|There are more than 200 Australian-based companies working in Africa.|
Australian mining companies are looking to Africa as declining grades of ore and the high cost of doing business continues to have an impact.
Speaking at a mining conference in Perth, Western Australian Premier Colin Barnett said despite the fall in commodity prices during the past 12 months, the industry remains strong and Africa holds huge potential for Australian countries looking to invest.
Mr Barnett told the 1,800-strong audience, which included 20 African mining ministers, that WA is "not in some sort of mining recession, but we've come off the peak".
He said Australian companies were looking to invest in low-cost, high-return projects.
"Thirty per cent of the world's mineral resources are to be found in Africa," he said.
"Australian companies have been involved in all aspects of mining [in Africa] ... we feel proud to be part of your development and hope to continue to do so.
"Can I assure you that Australia is your friend... and your best friend will be Western Australia."
Analysts are forecasting a cautious upturn in market sentiment towards resources after a report revealed Australian companies had discovered almost $700 billion worth of minerals across the continent over the past five years.
Of the 220 ASX-listed companies operating in more than 1,000 projects across 30 African nations, more than 70 per cent of them are WA-based.
Conference convenor Bill Repard said African countries were looking to lock in additional Australian investment.
"Certainly, African government representation will be at its highest-ever level and I think we have to take that as a sign not just of the intensity, but the enhanced competition and rivalry among African countries to earn the trust and respect of Australian partners," he said.
"While junior explorers are far from out of the woods yet, there are signs investors are once again beginning to warm to African mining stories as they look to balance slowing returns in Western countries."
Mining investment banker Mark Tyler said while the market has cooled, companies were willing to invest in Africa.
"World markets are looking a little tougher, but in Africa it might be a bit tougher to raise equity, but the money is there," he said.
"We think there will be a lot more investment than there has been in the past, the money is available for good quality projects.
"The opportunities are there, the money's available and we think there will be a lot more investment than there has been in the past.
"I think Australian companies are good at investing in Africa and good at running mining companies in Africa and there are good resources in Africa.
"I think the good management from Australia combined with the good resources makes a good story."
Mr Tyler said exploration in Africa has dropped off, but less dramatically than it has in WA.
"There are two sources of exploration funding - the majors are still spending a lot of money developing around their mines, but there is still money around for the juniors to go and do it," he said.
Barnett warns of big business demands
In January, the WA Government established a memorandum of understanding with 19 countries in eastern and southern Africa to help develop their administration of mining.
Mr Barnett said both the Government and WA mining companies have a big role to play helping Africa establish a stable resources industry.
"WA has a sophisticated mining industry, and we have big shares of world production - we also have 120 years history of mining administration," he said.
PHOTO: WA Premier Colin Barnett said he hopes WA companies will continue to invest in African-based projects.(Louise Merrillees)
"We are displaying the way mining is done in WA, and I think the areas of most interest will be safety, environmental management and rehabilitation - we've probably learn the hard way - and how a host nation can derive a fair revenue from mining."
Mr Barnett said ensuring developing countries get a fair royalty base to support their economy was the most contentious issue.
"Often international companies will put the pressure on small countries, that they should provide concessions and help subsidise arrangements and I don't think those countries are in the position to do that," he said.
"I think its in the interest of the mining companies to have a stable and predictable and certain stream of revenue to the host governments.
"It allows these developing countries to have an income to deal with the social education and health issues they have.
"And certainly the African ministers are interested in how that is done because it hasn't been all that well done in the past."
Mr Barnett also told delegates to not get cowed by the demands of global companies.
"Don't get spooked by the companies. If the resources are there, they will come," he said.