Rio Tinto’s Walsh slams manufacturing ‘myth’

Sam Walsh has lashed out at claims the mining industry does not support Australian manufacturing, labelling it a myth.

“There’s a bit of myth that mining companies are not supporting Australian manufacturing. Well that’s not true.

“If you look at our expansion projects [in the Pilbara], we’re running with 75 per cent local content.

"If you look at our ongoing operations we’re running with 86% local content,” he said.

It comes after comments from the steel industry who say miners are increasingly turning overseas for fabrication, harming the manufacturing industry, the Sydney Morning Herald reports.

Greens minister Adam Bandt echoed this, calling for local content rules for large mining projects.

He used Bluescope’s recent axeing of 1000 jobs as an example.

“We know that the big miners are sending much of their profits overseas, but now we know that a lot of the goods and services needed to develop these mines are coming from offshore as well." Bandt stated.

Due to this the Federal Government appointed former Queensland premier Peter Beattie as the nation’s first ‘Resources Sector Supplier’ envoy, to encourage Australian mining companies to buy local, and is part of a wider Buy Australia program.

Walsh refuted these claims, stating that it sources around 86% of its content at its Pilbara iron ore operations from Australian.’

He went on to say that the nation should focus on where it will be competitive in the long term, a belief echoed by Ross Gittens, who stated that government’s should not increase protection and other assitances to the manufacturing industry to stave off change.

Walsh stated that “manufacturing is going through an evolution [and] it needs to go through an evolution so we can concentrate on areas where we’re competitive”.

West Australian premier Colin Barnett also criticised the new local content laws.

He stated that enacting these laws may have the reverse effect and drive more manufacturing offshore.

“The government has got a very clear interest in making sure work does stay in Western Australia and there are skills and job opportunities available for the Western Australian public, but it is very dangerous territory when governments get involved in direct private sector financial arrangements.

“I don’t favour legislation at all.

“I think that would be a very poor way of proceeding and would probably make the companies recede even further from giving work locally.”

The Federal Government is reportedly facing caucus revolts over the handling of the sharply declining manufacturing industry.

Earlier in the week, Prime Minister Julia Gillard rejected calls for an inquiry into the sector.

“We don’t want to be held up by having an inquiry.

"There are things we need to do now,” she stated.

However, senator Doug Cameron called the move “politically dumb”, adding that “it’s economically irresponsible not to take a close look at the manufacturing industry.

“I will move at the next caucus that we should have an inquiry.”

The mining industry continues to grow.

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