North Australia Digest – 26/9/12

by 26 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Australian

Queensland mining magnate Clive Palmer has lodged legal proceedings after rival miner GVK was awarded the rights to build a railway line between the Galilee Basin and Abbot Point. Mr Palmer claims he has not be provided with adequate information as to why his company, Waratah Coal, was not awarded the contract.

Live sheep export to the Middle East has been resumed for the first time since disease claims last week. Halting live exports to the region 10 days ago led directly to a 25 per cent drop in sheep prices, according to some farmers.

The Australian Financial Review

The biggest shut down of nuclear power in history will spur record demand for liquefied natural gas in coming decades. In a move that will increase demand from Australian producers, Japan, once the world’s third biggest nuclear generator will close all of its reactors within 30 years after last year’s meltdown at Fukushima.

Despite escalating costs in the sector, Chevron is sticking to its plan for a rapid expansion of the Gorgon liquefied natural gas project, Australia’s biggest ever resources development. Chevron has confirmed it will start engineering work late this year on a fourth production unit, an expansion which will cost at least an extra $10 billion.

Mining industry job losses have spread to the gold sector, with Newport mining laying off 50 local support staff in an attempt to rein in costs.

The Courier Mail

State and federal government’s are considering a plan for North Queensland to become its own economic zone. Cairns, Townsville, Mackay and Rockhampton will unite in an attempt to gain a larger share of the $60 billion in wealth generated annually in the region. Local Government Association of Queensland president Paul Bell said the four regions would also work as one to cut red tape, “It will collectively exert a far greater amount of political power and influence on Brisbane and Canberra,” Mr Bell said. “They will be able to deal with half of Queensland as one group and in one hit.”

The Kingaroy gas project, which contaminated groundwater in the region, was given environmental authority to operate on “inadequate conditions”, according to an independent review of the process.

The West Australian

Only “modest” improvements to rail lines to Esperance Port would be needed to cater for the export of an extra 15 million tonnes of ore a year, according to Iron ore mining hopefuls in the Yilgarn region.

Abbott will put UAV drones in Northern Australia

by 25 September 2012

Earlier today, Opposition Leader Tony Abbott outlined a promising plan for a stronger military presence in northern Australia in a speech to the RSL national conference in Sydney. Mr Abbott stated that a coalition government would immediately begin the process of “acquiring state-of-the-art unmanned aircraft” as part of a move to increase spending on Australia’s Defence Force.

The Coalition plans to deploy what are commonly known as drones in Northern Australia.

It is refreshing to see a leading Australian politician finally taking the defence of northern Australia seriously. A defence force review released earlier this year found that there was significant “weakness and risks” in Australia’s military capabilities in the north-west.  Currently the north-west is home to two small army regiments, and is completely devoid of any permanent naval installments.

Yet this is a region of significant national importance. The resources in the Pilbara alone contribute 60 per cent of Australia’s total exports to China. Investment in liquefied natural gas projects in the region are set to hit around $200 billion.  The lack of military infrastructure in the region is made more alarming by the proximity of major security threats in the Indian Ocean instability in the South China Sea.

Mr Abbott’s plan to concentrate more of Australia’s military strength in the region is a welcome response to the growing importance the north-west, both strategically and economically.

And the capacity of drones to cover vast areas makes them perfectly suited to Australia’s north-west coastlines.

North Australia Digest – 25/9/12

by 25 September 2012

Financial Review

China’s giant sovereign wealth fund, China  Investment Corp, has a $US 190 billion war chest, with a view to secure the country’s long-term food supplies.  Currently a litre of milk in Beijing sells for about $7 a litre compared with $1 here.

Any Chinese attempt to buy a large stake in Australia’s dairy industry would need approval from the Foreign Investment Review Board and would have to focus on sustaining jobs, according to Treasurer Wayne Swan. Swan said he welcomed foreign investment in the country “because it creates jobs. If there were any proposal that were to come to us about investment in dairy or anywhere else, what the government does is apply our national interest test.”

Australia’s “defensive and suspicious approach” to foreign investment is putting at risk much needed investment from China, ANZ chief executive Mike Smith has warned.

