CHINESE INVESTMENT

The Hon. B.V. FINNIGAN (14:35): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about Chinese investment in South Australia.

Leave granted.

The Hon. B.V. FINNIGAN: Australia and China are natural partners for future growth and, as this emerging economic giant's appetite for resources grows, our nation works towards meeting that demand. China is South Australia's second-largest trading partner, based on two-way trade worth $1.8 billion in 2007-08. Only the United States has a larger volume of trade with our state. During this 12-month period, the state's total exports to China were worth $817.3 million, and imports from China were worth $995.6 million. Trade is only part of the story, with foreign investment from China into resource-related projects being a key element in the development of future mining projects. Will the minister provide details of what South Australia is doing to lure Chinese investment to this state to help develop our pipeline of world-class prospects?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:36): I thank the honourable member for his very timely question. Only last week, I travelled to China to take part in the China Mining 2009 congress at the TEDA Convention Centre (the Tianjin Economic Development Area centre) at Tianjin's Binhai New Zone. Tianjin is, of course, the port city for Beijing. I was very impressed with not only the congress but also the modern venue. Team Australia (that is, all the Australian states and their representative geoscience officials) and South Australia had a very high profile at the three day congress, which is rapidly growing to rival the PDAC (Prospectors and Developers Association of Canada) mining conference in Toronto.

My trip to China, accompanied by a team from Primary Industries and Resources SA, headed by Dr Paul Heithersay, provided an opportunity to reinforce South Australia's reputation as a secure investment destination and potential supplier in mineral exports. As part of Team Australia, South Australia was able to remind Chinese and other overseas delegations of the continued potential for mineral resources development in South Australia and the support provided by the state government through the Plan for Accelerating Exploration (PACE). Chinese companies attending the congress included Sinosteel (the Chinese government's chief investment arm), the CITIC Group, Wuhan Iron and Steel Company and the Shandong Geomineral resources group, all of which are already investors in exploration and development in South Australia.

South Australia has emerged as a competitive and reliable supplier of a wide range of resources to China. During the past 18 months there has been a significant rise in the level of Chinese foreign direct investment in Australia, including our state, despite the global financial crisis. In South Australia, in particular, there have been numerous Chinese resource and investment groups entering into cooperative ventures with South Australian explorers and mining companies.

While in China I had the privilege of providing the opening address to the Australia-China Mining Investment Seminar in Beijing, which included representatives from South Australia and the other Australian states, including parliamentary secretary Lylea Ann McMahon from New South Wales. The seminar, themed 'Australia—your natural partner for mineral exploration development', provided information to potential Chinese investors of projects being developed within the nation's resources industry. This seminar was well attended by local companies and foreign media, which reflected the genuine interest in Australia's minerals and energy sector.

Our team also attended the inaugural gathering of the Oriental Mining Club. Established by some of the mining and mining support services companies based in Asia, the club was launched with a speech by former BHP Billiton China chief representative Clinton Dines. Mr Dines was able to provide a brief history of his 25-year involvement in China's opening up to the world and give some thoughts on the future for mineral exports and inbound investment. It is clear that more and more the economies of South Australia and China are becoming inextricably linked. South Australia actively encourages and welcomes foreign investment in the mineral resource sector, subject to all relevant approvals, including from the federal government's Foreign Investment Review Board. Despite recent media hype, the pace of foreign investment approvals in South Australia is quite significant.

At the China Mining Congress Mr Alan Morrell, the head of Austrade, pointed out that Australia has received 90 applications from China for foreign investment approval and these have been approved at a rate of one a week. The South Australian government has been very supportive of this foreign direct investment and has actively promoted applications submitted for approval. Whilst some people would like to talk up the one or two examples where Foreign Investment Review Board approval has been problematic for one reason or another, the overall picture is quite positive.

China resource and investment groups have recognised that South Australia is a source of world-class mineral and energy deposits and has great potential for further discoveries. South Australia also has a diverse range of minerals resources, including iron ore, zinc, heavy mineral sands, copper-gold and uranium. South Australia has also become a leading international destination for investment to tap the potential of geothermal energy. As I am sure many members in this place would already know, South Australia has a sister-state relationship with Shandong Province that has been going for more than 20 years, and we continue to maintain good relations with our friends from the Geology and Mineral Resource Bureau of Shandong. Evidence of this close relationship is the decision by Shandong Geology and Mineral Resource Bureau to establish the Shandong Ludi Mining Company in Adelaide to manage its existing mining interests and pursue further investment in South Australia.

I was delighted to host representatives of both the Shandong Geology and Mineral Resource Bureau and Shandong Ludi Mining at an investment dinner during my stay in Tianjin. Despite the worldwide economic downturn sparked by the global financial crisis, the fundamentals of the mining industry, including demand from China, remains positive. In that regard it is quite timely that South Australia has established itself as a low risk destination for investment. It is largely due to the positive environment this government has created in the past 7½ years that our state has entered a period of sustained growth and prosperity, supported by record levels of investment in mineral exploration.

Resource companies are exploring deeper and in more remote parts of the state with outstanding success. I am confident that last week's visit to China reinforced South Australia's international reputation as a secure destination for investment, and a growing source of a wide range of mineral resource exports.