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African resources still draw Aust firms

AAP logoAAP 7/09/2016

Australian investment in Africa's resources sector remains strong despite a prolonged downturn in commodity prices, the federal government says.

There is potential for deeper economic engagement though, and Australian companies are likely to have an edge over global competitors.

According to government data, around 200 Australian companies have invested $30 billion in about 700 projects across 35 African countries. Much of this has been for exploration activity - particularly in the gold sector.

"The African continent is one of the largest investment markets for Australian extractives companies beyond Australia," assistant trade and investment minister Keith Pitt said at the Africa Down Under conference in Perth on Wednesday.

"The future is bright, especially as we come out of a period of particularly low commodity prices."

Major Australian companies with interests in Africa include Rio Tinto, BHP Billiton spin-off South32, gold miner Newcrest Mining and energy giant Woodside Petroleum, while scores of junior explorers have joint ventures or partnerships on the continent.

Africa is home to about 30 per cent of the world's mineral resources and among the world leaders in the export of crude oil and natural gas.

But the continent accounts for only about eight per cent of global mineral production.

Mr Pitt said African nations will require considerable foreign investment to boost this production.

He said Australian resources companies had experience in managing large scale projects, were at the cutting edge of international best practices, had demonstrated resilience in challenging environments and are backed by robust legal and financial regimes.

Trade in goods and services between Australia and Africa totalled $7.6 billion in 2015, of which $2.1 billion was in services.

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