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ALABC's monthly newsletter, "Latam News," keeps members and supporters abreast of developments taking place in the Latin American markets. Locked articles can be read by paid ALABC members, including Individual, SME, Corporate and Patron.

Industry News

25

Major sporting events in Latin America offer opportunities for Australia

The Buenos Aires 2018 Youth Olympic Games and the Lima 2019 Pan American Games are providing a range of opportunities for Australian businesses.

The sporting events require architects, designers, construction companies, event planners and producers among other services.

Marie Hill, Austrade’s Trade Commissioner for Peru, said Australia is internationally known for its depth of experience in all aspects of staging major sporting events.

‘Australian companies have played key roles at major sporting events including Summer and Winter Olympic Games, Commonwealth Games, FIFA and Rugby World Cup tournaments and the Asian Games,’ said Hill.

‘They have assisted with all aspects of major sporting events from initial construction and planning to Olympic torch design to opening and closing ceremonies.

‘With proven capabilities and a demonstrated record in helping host nations deliver successful events, Australian businesses are ideally suited to assist in Latin America, as event organisers call for tenders and secure suppliers,’ added Hill.

In Buenos Aires, Argentina, host of the 2018 Youth Olympic Games from 30 September-12 October 2018, infrastructure opportunities include the development of new facilities and upgrading existing venues.

Key projects include Argentina’s Olympic Park which encompasses an athletics venue, aquatic centre and playing fields for several sports like hockey, where Australia’s expertise in developing such facilities is internationally recognised. Suppliers of sports material and equipment are also in demand.

The 2019 Pan American Games and Para-Pan American Games held in Lima, Peru from 26 July-11 August 2019, offer a variety of opportunities for Australian suppliers to assist with infrastructure, equipment and services.

COPAL, the Organising Committee of the Lima 2019 Pan American Games, will use the Canadian Commercial Corporation (CCC) to manage all Games-related procurement and is expected to announce major infrastructure tenders in mid-March 2017. The details of service projects are also likely to be known once infrastructure projects commence.

‘To date, four local companies have told Austrade of their interest in partnering with Australian counterparts to bid for Games-related projects,’ said Hill.

‘Peru’s two largest infrastructure firms are interested in working with Australian firms who hold sports infrastructure expertise and international experience, as well as suppliers of relevant building products and sporting equipment.’

Hill said these partnerships would assist in bidding on key infrastructure projects which include the athlete’s village, athletics venue, aquatic centre, and indoor multi-purpose sports centres; as well as upgrading existing facilities like the soft roof to Lima’s cycling velodrome and resurfacing sports tracks.

‘Austrade has also generated interest in Australian companies forming partnerships to help establish an accredited anti-doping laboratory in Lima.’

Other potential opportunities include providing services in security, hospitality, transport, traffic management and volunteer training.

‘Further opportunities are likely and a trade mission to Lima and Buenos Aires is planned for March 2017. The mission which will include meetings with event organising committees and facilitate introductions with prospective local partners.

‘The 2019 Pan America Games will provide additional opportunities to build relationships between Australia and Peru on a number of levels through our common sporting interest,’ added Hill.

The Buenos Aires 2018 Youth Olympic Games is expected to attract 7,000 attendees from 206 countries and involve more than 3,800 athletes.

While the Lima 2019 Pan America Games is anticipated to involve 6,500 athletes and Para-Pan American Games 1,800 para-athletes in nearly 400 events, attracting over 75,000 visitors.

These events follow Latin America’s success in hosting international sporting events – the 2014 FIFA World Cup and 2016 Olympic Games in Brazil.

Visit Austrade’s website for more information about the Lima 2019 Pan American Games and doing business in Argentina.


