North Australia Digest – 18/9/1218 September 2012
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.
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.