In this opinion piece, Adam Courtenay says the mining boom has been sold short by many in the media, arguing  it still has some way to go. Courtenay points out that spot iron-ore prices are not everything, particularly as a lot of iron-ore shipments have been sold forward at a higher price.

The Australian

Business leaders have warned that Australia has failed to understand or embrace the Asian region, particularly our biggest trading partner China.  In a roundtable forum hosted by the Australian Institute of Company Directors, directors of blue-chip companies including BlueScope Steel, QBE Insurance Group, Perpetual, Westfield, Suncorp and Toll Holdings said there was a huge cultural gap that needed bridging if the nation was to benefit fully from the rise of Asia.

The Gillard government’s proposed business tax changes could make Australian oil and gas producers the least competitive in the world, industry groups have said. The warning have come in response to proposed tax changes which industry says could stall the massive projected growth in the oil and gas sector in Australia.

Key drivers of investment in the in resources sector are no longer supporting commodity markets making investment the most difficult it has been in the last 10 years, HSBC’s mining head has warned. Simon Francis, HSBC’s regional head of metals and mining research, Asia Pacific, said commodities markets had entered a period of slower yet more sustainable demand growth.

North Australia’s coast could be patrolled by unmanned drones under a Coalition defence strategy to be announced by Tony Abbott in an address to the Returned Services League (RSL) Congress in Sydney today.

The West Australian

Woodside Petroleum managing director Peter Coleman has said rising costs in the Pilbara are set to rise higher as new projects increase demand for labour. “Today is probably a period of time when the cost versus (LNG) price element, the margin is as skinny as it has ever been, or at least for a long period of time, for new projects,” he says.

North Australia Digest – 24/9/12

by 24 September 2012

Australian Financial Review

A Chinese sovereign wealth fund is looking to make its first significant investment in the Australian dairy industry, as China tries to secure food supplies for its growing middle class.

The head of NAB’s agribusiness division says, while the possible end of the mining boom is grabbing headlines, demand for farm commodities could underpin the economy for years to come.

This opinion piece surveys the possible consequences of a terms of trade slump and reduction in mining investment.

The Australian

The Queensland government is threatening to withdraw more than 300,000 small business employees from federal IR laws and reemploy them under state awards. Queensland is “seriously considering” applying to take back industrial relations powers previously handed over to the Commonwealth by Labor.

A government report says much of remote indigenous communities’ funding is wasted on bureaucracy.

Former Future Fund chairman David Murray has warned Australia risks falling victim to the same malaise Europe is suffering as political leaders overcommit public finances and stifle freedoms needed for a truly open economy.

The West Australian

The WA Chamber of Commerce and Industry’s scorecard of the WA Government’s performance says it is failing in public sector reform and industrial relations and has slipped backwards in energy, approvals and climate change.

Courier Mail

From the weekend, QLD state MP Rob Katter has called for a public debate on whether to allow a uranium export industry in Queensland, declaring in this op-ed: “Katter’s Australian Party supports a uranium mining export industry because of its economic potential, the associated development of regional Queensland and for the reduction of greenhouse gas emissions it would provide.”

North Australia Digest – 21/9/12

by 21 September 2012

Australian Financial Review

Jobs will bear the brunt of a faster than expected end to the commodity boom according to economists and business leaders. The calls come in reaction to Ross Garnaut’s prediction that Australian’s would struggle to cope with falling living standards. Business Council of Australia chief executive Jennifer Westacott said the nation had abandoned its ambitions to improve productivity and Australia must do more on tax reform, reducing regulation, improving skills and workforce mobility to ensure the nation’s prosperity.

The chief executive of BHP Billiton Petroleum, Mike Yeager, said there should be more compensation for Australian landholders. Speaking at the World Shale Conference in Houston yesterday, Mr Yeager pointed to the generous pay deals for farmers in the US which have underpinned the boom in shale gas exploration. “The US is blessed by the fact that the royalty owners want us to be there. I cannot stress enough how important that is,” he said.