Latin America Downunder Early Bird Registrations Open
16

Latin America Downunder Early Bird Registrations Open

Latin America Downunder
17-18 May 2017
Perth, WA


Early Bird discounts for registration are available now

For $990 (incl. GST) you will receive:

  • Full access to the exhibition area and presentation sessions over the two days
  • Morning tea, buffet lunch and afternoon tea
  • A delegate satchel
  • Admittance to the cocktail receptions held on 16 & 18 May 2017
  • A discount purchase rate for the CD of conference proceedings
  • 25% off a full priced subscription to Australia's Paydirt and Gold Mining Journal

To register, please click HERE

 


08

David Landers - Speech 2nd Australia-Chile Economic Leadership Forum Melbourne 6 December, 2016

David Landers 

Speech 2nd Australia-Chile Economic Leadership Forum 

Melbourne 6 December, 2016  

 

Download the presentation

Introduction (slide 1) 

Good morning everyone. It’s a great pleasure for me to be here today and to speak with you at this Australia-Chile Economic Leadership Forum. 

You’ve heard a lot about the Australia-Chile relationship so far, and so today I’d really like to speak to you about “The Big picture through the unique lense of the Australian Trade and Investment Commission” and what this picture could mean for the relationship moving forward.  

As you’re all well aware, the mining sector has been an important block in the foundation of the relationship between our two countries; one that has had significant flow on effects for other parts of the industry. Indeed, there are now over 90 Australian companies providing services and technologies to Chile’s mining industry and Austrade has worked to both support our established companies and also to provide opportunities for new entrants.  

But now, I’m going to focus on our plan to take the Australia-Chile bilateral trade and investment relationship to the next level. Following on from our success in mining, businesses in other industries have begun to enter Chile with greater regularity, whilst more sophisticated trading platforms are enhancing the way in which we do commerce globally.  As both Chile and Australia’s economies diversify, it is these emerging areas that will become the new engines of growth between our two countries, and therefor today I’ll be sharing with you:

  
1) the trends we have identified beyond the mining sector 

2) How we can boost these new areas by joining forces: Going from competition to competitive complementarity

3) How Australians are using Chile as a springboard for doing business regionally.   

1. Chile 3.0: Beyond mining   
So where is our trade relationship now? 

Chile is Australia’s main trading partner in Latin America. We have an FTA and a double taxation agreement in place. This has facilitated trade between our countries with two way trade in goods and services amounting to just over $1 billion. Chile is home to over 180 Australian companies and other entities.  (Prompt: Move to slide 2)  

Whereas our presence in the region used to be defined by names such as BHP Billiton and Rio Tinto, we have entered a new period of engagement where companies such as SEEK, carsales.com.au, Amcor, Latam Autos, Cochlear, and Nufarm are seizing a different set of opportunities. The trend is not driven by mineral wealth but by the growing wealth of the middle class and increasing connectivity in the region. 
  
Austrade understands this trend, and through our office in Santiago is working to exploit opportunities across a range of industries to ensure the continued expansion of our relationship:  (Prompt: Move to slide 3)

a. Health:  We are very proud of our capabilities in the health sector. Australia’s medical technologies are making a global impact; solutions such as the cervical cancer vaccine, the cochlear implant (the bionic ear) and multi focal contact lenses are just a few Australian inventions that have transformed the lives of people around the world.    

These solutions are making their way to Chile, where Cochlear implants are helping the hearing impaired and where Truscreen’s portable cervical cancer screening device should soon be providing real time, 99% accurate detection of cervical cancer. 

  We are exploring cooperation in the aged care sector. Chile, much like the rest of Latin America, is trending towards the progressive ageing of its population. By 2050 Chile will have the second largest percentage of senior citizens in all of Latin America with 30.6% of the population. This increase in the ageing population requires a range of public policy responses to address a number of challenges and issues that this demographic trend presents. In the last 20 years, Australia has seen a similar pattern, implementing policies, skills and aged care infrastructure relevant to address the needs of our senior citizens. As such, there is an explicit experience that we can share. 

  
b. Infrastructure: Our engineering companies, which have established themselves in the mining sector are now successfully diversifying and pursuing opportunities in other sectors.   

With over 15 years in Chile, GHD is leading the charge on this front. Today, GHD is working on major projects across multiple sectors, including: 

  • the engineering study for the repair works of the recently collapsed Tolten bridge;
  • studies for the expansion of one of Chilean Patagonia’s most dangerous navigation channels (the Kirke Channel); 
  • redesigning the promenade of the beautiful southern city of Frutillar and 
  • power plant engineering, to name a few.     

