Sunday, July 19, 2009

A facade to hide Australia's foreign-owned resources

Today, in a newspaper distributed in Australia and known as the 'Daily Telegraph' Mr Greg Sheridan has an article entitled 'Stern response vital to future' [1]. In it Sheridan refers to an interesting saga now playing out between an angry Chinese Government and Rio Tinto, which is a giant, mainly British-owned multinational natural-resource company that operates on 6 continents. It is the 4th largest publicly-listed mining company in the world.

Two weeks ago Mr Stern Hu, an executive of Rio Tinto who is also an Australian citizen, was detained by the Chinese Government and accused of "bribing officials from companies he was doing business with and engaging in illegal espionage."

The context for Mr Hu's detainment was that Rio Tinto had recently rejected a $25 billion bid for a 20% stake in Rio by the Chinese Government-owned Chinalco. The Chinese Government made it clear that it was "furious" about this rejection. China also missed out on its bid for a 40% cut in iron ore prices when customers from Japan and South Korea undermined China's position by accepting prices would fall by a lesser 33%.

What concerns me about the nature of the reporting on this issue in Australia's mainstream media is that the Australian reader is being misled about the true nature of these, and related, disputes. The conflict, it is pretended, is between China and Australia. But it's not. Australlian ownership levels in Rio Tinto are minimal at around 16%. By contrast 42% of Rio Tinto shareholders are in the UK and 18% of its equity is owned by Americans.

Although it's true that Mr Stern is an Australian citizen, his detainment alone does not justify the enormous amount of media coverage that his arrest is getting. Nor does it seem appropriate that our Prime Minister over-emphasise the economic stake that China has with its relationship with the Australian government; as he appears to do.

Alarmingly, Australia's mining resources (in general) are likely to be predominantly foreign-owned. [2], [3] If this nation now fits the contemporary description for Canada: a "twenty-first century version of a tenant farmer", it's about time Australian citizens were told the truth by the major GLOBAL media companies.

[1] 'Stern response vital to future by Greg Sheridan. The Sunday Telegraph. Page 100. 19th July 2009

[2] Foreign-owned major resource projects By Stephen Mayne. May 19, 2009

[3] Foreign government investments in Australia By Stephen Mayne. May 18, 2009

6 comments: said...

Having just returned to the US from Australia, where I got to meet Brenda for the first time, :-). it is interesting to see the contrast in coverage. This is top story in OZ, but way down outside of it. The PM of Australia is being chided in the local media for not being able to get Hu out, but it is admitted in fine print, and noticed more obviously outside, that indeed nobody knows the facts, and it is not at all unlikely that bribery and other things were going on.

OTOH, this is part of China wanting a guaranteed price for iron ore that is well below what is being paid in general on world markets, a setup that would give Chinese steelmakers a major competitive edge in world markets, definitely a hardball game, with only a few players, Rio Tinto being huge (and not all that Australian in ownership, as Brenda points out).

gordon said...

It's curious that the Aussie media have completely ignored the implications of a Mr Chung's (a Boeing employee) recent conviction by a US court of spying for China. If this conviction really means he was a spy (there seems still to be some doubt about what he actually did for China), then any foundation for China's moral outrage immediately collapses.

gordon said...

And maybe there would be some grounds for a spy-swap in the good old Cold War tradition - Chung for Hu. What Mr Chung would think about such an option remains unknown, but I doubt whether anybody will ask him.

Myrtle Blackwood said...

Yes, the 'apparition' of Barkley Rosser on Australian ground! It was great to finally meet :-)

[I'm still in transit, so haven't checked out the photos yet.]

In relation to the China-RioTinto thingo, there may be a few Australian related issues .... the iron resource they send to china comes from Australia because it is the closest. The Australian Government appears to have intervened in relation to the intended Chinalco merger with Rio Tinto...

Gordon, thanks for posting this link. Very interesting. From the information I've gathered over the last few years it's clear that American businessmen and other key people were not unaware of China's ongoing attempts to gain insight into western technology etc. In fact large TNCs openly shared knowledge and expertise with China.

I see this spy saga as merely the signs of a breakdown of working relationships between China and Australia, the US and UK in particular.

gordon said...

On the foreign ownership issue, Four Corners did a report last night on Chinese attempts to mine coal on the Liverpool Plains. Lots of shots of outraged local farmers and complaints about how coal mining there would wreck some of Australia's best farmland. Sen. Barnaby Joyce was interviewed; the poor fellow didn't know whether to support the farmers (like a good National Party MP) or the coal miners (like a good National Party MP)!

Then this morning this report appeared.

Myrtle Blackwood said...

From the 'Four Corners' report: "It's estimated there may be up to 1.5 billion tonnes of coal under the plains and in the hills nearby. . ."

We've got a terrifying climate change emergency situation and yet nations are vying for a CO2-intensive energy supply without the existence of any adequate technological fix to capture carbon.

These government-corporate elephants are stampeding us quickly into extinction. Noone's taking charge of the crises.