BHP has shelved rail and port infrastructure plans of more than $US5 billion as it reviews its coking coal ambitions in Queensland.

Chinese manufacturers are expected to begin a long, slow recovery in the final quarter of this year. Treasurer Wayne Swan will tell an audience in Sydney today that China has considerable scope to stimulate its economy and that he remains optimistic about Australia’s largest trade partner.

The Australian

Uranium mining is back on the agenda in Queensland, with the Newman government saying it is open to  “a serious public discussion” about the issue. Allowing the mineral’s exploitation could potentially create an industry worth up to $20 billion in the state.

Indonesia is refusing to budge on the banning of more than 11,000 Australian breeding cattle in a new trade dispute between the two countries. The Indonesian quarantine service has rejected breeding certification it previously accepted, brining the $35 million-a-year export business to a standstill.

With increased reliance on LNG and a soaring gas bill, Japan is looking to sever ‘oil-linked prices’ for its LNG imports, a system which has existed since the 1960’s. The move could reduce the profitability of many Australian projects, and is linked to the availability of large shale reserves in the US.

The West Australian

Bureaucratic wrangling is putting the entire WA sheep farming industry on the brink of collapse, according to WA farmers. In response to Pakistan refusing to accept 20,000 WA sheep, despite repeated assurances the animals were disease free, the Department of Agriculture, Fisheries and Forestry has refused to allow 200,000 WA sheep and 10,000 cattle to be exported. Farmers say everyday they are not being allowed to send their sheep is costing them thousands of dollars.

The Courier Mail

The Queensland government has moved uranium mining off the backburner, calling for a public debate on the issue.  The industry is seeing it as a change in tack by the Government after decades of uranium deposits being locked away by state and federal government bans.

North Australia Digest – 20/09/12

by 20 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Financial Review 

Ross Garnaut has warned Australians to prepare for a living standards ‘bust’ as the resources boom gives way to falling export prices and a slump in mining development.

An influential Chinese insider says Australia must prepare for falling demand for coal and iron ore as the world’s second-biggest economy undergoes structural changes.

BHP Billiton, the world’s largest mining company, says the first phase of major economic growth in China has come to an end, as is reflected in a slowdown in demand for iron ore.

The Australian

Another serious dispute has flared in the Australia-Indonesia live cattle trade, with Jakarta officials rejecting more than 11,000 breeding cows shipped since May and exports halted since the middle of last month.

BHP Billiton has shelved multi-billion-dollar plans to build one of the nation’s biggest coalmines as it reviews its Queensland coking coal development plans amid sliding commodities prices and lower growth expectations in China. 

Australia’s mining contractors are bracing themselves for a margin squeeze from clients taking advantage of the rapidly changing industry dynamics.

The Age

BHP Billiton has shelved plans to build a $3 billion coking coal mine in Queensland as part of the spending cuts announced by the world’s largest miner last month, the Australian newspaper reports today.

West Australian

The resources industry has hailed a State Government determination on Toro Energy’s Wiluna uranium project as another positive step towards approval of WA’s first uranium mine.

Environmental conditions for WA’s planned first uranium mine have been strengthened after an independent review of appeals.

Courier Mail

Mining companies are making a concerted push to influence the State Government in a bid to shore up the multibillion-dollar pipeline of future projects.

NT News

A developer who sold residential blocks before he had approval to subdivide said it was “not uncommon” for developers to “jump the gun” because the approval process was too slow.  

North Australia Digest – 19/09/12

by 19 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Age

New Coal projects will be shelved across Queensland as a result of increased royalties on coal announced in last week’s state budget. Robert Neale, managing director of New Hope Corporation, said “Where it does have an impact is the cumulative burden of that plus the MRRT and the carbon tax on new projects. That burden is such that I would think the current climate the majority of development projects in Queensland are likely to be delayed to varying extents.”

The Australian

Resources Minister Martin Ferguson has blasted union and mining company executives for complacency over the mining boom. “Industry itself has got to front up to better managing some of these projects. In terms of construction projects, management has become sloppy,” he said. Mr Ferguson also challenged union leaders to adjust their claims given that iron ore was down from $190 to $100 a tonne, coking coal was down from $320 to $160 a tonne and thermal coal was down from $220 a tonne to a range of $70 to $90 a tonne.

