Agreement on countertrade with Itochu Corp and AAB

7/8/94

Western Australia is to receive a $60 million spin-off benefit from the establishment of the new Collie power station.

Itochu Corporation and ABB, partners in the project, will inject $30 million each into the Western Australian economy to fulfil countertrade obligations.

The Japanese company is now working out the details of its obligation through the Department of Commerce and Trade.

Commerce and Trade Minister Hendy Cowan has signed the Itochu Countertrade Agreement and said today that a list of projects and business proposals was now being discussed with Itochu.

These potential investments include:

·   US$6.9 million in a WA firm to upgrade its processing of lithium carbonate and help market and export it;

·   a silica sand export operation;

·   an icecream export operation to Japan;

·   a software development project for ship-design and analysis; and -

·   beef purchasing and export.

"The Government believes that it should ensure Itochu extends the range of its export and investment activities under its obligation beyond minerals-related projects towards elaborately-transformed manufactures," Mr Cowan said.

All these proposed activities are being investigated thoroughly to ensure they comply with the State's countertrade guidelines and will deliver genuine additional economic benefits to WA.

"Under the Countertrade Agreement, overseas companies which benefit from major contracts with the State Government must fulfil obligations which help theWA economy," Mr Cowan said.

"The Government's countertrade policy has generated more than $79 million in exports and inward investment in the past five years.

"The $30 million countertrade obligation for Itochu's Collie project partner, ABB, is also in the final stages of negotiation."

Media contact:  Peter Jackson 222 9595