Australian transport infrastructure expertise is also finding a receptive audience as the government looks to double rail cargo and more than triple passenger numbers by 2020 with a US$7.6bn reform. It has already identified Australia as a compatible partner given similarities in the two country’s rail systems and Austrade secured a keynote address slot for an Australian expert in rail communications systems at a major seminar for stakeholders this year and we are of course pleased to be hosting the Vice-Minister for Transport this week.    
  
c. Agribusiness and Food:  Both of our countries are agricultural power houses.  Our geo-climatic conditions are very similar and we share export destinations. Hence, it’s not surprising to observe increasing cooperation amongst our agencies and a growing number of agri-tech companies exploring opportunities in each other’s countries.  

  There is an increasing number of Chilean wine-tech companies (such as Cargobulk) and enologists in Australia’s wine industry. We see Australian automation equipment companies (GP Graders), seed (Valley Seeds) and water solution (Rubicon, Sentek) companies successfully establishing themselves in Chile. Over the past 24 months we have welcomed farmers from Chilean Patagonia who have visited our shores in search of sheep and cattle genetics and fruit producers seeking water management solutions.   

We are also very excited to share that CSIRO and Chile’s National Institute for Agricultural Innovation are exploring joint cooperation to investigate and find solutions to common challenges in the agricultural sector.  

d. Education:  Productivity is high on the Chilean government’s agenda and there is a renewed focus on skills and vocational education and training as part of the country’s ambitious education reforms. The Australian Qualifications Framework and training packages have become a model to be shared and adapted according to the local needs. The Chilean Skills Council for Mining is an example of this. The Chilean g overnment is set to create 15 new public tertiary level VET institutions, with potential opportunities for Australian institutions across curriculum development and teacher training.  The creation of a new Ministry of Science and Technology has been announced and a greater emphasis on strengthening local research capacity and capability is expected as a result of this.   

What we identify (beyond pure trade) is in fact the opportunity for our companies, educational institutions and science agencies to join forces with their Chilean counterparts to tackle even greater opportunities.   

2. Competitive Complementarity 

 (Prompt: Move to slide 4) 

Both Chileans and Australians are diggers, planters and service providers. To us, that means that whilst we could be viewed as natural competitors, the nature of that competition is highly complementary and makes us ideal partners in a number of fields.  

We both do well on the international business stage and have similar business cultures. Both of our countries are platforms for our respective regions: Australia for Asia and Chile for Latin America. Our universities and research agencies are working together and we offer each other’s companies fertile business environments. These are more than just observations; our companies and research institutions have already developed a number of strong and successful partnerships.   
  
As is to be expected, some of our strongest partnerships have been in the METS space, where we have seen cases like Seeing Machines team up with GTD and create Seeing Machines Chile. They are well established in the Chilean market and are now exploring opportunities in Brazil and Mexico. Conymet is a well-known Chilean Mining services Company that went to Australia, invested in Duratray, and is now selling Duratray’ s mining truck dump trays to Chile’s main mine operators. Romteck and Vantaz have also teamed up to form a distribution partnership. Thanks to Vantaz, Romteck’s technology is now monitoring mining employee fatigue in both Chile and Peru.  

Like our relationship more broadly, these partnerships are extending beyond the mining industry. For instance, in Agribusiness we can see Rubicon Water teaming up with Agro Riego Tattersall to pursue opportunities in Chile and now Peru.   

We can see that cooperation is growing organically in mining and agriculture, let’s look at a few other potential areas of competitive complementarity:    
a. Services  (Prompt: Move to slide 5) 

Both countries’ services sectors are considerable. In Australia, services represent 80% of our GDP. In Chile, the services sector accounts for 61.5%1 GDP, putting it at the lower end of the developed economies range.  

As you can see from the graph, our service industries are at different stages of development. Australia’s larger and more mature services sector therefore has the opportunity to provide solutions to Chilean businesses in several critical sectors.  

