuclear Non Proliferation Treaty and which have a bilateral safeguards agreement with Australia.

We are committed to mining uranium with safe hands and supplying it to safe hands.

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The bilateral agreement between Australia and China is world’s best practice with respect to nuclear safeguards and it provides a benchmark for future uranium supply agreements.

There are active uranium mine developments and expansions under way in South Australia and the Northern Territory and it is good to see those jurisdictions benefiting from the associated jobs, royalties and export earnings.

Australia is well placed to meet China’s uranium

requirements in the medium to long term and the

two nations will work closely to strengthen non proliferation safeguards.

Australia's engagement with the region - especially here in China - can be seen in our work to help improve mine safety, through the increasing level of trade and investment between our countries, through cooperation on clean energy technologies, and through our negotiations toward a free trade agreement.

This is the essence of the enduring Australia-China relationship: mutual benefit built on trust.

Ladies and gentlemen, the continuing strength of Australia’s resources relationship with China is important for the longer term prosperity of both countries.

The foundation of our future success will be open, transparent markets and regulatory frameworks for trade and investment.

The Australian Government is committed to working in partnership with China to achieve that outcome.

Your success is our success.

And I am glad we can celebrate that success tonight.

Thank you.

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