Industry depends on foreign investment

Investments in Australia's resource sector have enabled the country to develop a world-class mining industry and become a key partner for China. As the countries celebrate 40 years of diplomatic relations, Australia and China are focusing on opportunities in the mining industry.

"The first recorded European discovery of coal was at Newcastle by convicts on the run from Port Jackson", says Stephen Galiliee, CEO of New South Wales Minerals Council. "In 1798, the first shipment of coal was exported from Newcastle, New South Wales to India."

In the 1840s, silver and copper were discovered in South Australia. A decade later, the first of numerous "gold-rushes" started in New South Wales and Victoria, generating populous areas, wealth and the foundations of the affluent states seen today.

Australia remains one of the world's leading mining authorities and still possesses an abundance of minerals and resources. The entire mining industry accounts for approximately 19 per cent of Australia's GDP and 60.8 per cent of the country's total exports. Iron ore and coal accounted for 58.2 per cent of total resource exports last year, with a combined value of US$114.37 billion.

Australia has the world's largest reserves of brown coal, mineral sands (rutile and zircon), nickel, lead, silver, uranium, iron ore and zinc.

In recent years, China has overtaken Japan to become Australia's largest export market. Two-way trade between the countries is valued at US$124.89 billion. Energy and minerals constitute two-thirds of Australia's total exports to China, and more than half of Australia's iron ore exports are bound for the country.

"The strength of the Australian economy is in large part due to China's demand for our resources", says Simon Bennison, CEO of the Association of Mining and Exploration Companies. "The Chinese have also been providing Australian mining companies with a lot of investor capital at a time when traditional investors have been taking a more conservative approach".