Chile’s services sector is made up of business and financial services, transport and communication, hotels and restaurants and personal services such as education, healthcare and real estate. Australia’s sector correlates well, with financial and insurance services leading the way, closely followed by construction and healthcare. One area where the opportunity for cooperation is high is in:  

Agricultural services. Both Australia and Chile have had to resolve similar challenges in the Agri sector. These range from high labour costs, to water management, to pasture improvement. Our companies and research agencies are already engaged with Chilean counterparts and customers. We see considerable potential in following the steps of mining companies and joining forces to service this sector, where we have common customers in Asia.  
These services areas provide exciting opportunities for collaboration which we look forward to pursuing.      

b. GVC’s:  (Prompt: Move to slide 6) 

A 2013 OECD study reported that approximately 70% of world trade is structured within multinational corporation (MNC) global value chains. That is to say, 70% of world trade is in unfinished goods.  

The income from trade flows within GVCs has more than doubled between 1995 and 2010. For China it has increased six-fold, India five-fold and Brazil three-fold. GVCs are an integral part of the global economy now, and will only grow in importance over time.  

Increased engagement in GVCs by our respective countries is therefore essential to boost our relevance and competitiveness in the global economy.   

This is particularly the case as certain functions of MNC value chain decision making and production nodes move into countries and regions such as Mexico, South Asia and ASEAN to access a trifecta of innovation, cost efficiencies and proximity to significant emerging customer bases.   

Australia’s strong reputation for innovation, a highly educated workforce, urbanised and digitally connected means that Australia is well-placed to take advantage of global opportunities related to the evolving needs of multinationals.     
Austrade is pursuing this strategy through customer access programs, by working with major MNC customers to diagnose and prioritise particular needs in relation to their value chains and then employing a ‘Team Australia’ approach to identify and position best-in- class Australian solutions.   

Chile’s favourable trade and investment openness create an attractive environment for Global Value Chains. Low import tariffs, both at home and in export markets, and engagement in preferential trading agreements position Chile well in Central and South America.   
Chile has easy access to a number of GVC’s operating within its borders. Together we can access opportunities in: Mining, Fisheries (Biomar, Aqua-Chile Marina Harvest, Cermaq) and Agriculture (Ferrero Rocher, Nestle) Another option, which is closer to home and a much more immediate strategy for Austrade is the regional migration of our companies.   

3) Australia-Chile - regional springboards for migration  (Prompt: Move to slide 7)  

Chile is familiar to Australian businesses and provides a direct entry point to Latin America. It’s a great country for Australians to familiarize themselves with the business environment and then grow.  Likewise, Australia is familiar to Chilean businesses and provides an excellent gateway to Asian markets.   
  
This slide is a good illustration of how Australian companies, universities and science agencies are using Chile as a springboard for regional migration. It shows companies that have set up their operations in Chile (either by establishing a subsidiary or engaging a representative) and have then gone on to either establish offices or pursue opportunities in Argentina, Peru and Colombia.   

Helping Australian companies, universities and science agencies grow and pursue opportunities in neighbouring countries is a key component of Austrade’s strategy. We have agile and closely connected teams posted across the region. We share intelligence about business opportunities and local country conditions, develop valuable networks and have the capability to guide our companies though the unique business culture of each country. We would be very pleased to support Australian-Chilean partnerships in their search for greater opportunities abroad.   (Prompt: Move to slide 8)  

But it’s not all one way, Chilean companies are taking advantage of direct air-services to Asia from Australia and established partnerships and linkages between Australia and Asia to export their goods and services.  And Chinese companies in particular are making investments in Chile through Australian acquisitions, Pacific Hydro is an example.  

Conclusion:  

There’s no denying the importance of the Mining sector to the Australia-Chile bilateral trade and investment relationship, but I hope I’ve made a case that the complementarity between our two economies extends through a much broader range of sectors. Health, Infrastructure, Agribusiness and food, and Education.  

Moreover, the depth and breadth of Australia’s services sector offering, Australia’s capacity to feed into the global value chains of multinationals corporations that are operating out of Chile in increasing numbers, and finally the access both our countries offer to larger regional economies suggests that the future of our economic engagement will be significantly more weighted toward a variety of more globally integrated sectors.  
It is therefore critical that we work collaboratively to leverage each other’s strongest capabilities and work to open ourselves up to new industries and markets.  

