Wednesday, May 27, 2009

Stand by for lots more smoke

I've been at the Minerals Week conference

India has signaled that agreement at the December Copenhagen climate change talks will be hard to reach, declaring that it will not accept anything less than the right to lift its emissions per head to Australian levels.

Addressing a minerals conference in Canberra India's High Commissioner to Australia, Sujatha Singh described the negotiating stance as a concession "not lightly given".

"You cannot have an agreement whereby countries that reach a certain standard of living, a certain level of development, turn around and tell the rest of the world that what we have we get to keep; what we have, you can't even aspire to."

"That would be what a restriction on India's emissions would amount to"...

Were India's emissions per head to grow unrestricted until they reached Western levels it would become the largest or second-largest emitter in the world.

"We are telling you that we need to grow if we are going to give our 600 million people who live under $2 US dollars a day a decent standard of living," Mrs Singh told the conference.

"Our per capita emissions will increase, there's no doubt about it."

"But I am assuring you that they will never increase to what you yourselves are emitting. So you have an incentive to bring it down. Bring it down, we'll match it, we won't exceed it."


Russia and India are stepping up pressure on Australia to sell them uranium in the context of international climate negotiations.

Both Russia's Deputy Trade Minister and India's High Commissioner to Australia used Minerals Week in Canberra to stress that they wanted decisions on access to Australian uranium soon.

India's High Commissioner Sujatha Singh said there were other countries prepared to supply India if Australia would not.

On winning office, Labor overturned a Howard government decision to sell uranium to India on the ground that it was not a member of the nuclear non-proliferation treaty.

It put on hold an in-principle agreement to sell uranium to Russia after receiving a treaties committee report last September raising concerns.

"We are just expecting its position on this issue," he said through a translator. "Certainly we are waiting for the Australian decision."

Indian High Commissioner Sujatha Singh called on Australia to change its mind.

"If you are concerned about greenhouse gasses then it is worth considering that Australia exports coal to India but not uranium, which would help India move to cleaner energy sources," Mrs Singh said.

Here I would like to place on record that India is grateful to Australia for its support to India at the nuclear suppliers meeting and the International Atomic Energy Agency on the special exemption that allows India access to international co-operation and civil nuclear energy.

She thanked Australia for its support for a deal that allows India access to United States uranium for civilian purposes even though India has not signed the non-proliferation treaty.

"Looking into the future we hope that this support will be taken to its logical conclusion," she added.

"We are already talking to other countries. We are taking to France and Russia, and to Kazakhstan and Mongolia.

"When the moment is ripe, I would like to see Australia added to this list."


China has stepped into the row over whether Australia's Foreign Investment Review Board should approve the $19.5 billion proposed investment by the Chinese aluminum maker Chinalco in the Anglo-Australian miner Rio Tinto.

Ahead of the decision due next month China's Ambassador to the Australia Junsai Zhang told a conference in Canberra that China "does not intend to control Australian energy" and that it would not be possible for it to do so.

Mr Zhang said the deal, which could eventually give Chinalco 18 per cent of Rio, merely reflected China's status as Australia's largest trading partner.

"China's actual investment here only accounts for 1 per cent of foreign investment in Australia," he said. An increase in Chinese investment in Australia would be "nothing strange".

"However some people in Australia have different views. They argue that the Chinese investment is from state-owned enterprises, and they will control Australian energy and mineral resources to the detriment of its national interest."

"Such worries are understandable but unnecessary."

"State-owned is not state run. In some of our state-owned enterprises the government owns a big share. In some it is a smaller share. Some is listed on the share market."

"Yes, the chief executives are appointed by the government, but their performance is judged whether they can make money or not," he told the conference.

"We are interested in win-win situations. In the current crisis opportunity still knocks. China-Australia relations are still growing."

Rio Tinto's iron ore chief Sam Walsh poured scorn on the notion that state control mattered.

"Our competitor BHP Billiton has downstream joint venture partners across all of its Pilbra operations, including joint ventures with Chinese state-owned enterprises.

"This is precisely as it should be."

"History shows us that when customers or companies with strong links with customers are involved in major resource developments the resulting trade with those customers grows and prospers."

"Indeed one of the strategic attractions of our proposed Chinalco transaction is exactly that it involves Rio's and Australia's now major market for iron ore, potentially deepening the relationship," Mr Walsh said.

The iron ore chief called on critics of the proposed deal to "get a grip".

"Rio Tinto worldwide has more 40 joint ventures, nearly all of them with customers," he told the conference.

"It beggars belief that anybody can now object to this is 2009 on the basis of some principle entirely new to this industry after nearly 50 years of experience both here and internationally which has shown definitively that companies can have both close and productive relationships with customers and at the same time maintain commercial independence."

Mr Walsh claimed that the deal could even be good for Australia by ting Chinese buyers more closely to Australian sellers.

"Customers can go elsewhere, and we have seen this in the past," he said.

"Australia and we recovered that mistake, although not before Brazil was established as our competitor."

"This is a time to recognise that trade and investment in resources go together and to position ourselves accordingly.

After speaking earlier at the conference Treasurer Wayne Swan refused to commit himself to a timetable for making a decision.

"I never speculate about decisions that are before me as the responsible Minister for administering the Foreign Investment Review Board and the Act," he said.

Asked whether he would be meeting Rio Tinto's new chairman, Jan du Plessis, who arrives in Australia within days the Treasurer said he did not "usually speculate about meetings I'm having day by day".

Mr Walsh later told reporters the Chairman was planning to meet with "major investors and government and others".