04/09/2014 - 14:56

Blakiston criticises Barnett’s warning

04/09/2014 - 14:56

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Leading mining lawyer Michael Blakiston has criticised Premier Colin Barnett's comments urging African mining leaders not to be intimidated by global mining companies and to ensure their citizens received a fair return for their resource exploitation.

Gilbert + Tobin partner Michael Blakiston.

Leading mining lawyer Michael Blakiston has criticised Premier Colin Barnett's comments urging African mining leaders not to be intimidated by global mining companies and to ensure their citizens received a fair return for their resource exploitation.

At the Paydirt Africa Down Under Conference in Perth conference today, Gilbert + Tobin partner Mr Blakiston took a counter view to Mr Barnett’s comments, saying “the golden goose did not have golden eggs just for the taking”.

“For the premier to tell African mining delegates here to stand up and not get spooked by companies simply on the basis ‘the miners will come because the resources are there’ just simply doesn’t stand up.”

Mr Barnett told delegates at the conference that while capital required a safe environment for investment, resource companies would always pursue resource deposits, and African nations needed the courage and political will to refrain from subsidising the minerals industry.

He warned that such action would be detrimental to those countries’ economies.

“In reality, investment capital is limited and its placement is regardless of what governments want, only what shareholders want for their investment,” Mr Blakiston rebutted.

“And right now they are sceptical of the resources sector and want returns on their investment, not project growth.

“While $6.83 billion has been raised through follow-on raisings by ASX-listed companies for mining projects in Africa over the past five years, the reality is that despite this total amount, the more recent 18 month period has seen a dramatic contraction in available equity,” he said.

Mr Blakiston warned that Africa needed a new resources growth model, which would operate closer on partnerships with governments and communities.

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