Melbourne has long been the spiritual home of Australian mining. While this is a legacy of the Australian gold rush of the 19th century, today this dynamic and rapidly growing industry has a truly global focus, and the city's resources giants are driving a wave of foreign investment both locally and around the world.
Mining is big business in Australia. The resources sector represents more than 10 per cent of Australia's GDP and employs over 300,000 people locally, generating over A$170 billion in annual exports.
And Melbourne is the heart of the action. Victoria-based companies constitute over 60 per cent of Australian mining by ASX 100 market capitalisation, and 80 per cent by revenue.
More than 100 major mining and related companies call Melbourne home, and the city hosts the head offices of heavyweights such as BHP Billiton, Newcrest Mining, MMG and mining services giant Orica amongst many others.
Victoria's gold fever of the 1850s has long since subsided, but thanks to its heritage the state's capital Melbourne, along with London and Toronto, is today one of the world's big three global mining centres, says Campbell Jaski, mining consultant and partner at PPB Advisory.
"Melbourne has historically been the home base of many big mining houses, and of internationally renowned senior executives such as the Hugh Morgan's and the Owen Hegarty's of this world,'' says Jaski.
"They attract big investment opportunities. That then flows through to requiring a service hub to support those projects.''
As miners look ever further afield for elusive deposits, exploration and mining operations increasingly take part in remote corners of the world. But all the technical expertise, strategic management and financing is delivered out of first-world hubs such as Melbourne, says Jaski.
"These days Melbourne is not at the heart of the operational environment, but we are at the heart of the strategic and financial environment.
"Having so many of the big players based here provides work for professional services such as law firms. The sheer size of market here means it is a good place to find world experts in these fields.
"As a result, the city has a really strong mining community. For instance the Melbourne Mining Club's events are attended by over 600 people every few months and attract the world's best CEOs to give presentations.''
Image: Victorian Mining businesses in the ASX 100
International players choose Melbourne
Investment by international mining houses in Melbourne is increasing, with the likes of MMG and China Minerals bringing a strong offshore presence to the city.
For example, specialist resources private equity manager EMR Capital chose Melbourne for its operations because it is the centre of mining in Australia.
EMR chief executive officer Jason Chang says this foreign investment is crucial to bringing project financing, employment, revenue and taxes into the Australian economy. But it also means so much more than that.
"Importantly, it builds a platform for country-to-country engagement,'' Mr Chang says.
"You don't just have mining companies and investors, but you've got key stakeholders from governments. You've got a lot of the Asian ministries coming along, for example, and Asian ministries are the ones that have the most at stake.''
The rise of METS
It is not just physical products and technologies that are being sold to mining firms from around the world from Melbourne, but also the knowledge required to utilise them efficiently.
Victoria is home to a large number of mining equipment, technology and services (METS) companies, two thirds of whom actively export.
Professor Satchwell of the University of Western Australia's Energy and Minerals Institute says by educating offshore companies in Melbourne on how best to use METS globally, Australian experts are transferring knowledge to less developed parts of the globe.
Breaking the borders
Prof Satchwell co-authored a recent report, Sharing the Benefits: enhancing Australia's global leadership in the mining value chain.
The report highlights how Australia has become a worldwide mining centre, with A$143 billion in offshore mining investment in 2013, and how this not only assists other countries to transform their resource endowments into economic and social benefits locally but also creates a more conducive business environment for Australia-based companies.
Jaski has worked in many developing countries in a range of mining-related roles.
"Australian mining companies have a really good reputation around the world for being technologically sophisticated and also for having a really good community ethic and high community engagement standards,'' he says."Their involvement sets the local mining industries in these developing countries on a good path going forward, as much as it delivers benefits back to Australia.''