Be rational - we are not monopoly in minerals!

This is comments on Professor Christopher Findlay's article on Public opinion on Chinalco’s investment in Rio Tinto April 19th, 2009, on http://www.eastasiaforum.org/2009/04/19/public-opinion-on-chinalcos-investment-in-rio-tinto/ I put it here, since it looks at the issue from another angle, often seldom mentioned in the media or by politicians.

While it is perfectly normal to have a range of views, some even very influential at high levels, especially when the issues involved can stir up strong emotions and the real interests are ill defined or difficult to define, one needs to realise an important point that the world mineral market is reasonably competative and Australia does not have the monoply power over world natural minerals, even though it is a very important player.

The Chinese investors want to invest in Australia when they see value in such investments. Equally, they will want to invest in mining in other mineral rich countries when they see value in investing there. Further, if they are not allowed to invest in Australia when they have the fund to do so, they can and probably will move to other countries, although it may be a second best outcome to them.

As in all investments, investors move down the ladder of investment opportunities, starting from the highest return to the point either their funds are exhausted completely or the benefit from such investment equals the cost of their funding at the margin. So although they may be dispointed if their applications are disallowed, they will move on to find other opportunities outside Australia.

After the dust of high emotions finally settles, one has to live with the hard and sometimes maybe very uncomfertable reality, bearing the consequential benefit or cost.