Over the past 12 months, Australian mining companies have tightened their belts owing to the supposed downturn in the Chinese economy.
Iron ore and coal export demand was hit hardest and the media swooped on the mining industry proclaiming the end was nigh and all hope was lost.
Let’s look at where China sits today – 12 months on. You can decide for yourself whether there are still opportunities and mining jobs up for grabs in Australian iron ore, coal and mineral mines.
One of China’s top corporate officials sent a strong message to Australian minging companies that the rapid development of China’s infrastructure and subsequent urbanisation will run for several decades. This will have the knock on effect of creating strong demand for Australian minerals like iron ore and coal.
Chinalco boss Xiong Weiping said around 52 per cent of Chinese people exist in highly populated urban/city areas and the rate had been increasing about 1 per cent every year. Chinalco is the biggest shareholder in Rio Tinto, whose chief executive, Sam Walsh, said the company’s relationship with Chinalco was ‘now the strongest it has ever been’.
”The Chinalco group is no longer just a shareholder; it is now one of our most important business partners,” he said.
The two companies have agreed to set up a joint venture that will seek to develop the next era of mining technology.
”Based on this accelerated growth pattern, urbanisation which drives construction and development, will continue to boost China’s domestic demand for imported iron ore for at least 30 years before it reaches the rate of 80 per cent,” he said.
Speaking at a Melbourne Mining Club event in Beijing, Mr Xiong said China’s demand for minerals had traditionally been higher than the nation’s overall economic growth, which meant demand for minerals and commodities should be stronger than the expected growth rate of 7.5 per cent in coming years.
”If China’s future GDP growth stands at 7.5 per cent, the growth rate of China’s demand for minerals will be above 7.5 per cent,” he said.
I has been forecast, in the next 10 years, China will enter a critical stage of accelerated industrialisation and urbanisation, when the demand for mineral resources will continue to be very strong.
He went on to mention that Australian mining companies like Rio Tinto, BHP and Fortescue Metals Group, who are big iron ore mining companies, should grasp these rare opportunities in China’s mining industry and make the best of it. Already we’ve seen a massive surge in productivity by mining companies with record volumes of material being dug out of the ground, transported to port, loaded onto vessels and exported to worldwide customers.
The comments come after a year of debate in Australia about the legitimacy of the ”China mining boom”, with former prime minister†Kevin Rudd rubbing salt into the wound declaring the lucrative phase to be at an end.
BHP Billiton boss Andrew Mackenzie has remained steadfast in his view that Asian demand for Australian iron or, coal and other commodities like gold, nickel and copper will remain strong for decades, and Australia can continue to profit from it so long productivity keeps improving and the relationships between unions and mining companies remain positive.
Whilst China is a huge consumer of minerals and commodities, it dominates the world iron ore trade, which is Australia’s most lucrative export industry.
With urbanisation on the increase, it’s a good sign for iron ore exporters like Fortescue Metals Group, Rio and BHP, as it suggests ongoing demand for steel-making ingredients to build acres of civil engineering projects.
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Reference: iMINCO – Mining jobs – China says it’s not over yet! China’s urbanisation and growth is set to run for decades.