Mining

The announcement by Toyota of several hundred job losses this week is certainly alarming and it will have had and will continue to have ramifications for the broader industry.

But it will only mark the end of the industry if we as a society say we don’t want manufacturing and we are happy to simply be China’s quarry and maybe a second tier tourist destination.

In all the hyperbole and wild statements we hear about our mining industry, we rarely hear some of the uncomfortable truths. That it’s only 9 per cent of the economy, that it is the cause of the high Australian dollar which is putting pressure on our manufacturers and farmers, and that, at its best, it really only represents the highest aspirations of the average third world dictator.

Continue reading "A bloody good reason to subsidise car making" »

In the iconic Kimberley region of West Australia one of Australia’s biggest recent environmental battlegrounds has emerged in the red cliffs and turquoise waters of James Price Point, about 20 km north of Broome. This is a battle that might ultimately be won in the investor board rooms rather than on the front lines of blockades.

The Browse Basin gas hub development has stoked up so much opposition on so many fronts that many investors are now asking if the project is still economically viable, or if in fact Woodside’s ‘social licence’ to proceed has disappeared in the red dust that graces the Kimberley coastline.

Australian business is all too familiar with the impact strident community opposition can have on controversial major projects, yet some large corporations and investors continue to discount the importance of maintaining their social licence and protecting the environment.

Continue reading "Has Woodside hit its price point on the environment?" »

He’s a self-confessed “cashed-up bogan” earning $800 a day or more than $208,000 a year in Western Australia’s booming mining industry.

Since dropping out of Mandurah Catholic College in year 10, James “Jimmy” Dinnison, 25, has earned more than a million dollars, bought a house at aged 18, but sees no problem in splurging most of his hard-earned on boy’s toys.

Jimmy works extremely hard in tough, hot and dangerous conditions as a fly-in, fly-out driller working 12-hour shifts in the WA’s north-west, but he has also sparked fierce debate about the fall of the American economy, thanks to an intriguing profile in that country’s highest circulating newspaper, the influential Wall Street Journal.

Continue reading "He drills. He earns. He spends. He doesn’t apologise" »

When Julia Gillard rises at the ALP national conference Sunday week to urge uranium exports to India she will anger some of her closest supporters - women.

She will also rile the ALP left who will argue against yellowcake to the sub-continent, but it is a long time since Julia Gillard has been considered a leftie.

Of greater importance might be the response of women voters in general, a significant number of whom have stuck by Gillard since she toppled Kevin Rudd, bungled an election campaign and scraped together a ragged agenda of her own.

Continue reading "Gillard needs to bring women to the yellowcake party" »

Update 6:45am: The Minerals Resource Rent Tax Bill 2011 passed the lower house in the early hours of this morning after a marathon sitting day. Voting on the bill and 10 associated pieces of legislation didn’t begin until almost 12.30am AEDT.The vote on the bills finished at 2.42am. Treasurer Wayne Swan said the historic reform meant all Australians would share in the benefits from the country’s non-renewable resources.

It’s no secret, many Australians are doing it tough. With the constant demands of the mortgage, bills and school fees, it’s difficult for many to provide for their families.

Meanwhile, at the other end of town, big mining has not only remained immune to the financial squeeze, they’re doing better than ever.

Australian mining darling Fortescue Metals last week announced a $1 billion profit for the last financial year, a profit made without one cent of corporate tax. This comes on the back of a record $22.5 billion profit announced by BHP Billiton earlier this year and Rio Tinto’s 30 per cent increase in first half profits.

Continue reading "The mining pie is more of a magic pudding" »

West Australia’s Pilbara is populated by oversized creations, from trucks which can carry 360 tonnes to ships which can cart close to 150,000 tonnes of ore around the world.

But perhaps nothing is bigger than the brawl between the big iron ore producers, and the smaller outfits represented most loudly by Fortescue Metals Group.

This is an eye-gouging, rolling-in-the-red-dust, steel-capped boots affair which will barrel into Parliament this week as the Government attempts to pass the $11 billion Minerals Resource Rental Tax (MRRT).