(Prompt: – move to slide 9) 

Thank you.


28

His Excellency General the Honourable Sir Peter Cosgrove AK MC (Retd) - Sydney Annual Dinner speech

ALABC 2016 SYDNEY ANNUAL DINNER 

22 NOVEMBER 2016

HIS EXCELLENCY GENERAL THE HONOURABLE SIR PETER COSGROVE AK MC (RETD)

SPEECH


 

Good evening.

It is a pleasure to be with you.

At the outset I want to express my sincere appreciation to Jose Blanco and all those at the Australian-Latin America Business Council.

For 27 years the Council has dedicated itself to forging closer ties between Australia and Latin America.

You have made immense progress and the relationships we enjoy today—economic yes, but also the people to people relationships and our strong cultural ties—owe much to Jose and his team.

My visit earlier this year to Latin America was the first by a serving Australian Governor-General.

And a cracking pace was set.

In 17 days I made State Visits to Mexico, Uruguay, Argentina and Chile; as well as an official visit to Brazil—even finding time to meet the Australian Olympians in Rio.

There were many highlights:

Mexico:

  • Meeting President Peña Nieto to celebrate 50 years of diplomatic relations between Australia and Mexico.
  • Visiting the Australian-funded International Centre for Research and Improvement of Wheat and Corn in recognition of
    its 50th anniversary.
  • Visiting the Teotihuacan Archaeological Zone—Pyramid of the Sun, Jaguar Mural, Butterfly temple.
  • Laying a wreath at Niños Heroés monument.
  • Being made a Distinguished Guest of Mexico City and awarded the keys to the city.
Brazil:
  • Attending a reception with the then interim President of Brazil Michel Temer and seeing the magnificent Olympic
    opening ceremony.
  • It was a wonderful Olympics and Paralymics, the facilities were great and the logistics ran smoothly.
  • Visiting the Australian-funded Pipa social project.
  • Meeting Australians working and living in Brazil.

Uruguay:

  • Meeting President Vazquez.
  • Receiving the Key to the city of Montevideo.

Argentina:

  • Laying a wreath at the General San Martin Monument.
  • Being invested with the insignia of the Collar of the Order of the Liberator General San Martin.
  • Visit to the Australian-funded Fundación Botines Solidarios rugby academy.

Chile:

  • Marking the 70th anniversary of Australia's diplomatic presence in Chile marking with President Bachelet—a woman with
    a long and close connection to Australia—.
  • Laying a wreath at the General Bernardo O’Higgins Monument and then visiting his Crypt.
  • Visiting the Australian-funded San Nectario Foundation School for children with autism and dysphasia.

These are just some of meetings and people who provided unique insights into countries and a continent you all know very well.

And now I’ve had time to reflect—I can see that there were a couple of key messages kept coming through.

From presidents, diplomats and business people—everyone I met wanted our countries to stay close, to stay open and to keep working together for all our benefit.

They understood that our futures are joined.

They understood Australia was a genuine friend.

And they knew that prosperity comes from people and nations embracing each other, recognising all we have in common and working together for our mutual benefit.

Universally, there was enthusiasm for closer bonds between our nations and people:

  • For greater friendship.
  • For more trade and investment.
  • For closer business ties of course but also education and tourism.
  • To capture the benefits of economic growth.
  • And to work as one, for a better planet, for better lives and to tackle the really big issues facing our planet.

We need to have mutually beneficial relations between nations.

There is no place for isolationism, xenophobia, and protectionism; they are not the Australian way.

And they are not the Latin American way:

  • We have recently seen the elections of reform minded governments in Argentina and in Peru with the election of
    President Macri and President Kuczynski.
  • Brazil is moving toward greater trade liberalisation and free markets under President Temer.
  • Peru has just successfully hosted APEC which is all about fostering greater trade in the Asia-Pacific.
  • Peru, Mexico and Chile are also part of the Trans Pacific Partnership.
  • Mexico is here this week for MIKTA.
  • And Argentina is set to play an important leadership role in the world economy as chair of G20 in 2018.

So all my experience, all the evidence, is that multilateralism and global trade continue to be alive and well and very much front and centre of our relationship.

