AusRAIL, Market Sectors

China tapped for $11bn resources investment

<span class="" id="parent-fieldname-description"> China is to pour more than $11.4bn into Australia’s port, rail and mining projects in a deal signed on June 21. </span> <p>By Sineva Toevai and Jennifer Perry</p><p>Prime Minister Kevin Rudd and China’s vice president Xi Jinping met in Canberra on Monday for the signing of 10 new agreements, which include seven resources and energy related contracts.</p><p>Chinese companies will provide US$8bn ($9.1bn) to build a coal mine, 476 km rail line and a coal terminal at the port of Abbot Point.</p><p>“The project is expected to result in approximately $4bn in exports every year for 25 years,” Rudd said.</p><p>China Development Bank will also inject US$1.2bn into the construction of the new deepwater port at Oakajee, north of Geraldton in Western Australia, and connecting rail infrastructure.</p><p>“This joint venture is a critical component underpinning the development of proposed port and rail infrastructure at Oakajee. This infrastructure, together with Karara’s project at its mine site is expected to generate several thousand new jobs in the region,” Rudd said.</p><p>The bank will also assist in the development of Aquila Resources’ coal and iron ore mining projects in the Pilbara.</p><p>Meanwhile China will provide engineering and design services to Fortescue Metals Group to fast-track FMG’s iron ore project in the Pilbara to a production capability of 95m tonnes a year.</p><p>At current estimates, this expansion will add more than $5bn of annual export revenue to Australia.</p><p>China is Australia’s largest trading partner and a massive consumer of our iron ore, coal and gas.</p><p>However, there is reportedly concern amongst some in the industry about loss of control over Australia’s natural assets.</p><p>Xi has said that considering Australia’s abundant natural resources, China and Australia had much to offer each other and reportedly told a business lunch at Parliament House that “steady progress” was being made on a free trade agreement between the two countries. <br />&nbsp</p>