Mining’s future: Industry leaders discuss the sector’s concerns @ AIMEX13

As the mining industry gathers to see the latest technological developments and equipment at AIMEX, a group of some of mining's best-known voices chaired a panel to address the sector's major issues.

In a panel moderated by Q&A's Tony Jones, GVK Hancock Coal's managing director Paul Mulder, Austmine's Alan Broome, well known geologist and outspoken climate change denier Ian Plimer, and GE Mining's CEO Geoff Knox were subject to questions from the audience and Jones that covered topics as diverse as industrial relations, mining's social licence to operate, the carbon and mining taxes, energy efficiency, and Australia's place in the world.


The night began with a focus on automation and mining's operational changes.

Jones first asked Broome how automation will change the industry, and whether it will affect workers. Broome explained that automation is one of a number of tools that will help the industry progress, but that there needs to be a focus on efficiency.

"For mining to advance we need to apply more technology and we are really seeing the next stage of the industry, mining is changing and the future is going to be the technology age of mining," Broome explained.

He stated that what the public sees at Rio Tinto's Mine of The Future remote control centre outside of Perth's airport is simply one aspect, adding that "the centre is simply the tip of the iceberg".

But automation is not moving at a glacial pace for the mining industry, it is swiftly changing the way in which we do business, and may take the sector to new, unknown places.

"Mining in the future is going to be completely different to what we're used to seeing so far, and we’ll see this technological change really coming over the next five years," Broome said.

Plimer explained that currently mining is very inefficient when it comes to energy.

"Around 2 per cent of the world's electricity is used simply to crush and grind rock right now," Plimer said.

However new technology is allowing miners to operate at the next level.

"We don't need to operate like this, in fact on a recent visit to Greece I saw a circuit operating off a single mobile phone battery."

Knox added that much of the software needed for automating major processes already exists.

Mulder agreed with both Plimer and Broome, adding that "automation is vital to the industry's future".

He added that the industry has to move quickly and make many of these technological leaps itself, or suffer the consequences, but it can't act alone.

"If we fail to innovate then we have no choice to adapt it to our operations, but if the technology is developed early we can choose the areas to focus on and overhaul to make it more efficient for us,” Mulder said.

However Mulder acknowledged that "automation is not a silver bullet" for all of mining's problems, and that "new technology should be instead used as a pillar for increased development".

He explained that mining cannot go it alone and that the government needs to support the industry, and not just in the boom times.

“With that support we can become more sustainable and further innovate".

Rules, regulations, and taxes

The government was the focus, not just as source of support for the industry, but also as a sore point, especially in Australia's mining industry.

GE Mining's Geoff Knox summed up the attitude of the room succinctly, stating that while the nation's position globally has changed the government's approach to business and keeping it sustainable has not.

"Island Australia is now in competition with the rest of the world, and no matter the effect the [carbon and mining] tax regimes actually have, the way in which they are viewed affect our competitiveness,” Knox said.

"Everything needs to be approached in a pragmatic and more competitive way, without ignoring the social and environmental issues."

Broome expanded upon the reality of the taxes versus the perception of it internationally.

"We've currently got circumstances where the reality of the carbon and mining taxes impact isn't as high as projected, but it is having a detrimental effect on the perception of Australia as an investment location," Broome said.

Mulder added that "investment is global, it can go where it wants, and investors look at how things are affecting our competitiveness – and they're more likely to go elsewhere when there are already high operating costs, for instance the average cost of coal per tonne is $100 globally, in Australia its $160”.

"The perception overseas is that our country is unattractive [as an investment location]; this is despite the tax not bringing in much money, it is again that perception that Australia is not the best place to invest for mining," Broome told the room.

Ian Plimer explained that this will have a damaging impact on the nation as "this country has imported capital for 200 years, and if we scare it away it will go to places like West Africa, and at present West Africa is a place of interest for investment, even though you can count on a sawmiller's hand the number of a successful projects in West Africa".

"Now miners are asking 'how do we get rid of that aura of the taxes?' [and bring back investors]," Broome said.

Mulder added that "investors look at the longer term, and whether the taxes will be jacked up, whether costs will be jacked," and this contributes to long term uncertainty.

Plimer jumped on these comments stating that this will have a long term economic effect on the industry.

"If the government doesn't change Australia will stay uncompetitive.”

He took a swipe at the nation's leaders, stating that "the government doesn’t understand the fundamentals of turning rock into money".

This lack of understanding has led to the increasing strategy of governmental approvals processes in an effort to mine the industry for royalties.

Mulder explained the regulation pains encountered by miners, stating "for an environmental impact statement (EIS) it costs $50 million" as well as the costs of time.

"It just wasn't efficient," he said.

"It's not as if miners don't want to protect the environment, but the process has to be streamlined."

Even the government itself is divided.

The member for Mt Isa, Robbie Katter, has been vocal in aiding miners in cutting both green and red tape, putting forth a bill to reduce processes that he says sometimes triple miner’s efforts.

And the subsequent increase in workloads and processes has had a negative impact upon investor sentiment.

Broome added that "we need to prove a period of stability, in our political sphere, in red and green tape and policy; but the question remains of how long will it take to get to this period of stability where investment comes back".

However there was support for the initial concept of the taxes.

A bold question from the audience on the night asked whether the carbon tax was simply a tax on air.

Knox was the first to jump in, stating "if we're looking to improve the environment then the carbon tax's intent was to do that, but the design of the current system is faulty" as it harms business and discourages investment.

Instead "it needs to both encourage better environmental processes as well as investment".

FIFO, unions, and the power struggle

The question Jones opened the panel with was the topic on which it ended: industrial action.

Following court action which now allows fly-in-fly-out workers to remain on site during strikes, Jones asked whether industrial issues still played a major part in a mine’s profile.

The issue was close to Mulder's heart, and he proceeded to elaborate on current industrial relation issues across the nation.

He called on unions to become more flexible as the industry itself changes globally.

Mulder regaled the room with anecdotes on over-the-top union action, citing a strike over a five cent increase in coke in vending machines, and one crew striking after not getting onions with their Christmas BBQ while another did.

Australian Mining was also told of similar strike action taken in Pannawonica in the 1980s, where workers carried out stoppages after pink ice cream was discontinued on site and only vanilla remained.

Mulder said actions like these take a massive toll on the industry.

"It costs companies, and these costs have to come out of somewhere as mining is not a bottomless pit,” he said.

"Coal is currently doing it very tough, and you can keep putting your hand out but there comes a time when the mine eventually has to shut as it's not sustainable.

"The way in which these miners can exploit the rules is ridiculous sometimes as legislation isn't tight enough to stop it."

He was supported by Broome who said that unions were important, and the spud and onion strike in Broken Hill demonstrated this, but "unions have now done their jobs as what they fought for is now enshrined in legislation, and now they need to work with industry, instead of working against it and causing industrial strife".

The panel was the highlight of the night, and generated much discussion.

Talking to people after the event they said they were more than happy for the speakers to keep talking for another hour or more.

Reed Mining Events told Australian Mining that judging by the success of the night, they are likely to hold similar events at QME next year.

Hopefully the next panel is able to raise as many questions and frank discussions as they did for this year’s AIMEX event.

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