And why wouldn’t it be:

  • Out trade has exceeded the $10 billion mark.
  • Over 280 Australian companies are doing business in Latin America—many of them in mining sector.
  • Nearly 50,000 students come to Australia from Latin America to study, a figure that is growing each year
  • And visitor numbers between Australia and Latin America continue to rise.

There is so much potential still to be taken advantage of.

And this is where I am happily and earnestly doing my bit to promote the relationship and the opportunities that exist.

Whenever I get a chance, I spruik all that we are, and that we can become together.

Admittedly I do it with the zeal of a recently returned traveller.

But I also do it with the opportunities and contacts that come with being Governor-General and armed with a knowledge and appreciation of our countries, the linkages we have and the untapped potential that remains.

I think of Australia and Latin America as trusted friends and trusted partners committed to working together for our people and our nations.

I am honoured to be part of that process.

And of course the Australian Australian-Latin America Business Council is integral to that process.

Together we are, and we will continue to be, firm friends and partners.

Thank you.

 


28

Victorian Government | Department of Economic Development, Jobs, Transport and Resources - Platinum Partner of the inaugural Latin American Infrastructure Forum (‘Forum’) in May 2017

The Australia-Latin America Business Council (‘ALABC’) is pleased to announce that the Victorian Government, through the Department of Economic Development, Jobs, Transport and Resources, has become a Platinum Partner of the inaugural Latin American Infrastructure Forum (‘Forum’) that the ALABC will be hosting in May, 2017.

The Forum will be held in Melbourne on May 23, 2017 and will give Australian business an unprecedented opportunity to learn about the infrastructure developments taking place across the Latin American region. Through comprehensive presentations, panel discussions and one on one meetings, Forum participants will have the opportunity to learn about:

  • the current economic status of the major markets in Latin America;
  • the critical role that infrastructure development  will play in underpinning productivity growth and  the increased competitiveness of these markets;
  • the pipeline of projects on offer in each market and strategies for accessing them;
  • the issues that need to be taken into account when investing in or participating in projects in the region.

Read the full media release below


12

2016 Australia-Latin America Business Awards- Now Open







Australia-Latin America Business Awards 2016


Since 2002 the Australia-Latin America Business Council (ALABC) and the Council on Australia Latin America Relations (COALAR) have recognised outstanding contributions to the development of Australia's commercial links with the Latin American region through their "Australia-Latin America Business Excellence Awards".

Since their inception, the Awards have grown in prominence and have been presented to a broad range of outstanding companies, institutions and individuals, all of whom are connected by their shared commitment to the markets in Latin America and by the success that they have had in engaging with the region.


Nominations

The Awards are open to all applicants and membership of the ALABC is not a prerequisite in order to nominate. All applications are assessed by a committee established by the ALABC and this year’s Awards will be presented at a gala function that will be hosted by the ALABC in Sydney on 22 November 2016.

 The deadline for submission of applications is 5.00pm on 31 October 2016.

 

Award Categories

The Awards are offered in the following three categories so as to ensure that all applicants are able to compete on an equitable basis:

A:  Entities that have more than 200 employees

B:  Entities that have between 20 and 200 employees

C:  Entities that have less than 20 employees

 

Applicants will be required to show one or more of the following:

  1. a proven commitment to one or more of the markets in Latin America;
  2. success in the export of products or services to Latin America;
  3. the development of a successful investment strategy in the Latin America;
  4. an outstanding contribution to furthering the development of relations between Australia and the Latin America region.

 

Award Benefits

The three (3) finalists in each category shall receive one (1) ticket to the ALABC dinner of their choice in 2017;

The winners of each category shall receive:

  • one (1) year’s free membership of the ALABC;
  • acknowledgement on the ALABC website for one (1) year;
  • recognition of their achievement at the ALABC dinners in 2017

 

For further information, please contact Mya Bilbao, ALABC Secretariat on (02) 9431 8651 or email: secretariat@alabc.com.au

Proudly Sponsored by:


05

Andrew Michelmore- MMG Limited- Melbourne Annual Dinner speech


ALABC 2016 MELBOURNE ANNUAL DINNER 

WEDNESDAY 3 AUGUST 2016

ANDREW MICHELMORE  SPEECH


Thank you to The Australia-Latin America Business Council for your invitation to speak here this evening.  

