On the evening of August 19, President Zhou Zhongshu and Senior Vice President Li Fuli attended an evening banquet held by the Melbourne Mining Club at Peninsula Hotel in Shanghai. President Zhou, as one of the major guest speakers at the Banquet, delivered a well-received speech. While in Shanghai, President Zhou attended MMG's board meeting as Chairman and accepted interviews from a number of Australian news agencies.
President Zhou mentioned in his speech that China surpassed Japan and became Australia's largest trading partner in 2009. Minmetals's investment in Australian resources assets by MMG has contributed greatly to the growth of China's direct investment in Australia. Today, more than ever, the importance of Australia-China relationship is evident. In creating MMG, we formed a unique bridge between China and Australia. The importance of the Australia-China relationship is also clearly reflected here in Shanghai, both in the high caliber of Australian and Chinese resources industry people gathered in this room and the impressive Australia Pavilion at the World Expo.
President Zhou pointed out that, Minmetals has invested in many mining projects throughout the world, which brought us not only assets, but also valuable human resources. The establishment of MMG is a best example. Australia has some of the most talented people in the global resources industry. MMG welcomed 5,500 employees when established; today this number has grown to over 7,000. MMG has technical experts, specialists in the fields of mining engineer, metallurgy and geology to name a few and at the executive level, some of the most well known faces in the industry with experience in growth transactions around the world. Meanwhile, Minmetals can provide MMG with the knowledge about the Chinese market and our insights into commodity supply and demand, to assist their operation in China. In July, we held a knowledge sharing event in Melbourne bringing together employees from China Minmetals and MMG. We shared our knowledge, processes and systems across a number of fields including risk management, safety and asset management. Through an ongoing learning cycle we will both continuously improve.
President Zhou also detailed Minmetals's efforts in actively honouring corporate social responsibility and boosting the development of local communities. When forming MMG we said that we were committed to ensuring that local economies would receive tangible benefits from the operations. We have invested around AUD4.4 million into local communities through community and local business development, education and training, sponsorships and capacity building. At Sepon Gold & Copper Mines in Laos, Century Zinc Mine and Golden Grove Mine in Australia, Minmetals provided skill trainings for local residents, to help them find future roles in mining and other industries. At Sepon, around 50% of our workforce is from local communities and another 35% from other regions in Laos. At Century mine, around 20% of our workforce is indigenous supported by our pre-employment training program. We recently signed an agreement with the Government of Laos, where our Sepon mine is a major contributor to the country¡¯s GDP. This Memorandum of Understanding paves the way for the exchange of information and experience between Minmetals, MMG and the Lao Government for a modern and successful resources sector in Laos.
Finally, President Zhou said, our strategy for MMG is to build a leading global diversified minerals and metals company. MMG will serve as an international investment platform for us as we continue to monitor mining assets and deals at good value. We have very high expectations for the MMG management team, and we are very confident in the growth prospect of MMG. We believe that with the support of China Minmetals, MMG can be improved in many aspects and will set a successful example for economic cooperation between the two countries.
Another major guest speaker Tom Albanese, CEO of Rio Tinto Group also delivered an important speech at the Banquet.
President Zhou and Senior Vice President Li attended MMG's board meeting on the same morning, expressing their recognition of the performance of the board of directors over the past year and putting forward expectations and requirements of the future work. At that Afternoon, President Zhou had interviews with journalists from " Sydney Morning Herald", "The Age" and ¡°The Australian".
Speaking of sharing overseas investment experience, President Zhou said that we consider three factors prior to Minmetals¡¯ investment in any project. First whether the project meets our strategic development goals, second, whether good cooperation could be achieved between the original management team and our headquarters, and third, a professional team necessary to ensure the implementation of the ¡°going out¡± strategy. Otherwise, many problems will arise in due course in despite of the completion of the acquisition. Prior to the acquisition of OZ Minerals, Minmetals has maintained good communication with the Government and business executives of the target company and the open and frank attitude from both sides remove all the negative factors and obstacles although various differences exist in the historical, cultural and legal aspects between China and Australia. After the establishment of MMG, Minmetals¡¯ headquarters and MMG continue such frank attitude to eliminate differences and solve problems. President Zhou noted that Minmetals obtained the experience in overseas acquisition from business practices in over 30 years since China¡¯s reform and opening up and has also suffered setbacks during the period, and successful acquisition of OZ Minerals and the smooth operation of MMG attested the feasibility and validity of constant accumulation of experience in overseas business development. Meanwhile, Minmetals expects to build a benchmark for overseas investment and cooperation between China and Australia.
In addition, President Zhou also responded to other issues of concerns for the journalists, such as the listing plan of MMG, Minmetals¡¯ transformation from a trading house to an international corporation with a whole industrial chain, whether Minmetals is interested in investing in iron ore resources overseas including Australia, the impact of China's economic restructuring on Australian economic development.
Zhang Shoulian, Assistant President and the Chief Representative to Australia and New Zealand; Peng Pugang, Assistant President and General Manager of Minmetals Japan; Ma Jun, Director of the General Office; General Manager Jiao Jian and Deputy General Manager Xu Jiqing of China Minmetals Non-Ferrous Metals Co., Ltd.(CMN), CEO Andrew Michelmore, Executive Director Mark, Non-executive Director Wang Lixin of MMG, and President Zhou¡¯s secretary Chi Daqian, also attended the relevant activities.