The falling queue of ships waiting to collect raw materials from our ports is a clear indication of falling demand in the resources sector. Three years ago, there were queues of more than 300 ships waiting off Australia’s major ports to load up with iron ore and coal, yesterday there was only 90. The figures show that Asian and European ships are increasingly going else where for their raw materials, mainly the US.

Bureau of Resource and Energy Economics executive director, Quentin Grafton, said yesterday prices for Australia’s key iron ore and coal exports will bounce back over coming months as China’s steel mills come back into the market. Dr Grafton said the price fall reflected short-term cyclical factors rather than any change in the long-term outlook for our export commodities.

In a submission to a federal parliamentary committee examining the proposed Protecting Local Jobs Bill, the Construction Forestry Mining and Energy Union has called for local workers “to have a legislated preference in redundancy situations over overseas workers” as part of the regulation of Enterprise Migration Agreements.

Immigration Minister Chris Bowen has rejected a union push to abandon the use of foreign labour in large mining projects as the resources industry slows. “A lot of work went in to making sure that Australians get the opportunity for those jobs but that there is appropriate provisioning for certainty for these very, very large projects to be able to proceed in the knowledge that they can get the workers necessary if they’re not able to source the labour in Australia,” Mr Bowen said.

The Financial Review

Australia will have to fight to secure a next round of liquefied natural gas projects, Resources Minister Martin Ferguson has warned.  “We have got a lot of major LNG projects that we are going to have to fight to get,” Mr Ferguson told a resources conference yesterday, “It will not be easy.” Woodside’s executive director for corporate and commercial, Rob Cole, said “We must not take future growth in Australian oil and gas for granted. Australia’s LNG growth is occurring within an increasingly competitive global gas market, with more choice than ever for customers and investors. We can’t afford to be too sanguine about challenges such as rising costs and skilled labour constraints which, if not addressed, may compromise future success.”

Australia should prepare for lower growth over the long term from its major trading partner, as China goes through a period of structural change according to a senior official at China’s central bank. Speaking to economist in Shanghai last week, Sheng Songcheng played down the need for another stimulus package. After the briefing some economists have revised down their 2013 forecasts.

Rio Tinto Australia managing director David Peever has called on the Gillard government to hold an urgent review of Australia’s loss of competitiveness. Speaking at the Bureau of Resources and Energy Economics conference in Canberra yesterday, Mr Peever outlined a six point plan to make Australia more attractive. Companies needed to get skilled labour, the industrial system needed to be improved, regulations and approvals need to be simplified, there should be a focus on innovation, infrastructure needed to match capacity and a tax regime that didn’t punish the sector, he said.

The West Australian

Australia’s live sheep trade is at crisis point as the Federal Government delayed issuing shipping permits amid animal health concerns. Approximately 200,000 sheep have been left stranded on WA farms and feed lots as exporters and Australian diplomats work to clarify trade agreements with importers in the Middle East.

About half of Australia’s non-bulk commodities mines will be exhausted between seven and 18 years based on current reserves and resources, according to a university of WA paper. This short time frame sends a clear message that governments at all levels must put more resources into Greenfield exploration in order to find the mines of tomorrow, argues Simon Bennison. (No link)

The value of rural exports in 2012-13 is expected to be about $38.9 billion, one per cent lower than a year earlier. The Australian Bureau of Agricultural and Resource Economics and Sciences said the result would still be 21 per cent higher than the most recent five-year average. ABARES executive director Paul Morris, said “this is largely reflected by continued demand growth in the Asian region and markedly higher export prices for grains and oilseeds,” he said in a statement.


North Australia Digest – 18/9/12

by 18 September 2012

The Australian

Here is a digest of today’s major stories that impact North Australia:

A slowdown in the mining sector and the shelving of major projects has encouraged an escalation of the ACTU’s war on the recruitment of foreign workers. The ACTU’s secretary David Oliver has demanded an end to enterprise migration agreements:

“With some of the largest resources projects being put on hold, there is no case of the mining industry to be crying about labour shortages and seeking to brining in foreign workers.”

