SYDNEY: Kolkata's Arun Jagatramka is a popular figure in government circles here. Officials of the New South Wales government never tire of quoting him as an example of what foreign investors can do in this resource-rich country. Jagatramka owns what is arguably coal mines with the best view - the mines overlooking the beautiful sea, some 70 kms from Sydney. "These were century old mines that were being closed, but I took a risk and bought them at throwaway prices. Now we find there are reserves of premium hard coal worth 550 million tons and life for 50-60 years,'' Jagatramka told TOI. He adds: "Jobs have been created and incomes generated making the local community happy.''
In neighbouring Queensland state that has the largest coal reserves in the world, Ahmedabad's Gautam Adani is fast rising to eminence. For Adani has bought the rights of coal mining in the Galilee Basin aiming to establish a huge 60 million ton per annum facility. A 150 km rail line to the port that will also benefit other coal miners in the region is part of the Adani charter. Adani's Gallilee mines now renamed Carmichael project after a river that runs in the region will yield coal for over one hundred years.
A Lanco proposal to mine coal in Western Australia is also in the final stage of approval.
"We welcome Indian investments in huge quantum... Australia is built on the back of foreign investments and there is no way that we can do this on our own,'' says Australia's federal minister for resources, energy and tourism, Martin Ferguson. So keen is the minister for India's investment that recently he went public with the demand that an Australian ban on uranium exports to India be lifted.
Director of Access Economics, Ian Harper, explains the Australian need for Indian investments. "Australia is huge country rich in minerals-iron, bauxite, uranium and coal. But with a population of merely 22 million, there is none to mine this stuff. Two decades ago we welcomed China and they set up huge mining facilities. They carried the iron ore back home and we got the moolah. Though we may have become rich, there is a growing economic and geopolitical concern about this Chinese overdependence and its implications. This is where India comes in. India can become a counterveiling force to China,'' says Harper.
Concern over this Chinese overdependence is a subject of great debate in Australian newspapers these days although every one realises that this huge Chinese demand for Australian resources all through the global financial crisis saw the latter country boom. This has led to the Australian dollar touching a value that is equal to the US dollar and unprecedented prosperity Down Under. "So huge is the Australian dependence on China that bankers often use value of the Australian dollar as a proxy for the Chinese currency. But clearly the Aussies are now a bit concerned about the geo-political impact of this relationship,'' says CEO of SBI's Sydney operations S Salee. Government officials are of course more circumspect. "Let's put it like this, China has supported us through the financial crisis. Now we are looking towards India,'' says Eric Roozendaal, treasurer and minister for state and regional development of the New South Wales government.
The treasurer says that the Indians are welcome not only to prospect for minerals and exploit them, but also free to buy up land for farming. "In India corporates have been wanting to go into farming for long. They can exploit the opportunity in Australia,'' says Salee. Not surprisingly the Chinese have huge land holdings Down Under though no estimates could be obtained.
All analysts say that Australia may present a great opportunity but Indian businessmen should gear up to strong corporate governance and environmental norms. They point to Pankaj Oswal who had set up a $700 million fertiliser plant in Western Australia a few years ago and became well known for the $70 million mansion that he built and the parties that he threw. Now he has run away leaving behind his company in debts and with charges of financial misdemeanour. "The India investment story is unlikely to be halted by the Oswal episode,'' says Hamish McDonald, Asia Pacific editor of the Sydney Morning Herald. But as they say, in Rome do as Romans do.