It is wonderful to have this opportunity to connect with such a diverse range of distinguished representatives which connect our two continents; Australia and South America.  

Latin America and Peru

As the CEO of MMG and also the Chair of the International Council on Mining and Metals, the ICMM, I am proud to be a part of the strongest trade link between Australia and Latin America – the mining sector.   

The ICMM brings together 23 mining and metals companies and 34 national and regional mining associations. It addresses the key challenges in sustainable development and sets the standards for sustainability wherever we operate in the world.  

This is a unique collective – now in its fifteenth year – representing over 60% of the world’s mineral production and dedicated to being a catalyst for change.  The ICMM is dedicated to improving the social and environmental performance of the mining and metals industry and 17 of the 23 member companies have operations in Latin America.  

 

Today, mining accounts for the largest share of Australia’s trade and the majority of the leading mining companies have a significant presence in Latin America. 

As a region it is blessed with a significant natural resource endowment, immense diversity in the minerals available; and the potential to translate this blessing into strong economic growth, improved living standards and infrastructure development to benefit future generations.  

Few countries have had a greater contribution from mining to their living standards than Australia.  
Melbourne, where we meet today, owes much of its wealth and architectural beauty to the gold rushes of the late 1800s and the ‘Collins house’ companies including BHP/CRA and WMC.  
Part of what has made us ‘the lucky country’ is this ability to attract mining investment through a stable regulatory regime, plentiful resources and low sovereign risk.  

Our Story 

Peru, our newest operating jurisdiction offers many of the same opportunities. It is also similar to Australia in its dependence on resources and the significant benefit it derives from foreign direct investment.  

It has diverse resources, a significant pipeline of future projects and balanced investment and regulatory settings.  

Our expansion to the region, through our acquisition of the Las Bambas copper project two years ago, has been transformational for MMG. It has significantly changed our production profile – we are now an emerging major copper producer.  

Our ability to grow during this commodity down cycle, when much of the industry is seeking to downsize, is thanks in large part to the support of our major shareholder China Minmetals Corporation, known as Minmetals.  

Together with Minmetals we share an ambition to build a global mining major and to be at the top of the mid-tier miners by 2020. 

MMG’s experienced management team combined with China’s funding potential provides for a powerful combination to drive growth and investment in Latin America. And we are on our way.  

On 1 July we announced the start of commercial production at Las Bambas following a successful ramp up and commissioning.  

Las Bambas is the largest copper mine to be built for more than a decade and represents a ten year, over $10 billion investment into the future wealth of the comparatively poor region of Apurimac in the Southern Andes.  

Its scale means that it will be a major contributor to Peru’s exports and tax contributions. It will deliver employment and development and create wealth for the community and shareholders.   

The Central Reserve Bank of Peru estimates that Las Bambas, and fellow mining development Cerro Verde, will contribute 2% to global copper production and increase the national GDP by 4%.  

Mining has contributed approximately 12% to Peru’s GDP since 2000 which translates to an enviable growth rate of more than 6% - the highest among Latin American economies. It is also the fastest growing export sector, accounting for 62% of the country’s exports. 

Where the industry’s largest impact is felt is in the regional communities.  A study from the Peruvian Institute of Economics estimates that the Apurimac region grew 31.6% between January and March of 2016 due to activity surrounding Las Bambas.  

The region’s economy is expected to double this year – this is consistent with the overall trend between the mining regions which reported a 12.4% growth rate in the first three months of 2016, and non-mining regions which reported a growth rate of 0.1%, excluding Lima.  

Undeniably, mining is a major catalyst for the rising standards of living in Peru and as an industry it has become increasingly sophisticated.  

Yet our industry struggles to attain broad acceptance. This is not a new struggle.  

While the challenges are unique they often mirror the same issues we see in more seasoned jurisdictions, including Australia.  

To date, over a billion US dollars has been spent on community infrastructure and social development in the region surrounding Las Bambas.  