The push has angered resource sector employers, who say that skilled migrants are needed to get projects built on time and on budget. They warn that more red tape would add to the cost of projects.

A radical plan to extend sea grass protection will be floated by Environment Minister Tony Bourke later today. Under the plan mining companies will be forced to invest in protecting seagrass meadows thousands of kilometres away from their own export facilities as a condition of future port development.

A global mining survey has found that Australia’s tax and royalty regimes make the country less attractive than other global mining heavyweights. The survey, conducted by lawyers Baker & Mackenzie, found that Australia’s political stability still leaves it one of the most attractive places to do business in.

Northern Iron is the latest victim of plunging commodity prices, announcing job cuts and a suspension of its exploration program. The Perth based junior miner is the latest in a number of companies to cut jobs as a result of high costs and low commodity prices.

The Financial Review

One of Royal Dutch Shell’s top global executives has warned that the Chinese economy is in worse shape than official figures suggest, threatening demand for Australia’s resources at a time of increased competition and rising costs. Shell’s global downstream director, Mark Williams, said “On the upstream side you’ve got to go where your opportunities are. Australia is not the easiest place… from an upstream standpoint, although there are vast reserves here, and that’s the cost issue.” LNG consultant for Tri-Zen International, Tony Regan, said Australia was pricing itself out of the market because costs were running ahead of cheaper supply options emerging in North America and eastern Africa.

More than 70 per cent of the mining industry leaders said Australia had become more expensive, complicated and time consuming over the last decade, according to a report by Baker & McKenzie.  One respondent of the 301 mining, legal and financial sector executives interviewed singled out Queensland, claiming there were up to 1800 permits and approvals required for mega-projects in the state.

Resources Minister Martin Ferguson has come out in support of the findings of a report commissioned by Minerals Council of Australia, which found that costs in mining industry were putting at risk major investment. Ferguson supported the central argument that Australia needs to get its cost structure down to lock in the pipeline of resource projects. Shadow energy and resources spokesman Ian Macfarlane said the report was a wake-up call to a Labor government that viewed the industry as a Cash Cow.

The ambitious plan to phase out nuclear energy in Japan by 2030 could result in a substantial pick up in demand for Australian LNG. The increase in demand could kick start struggling supply projects in Australia, despite soaring costs and intensifying competition internationally.  Resources and Energy Minister Martin Ferguson said “Australia is well placed to respond to an increase in gas demand, particularly with the development of new coal seam gas resources and the creation of an LNG export industry in Queensland.”

Matthew Stevens argues the best thing the government can do for the mining industry is to leave it alone. The call comes in reaction to the possibility that government may remove or reduce the diesel rebate to reach a budget surplus, a move many argue will make the mining industry even less competitive.

The West Australian

The Bureau of Resources and Energy Economics, in its quarterly outlook, said this morning that Australia’s resource and energy exports have taken a $19 billion hit because of falling iron ore and coal prices. The outlook predicts that volumes of resources exports are expected to increase substantially this financial year, however, further decline is expected in the prices of these commodities.

Courier Mail

Former NAB chief executive and BHP Billiton chairman Don Argus has said that the mining boom won’t last forever and government must rein in spending and better target welfare. Mr Argus said Australia, inoculated in recent years by high commodity prices and the mining boom, must learn from the “misadventures” of northern economies.

North Australia Digest – 17/8/12

by 17 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Australian

Modelling released by the Minerals Council of Australia has warned that labour costs in the mining industry are among the highest in the world. The modelling warns that high costs threaten to stall major resources projects and consequently shrink the economy by 5 per cent unless Australia commits to policies to regain its competitiveness including loosening restrictive rules on Enterprise Migration Agreements. The report also calls for measure to stop wage cost super-inflation by using skilled immigration and redirecting workers from manufacturing jobs in the eastern states to minerals jobs in West Australia.

House prices in Karratha are falling, according to a local real estate agent.

