Australia’s Trade and Economic Links With Africa

AFRICA REPORT

Australia’s trade and economic links with Africa have only become stronger over the last decade. Trade has grown at an average rate of over 9 per cent per year, bringing Australia’s total merchandise trade with Africa to be valued at $5.5 billion in 2008-2009.

Australian Mining Companies are taking advantage of Africa's vast resources.

Australian resource companies have interests in 38 African countries, with investment in these areas currently at around US$20 billion dollars. In a number of speeches given by the Honorable Stephen Smith MP, Australian Minister for Foreign Affairs, it was made clear that Australia’s support for Africa is strong. (Smith, S (2009) [Accessed 16 June])

Although around 40 per cent of Australian mining companies’ overseas projects are in Africa, in an article written in the Herald Sun, it was suggested that certain mining activities in Africa should shame Australian investors. (Galacho, O (2010) [Accessed 16 June]) Multi-national companies including BHP Billiton, Rio Tinto, Paladin Energy and Uranex refused to make their submissions public at Joint Standing Committee inquiry into their relations with African countries.

Those who did make their submissions public, including OXFAM and World Vision, made statements to the point that explorations in Africa are ‘decimating African communities.’ (Galacho, O (2010) [Accessed 16 June]) They then stated that it was the Australian Government’s responsibility to curtail such unethical investments.

The mining of oil, minerals and gas in developing countries is extremely profitable for not only the companies themselves but also the Australian people who are shareholders in such companies. If it is to be believed that companies are exploiting the relaxed nature of these nations, then those shareholders are benefiting from this exploitation.

Australian mining companies are now the third-largest group of miners in Africa. It would seem that many have been attracted as a result of the poor governance of its regimes. Martin Kavanagh, Director of Deep Yellow Resources, whose company is currently mining in Namibia, has said that the controls on mining are far more lenient in Africa than Australia and this is therefore the appeal of having interest in the continent.

He stated, “There isn’t the bureaucracy there that stifles Australia. Our view is that it would take eight to ten years to develop a mine in South Australia or Northern Territory, whereas you can do it in three to five years in Africa.” (Morgan, E (2008) [Accessed 16 June]) In addition, Director of Australian uranium mining company, A Cap Resources, Dr Andrew Tunks defends mining practices in Africa. He claims that although mining companies may take advantage of the relaxed regulations in Africa, “it doesn’t mean Australian companies are exploiting the continent.” (Morgan, E (2008) [Accessed 16 June])

In a further article published in the Age newspaper, it was reported that there have been endless numbers of complaints in relation to Australian mining practices in Africa. (Hewett, A (2008) [Accessed 16 June]) These include environmental damage, involvement in human rights abuse and allegations of corruption.

For example, members from a Congolese community are in the process of considering legal action against mining company Anvil after allegations of military suppression. Oxfam Australia has established a mining ombudsman in order to deal with community complaints, which at this point, often go unnoticed by both the mining companies and governments within the country they are mining. Oxfam has called for the Australian Government to establish its own ombudsman to ensure that mining companies are operating fairly in developing nations.

Alternatively, Stephen Smith has asserted that Australian mining companies ‘enjoy a well-earned reputation for excellent safety records and high environmental standards.’ At this point there is not enough well documented, credible evidence to support reports such as those mentioned above.

The Australian government is no doubt benefiting from the mining boom so it is important that those residing in areas where resources are being extracted for our benefit and are not exploited and helping to fuel any kind of conflict as those mentioned above. Relations between communities and multi-national companies in nations where the mining of resources is occurring must keep their practices reputable and equal to Australian standards.

In conclusion, natural resources in Africa have proved to be instrumental in causing, funding and prolonging conflict. Nigeria, Sierra Leone and the Democratic Republic of Congo are just three examples explaining the consequences of possessing vast amounts of natural resources. Finally, the Australian Government must monitor Australian mining companies so that they do not exploit the instability in this region to gain favorable arrangements for themselves and their shareholders.

Reference: 

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Source: ResourceAfrica

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