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Australia seeks to consolidate natural resource dominance in Taiwan market

Australia is seeking to further consolidate its position as a major source of natural minerals for Taiwan with its big guns of energy and resources converging on Perth to meet with Minister of Economics Lin Yi-fu and Taiwanese industry leaders.

Lin, who arrived in Perth on Saturday at the head of a delegation of senior Taiwan business leaders representing more than 50 companies, met yesterday with executives of Australian mineral giants including Iluka Resources, Rio Tinto and Australia LNG.

Capping the 18th annual meeting between the Australian Taiwan Business Council (ATBC) and the ROC Australian Business Council, the Chinese Petroleum Corp is expected today to sign a joint oil exploration deal with Norwest Energy NL.

In addition to these meetings, Lin will also meet with Australian Minister for Trade Mark Vaile, who addressed the opening of the conference yesterday. With the state of Western Australian providing more than 70 percent of Taiwan's iron ore imports and most of its its industrial salt it shouldn't be of any surprise that talks on natural resources dominate the conference, according to Ross Maddock, national director of the ATBC.

We decided to have it in Perth because West Australia is already important for its steel making and salt and other industrial raw materials. It could be important in the future for energy as well, Maddock told the Taipei Times by phone.

Australian executives and officials had a captive audience for the resource briefings yesterday as senior representatives including the Chairman of Taiwan Salt Industrial Corporation, the President of China Petroleum Corporation and senior executives from the China Steel, Taiwan Power and Taiwan Sugar Corporations are all attending the conference.

We recognize this is one of our most significant commercial relationships. Still one of our top ten export markets and one of our top ten trading partners, he added.

Natural minerals are the top Australian exports to Taiwan, with crude petroleum amounting to AU$849 million in 2001, coal totalling AU$763 million and iron ore AU$388 million, according to the Australian Ministry of Foreign Affairs and Trade.

Maddock pointed out that Taiwan's importance in terms of trade rivals that of China.

Two years ago we exported more to China than Taiwan. But now per head of population we sell 60 times more to Taiwan than to China, said Maddock. Indeed like China, Taiwan also appears to have also cast its gaze southward in its effort to diversify its sources of energy.

The joint exploration deal between state-run Chinese Petroleum and Norwest Energy in the waters off northwest Australia, could perhaps eventually rival that signed by CNOOC Ltd, a Chinese offshore oil and gas company to buy a stake in the same Australian gas fields for US$320 million.

Another deal that could potentially rival China's energy dealings with Australia is a NT$400 billion, 25-year purchase order from the state-run Taiwan Power Co.

Australia LNG, a powerful grouping of international energy giants are undoubtedly keen to seal that deal which potentially be worth more than the agreement it signed early last month with China to supply over 3 million tonnes of LNG per year for 25 years.

Prime Minister John Howard described the agreement with the Chinese as "...Australia's largest single export deal."

The contract will be worth between AU$20 - AU$25 billion in export income for Australia, said Howard in a statement.

Due to the political sensitivities vis-a-vis China, inister Lin's visit is considered unofficial. However the interest and the simple dollar potential of future resource deals that could be fostered by the meeting illustrates the comparable importance of the trade relationship for both sides.

As Maddock pointed out, because of the lack of diplomatic relations there's very little celebration of the relationship. No one else does that so the business community does it.

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