The Industrial and Commercial Bank of China is scaling back its lending to the Australia resources sector due to fears the boom is coming to an end. The head of the Bank’s local operations has revealed the bank is instead interested in increasing investment in Australia’s agricultural sector.

The Australian Financial Review

The AFR has in-depth coverage of a Port Jackson Partners report commissioned by the Minerals Council of Australia. The report says an explosion in costs is jeopardising Australia’s standing as a viable coal, iron ore and base metals producer, putting at risk $121 billion a year in resources revenue over the next two decades. High wages and productivity declines mean Australia has lost its competitive advantage over emerging miners in Africa, Asia and South America. Alan Mitchell writes that the windfall of the Chinese-driven mining boom has made Australians complacent when it comes to extracting the most from the economy, including the mining sector.  The AFR’s editorial argues that Australia’s resource industry has lost its competitive first-mover advantage at the same time as the commodity price cycle has peaked, “leaving us exposed to lower cost rivals eyeing our major export markets.”

Waratah Coal’s Nui Harris says “If governments would only get down and support business and let them develop mines, the flow-on effect is that the governments will get their revenues- it’s that simple”. The calls come as miners are facing difficulties from all angles, including low commodity prices, a shortage of skilled labour and an increasingly unpredictable tax environment.

The Courier Mail

A truce between mining company BMA and coal mining unions is in tatters after CFMEU walked away from negotiations.

The Queensland government is calling for any interested parties in a bauxite mine in Aurukun, Cape York, after Chinese miner Chalco walked away from the land in 2011. On a visit to Cairns, Queensland Premier Campbell Newman said the “only condition attached to that process…is that the successful party will be the one that can show the most benefit for the Aurukun community.”

The West Australian

The single wheat desk is facing increasing pressure in Western Australia. Many WA growers want the interim wheat regulatory body, Wheat Exports Australia, scrapped as it is currently resulting in a 22 cent-a-tonne levy.

The Age

A combination of factors will restrict a substantial rebound in the Chinese economy according to Rio Tinto chief executive Tom Albanese.  According to Mr Albanese China is suffering from a major slowdown in its primary export market, Europe, while also dealing with “structural imbalances… and inflation” caused by the 2008 stimulus package.

Head of HSBC Helen Wong has said that the slowdown in the Chinese economy is cyclical, and that recent moves by the government should continue to promote growth, all be it at a slower rate. Major infrastructure plans as well as lower taxes for small businesses will lead to growth in the long term, Ms Wong has also projected a bounce back in the fourth quarter.

Speech – National Party Federal Conference – by Mr Tad Watroba, Executive Director of Queensland Coal Investments

by 15 September 2012

Party President, Federal Leader of the Nationals and the next Deputy Prime Minister of Australia,  the Honourable Warren Truss, Nationals Senate Leader  Barnaby Joyce,  Premier of Queensland, Campbell Newman, Deputy Premier of New South Wales, Andrew Stoner;  distinguished guests, ladies and gentlemen.

Thank you for your very warm welcome and thank you for the invitation to Mrs Rinehart to address you, but as you can see you have me instead, still battling with my Aussie accent. You see I’m from Poland. I had to escape my country, which was communist then, to give my daughters a better life. One not only with plenty of food and electricity, but one also with hope and opportunity.

And most importantly,  with freedom.

Yet when I arrived here I only spoke one or two words of your language.

But even if my accent is not pure Aussie yet, I have chosen to adopt this country by choice instead of communism.  I know as I’ve lived under it and never want to see it in my chosen country. In the last few years however, one wonders where our current federal government tries to lead us. There are some scary similarities in actions by some of the members of Gillard’s government and of course the other minority party which the government rely on for support, with those I remember back in my old communist country. The “class war” is a classic example of that. We as Australians must be very alert to that, and do everything possible to preserve our democratic way of life. Not only for ourselves,  but also for the generations to come. So I wish the Nationals the best at the next federal election, when together with the Liberals you need to win, to reverse this current disastrous trend.

