The Australian Equity Market as a Source of Capital for Pacific Basin Mineral Development

One of the major changes in the resource industry in the nineties has been the re- internationalisation of the industry. The history of the resource business has been one of companies from the developed world utilising the cash flows from their operations to explore and develop mines in less developed regions of the world. This resource development has progressively generated wealth and economic development, which in tum, has led to a new generation of exploration and mining projects.   InSouth America, Chile had led the way in a mining resurgence, now closely followed by Argentina, Brazil, Venezuela and Peru. Although Chile has long had a significant copper mining industry, the pre-nationalisation phase was driven by American capital; the current phase has been spearheaded by RTZ - BHP at Escondida with Canadian junior companies, in particular, providing major speculative impetus. The Australian junior companies have not been significant in South America.   Although Canadian and USA exploration appears to be in decline, the mining industry, particularly in gold, is buoyant in North America. Interestingly, a number of listed and unlisted Australian companies are active, particularly in United States exploration.   Australian-based companies have dominated the South-East Asian exploration scene, especially in the Vietnam region. To date, the combination of political and legislative uncertainties have failed to lead to significant resource developments in this region. The area remains one of great potential, as exemplified by the exciting developments in Indonesia.   The Philippines has a history of mining, and this has been dominated by both local and North American operators. Both large and small Australian resource companies have a presence in the Philippines, and the development of the copper-gold potential could be impressive over the next decade.   The tales of the undeveloped mineral potential of China are probably rivalled only by the supposed strings of virgin Russian orebodies! Many Australian companies appear to have looked but few have chosen to proceed with Chinese developments. There seems little likelihood that China will, in the foreseeable future, rival South America as a target for Australian and North American resource capital.   Papua New Guinea has had an active, albeit chequered history in mining, with Australia long being the predominant source of exploration and development funds. The developing nation status of PNG has generated extreme uncertainty, with the current exploration scene all but dead. Most recently, the international flotation of Lihir Gold has tested the international and Australian investment community's commitment to PNG resource development.   The Australian exploration scene continues buoyant, although dominated by gold. The base metals scene is generating, on average, one significant base metal mine developed every couple of years. This is probably the fastest rate of significant base metal development in Australia's history.   The gold scene has been one of incredible dynamics, and there is no evidence that this momentum is waning. The development of new exploration techniques, together with a number of the companies reaching a critical size, has added to the momentum in the industry.