Continue reading "Shock and awe in the war over ore" »

Roma, some 600km west of Brisbane, used to be a country town where you could drive your car onto the airport tarmac to pick up friends arriving on the few flights servicing the place.

It had a small motel many years ago when I lived there but most travellers stayed at pubs with names such as The School of Arts.

The population back all those decades ago when sheep and cattle ruled was nudging 5000. Compared to some of the neighbouring towns such as Injune and Wallumbilla, it was a big place.

Continue reading "Coal seam gas a blast of hope for rural communities" »

Of all the voodoo economic nonsense circulating at the moment, none is more curious than the idea that the current mining boom is more trouble than it’s worth. You’ve probably heard the claims.

Mining is racing ahead of the rest of the economy, soaking up skilled workers and other factors of production, leaving the non-mining industries in a state of semi-permanent weakness.

According to the script, the boom is the sole cause of the soaring Aussie dollar and - according to one of the more hysterical assessments offered last week - tearing apart the very fabric of our economy. A sober look at the facts paints a very different picture.

Continue reading "If you’re blaming mining you’ve got rocks in your head" »

The Australian economy is in danger of being torn apart by the resources boom.

The high prices being paid for our minerals, the unprecedented foreign investment to dig up those minerals and the rising value of the dollar are already reshaping our economy.  This is only the beginning.

It will end, all booms do, but this one will take some time and it will bring great change.

Continue reading "The carbon tax won’t kill the economy, greedy miners will" »

You get the feeling not much happens on a Saturday morning in Merriwa. The sleepy country town in the Upper Hunter region of New South Wales just hums along quietly. Except for its proud and tidy RSL, where the front bar opens at 10am, horse races flash across the television screens and tickets pump out of the Club Keno machine.

In a stuffy back hall, on neat rows of red vinyl chairs sit the Merriwa Healthy Environment Group; a group of local farmers and landowners who came together in February to unite against the coal seam gas companies as they rode into town.  Seven months later, they feel under attack. 

Their enemy? PEL 456, PEL 468, PEL 4 and PEL 433; coal seam gas exploration licences for Merriwa and its surrounding areas of cattle, sheep and cereal farming land, up for sale to the highest bidder.

Continue reading "Community is the real cost of coal seam gas" »

To put it bluntly, which job would you pick for your child: Ripping precious minerals from the soil for sale to Chinese billionaires, or mixing daiquiris for sale to Chinese billionaires?

It’s not an easy choice for a parent to make, and it has been just as hard for the Government.

Just 18 months ago the general idea was that the best labour management strategy was make sure all hands were on the mining boom pump.

Continue reading "Mixing daiquiris and mining a top cocktail for economy" »

By many counts, Australia’s economic position is to be envied by the world. Assuming the Gillard government can deliver on its promise, there will be a surplus for the 2012-13 budget. We are experiencing historically high terms of trade: importing on the cheap while exports sell high.

Unemployment is only a touch over 5%. Our dollar has overtaken the US Greenback. We have the second lowest public debt (proportional to our GDP) in the industrialised world. And If you’ve listened to Treasurer Wayne Swan open his mouth in the last 6 months, you’ll know that our economy’s “fundamentals are strong”.

It may surprise some therefore, that I would suggest that this is no time for complacency about our future. Indeed, our position is more precarious that one might initially think. For there’s another side to the Australian story: lopsided growth, struggling non-resource exporters, depleting natural resources, coming challenges of an ageing population and climate change, and a vulnerability to oscillating commodity prices. Considering these factors, it is best that the orthodox optimism surrounding our economic future be taken with a grain of salt. 

Continue reading "Australia must have a sovereign wealth fund" »

It’s a management case study that will live on in textbooks for decades.

Just weeks after banning employees from leaving post-it notes on computers or eating lunch with strong odours, resources giant BHP has announced a whopping great profit of $A22.5 billion, up 85.9 per cent.

Of course it wasn’t only the absence of messy post-it notes that pushed profits into the stratosphere. There was also the company’s nation-wide crackdown on jackets slung over the backs of chairs. Oh, and record prices for Australian coal, iron ore and gas.