The relocated town of Nueva Fuerabamba is a modern community in the Andes which would not look out of place in the suburbs of Melbourne.  
  
As is the case in most remote communities where mines are located, including the Australian Outback, an expectation is established for the company to take a leading and active role in the economic and social wellbeing of its neighbouring communities.  

As miners, we assume the responsibilities of delivering social, economic and health outcomes without having an elected mandate to deliver.  

We also face the challenge of meeting rising expectations while contending with the perception that the industry does not contribute as much as it should. This results in often short term tax-based solutions which fail to offer sustainable benefits.  

We saw this in Australia’s proposed Resource Super Profit Tax which was replaced by the Minerals Resource Rent Tax.  

Similarly, in Peru a profit tax which aims to share the industry’s profits with frontline workers has led to unintended consequences including the growing income gap between mining and other sectors.  
Governments have a critical role in ensuring that the profits raised are used as a catalyst for industry-related development and growth, especially the provision of infrastructure. 

The debate should be less about how you slice the pie, and more about how you grow the pie. Access to plentiful natural resources is a competitive advantage that not all countries share. The challenge for Peru and Latin America is how you transfer this advantage into a competitive strength.  

Ensuring sustained, long term economic growth and softer landings during the downturn as we are experiencing now, is a joint effort between governments, civic society and of course the industry.  

Governments must offer stable regulatory conditions which support growth. The industry must showcase transparency and strong governance, and civic society must capitalise on the opportunities mining affords to improve education, increase employment opportunities and to raise living standards.  

I am encouraged to see that as a region Latin America has, after decades of political upheaval, emerged as a region championing governance reform. One example of this is Peru’s pioneering role in the Extractive Industries Transparency Initiative process - demonstrated by 11 years of publically reporting mining and oil and gas revenues. 

Conclusion  
There is also something unique in the character of Australians that make them very much at home in Latin America. It goes beyond respect for a good BBQ to a feeling of progress and promise. While both our continents are home to ancient civilisations, we share a feeling of opportunity and we don’t take ourselves too seriously.  

I have been a regular traveler to Latin America for many years – mostly to chase mining opportunities. For the last two years, I have become a much more frequent visitor and I have grown a better understanding and love for the region.  

Our investment in Peru has lived up to our expectations – as has the quality of Peruvian cuisine and the Argentinian and Chilean wines! I want to personally thank Jose and the Australia-Latin America Business Council for the tireless work in extending the Latin American and Australian relationships and for his advice to us at MMG in our own entry to Peru.  

And I should also mention the Victorian Government’s outstanding efforts to build trade and investment between the two regions. The opening of a new trade and investment office in Santiago, Chile later this year will provide a Victorian base in Latin America to extend this cooperation.  

Thank you 


04

Inquiry into Australia’s relationship with Mexico Report

On 20 August 2015 the Senate referred the following matter to the Foreign Affairs, Defence and Trade References Committee for inquiry and report by 3 December 2015. The terms of reference for this inquiry are as follows:
  • Mexico’s continued elevation in the global geo-political and economic order and its implications for Australia;
  • opportunities for enhanced relations, including the potential for increased bilateral engagement and also through jointly held memberships such as the G20, APEC, OECD and MIKTA;   
  • potential opportunities for enhanced trade and investment ties, in particular those emanating from the proposed Trans-Pacific Partnership (TPP);
  • scope for increased collaboration in the education sector and the potential for extending scholarship programs to Mexico;
  • scope for increased trade and commercial exchange in the resources sectors with particular reference to hard rock mining and the Oil & Gas sector in the Gulf of Mexico;
  • scope for cross investment and joint ventures in Australian and Mexican infrastructure projects; and
  • any other related matters.

The committee advertised the inquiry on its website. The committee also wrote to individuals and organisations likely to have an interest in the inquiry and invited them to make written submissions.

A total of 41 submissions and six supplementary submissions to the inquiry were received.

Please follow the below link to download a copy of the committee's report tabled  in the Senate.

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Foreign_Affairs_Defence_and_Trade/Australia_Mexico/Report

For more information on the report and upcoming inquires please visit the Parliament of Australia Website  http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Foreign_Affairs_Defence_and_Trade 

 


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