This article is a sponsored feature from Mining.com.au partner Australia China Business Council. It is not financial advice. Talk to a registered financial expert before making investment decisions.
China has signalled it wants to take its already deep ties with Western Australia to the next level, with Beijing’s new top diplomat in Perth emphasising the state’s pivotal role in the future of the China-Australia partnership.
In her first address as the newly appointed Chinese Consul General in Perth, Madam Fu Lihua says China is ready to work with Australia to further advance relations between the two countries.
“As two important countries in the Asia Pacific region with highly complementary economic structures, China and Australia share significant interests in strengthening cooperation for mutual development and promoting global peace and stability,” she says.
“In recent years, the comprehensive turnaround in China-Australia relations has delivered tangible benefits for our peoples.”
Fu delivered the speech at the joint Australia China Business Council WA (ACBC WA) and China Chamber of Commerce Perth Branch (CCCA) China National Day Celebration on Wednesday (1 October).
In July, Chinese President Xi Jinping met with Australian Prime Minister Anthony Albanese and expressed that both sides should continue to enhance strategic mutual trust, deepen mutually beneficial cooperation, foster greater people-to-people friendship, and jointly address risks and challenges.
“Among all Australian states, Western Australia boasts the closest and most prominent practical cooperation with China,” Fu says.
“For many years, China has been WA’s largest trading partner, largest export market, and largest source of inputs.”
Last year, the state shipped about $124 billion worth of goods to China, accounting for 52.8% of total exports. Western Australian Government data places the average annual growth rate over the past decade at 8.2%.
Top exports include iron ore, lithium and liquified natural gas.
Speaking to Mining.com.au, ACBC WA President James Clarke says the bilateral trade and investment relationship ensures prosperity for every Western Australian household.
“This includes employment gains, disposable income gains, and it also drives down the cost of living,” he says.
“This relationship is not only vital for Western Australia, but also profoundly significant for China, supporting its ongoing growth and development.
“It is built on deep economic complementarity and underpinned by more than 50 years of friendship and bilateral engagement.”
Minerals, agriculture and innovation drive ties
Fu says Western Australia is rich in mineral resources, its agricultural products enjoy a high reputation, and it also has a good foundation for scientific and technological innovation.
Meanwhile, China brings a “supersized” market, a fully-fledged industrial system, ample innovative talents, and rich application scenarios, according to Fu.
“By strengthening cooperation in traditional and emerging areas, China and WA could turn their complementary strengths into a strong momentum for common development,” she says.
Western Australian Mines Minister David Michael also addressed the China National Day Celebration that was attended by 240 people at Fraser’s State Reception Centre in Perth’s iconic Kings Park.
China National Day marks 76 years since the establishment of the People’s Republic of China and is one of the most important public holidays with deep political, historical, and cultural significance.
“For more than 50 of those 76 years Western Australia has been part of China’s story, just as China has been part of Western Australia’s story,” Michael says.
While the minister sees China and Western Australia’s partnership continuing to grow, he notes that traditional commodities will be less of a focus as innovation and sustainability become more critical.
“The way in which we grow is changing. Our trade will involve increasingly sophisticated products,” he says.
“Innovation and sustainability will become increasingly important, and the need for traditional commodities that underpinned growth in the 20th century will begin to taper.
“For example, in recent years WA has been a major supplier of vital imports for China’s battery and electric vehicle industries. At the same time, these vehicles are becoming a growing part of Australia’s automotive market.
“In that respect, the WA-China relationship is not just about mutual benefits, it’s about global benefits.”
Strategic Dialogue fosters trust and investment
Michael and Western Australian Premier Roger Cook were in Shanghai last week for the 7th China-WA Strategic Dialogue, which is also an initiative of ACBC WA and the CCCA Perth Branch.
In his opening remarks, Cook said China remained Western Australia’s largest trading partner by a very wide margin.
“According to modelling by the Bankwest Curtin Economics Centre ‘Australia’s Trade and Economic Relationship with China – benefit to Australian households’ report, commissioned by the Australia China Business Council, in 2022-23 Western Australia’s trade with China contributed to approximately 220,600 local jobs, representing 14.5% of the state’s local employment,” he said.
