Article – Mining overregulation curbing key to our future, says Rinehart

by 6 September 2014

4 September 2014
Barry FitzGerald
The Australian

Billionaire iron ore magnate Gina Rinehart believes the Abbott government has more to do after fulfilling its election promise to axe the carbon and mining taxes.

A strong critic of the now-abandoned mining tax on the iron ore and coal sectors, Mrs Rinehart said “overregulation and the high costs of approvals and compliance remain as huge impediments’’.

Writing in her regular column in Australian Resources and ­Investment, out today, Mrs Rinehart said that mining should not be seen as a dirty word, but as an industry critical to Australia’s future.

“Unfortunately it is an industry facing problems,” she said.

“We can’t afford to overregulate and overburden industry if we want to remain competitive and maintain our standard of living.

“We should instead be focused on making our country’s exports sustainable in the world markets, for the benefit of Australians and Australia’s ­future.”

Mrs Rinehart — Australia’s richest person and the major shareholder in Fairfax Media — said low-cost nations, particularly in places like Africa and parts of Asia, were seeking out investors to develop their resources.

“I am NOT saying Australia needs wages like Africa’s — in fact, I never have. Some lefty media commentators chose to ­deliberately distort what I said.’’

Mrs Rinehart said critics of the industry, whose “political leanings are typically embedded in the Left”, should be the first who want to see a prosperous industry.

“When there is a downturn it is almost always those on the lowest incomes who are hurt the most.

“Investment sustains employment and creates more.

“The increased tax revenue pays for public facilities and government welfare.’’

Mrs Rinehart said Australia needed to be wise to what was happening, and do its best to reduce government-imposed costs and risks, which reduced Australia’s attractiveness as an ­investment destination as well as its ability to be cost competitive and able to export to overseas markets.

Mrs Rinehart’s comments come as Hancock Prospecting, and its Japanese and Korean partners, build the $10bn Roy Hill iron ore project in the Pilbara, with first production due in the second half of next year.

“Our own experience at Roy Hill saw government approvals, permits and licences tally into the thousands and with every one comes considerable costs and delays,’’ Mrs Rinehart said.

“Add to this compliance time and costs, and further regulation. Our competitor countries just don’t operate like this. Although Australia is blessed to be resource rich, we must be vigilant and active to make sure we are not priced out of the market and that we retain our reliability.’’

Last week, Mrs Rinehart hinted first production from the 55 million-tonne-a-year Roy Hill could beat the September 2015 target. She added that “as mining investment generally is contracting in Australia, Roy Hill and Hancock Prospecting is against the trend and continues to invest and grow”.

A factor in the retreat in mining investment has been the fall in iron ore prices from historically high levels to less than $US90 a tonne in response to the growth in new supply outstripping demand growth.

Like the other Pilbara giants — Rio Tinto, BHP Billiton and Fortescue — the Roy Hill development is expected to be protected from the iron ore price slump because of its lower costs of production.

 Gina Rinehart , launches her new book

Courtesy of The Australian

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