Call to let Chinese workers build mines

The China Mining Association wants the Australian government to allow Chinese labourers into the country to fast-track the building of mining projects.

Sydney Morning Herald, August 8 2013

The association's executive vice president, Wang Jiahua, also told a Melbourne Mining Club lunch Australian miners could not expect to keep selling minerals at high prices that were forcing their Chinese customers to post losses.

A relaxing of foreign labour laws is unlikely to please trade unions who have complained to the Immigration Department about multinational miners employing workers in Australia on 457 visas and then underpaying them.

However, Mr Jiahua said it should happen as Chinese enterprises investing in and building Australian mining projects were having trouble with labour, with China's 1.3 billion-plus population offering a solution.

"We can fully utilise the advantages of labour in China so that the projects can quickly achieve capacity for construction," he said.

"After that the Chinese labourers move back to China in stages and the project is handed fully to Australians to solve the unemployment rate in Australia too."

He said pricing in minerals was unfair, with the high pricing for iron ore commanded by miners such as BHP Billiton not matched by China's steel industry customers who were losing money.

He had met with executives at Rio Tinto, BHP and Fortescue Metals last year and told them the relationship should be a balanced "lips and teeth" one.

He suggested cross shareholdings, in which Chinese steelmakers would take stakes in Australian iron ore mines, to better align their interests and create a fair mineral pricing mechanism.

If not the Chinese government would reduce its capacity to buy those minerals or look to develop their own mines.

"It is hard to imagine whatever the Chinese sell will be cheap, whatever the Chinese buy will be expensive to become the norm,' he said.

"The interests and profits for upstream and downstream businesses have reached a mismatch, this is not sustainable, not good and not beneficial for anyone.

"We need to choose and find a win-win path and get a strategy panned out"

The comments come as it was reported on Thursday that BHP had stared down a request from China's leadership at the top level to lower prices, with the miner telling them that prices had already fallen in the last year.

Mr Jiahua said Chinese investment in Australia had fallen because of a confusing mining tax, poor infrastructure and labour and indigenous issues.

However the mining boom had not ended, he said, with China's continued growth including current plans to build 10 cities proof of that.

The state-backed association says it represents China's resources industry comprising 1,500 member organisations, 600 of whom are exploring and developing overseas.

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