Peabody slams Gov, calls for resources competiveness

Peabody Energy CEO Gregory Boyce has slammed the Australian Government's mining polices, and called for the establishment of commission to ensure resources policies serve the nation's long term interests.

Speaking at the Melbourne Mining Club last week, Boyce called on the government to establish a National Commission on Minerals Sector Export Competiveness.

He stated that the Federal and State Governments need to have amore holistic approach to ensuring Australia's mining sector remains table and more competitive, especially as the Asia-Pacific region grows.

"Recent news of cutbacks and project cancellations across Australia's mining sector can't be attributed solely to the global macroeconomic backdrop or current pricing," he said.

"The fact is that inflationary pressures, a strengthening Australian dollar, permitting delays and a barrage of additional tax burdens at both a federal and state level have compromised Australia's international competitiveness.

Boyce added that it should work together to create a 30 year strategy to promote the nation's mineral wealth.

"In the coal sector, we undertake 'life of mine' planning – and we in Australia also need to adopt the same long-term approach to protecting the sustainability of the mining sector.

"Federal and state governments have assumed that plugging budget holes by placing additional tax burdens on the resource sector would not affect its competitiveness, but a steady stream of news on industry cutbacks has shown clearly that this is not the case

"Extreme policies threaten to undermine Australia's role as a global resources leader," he said.

"One of the immediate goals of a National Commission should be to re-evaluate the Carbon Tax, MRRT and State Royalties and assess their collective impact on the sector."

He went onto say that Australia faces increasing competition from other nations looking to enter or grow in the coal space.

"Five years ago countries like Mozambique weren't part of the global coking coal conversation. Today, Mozambique, Mongolia and Indonesia are seeing opportunity and creating threats to what should be Australia's natural advantage," said Boyce.

Rio Tinto announced that it had shipped first coal from its Mozambique operations in June, this year.

Russian president Dmitry Medvedev also recently called on his nation to increase coal output by five times by 2030.

"There is the possibility to increase [current levels] five times by 2030,” he said, adding that it expects to grow its export market, particularly in the Asian sphere.

"Despite current market headwinds, the long-term fundamentals for coal remain strong and Australia has both the national endowment and the geographical advantage needed to serve Asia's high-growth demand centers – so long as we don't ignore the global laws of economic returns," Boyce said.


Image: Bloomberg

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