Yes, thanks Saracen. Some great info very supportive of NMDC's moves to line up with MAK & partner us in the development of Wonarah.
HotRods, thanks for the article.
I had opportunity to read over the weekend a great 'big-picture' speech given in Sept 2010 by Philip Lowe, Assist Gov (Eco) of Reserve Bank, about the significance of Asia to Aust over the years & decades ahead. While he doesn't specifically address the fert sector, he does address the ag-sector implications as a result of the rising urbanisation of China & India. You can find it at:
"When discussing the impact of Asia on Australia over recent years, the focus has rightly been on China. The transformation that has been occurring there is truly remarkable and it is reshaping the global economy. Over the past three decades, the proportion of the Chinese population living in urban centres has more than doubled to almost 45 per cent (Graph 3). While there have been a couple of historical examples of other countries urbanising as quickly, the sheer number of people migrating to urban centres is unprecedented in human history ? over the past 30 years, nearly 400 million Chinese citizens (almost 20 times the population of Australia) have moved to cities. As a result, there are now around 170 Chinese cities with more than a million residents, compared with only around 35 in Europe. And the urbanisation process still has quite a long way to run, with another 300 to 400 million people expected to move from the country to the city over the next 20 years.
These developments in China are being closely observed in Australia, including at the Reserve Bank. A decade or so ago, we spent a lot of time puzzling over why quarterly movements in Australian GDP were so highly correlated with quarterly movements in US GDP. We don?t puzzle over this anymore ? not because we solved the puzzle, but because the correlation has fallen (Graph 4). At the same time, the correlation between quarterly movements in Australian and Chinese GDP has steadily increased. Clearly what happens in the Australian economy is now more dependent upon what happens in China than has been the case at any time in our past.
But as we think about the future, the story is broader than China. Over the years ahead, the Indian economy, which also contains more than 20 per cent of the world?s population within its borders, is likely to become increasingly important to Australia. After India grew at a disappointing pace in the 1960s and 1970s, growth has picked up over recent decades, averaging 7 per cent per year over the 2000s (Graph 5). The economy has gradually opened up to foreign trade and capital, and government influence over investment decisions has been scaled back. While India will inevitably follow a different development path to that of China, the prospects for sustained solid growth look to be better than they have for many years.
Like China, India too is urbanising. The process though is more gradual, with the number of people moving to urban areas over the past 30 years less than half that in China (Graph 3). Despite India?s population currently being only marginally lower than China?s, it has about 40 cities with a population of over 1 million, compared with China?s 170 or so. This lower rate of urbanisation partly reflects the fact that India has not industrialised as quickly as China.
As I mentioned a few moments ago, as people move to cities the demand for steel tends to rise. Not surprisingly, in China consumption of steel has more than quadrupled since 1997, with just over half of current steel consumption accounted for by the construction sector (Graph 6).2 Indian steel consumption has also grown, but not nearly as quickly. However, the experience of China and that of other countries that have urbanised hints at the potential growth in India. While at the moment, the bulk of the Indian population live in rural areas and investment in infrastructure has been relatively low, there is the potential for this to change over the years ahead, just as it has in China over the past 30 years. If this does indeed occur then the demand for raw materials ? and steel, in particular ? is likely to be very strong over coming decades.
The impact of Chinese and Indian development is not just confined to the resources sector though. As countries develop and living standards rise not only does the demand for steel increase, but so does the demand for higher-quality food, and consumption of protein increases. Again, the comparison of China and India is instructive (Graph 7). As income per head in China has grown over the past 30 years, protein consumption per head has also risen strongly, almost doubling over this period. Protein consumption has also risen in India, although the increases have been much smaller due to slower growth in income per head and differences in dietary preferences.
Again, over the years ahead it is quite likely that global demand for protein will grow strongly, particularly if India and China continue on their current paths."
This captures well one of the reasons why I've invested in MAK.
GL to all Cheers
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