Continue reading "Bloody Huge Profit" »

Australia is not heading for a recession but our precise economic destination over the next few years can’t be forecast because of the swirl of factors buffeting certainty around the globe.

We simply don’t know exactly what is going to happen in Greece, Spain, Portugal, the United States and China. Or even in Australia.

This means the Government will have to be careful as it tip-toes towards a Budget surplus in 2012-2013; and the Opposition will have to use caution when predicting calamity from carbon pricing.

Continue reading "Forget the cat calls, the economy still has claws" »

Bob Katter gave a press conference today, to announce that he may or may not form a new party. In the end, that was hardly the point.

If the independent member for Kennedy was sketchy on the details of his immediate political future, he was as forthright as a charging bull on his concern for the future of the Australian economy, a concern the nation’s leaders appear to have forgotten.

As usual this week, our leaders are banging on about big picture crap. Gillard is flogging her dead horse of a carbon tax, Abbott’s busy telling us the sky is falling under the weight of asylum seekers, while Bob Brown continues to rail against everything except the destruction of the trees he was originally elected to protect.

Continue reading "If this hatter’s mad then invite me to the party" »

By the time Francis Ona and the various factions of the Bougainville Revolutionary Army permanently laid down their arms on 30 April 1998, it is estimated that more than 15,000 Bougainvillians had lost their lives.

The decade long conflict – part war of independence, part civil war - had been the most bloody and costly war in the Pacific since WWII. At the turn of the millennium, Bougainville was a place of devastation.

Bougainville has long loomed large in the consciousness of many Australians.

Continue reading "Bougainvillians deserve the chance to say “it’s mine”" »

On the eastern side of Geelong is Point Henry. On it stands a fifty-year-old aluminium smelter and accompanying rolling mill.

This complex provides jobs for a thousand people and contributes to the livelihood of thousands more. Operated by Alcoa, Point Henry is, along with the Ford plant, one of the largest economic centres in Geelong.

The electricity consumption of Point Henry is massive. This is not Alcoa’s fault. While other industrial processes may use combustion or a chemical reaction, aluminium is made by passing a very large electric current though alumina.

Continue reading "Not pricing carbon would cost us dearly" »

The series of natural disasters that have caused so much damage in Queensland are creating new medium and longer term challenges for the Australian economy. 

However the Gillard Labor Government is unable to take the necessary action needed to stop the inflationary and multiplier effect its re-regulation of the labour market is bound to cause.

Unfortunately for all of us the Government can’t and won’t say no to its trade union masters.

Continue reading "Gillard continues to recognise faceless men" »

Last year BHP helped prove that crying wolf works, provided you crank the volume up to 11. Along with the other mining giants, they managed to convince Australians that paying anywhere near a fair amount of tax would somehow cripple their companies – and the nation.

We know now how the scare campaign played out: a Prime Minister was rolled, a new one installed and the Resources Super Profit Tax became the Mineral Resources Rent Tax.

Within 24 hours this week, in what can only be attributed to a divine act of timing, Australians have discovered how much mining wealth the nation lost and how quickly it’s made by those who squealed so loudly. Yesterday, BHP Billiton announced half-year net profits had surged 72 per cent – to $10.6 billion dollars.

Continue reading "$10.6 billion profit leaves plenty to go round" »

Opening this week is a small, yet powerful, documentary on the ill-effects of using the controversial “fracking” technique to extract natural gas.

Now, I’m not a scientist, or a geologist, but I am a film reviewer, and watching Gasland was illuminating enough to allow the mere mention of natural gas to prompt a range of pretty terrifying images.

So when a story broke over the weekend that suggests natural gas mining may soon become a reality for inner Sydney, it’s clear that the timing for the release of this powerful documentary film could not be more apt.

Continue reading "Clover, before you mine Sydney, watch Gasland" »

With Parliament set to wind up in the coming week and the ructions of an explosive year beginning to fade, the reality of a more featureless landscape in the next two years is becoming clearer.

