Unstable policy environment hurting mining: Glencore Xstrata

The world’s biggest mining company says Australia’s coal industry is being ‘smashed’ by an uncertain investment and policy environment.

Speaking last night, Glencore Xstrata’s head of global coal assets, Peter Freyberg,  said a ‘significant’ part of the Australian coal industry was operating at a loss and that companies were cutting costs ‘as a matter of survival’.

Freyberg said policy makers were causing instability in what are already uncertain times, The Australian reported.

"Instead of supporting one of Australia's largest export industries, policymakers at both a state and federal level have imposed additional costs, taxes and other burdens at a time when the industry is under enormous pressure," he said.

"Any claim that big mining companies don't contribute to the nation's economic wellbeing is misleading and is a disservice to every Australian employed in or connected to the sector.”

Freyberg said that if Australia “"wanted to remain a competitive supplier of mineral and resource commodities to a growing global market . . . we need a long-term policy plan that supports this ambition because success can no longer be taken for granted".

The comments come after the company yesterday announced plans to dump a billion dollar coal export terminal on Balaclava Island, blaming the decision on poor market conditions.

Minerals Council of Australia chief Mitch Hooke said the sentiment in the industry "underscores why there should be no new taxes imposed on Australia's minerals industry . . . Australian mining is already at the Mount Everest of global tax rates. Enough is enough".

Hooke is concerned today’s budget will hold some tax hikes for the industry which he says will continue to make the sector less internationally competitive.

Australian Coal Association acting chief executive Greg Sullivan said the industry is facing the most difficult operating conditions for more than a decade.

Sullivan said the government often "fails to recognise and act on these extremely difficult operating conditions".

"The federal government is being dangerously short-sighted and formulating tax measures and regulations based on the industry being in boom market conditions," he said.

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