BHP Billiton’s CEO says mining is the cornerstone of Australian economy

Speaking at Minerals Week in Canberra, BHP Billiton CEO Andrew Mackenzie has called on the mining sector to lead the way on sustainability and innovation.
Mackenzie used his keynote speech to highlight the importance of competitiveness and innovation.
He said mining companies should strive to become exporters of new ideas.
“The mining sector must lead the way with innovation and sustainability to maximise the economic and social benefits of our operations and minimise our environmental footprint,” Mackenzie said.
“To become an exporter of new ideas Australia must become a leader in education and develop a pipeline of talent, knowledge and skills, especially in the STEM subjects. The resources industry needs to work more closely with leading universities and other research organisations such as CSIRO.”
Mackenzie also spoke to the huge role mining plays in the Australian economy.
“The Australian resources industry has many competitive advantages including our superior resource endowment, geographic location close to our key customers, infrastructure linking these resources to markets, a skilled workforce and a stable political environment,” he said.
“Ever since coal was first discovered near Newcastle, a decade after the arrival of the First Fleet, our industry has been a cornerstone of the Australian economy.
“Our nation’s prosperity has been built on an abundance of natural resources and the last ten years has provided ample proof of that.
“The economic benefits from mining increased our standard of living and saw Australia emerge as one of the world’s strongest economies and wealthiest nations.”
Speaking about the current low commodity price cycle, Mackenzie said the sector was seeing the new normal for mineral demand.
“Prices for most commodities are now lower than the extreme highs of the recent past and closer to more sustainable longer term levels. This shouldn’t come as a surprise,” Mackenzie said.
Addressing suggestions that BHP should cut production in a bid to help the price of iron ore lift, Mackenzie labelled the move as “unproductive”.
“It destroys value, penalises shareholders, customers and employees and disrupts the power of open markets.”
Mackenzie said the most important fight companies needed to have was on costs.
“Commodity price changes not only in iron ore but in almost all other mineral and agricultural commodities are having a major impact on all companies in our sector and on Australia’s economic position.
“The reductions in prices we face today are something our industry and country has seen many times before and while this operating environment tests us, I am optimistic for the future.
“With each cycle, demand is greater than the previous one – and continues to rise.
But competition to meet that demand will be intense. Most recently, we’ve witnessed China’s deal with Brazil’s iron ore company, Vale.
“The companies and nations that succeed will be those that are the most productive and can supply at the lowest cost.”
Also set to speak at the Minerals Week conference today is Whitehaven Coal’s CEO Paul Flynn, Toro Energy’s Managing Director Vanessa Guthrie, Leader of the Opposition Bill Shorten and Prime Minister Tony Abbott.
Australian Mining’s Ben Hagemann is reporting live from the event.

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