Such apparent predictability seems almost foreign after 2010 which kicked off with the game-changing retreat on emissions trading and then lurched from one crisis to the next - think the rise and fall of the mining super-profits tax, various boat controversies, the spectacular Rudd / Gillard coup, and of course the closest election in history.

Nonetheless, barring the disappearance of the Government’s numbers in some unforseen crisis of confidence, 2011 and 2012 should by rights be years of sound governance - unaffected by elections. The country needs it and in their own ways, both leaders are depending on it too.

Continue reading "For Gillard it will all be about the tough decisions" »

Next time you watch election coverage and ask whether the people writing this stuff are on drugs, you can now safely say the answer is no. Julia Gillard and her press pack are officially conducting a drug free election.

As is the custom before entering Gregory Mine in Queensland, the Prime Minister’s entourage were today subjected to random drug tests through a marble lottery.

There are conflicting reports as to whether the Prime Minister herself was subjected to the piss take along with two female TV journalists, with some journalists on site claiming she was but her office saying it was an unnamed third person.

We can rest easy that all three were cleared.

You couldn’t invent Clive Palmer. Well that’s not quite true, you could invent Clive Palmer, but you’d be told to go back and come up with something that was less of a caricature for a mining boss.

The Queensland mining magnate billionaire is quickly becoming the chief vioce of industry opposition to the Government’s Resource Super Profits Tax, and the Government love it. 

Palmer is an easy target for the Government, epitomising every stereotype of a self-interested fat cat capitalist, a mere monocle and waistcoat away from being a cartoon character. As one Labor strategist said of Palmer “he’s our Joe McDonald.”

Continue reading "Why the Government just loves Clive Palmer" »

New Guinea, geographically as well as historically, is Australia’s closest relative. Separated from the mainland during the last glacial period, the waters filled-in what now separates them: 150km of the Torres Strait. 

Despite being endowed with enviable mineral stores, economic and political exploitation has left New Guinea housing many of the poorest people on earth – particularly in the western half of West Papua. 

Amidst a program toward independence from the Dutch, the international community neglected West Papua in order to realise a business deal between U.S. mining company Freeport-McMoRan Copper & Gold (“Freeport”) and Soeharto – at the time an Indonesian army general. 

Continue reading "Rio Tinto: A tale of rampant capitalism" »

Kevin Rudd’s proposed Resource Super Profits Tax on mining companies would raise $12 billion over the next four years, most of it in the fourth year. Pretty handy for a deficit-ravaged bottom-line but its true value is between now and the election. In other words, it’s political.

Wayne Swan’s third Budget and Tony Abbott’s only (he will be either PM or toast) Budget Reply have laid certain things bare.

First, that the Government is back arguing its claim to being fiscally conservative after a damaging, if economically successful multi-billion dollar foray into recession-proofing.

Continue reading "Rudd digs a hole for himself, but Abbott still runs on aggro" »

Royalties and mining taxes are the price mining companies pay to the people of a state and/or country for the right to mine and sell the resources of that state and /or country. Seeing as they can only be sold by the state once, it’s important to make sure that we get the best price we can.

However, if you set the price too high, no-one will buy what you’re selling. The Rudd government’s Resource Super Profit Tax (RSPT), as it is proposed, drives the price too high.

A well designed rent tax is a very efficient and even business friendly tax. With a rent tax, you only pay tax when you are making a decent profit while the government still receives a fair price for its resources. But there is a clear need for three major changes to the RSPT.

Continue reading "A Labor MP speaks out against the mining tax" »

If you hadn’t noticed Kevin Rudd and his Government are in a bit of trouble at the moment. A perception that they can’t be trusted to implement actual policy change and are willing to break election promises with bureaucratic abandon has begun to take hold in the electorate.

It is has been further complicated by the decision of the Government to introduce the 40 per cent super profits mining tax which - if you believe the only poll taken on it thus far - people are yet to be convinced by. 

But if I was to place microphone headset on, roll up my sleeves and fire up a highly inspirational PowerPoint presentation for the Prime Minister I would say this: it’s time to not just pick a fight Kevin, but pick a fight and win it for once.

