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PERTH (miningweekly.com) – Weaker global commodity prices were creating opportunities for resource-rich nations to find shared solutions, Western Australia’s Mines and Energy Minister Sean L’Estrange said on Tuesday.
Speaking at the first day of the Latin America Downunder conference, L’Estrange noted that an agreement announced between iron-ore majors Fortescue Metals and Vale earlier this year, demonstrated how competitors could work together to find innovative solutions to common challenges.
Western Australia’s Fortescue and Brazil’s Vale in March inked a memorandum of understanding under which the two companies would form joint ventures to blend iron-ore products. The new blended product would be developed to suit the long-term needs of Chinese steel customers, and improve the efficiency of the supply chain to the steel industry.
The agreement also provided a framework for potential investment by Vale in Fortescue through a minority acquisition of shares on market, or investment in current or future mining assets.
L’Estrange told delegates on Tuesday that the Australian government was working to enhance its relationship with the nations and economies of Latin America, and noted that a particularly strong partnership was emerging in the resources sector.
“Responsible mining and resource development offers a pathway for economic development for countries across the world. As a leading jurisdiction in responsible resource development, Western Australia is able to share its experiences, skills and expertise to assist other countries to realise this opportunity.
“Mining companies across the globe are currently facing similar challenges, declining ore grades, reduced access to finance, rising costs, price volatility and geopolitical uncertainty, as well as the need to continue to maintain environmental and safety performance.
“These factors are driving both domestic and international mining companies to improve cost efficiencies and review capital allocation programmes. New technologies and innovation are playing an increasingly important role in this process, opening up previously uneconomical resource deposits and providing opportunities for significant improvements in operational efficiency, safety and profitability.”
L’Estrange noted that the Western Australian resources sector boasted a world-class capability in regulation, research, training, equipment and technology, and offered services which could improve both efficiency and accountability.
“Western Australia is willing to share its mining expertise, best practice regulations and environmental management for the mutual advancement of both Western Australia and Latin America’s mining sectors,” the Minister said.
Federal Resources and Energy Minister Josh Frydenberg, meanwhile, pointed out that there were currently 96 ASX-listed companies with mining projects in Latin America, with the overall investment from Australia in the region reaching A$24-billion in 2014, up from just A$908-million in 2004.
There were currently 278 Australian mining projects operating in Latin America, of which some 60% were West Australian.