“Since its inception in Beijing in 2018, the dialogue has enabled direct and ongoing discussion between the Western Australian premier and key Chinese investors so the Western Australian Government can better understand and respond to your priorities and challenges.
“The Western Australian Government places enormous value on this dialogue, and China is the only country with which we hold this form of engagement.”
Speaking at the dialogue, Yong Zhang, President of the CCCA Perth Branch and Managing Director of Baosteel Australia, said “this event holds special significance for us — not only because it is the third time the dialogue is being held in China, but also because it is taking place at the headquarters of China Baowu.”
“Baowu is the largest consumer of Western Australia’s iron ore, and Western Australia is the primary source of iron ore used by Baowu.”
ACBC WA and this week’s China National Day Celebration were supported by mining majors including Fortescue (ASX:FMG), CITIC Pacific Mining and Tianqi Lithium.
Fortescue Group CFO Apple Paget says China has been central to the company’s journey – from its first iron ore shipments in 2008 to now becoming the fourth largest iron ore producer.
“Recently, we announced a landmark RMB term loan of $3 billion equivalent, and that was supported by major banks in China – a powerful vote of confidence in our strategy and shared commitment to a sustainable future,” she says.
“We’re also working with Chinese partners to deliver green iron metal, an innovation that can transform the Western Australian economy and help decarbonise not just the Pilbara operations, but China’s steel sector.”
Chinese companies fuel WA’s resources economy
Meanwhile, CITIC Pacific Mining – a subsidiary of major Chinese-owned investment company CITIC Limited (HKG:0267) – has made the “the largest stand-alone overseas investment in the resources sector by a Chinese company”, according to Head of Corporate Affairs Rob Newton.
He tells Mining.com.au the company has invested over $16 billion.
CITIC Pacific Mining operates Sino Iron – the largest magnetite mining and processing operation in Australia – located 100km southwest of Karratha in Western Australia’s resource-rich Pilbara region.
The company produces and sells a premium iron ore concentrate into the Chinese market. Most of the product is bound for non-CITIC owned steel mills.
“It’s playing a role because it is a high-grade product, it means that less energy is required to produce steel by these steelmakers,” Newton tells this news service.
“It’s very supportive of that industry-wide push for lower-emissions steelmaking.”
While CITIC is a well-known name in China, it is not as well known in Western Australia, which is why the company decided to partner with ACBC WA.
“There’s not necessarily a broad recognition of the level of Chinese investment in the Australian, particularly the West Australian, resources sector,” Newton explains.
“Sometimes geopolitical matters can cloud people’s perceptions of Chinese investment in Australia.
“We strongly support the ACBC’s endeavours in promoting that positive Australia-China business relationship and demonstrating the value of Chinese investment on the WA in the broader Australian economy.”
Battery minerals strengthen global supply chains
Chengdu-headquartered Tianqi Lithium has been a backer of ACBC WA for the past five years.
Raj Surendran, CEO of Tianqi Lithium Australia Energy (TLEA) – a joint venture between Tianqi Lithium and IGO (ASX:IGO) – tells Mining.com.au ACBC WA is a really good advocate for Chinese investment in the state.
“We see great value in the work that ACBC does in terms of being a voice for Chinese businesses here,” he says.
TLEA manufactures battery-grade lithium hydroxide in Kwinana from spodumene mined and concentrated at the Greenbushes mine, which is jointly owned by TLEA and Albemarle (NYSE:ALB).
Targeted annual production is 24,000 tonnes, which is shipped to customers in Korea, India and Europe.
“I think the opportunity that we have is really to build on the relationship, to build on the business that we already have here in helping Australia realise its critical minerals strategy, its midstream processing, its made in Australia strategy,” Surendran says.
EACON Mining Technology, the first in China to conduct 24/7 autonomous haulage operations, was also a sponsor of the China National Day Celebration.
The company established its Australian entity in Perth in 2023 and is looking to expand its operations further in the country.
In May this year, Thiess, Norton Gold Fields and EACON announced a tripartite partnership to deploy autonomous haulage technology in Australia.
EACON’s autonomy solution is being integrated into Thiess trucks operating at Norton Gold Fields’ open pit gold mines in Western Australia.
Write to Angela East at Mining.com.au
Images: ACBC WA, CCCA, Western Australian Government, CITIC Pacific Mining
