Getting friendly with China
Trade mission not the first contact on resource development prospects
In recent interviews, neither Premier Kathy Dunderdale nor Natural Resources Minister Tom Marshall could say exactly how many staff participated in the government’s June trade mission to Beijing.
In recent interviews, neither Premier Kathy Dunderdale nor Natural Resources Minister Tom Marshall could say exactly how many staff participated in the government’s June trade mission to Beijing.
The Telegram has filed an access to information request for all expenditures for the trip.
Meanwhile, a series of earlier access requests, dating back to 2011, have sought an account of travel to and from China by staff from the Department of Natural Resources. The results suggest the recent mission is an extension to years of growing outreach by the government to Chinese investors.
Cost for investment
The Department of Natural Resources has spent at least $100,000 since 2010 on CanadaChina investment forums, attending alongside representatives for locally active mining companies. Staff have been sent to the annual China Mining Conference, that country’s largest mining show, with the total cost for their travel and associated events hovering around $35,000 — $36,500 in 2010 and $33,300 in 2011.
The department has maintained a membership with the Canada China Business Council and has participated in Canada-China investment events in Toronto since 2009.
A total of $1,600 covered the cost of a single staff member to attend an event with the Chinese National Development and Reform Commission (NDRC) in Toronto in September 2011. The meeting was significant, since the NDRC is a government ministry tasked with approving foreign investment by stateowned enterprises.
The recent trade mission included a meeting with the NDRC, one with positive news for the province’s oil and gas industry (see related story on page A5).
Trade missions have been running both ways. From June 22-24, 2011, a delegation from the Chinese Iron and Steel Association visited both Quebec and Newfoundland and Labrador.
This province paid to have staff available for presentations in Montreal and to tour mine sites in Labrador west.
The total cost of $17,124 covered travel, translations, a presentation venue and bus service for two Natural Resources staff members on the Montreal end and then two staff members, plus former minister Shawn Skinner in Labrador.
Marshall said he expected some criticism of the cost of the latest trade mission — the most publicized effort to draw in more investment from China.
However, he said both his staff and individuals seeking local investment said a visit from senior provincial government officials — rather than the usual staffers — would go a long way to encouraging new investment.
“I think it’s based on the way they do business there, because if the government doesn’t OK their investment, then the state-owned companies in the private sector just don’t do it,” he said.
Taking a chance for returns
Gerry O’Connell, the former executive director for Mining Industry NL said the province has made efforts to self-promote without the travel. For example, through its Mandarinlanguage website.
“I think you have to promote. Sometimes it’s like fishing. When you throw your line out, you don’t really know who’s going to bite,” he said in a 2012 interview.
Ed Moriarity has taken over from O’Connell at Mining Industry NL. In a recent interview, he said it makes sense to promote the province to Chinese partners, considering that country’s need for commodities and the availability of those commodities in this province.
“That’s a nation that’s interested in … securing access to products to support their needs, and Newfoundland and Labrador certainly is an attractive place to come and do business,” he said.
Success stories
Individuals such as Brian Dalton of Altius Minerals and Alderon Iron Ore’s Mark Morabito have been credited with building needed economic bridges, by turning early interest into signed agreement.
Though yet to complete an environmental assessment, Alderon’s Kami project remains a go-to success story of foreign investment, with 25 per cent interest held by China’s Hebei Iron and Steel (HBIS).
The HBIS investment includes Alderon share purchases, an agreement to buy project product and an initial $182-million capital contribution.
“The very simple answer as to why we invested in Alderon and (in) Newfoundland and Labrador is that the Kami project was the most attractive to us,” said Hebei president Tian Zejun, in a statement provided by Alderon.
“There were several iron ore companies talking to us in Chile and one in South Africa, but the Kami opportunity fit our needs the best,”
More specific reasons cited include the size and quality of the estimated resource, its location in a politically stable jurisdiction and the “good economics” of the project.
The company has also credited the provincial and federal governments for their assistance.