The Mining Chronicle
When the chairman of the world’s largest mining company says costs in Australia are too high, and casts doubt on the company’s proposed $80 billion expenditure on growth projects globally, industry sits up, takes notice, and draws a collective breath.
In a speech targeting Australia’s industrial relations and taxation regimes, BHP Billiton chairman Jacques Nasser said Australia was “one of the higher cost countries in the world”.
Speaking to reporters after addressing the Australian Institute of Company Directors in Sydney last month, Mr Nasser also confirmed the global miner would not spend the $80 billion on growth projects up until 2015 as stated by BHP CEO Marius Kloppers in February last year.
He pointed out the industrial relations environment in Australia had become increasingly difficult, with the company facing 3200 “incidents of industrial action” at its Queensland coal operations in the past year.
Mr Nasser went on to attack “host governments” for increasing taxes and royalties in response to higher world commodity prices.
“While governments have the right to make tax and royalty decisions, those decisions have repercussions,” he said.
The mining boss went on to say that BHP Billiton had more projects globally than it could fund and so had to make choices about where conditions were best for investment.
He said the company took seriously its “responsibility to discover and develop the commodities owned by all Australians”.
However, “given our range of options”, if a project did not meet all the required criteria the company would invest elsewhere or not at all, he said.
John Shipp, director of the Australians for Northern Development and Economic Vision/IPA North Australia Project, said Mr Nasser only confirmed what ANDEV had been saying for over 18 months.
Other leaders in the resources sector, including ANDEV co-chairman Gina Rinehart, have sounded the same warnings for over 18 months, Mr Shipp said.
“For instance in her speech at the Telstra Business Women’s Awards in October 2010 Mrs Rinehart warned of the competition Australia faced from other regions in the world competing with Australia for investment. She said at the time ‘West Africa is not the only lowcost region where investment is happening and which will provide Australia with increased competition in the near future’.”
“To provide a better environment for investment, the government has to start by getting rid of the carbon tax and the mining tax. Industrial relations must also be reformed,” Mr Shipp said.
“The Treasurer, Mr Swan, must stop attacking the entrepreneurs who help the Australian economy grow. It is significant that the BHP Billiton chairman singled out Mr Swan’s recent attacks on mining leaders as something which was undermining overseas investors’ confidence in Australia.
“The government has to start listening to these warnings, or else instead of a two speed economy Australia will be facing a no speed economy.
“We have to turn our attention to the opportunities for development that exist in North Australia through policy ideas such as a low tax, low regulation Special Economic Zone,” Mr Shipp said.