Resources Minister Madeleine King is heading to Asia this week to further strengthen ties with the country’s second largest trading partner, Japan.
The aim of the trip is to promote investment in Australia’s resources and energy sectors as well as identify further opportunities to partner with Japan on critical minerals projects under the $22.7 billion Future Made in Australia agenda.
King will hold talks with executives from some of Japan’s largest companies and will deliver a keynote address in Nagoya to a major Joint Business Conference, which brings together Japanese and Australian business leaders.
Two-way trade between Japan and Australia in 2023 was worth more than $120 billion.
Exports to Japan – including liquified natural gas, iron ore and coal – totalled $90 billion in 2023, while total Japanese investment in Australia last year amounted to $265 billion.
Australia and Japan have had a strong economic relationship since the introduction of the Australia-Japan Commerce Agreement in 1957.
King says Japan is one of Australia’s most trusted and valued trading partners and Australia is “rock solid in its commitment” to remain a reliable and stable source of resources and energy.
“At the same time, the transition to net zero creates new opportunities to deepen ties in critical minerals projects under our $22.7 billion investment in a Future Made in Australia,” she says.
Some of Japan’s largest companies and trading houses are major investors in Australia’s resources and energy sectors.
Mitsui Group has been involved in Australia’s iron ore industry since the 1960s and was among the first Japanese companies to establish operations in the Pilbara region of Western Australia.
Mitsui is a founding partner and has a significant investment in the Robe River Joint Venture operated by Rio Tinto (ASX:RIO), with interests in the Robe Valley and West Angelas mining hubs, together with major power, rail and port infrastructure.
BHP (ASX:BHP) also has Japanese partners — including Mitsubishi, Mitsui and Itochu — across its coal projects in Queensland and iron ore projects in Western Australia.
Herbert Smith Freehills says in its Japan-Australia Investment Report 2023: Partners in prosperity that partnerships continued to flourish as the “third paradigm” for Japanese investment into Australia.
“A total of 38 partnerships were announced in 2023, building on a total of over 150 partnerships announced since 2019,” the law firm says.
“A number of the ‘new energy’ partnerships are now progressing to proof of concept and implementation phase as the underlying projects aim for commercialisation by 2030.”
Japanese companies also continue to be very active in seeking lucrative mergers and acquisitions (M&A) opportunities in Australia.
Last year, a record 53 M&A deals were done, with total Japanese direct investment into Australia increasing to a record $133.8 billion.
Toru Aikawa, PwC Australia’s Japan Deals Leader, says in terms of investment amounts, the resource and energy sector continues to play a critical role, with foreign direct investment from Japan showing a net increase over the past decade.
Write to Angela East at Mining.com.au
Images: iStock & Australian Government
