Mines job modelling questioned

Questions are being raised about the pressure placed on consultants used by mining companies as an expert claims out-dated data was used in Rio Tinto’s Warkworth mine approval.

Economists at Large Director Dr Rod Campbell says the Hunter Valley Research Foundation, who compiled the Economic Impact Assessment submitted by Rio Tinto, was a poorly constructed model.

It was claimed the project would create 44,000 jobs and there was sufficient labour in the region to supply it.

Approval for the mine expansion has since been overturned by the Land and Environment court, a decision being challenged in the Supreme Court by Rio Tinto.

Campbell claims consultants are often under pressure to provide favourable analysis for mining clients, ABC reports.

"I think the model they constructed was poor and was found to be deficient by the judge and I agree with that,” Campbell said.

"I also think there was pressure on the consultant, it's difficult for a consultant to contradict your immediate employer."

Campbell says the foundation made numerous claims about the jobs impact of the mine expansion.

"Their work was found to be deficient and misleading by the judge, they claimed that the Warkworth project would create 44,000 jobs.

"To do that they needed a number of fairly wild assumptions, one was that a job only lasts a year so that if you've been at a job for ten years by their definition you've had ten jobs.”

However DR Andrew Searles who appeared as an expert witness for Rio is standing by the economic modelling.

Searles said the HVRF tells its clients that the jobs figures should not be used as a definitive.

"We provide a description of the limitations of that definition so that people don't make those kind of claims," he said.

"Anybody that commissions us to do an input output analysis we do highlight that to them, that this is the way a job is defined using this kind analysis.

"We use every effort we can to prevent people from using it but unfortunately it tends to be the media where these mis-quotes, I think they are, occur."

Director of research at the HVRF Simon Deeming says he is not worried about an examination of the organisation's methods.

"We're very transparent about how we conduct our research and all our reports and any documentation we put out will tell people exactly how we conducted it, exactly what the assumptions were and exactly what the results are," he said.

"We leave people to determine what that means so that the extent to which a judge or anyone else in the community for example is critiquing the methodology or critiquing the assumptions, that's fine."

Image: The Australian

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