Delivering on mining’s future potential

The launch of a new statement on how to harness Australia’s potential in the resources industry could mark an important shift for mining. Ewen Hosie writes.

The Australian Government delivered a Valentine’s gift to mining this year with the publication of legislation that promises to shake up the sector.

The National Resources Statement (NRS), introduced by Minister for Resources and Northern Australia Matt Canavan at the Minerals Week seminar in Canberra on February 14, is the first statement of its type to be launched in more than 20 years.

The statement plans to lay out a forward-thinking vision for mining that compounds the nation’s strengths in the sector, while also delivering prosperity and social development that benefits all Australians.

“Our resources sector, and the people that rely on it, have an almost boundless future if we get this right,” Canavan says in the publication’s foreword.

The statement, the result of over a year of consultation, outlines five key policy areas in which Australia can successfully build on its resources expertise. These include delivering a globally attractive and competitive investment destination; developing new resources, industries and markets; investment in new technologies with an eye to improving environmental outcomes; creating secure, well-paid jobs; and making sure communities reap the benefits of Australia’s resources sector.

The statement notes that all five goals are of equal importance, building on recommendations made in last year’s Resources 2030 Taskforce, chaired by the former Queensland Minister for Natural Resources and Mines Andrew Cripps.

Association of Mining and Exploration Companies (AMEC) chief executive officer Warren Pearce identifies the overlap between the policy areas in the government’s statement and the recommendations made in AMEC’s Federal Policy Platform released in January 2019.

Pearce says the resources sector needs to do more to remove red tape by cutting “complexity and cost”.

“AMEC strongly supported the 2030 Taskforce’s recommendations, and have highlighted the importance of implementation and bipartisan support,” Pearce says. “We now need to see these measures turned into action.”

The Resources 2030 Taskforce was introduced in September 2018 by Canavan as something of a precursor to the NRS. The taskforce delivered 29 recommendations to ensure future prosperity for the Australian resources sector, including a spotlight on the economic potential for export growth in the Indo-Pacific region to serve an “aspirant middle class” in developing economies.

China, India and Japan will be the world’s second, third and fourth largest economies by 2030 in terms of nominal gross domestic product (GDP), according to research from the United States Department of Agriculture. This would mark the biggest shift for India, as China and Japan are already in second and third place, respectively.

A less conservative prediction from Standard Chartered suggests that China and India will overtake the United States’ pole position by 2030, with Indonesia and Turkey rounding out the top five and Japan dropping to ninth, driven in part by an aging population.

“Australia is a world leader in minerals and energy exports and is well placed to supply growing markets in China, India and South-East Asia,” Minerals Council of Australia CEO Tania Constable tells Australian Mining.

“However, these global opportunities are not guaranteed.

“As well as promoting our resources to overseas customers, the government needs to ensure consistent policies that encourage investment and productivity in the resources sector, ensuring mining continues to deliver highly paid, highly skilled jobs in regional and remote Australia.”

To fulfil the government’s aims to promote Australia as a top investment destination, the statement says, collaboration with industry is required to develop a “national resources brand” that highlights Australia’s skilled workforce and environmental standards.

In particular, the statement suggests that a global offshore resources strategy be developed to promote Australia’s offshore capability.

“Australia has a hard-won reputation as a leading country for resources investment, yet, we have typically not invested in the specific promotion of our nation as a destination for resources investment,” the statement reads.

“In contrast, Australia has marketed its strengths as a land of agricultural opportunity and as a tourist destination.”

Development of the battery and critical metals industries is another priority. The federal government launched a new funding round in February targeting critical mineral development through the Cooperative Research Centre project (CRC-P). The funding is designed to capitalise on growing demand for metals used in renewable battery production, such as lithium and cobalt.

These grants provide short-term matched funding of between $100,000 and $3 million (for projects of “exceptional merit”), with the seventh and latest round of funding including $20 million in funding allocation for projects with a focus on critical minerals.

Constable approves of the CRC, calling it a “positive step” for the Australian regional communities and the economy. The MCA chief also points out the strategic reform agenda for resources agreed to in December 2018 by the Council of Australian Governments (COAG) Energy Council as a “further opportunity to prosecute overdue structural reforms and to stimulate further development of the nation’s minerals for the benefit of all”.

“But with Australia facing strong competition from emerging mining regions to attract investment, our reputation as a stable, low-cost place to do business must be restored if we are to become a reliable supplier of critical commodities to the world,” she adds.

Constable also says the government’s statement provides welcome support for the next wave of new mining projects in Australia.

“Data analytics, robotics and artificial intelligence and the increasing need for mining engineers are transforming the mining sector,” says Constable.

“The future education and training of the minerals sector requires a mix of the latest scientific, technical and trade skills, along with soft skills including collaboration, team building, communication and creativity so we can build and operate the mines of the future.”

Queensland Resources Council chief executive Ian Macfarlane also welcomes the government’s CRC funding, as well as its $100 million exploration program, Exploring for the Future (EFTF), and expressed overall approval for the NRS.

He says the Australian resources sector, while rich in potential, needs a plan to capitalise on its opportunities.

“The Morrison Government’s National Resources Statement is a blueprint for the long-term future of the sector, and more jobs and important signal about the ongoing value of the resources sector for all Australians,” he says.

“To make the most of our resources diversity and opportunities, all levels of government must work together to ensure stable and consistent regulation, as well as support for new investments from the North West Minerals Province, to the Bowen and Surat basins and the Galilee Basin.”

The statement is also underpinned by a series of policy principles, such as having resources development contribute to revenues and provide jobs for regional communities (“remote Australia”) and Aboriginal and Torres Strait Islander people, and embracing data innovation to align “government and industry with the longer-term national interests needed for sustainable greenfield exploration programs”.

The increased emphasis on data analytics, automation technologies and robotics in the mining industry over the past few years has resulted in a sea change to the priorities of mining education as a need for newly minted engineers rises across the industry.

Australia is already in a good place to meet these needs, with four of the top six universities for mineral and mining engineering courses in the world located in the country, according to 2019 QS World University Rankings.

However, applications are falling and the government plans to deliver a skills map to ensure educational curricula meets the needs of the resources sector in the longer term.

As Constable says, “Investing in our people, skills and innovation is critical in delivering a more globally competitive minerals sector that delivers fulfilling careers in highly paid, high-skilled jobs.”

This article appears in the April 2019 issue of Australian Mining.

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