Rising risk profile behind CSA decision

PERTH-BASED resources consultancy CSA Global has added offices in South Africa and Canada to its UK, Indonesian, and Australian presence to counter growing negative perceptions of Australia as an investment destination.

Managing director Jeff Elliott has been with CSA Global since 1998 and has seen significant shifts in the global market during those 14 years.

The company provides a range of resources-focused consultancy services, from mining exploration, development and management to independent evaluations for financing proposals.

Mr Elliott said while the lure of quality deposits traditionally made Australia an attractive and convenient investment for local companies, other factors were now reducing its appeal.

“The first wave of Australian companies reducing investment here was when there were concerns over land access, and they started investing more overseas,” Mr Elliott told WA Business News.

“But the second wave, and the biggest wave that we’ve noticed, has been the current Labor government with the carbon and mining taxes; and even at a state level with government talking about banning uranium mining.”

Mr Elliott said Australia’s risk profile had increased dramatically, resulting in companies preferring to operate in locations such as Latin America and Africa.

That shift was behind CSA Global’s decision to open an office in South Africa.

Mr Elliott said while the region also had risks, people were finding it easier to get things done there than in Australia.

“There are risk issues but you can factor those risks into your business,” he said.

Also overseas, the company has bought a resources consultancy in Canada, Revelation Geoscience, for slightly different reasons – as Mr Elliott puts it, to be closer to where the money is.

“The majority of finance deals that are done are done out of Toronto, so we want to be near where that money is provided … because that’s where you get your due diligence and finance work,” Mr Elliot said.

“But we also want to be where that money is flowing into.”

Next on the company’s expansion hit list is Latin America, which could be followed by entrance into Central Asia.

The company’s strong balance sheet is enabling its expansion. Although income halved following the GFC, turnover has been increasing by at least 15 per cent since, to $27 million in the year to June 2012.

The company is completely self-funded with Mr Elliott the largest shareholder.

CSA employs about 130 staff globally, including those in Canada, while about 50 contractors are used on a regular basis.

CSA has its head office in Perth and has offices in Queensland and the Northern Territory to satisfy domestic demand, although Mr Elliot said work was needed to ensure ongoing business and avoid complacency.

“We’ve had it good for a long time and Australia as a country needs to realise that we’re competing for exploration funding and mineral investment on a worldwide basis,” he said.

“If there are countries that have a similar mineral resource, but make it more attractive to explore … then that’s where people will go; and that’s what’s happening.”