Conference highlights vast mineral potential of S.E. Asia

The combination of rapid economic growth and expanding mineral production in Southeast Asia will result in an economic event the world has not seen since the Industrial Revolution, according to the co-chairman of Diamond Fields Resources (TSE).

Speaking at an international mining conference in Toronto, Robert Friedland offered several reasons why North American mining companies and investors should remain bullish about the potential offered by Southeast Asia.

“The region has had an annual, compounded economic growth rate of 7% for the past 25 years. Fifteen years ago, Southeast Asia consumed less than 12.5% of the world’s base metal production; today, the consumption rate is higher than 25%. We expect that, during the next century, it will reach 50%.” He said the effect of rising consumer demand, sustained growth and a less shackled, more free-market-style economy in a region where one quarter of the world’s population lives will be staggering.

Friedland, who is also chairman and president of Ivanhoe Capital, gave the keynote address at the conference. Entitled “Southeast Asian Mining Opportunities,” the event was attended by more than 200 delegates, exhibitors and guests. It was sponsored by The Northern Miner.

Among the other speakers was Dr. Lorna Wright, director of the Centre for Canada-Asia Business Relations at Queen’s University. She stressed the importance of understanding cultural differences between North America and Southeast Asia. North American companies should commit themselves to building long-term business relationships with Asians and be sensitive to conceptual differences regarding contracts, time and fairness in business dealings, she said.

Reports on individual countries provided delegates with information on geology, royalties and taxation and mining laws. Among the nations profiled were Indonesia, the Philippines, Thailand, Laos, Vietnam, Malaysia, Myanmar, Papua New Guinea and China.

For geological, as well as political, reasons, Indonesia and the Philippines are the most attractive countries for mining investment. However, other countries may hold equal promise, provided North American businessmen exercise patience and understanding in their dealings. As Friedland remarked, “a reasonably well-funded North American junior company is not at a disadvantage, as long as its management is patient and sincere.” The consensus among speakers was that, despite the rewards for producers, there are obstacles and risks for explorationists which vary from country to country. North American companies must invest considerable time in cultivating an understanding of Asian business culture; they must establish a presence in these countries; and they must make a point of sending senior, “gray-hair management” to negotiate deals.