On 5 September Mrs Rinehart addressed the annual dinner of the Association of Mining and Exploration Companies.  Mrs Rinehart deserves to be quoted regarding the investment climate in Australia:

“We can bury our heads in the sand and pretend this critical investment pipeline is secure, and attack those who explore and invest and risk, but we can’t rationally expect to address the decline in exploration and in the investment pipeline unless we introduce policies to make investments in Australian projects and exploration welcome and enable them to be cost-competitive internationally, and improve the approval risks.”

Mrs Rinehart went on to point out that if Australia continues on the path of making exploration and investment too difficult or even unwelcomed, then resource projects will head to competing countries, especially those with lower costs.    This is not a time in Australia’s history, when Australia is already in record debt which is increasing daily, for us to bury our heads in the sand and pretend that everything is fine. Nor is it time to misrepresent these comments, or politicize these statements via media attacks on the risk takers, the investors, the wealthy entrepreneurs and message givers.

If the political alliance currently governing Australia is unwilling to listen to these statements, and just wants to immerse itself in destructive class warfare instead, then we have a compelling reason in my mind as to why the government should be changed.

Mrs Rinehart announced to the AMEC Conference that Hancock Prospecting Pty Ltd will sponsor an annual award for a miner, prospector or other who sticks up for the mining industry, promotes it and achieves a better appreciation of its great  contribution given the importance of that industry and its related industries to the future of Australia.

Here is a lady who sets a great example of standing up for the mining industry, and she is offering an incentive for others to join her.

She hasn’t stopped there, because I know she has made similar arrangements via the Sydney Mining Club,  the Small Business Association of Queensland of which she is patron, and through ANDEV in Northern Australia. With the assistance of the Voices of the North, Mrs Rinehart will make these announcements in the coming months. I just wanted you to have a little preview of these pro-Australia leadership programs, supporting primary industry and its related industries, small businesses and our North in general.

I share Mrs Rinehart’s enthusiasm  for ANDEV – Australians for Northern Development and Economic Vision.  It has attracted the support of many talented Australians who share a deep commitment to the development and future prosperity of our nation. You will find more information about ANDEV in the information pack, and I strongly urge all of you, who have an interest in development of our North to join the ANDEV ranks. I would be very happy to discuss ANDEV with any one of you later. You can also talk to our PA, Diana, who has information to share with you. Diana, could you please stand?

In Queensland Mrs Rinehart’s entrepreneurship has led the work of pioneering, investing in, studying and opening up the Galilee Basin.  This great Australian lady really sees the big picture, spurring the creation of three huge mines north of Alpha. After all approvals are met, of which there are thousands, these mines will ultimately  produce 54 million tonnes of thermal coal each year to earn royalties for the Queensland Government, and company and personal taxes for the Federal Government and provide opportunities for many local businesses and individuals.

And by the way, all of the Alpha Mine, which Mrs Rinehart graciously called Tad’s Corner, all of Alpha West and three quarters of Kevin’s Corner, were all applied for and acquired by Mrs Rinehart, not inherited, as the media wish  to incorrectly portray.  And the one quarter of Kevin’s Corner was so far inland then, it had no hope of ever being developed without Mrs Rinehart’s vision for more tenements and tonnage and integrated standard gauge heavy rail and port.

495 kilometres of railway will carry the Alpha coal to a new port facility at Abbot Point. We are proud to note Tad’s Corner, when still a 100% Australian-owned project, was the source of the first coal that was mined in the Galilee then washed and exported to overseas customers.

Some well-known companies have closed mines or shelved projects in Queensland, but QCI is on the move.  QCI has four new tenements granted in Queensland so far and we are busily implementing our exploration projects in all of these.

In addition, QCI is proud to be in new joint venture projects with other keen explorers. Their senior representatives are with us today, may I ask if you’d stand please? People who want to applaud you enterprising people and your companies can wait until I have introduced you all.   Hugh Dai and David Round of International  Coal.  Richie Ah Mat of the Cape York Land Council.  Peter  Meers and Dan Buckley of the Tiaro Coal Limited and Bundaberg Coal.  Peter Lindsay and Mick Avery of Guildford Coal, Megan McPherson and Bryce Mutton of Cuesta Coal and Tony Crimmins of Jatenergy Limited.

