It’s a great pleasure to be here this evening – and I thank the Canadian-Australian Chamber of Commerce and Baker and McKenzie for hosting us.
I have made it a practice in every country I visit to address a function of the ex-pat chamber of commerce organisation – it provides an excellent source of local intelligence which I have found invaluable.
I will have an opportunity in the Q and A session to respond to all sorts of issues that you might be interested in, but in the time available for formal comments, I would like to make two points.
Firstly, I strongly believe the resources and energy boom is not dead; it may be tapering, but it is certainly not dead.
Secondly, I observe that one great asset common to both of us – mineral and energy resources – seldom makes us commercial rivals, as much as natural partners, helping each other to develop our resources and to prosper.
So let me tackle the first point regarding the exaggeration of the death of the mining and energy boom.
Australia is already the third largest LNG exporter world-wide.
Within four years we stand to overtake Qatar as the world’s largest exporter as many of our developments of conventional and unconventional gas come into operation over the next year or two.
This is in addition to Australia having the seventh largest deposits of technically recoverable shale resources anywhere in the world; yet currently all untapped. This gas will add another century to Australia’s potential gas resource life.
So the LNG story has a long way to run in Australia, and we are not alone.
As Asia’s middle class reaches higher levels of affluence, projected demand for energy is building to extraordinary levels. With the middle class growing from 600 million to 3 billion by 2035-40, this will be the century of food, water and energy.
I recently met with Chevron’s chairman in San Francisco and he said that growth in global demand for LNG between 2016 and 2025 – over and above the supply from existing developments – is estimated at 15 million tonnes of gas a year.
The $50 billion Gorgan Gas field off Australia’s North West coast is our largest energy project and it will produce 15 million tonnes of LNG a year, so the forecast is for the equivalent of one Gorgan Gas project coming on-stream each and every year for 10 years.
And, importantly there is an opportunity for Australia and Canada to satisfy a significant proportion of this remarkable post-2016 demand.
None of this means that more traditional energy sources, like coal, aren’t an important part of the mix.
Since we came to office just over eight months ago our Environment Minister has already approved 230 projects worth $500 billion, mostly resources projects.
Some of these had had environment approval for up to six years but had been stalled by politics, and among these are two $10 billion coal projects in Queensland’s Galilee Basin.
So despite coal facing many pressures, the forecasts are that it will still be the world’s principal energy source some 60 to 80 years from now.
Furthermore, the World Energy Outlook recently forecast that global coal demand will increase by 17 per cent to 2035, with two thirds of the increase occurring by 2020.
To paraphrase Mark Twain, the reports of the death of the resources and energy boom appear both premature and greatly exaggerated.
Taking up the second point I raised earlier, where I asserted that our two energy and resources sectors share many complementary features, I was reflecting on the highly complex web of global partnerships involved in resource extraction and exporting.
That’s why many of our exploration companies list on both the ASX in Sydney and the TSX here in Toronto.
In this regard, Canada is already our tenth largest investor, with a $27 billion stock of investment.
A good deal of this is in the resources sector.
Canadian expertise developed in the gas fields of British Columbia and Alberta means your engineers and drillers are assisting Queensland as that state develops huge unconventional gas projects.
Cameco has two uranium operations in Australia, also bringing its experience in indigenous community engagement to those ventures.
Barrick Gold has 10 operating gold mines in four Australian states. In 2012 they produced 1.82 million ounces of gold.
For our part, Rio Tinto is the largest employer of indigenous Australians, and has set the same goal for its Canadian operations.
Rio employs 13,000 people in Canada, across 35 sites, involving alumina, iron ore, diamonds, titanium dioxide and aluminium.
Our biggest miner, BHP, mines potash, diamonds, cobalt, copper, gold, lead, nickel, uranium and zinc in Canada.
And Woodside has the exclusive right to negotiate a long-term tenure at the Grassy Point site in British Columbia, with the opportunity to build five LNG plants.
Additionally, Woodside’s expansion plan under the agreement could see 39,000 annual jobs created over a nine year construction period, with 75,000 jobs once the plants are operational.
These LNG plants will give Canada direct access to the Asian markets for the first time.
Importantly, companies like Rio, BHP and Woodside create employment opportunities world-wide and facilitate access for a range of Australian and Canadian SMEs to the global supply chain.
Their contribution was critical for us post the 2008 financial meltdown in the developed world.
This is also true of other major and junior miners from exploration to production.
But it is not all about the big extractors. The Mining Equipment, Technology and Services sector – or the METS sector as it is known – represents three per cent of Australia’s gross value add.
This is on top of the mining industry’s 10 per cent.
METS companies are operating extensively both in Canada and Australia. In fact, Australia’s major import from Canada is engineering equipment and parts.
18 per cent of Australian exports in the METS sector are to Canada – 18 per cent of a total $15 billion in exports. And more than 20 per cent of Australian METS companies have operations in Canada.
In fact, we have in our Australian CEO delegation, here tonight, Elizabeth Lewis Grey, the chair of Australia’s METS sector representative organisation, AUSTMINE, and Elizabeth is a significant explorer in her own right.
The cross-fertilisation between the resources and energy sectors in both our countries has been a great spur to innovation, investment and development, and has delivered great wealth to both our countries.
As we both position to compete against the world for the extraordinary further opportunities emerging in the Asia Pacific region, may the pace and extent of collaboration and cross-fertilisation only increase.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555