Continue reading "Mad or not, Kevin must fight for the mining tax" »

It’s becoming apparent that the Rudd Government has slaughtered the goose that laid the golden egg – all for one grand pre-election meal.

It’s not so much the $16 billion that was shaved off the share price of resources stock within the first three days of Rudd’s shameful tax-grab-masquerading-as-reform.  That was bad enough and thankfully for the moment stocks have at least stabilised.

Much more significant, however, are the rolling announcements of projects being shelved, expansion plans being abandoned and billions of future investment potentially heading overseas. Of course, we won’t see the effects of these decisions until well after the next election – so hang the long-term consequences for our nation.

Continue reading "Mining tax makes a meal of our future" »

It’s a political phenomenon as inevitable as a Troy Buswell indiscretion. Mention tax and people smell a rat.

As the Rudd Government prepares to release the Henry Tax Review, new polling from Essential Research shows what a tough time our leaders face when they want to review the nation’s revenue base.

Sixty one percent of Australians say they pay too much tax while just four per cent say they way too little. And even when you offer to the fix the problems that people want fixed, the majority would rather have the dour status quo than pay more moolah.

Continue reading "Tax is still a four-letter word" »

South Australia stands at the edge of a potential golden era, a golden era of opportunity like the state has never seen before.

It turns out that South Australia sits on a giant bed of yellow cake that, if managed properly, will drive the state for generations.  As China and India continue to grow at nearly 10% per year with no sign of stopping soon, their insatiable appetite for energy resources grows along with it.

For instance between now and 2050 China will require an additional terawatt of power just to sustain their current levels of growth.  Given the desire to build emission free power plants, uranium is in high demand as a fuel of choice around the world particularly amongst developing countries.

Continue reading "The dambusters: tax review’s threat to mining" »

Access to capital and finance is the single biggest issue facing the resources industry at the present time.

There’s not a single exploration company in this state that is struggling to get a project going for want of a desert power circle but there are plenty struggling for cash.

The state government has worked with the chamber in an orderly and disciplined fashion since the SACOME sponsored infrastructure conference in 2006. However, the best thing any government could do to get exploration spending moving would be to introduce a Flow Through Share (FTS) scheme.

Continue reading "Pulling mining out of a big black hole" »

Lately, I’ve got to thinking about the importance Australians place in burning great things – things of immeasurable value.

Take a drive to the Hunter Valley and you’ll see the ugly side of Australia’s predilection for carbon - the precious fossil fuels we peddle round the world and the huge economic power they wield in this country.

Around the mining town of Muswellbrook is a landscape ravaged by mining; farmland gouged away for the sake of the big deposits beneath, its air thick with coal dust and the smell of decay.

Continue reading "Torching God’s country" »

NOW that we’ve all accepted Peter Garrett is a monstrous sell-out, can we get back to the real debate _ should we develop a nuclear power industry in Australia?

It’s a debate Labor desperately doesn’t want us to have. Note how quickly Penny Wong and Wayne Swan yesterday shut down the suggestion from Rio Tinto _ admittedly the owner of our biggest uranium miner _ that Australia should start using nuclear energy to help meet its carbon reduction targets. ``We don’t agree with Rio Tinto on that point,’’ was the Treasurer’s curt response.

Unfortunately, the government’s blanket refusal to accept nuclear energy as a potential solution the planet’s greenhouse woes is fatally undermined by Labor’s own schizophrenic platform on uranium _ pro-mining, pro-exports but anti-power.

Continue reading "...And Labor should nuke its hypocrisy on uranium" »

A funny thing happened on the weekend: the world’s second largest greenhouse gas emitter - the US - took the first step towards establishing a carbon reduction scheme and almost nobody wanted to talk about it.

The Obama-endorsed scheme passed the US House of Representatives and only has to clear their Senate to become law.

In Australia, a few people welcomed the vote and applauded the move, but almost no-one dared to lift the carpet and comment on the design of the US scheme.

Continue reading "Looking to America for some sense on emissions" »