A century from now, Australia could turn into an empty mine-pit with used up natural resources, no jobs and no future in sight unless present governments formulate strategies and implement action plans that would anchor the country to not just rely on its natural resources for sustained economic growth.

James Dines, a prominent American investment analyst, criticized Australia for letting China acquire big chunks of its natural resources, in what he calls "resource imperialism" on the part of China.

It is alarming that Australia is being all too consumed to trade its natural resources for "easily printed paper," forgetting that its treasures are highly irreplaceable, Dines noted. Once it is lost, it is lost forever.

Speaking before the RIU Victorian Resources Roundup conference this week, Dines told an audience of mining executives, brokers and investors that Australia should slow down in selling off its natural inheritance, particularly to China who is out to get almost all the planet's inherent resources not just in Australia but in other countries as well.

Being rich in natural resources, Australia is a major exporter of agricultural products, such as wheat and wool, minerals such as iron-ore and gold, and energy in the forms of liquefied natural gas and coal. Although natural resources and agriculture comprise only 5% and 3% of GDP, respectively, they are a major influence to the country's export performance. Australia's largest export markets are Japan, China, South Korea, India and the USA. In the past decade, one of the most significant sectoral trends experienced by the economy has been the growth of the mining sector, including petroleum. This sector grew from around 4.5% in 1993-94, to almost 8% in 2006-07 in terms of contribution to GDP.

Dines described natural resources, including farmland, as a source of real wealth, urging his audience that these should be kept for "your descendants."

"The end of capitalism as we knew it had arrived and we are in the second great economic depression," he said. Instead of grabbing the means of production, China is legally buying the earth's natural resources. And it wants to get them all.

"China is storing commodities well above its immediate needs as a form of hard money for next century and beyond," Dines said, noting it already produces 97 percent of the world's total of rare earths, as well as copper.

"What they're doing is legal and far-sighted thinking. They are not buying a copper mine to re-sell at a higher price. They are buying it to use all that copper for China," he added.

The American analyst said Australia should not just depend on mining as major source of economic growth and advised government it should look into other probable industries to bring in money to the country, such as tourism, crops and seafood.

While it is good to see that Australia is high on the list of countries the other global markets turn to, Australia should safeguard a percentage of its mines and farmland is kept in Australian hands, to ensure a stable food and resource security in the future for the country.

Dines speech seems to echo some federal authorities' concerns of Australia entertaining foreign investors into its mining industry, as was the case of the Wesfarmers Ltd. and Yanzhou Coal Mining Co. of China deal. Australian firm Wesfarmers Ltd. has agreed to sell Premier Coal to Yanzhou Coal Mining Co. of China for US$293 million. The coal-mining business, located in southwestern Australia, produces about 3.5 million metric tonnes of thermal coal annually.

Western Australia's Premier Colin Barnett had expressed concerns as to how the sale-out could affect local supply, especially since Premier Coal is the major supplier of coal to government-owned coal power stations as well as and domestic industrial companies. "Indeed while these are private companies, the coal does belong to the state and there are provisions in the state agreement that ensure the coal is reserved for state domestic use," Barnett was quoted by AFP on ABC radio.

Heavy demand from developing countries, such as China and India, will put a strain on the earth's resources. Oil production has already been predicted to run out by this century.

"Sooner or later, Australia is going to need those rare earths for its own modernized manufacturing, or else your kids will be buying your own rare earths back from China, with a significant mark-up," Dines said.

China, who seems to predict what lurks ahead for global economies in years to come, is already erecting facilities to pile the commodities it is harvesting or purchasing.

The world's second-largest economy, in a study by Research and Markets, is aggressively expanding its coal chemical industry, and is poised to launch major projects in seven areas, namely, coal liquefaction, coal-to-gas, coal-to-olefins, coal-to-ammonia/urea, coal-to-glycol, low-rank coal upgrading, and coal-to-aromatics up through 2015.

At least nine coal-to-oil projects are already present in China, with annual capacity of 38.2 million tons and total investment of around RMB380 billion. Last year, China completed its pilot Shenhua Baotou Coal-to-Olefins Project in Baotou, Inner Mongolia. It is a large coal chemical project where coal is gasified and turned into methanol. The methanol is then transformed into olefin and the olefin is then polymerized into polyethylene and polypropylene.

The development of the coal-to-olefins industry will reduce China's dependency on foreign crude oil, and is a new approach to the sustainable development of China's petroleum and chemical industries. The country is poor in oil and gas, but richly abundant in coal. At the end of 2010 alone, its coal reserves were at 114.5 billion tons, representing 93.3 percent of its total energy reserves.