And if I can also repeat, none of these QCI tenements or JVs was inherited.

Now you can applaud.

There are six things which we all need to understand about the mining industry and which I’d like to share with you.

Firstly, mining is not easy. Less than one in a hundred prospects becomes a mine.  The typical successful mine has grown out of decades of disillusionment and disappointment.

Secondly, mining is hazardous for investors and hazardous for workers.  I am speaking with knowledge as a former underground miner in Poland where we were working more than a kilometre below the surface.

Investors in mining face more than enough risks without having to worry about being stabbed in the back by their own Federal Government.

Thirdly, the economics of mining are very fragile.  Every day Australian miners face fierce competition from Brazil, Indonesia, South Africa  and elsewhere.  But now we face the biggest threat to our competitiveness that we have ever faced  from newly developing  low cost  countries in Africa, getting ready to unleash commodities onto markets we thought were our own.

In your delegates’ kit is an article by my Chairman: “Let’s Get Back to Our Roots”.  Mrs Rinehart wrote: “the mining pipeline has indeed been squeezed too hard. Australia has become too expensive, taxes are too high and regulations and approval processes too costly and uncertain.”

My Chairman is concerned, but she is not the only executive concerned.

Australian miners are subject to sudden fluctuations in market demand, unscheduled acts of God, and planned acts of the ungodly.  By the ungodly I mean governments who are either hostile to mining or who see mining as the pheasant whose feathers can repeatedly be plucked.

Fourthly,  government which plunders the mining industry are plundering our nation’s future, and investors are rapidly investing offshore. Every day we read now of mine closures, or projects being shelved or delayed yet our government is not listening and thinks the Australian mining industry can continue to be burdened and plundered. The Mining Resources Rent Tax and the Carbon Tax are shocking examples. Future projects require current exploration, and exploration is declining.

Fifth, major new projects absolutely need access to foreign labour to get through the start-up phase. This will allow projects to become operational and employ thousands of Australians who are keen to find jobs for many years in the future.

Sixth, mining has a surprisingly light footprint on our nation’s land.  The biggest threat to prime agricultural land is urban expansion.  The Hon Ian McFarlane when Minister had a detailed study done that showed that all these  mines in Australia together took up less space than hotel car parks.

We have in Australia a hard core of hostiles or communists who hate all forms of mining and who specifically are committed to abolishing the coal industry no matter what this does to those who work in the industry or the impact this would have on the Australia’s increasingly debt ridden and fragile economy. A hard core of hostiles or greenies want to abolish the beef cattle industry starting with a permanent ban on live export, no matter what this would do to the small businesses and family businesses involved.

There we have it, six things we all need to remember about mining.  Mining is not easy but hard.  Mining is hazardous for investors. The economics of mining in high cost Australia are very fragile.  Governments which plunder the mining industry are plundering the future.  Major projects need investment and Australia needs to change its policies to welcome investment.  And, Australia has never before faced such competition from low cost countries with such vast resources.

Australia’s net foreign debt is reportedly $795.25 billion and rising every day. Shared amongst a population of 22,725,000, that makes foreign debt for every Australian an astonishing amount. About  $35,000. Our GDP per person is alarmingly similar. We are almost a second Greece.

Australia’s debt position is very serious.  There is a way out of the swamp of debt, through significant investment in mining and through enthusiastic development of Northern Australia as advocated by Mrs Rinehart and ANDEV.  If anyone has a better idea then I’d like to hear it.

We owe it to our children and grandchildren to lead this nation out of debt.  Increasing the burden of taxation and regulation in our high cost north is like throwing away the map, smashing the compass and taking the batteries out of the GPS.

Mr President, your great Party represents real Australians, people who love this country and work hard and deserve to see the product of their labours.  On behalf of Mrs Rinehart, on behalf of the Hancock Prospecting Pty Ltd Group of Companies, on behalf of QCI and on my own behalf, thank you for your outstanding dedication to Australia.

Thank you.