Australia must do more for future mining investment: BHP report
An additional $20 billion per year of investment in Australia’s mining industry is required for it to remain competitive over the next few decades, according to a BHP report.
The report, Recapturing Australia’s Competitiveness, finds Australia needs to significantly upscale its mining industry to continue the past success that has brought the country and Australians great benefit.
However, it says several challenges, such as long, complex approvals processes and reforms under the Closing Loopholes Bill threaten investor confidence. Collaboration between State and Federal Governments is critical to address these issues and improve competitiveness, the report says.
Slice of $100b pie slipping away
Globally, BHP estimates an extra US$100b a year of capital investment is needed to meet Paris Agreement climate goals.
By 2030, BHP claims the world will need 140 new copper mines, 60 new nickel mines, 50 new lithium mines and 17 new cobalt mines. But Australia’s potential to have a sizeable piece of this investment is wading.
“Australia has a huge opportunity to capitalise on major change in the world economy driven by the megatrends of decarbonisation, electrification and population growth – but we must be ready and able to compete in the global arena,” says BHP President Australia Geraldine Slattery.
While Australia is rich in resource deposits, other countries with superior deposits, such as Brazil and West Africa for iron ore, and Chile and the Democratic Republic of the Congo for copper, are becoming increasingly competitive.
Slattery says Australia’s competitors are implementing ambitious policies and investing in technology and skills to capture their share of new capital investment, talent and supply chains.
“Australia needs to encourage major investment in the people, technology and skills required to create a diverse modern economy,” she says.
“More efficient assessment and permitting for major projects, strategic infrastructure and a stable policy environment will encourage global capital to flow to Australia’s shores.”
Approvals process hindering investment
The report says Australia needs to have more robust, transparent and streamlined permitting processes to increase competitiveness.
“There should be no trade-off between high permitting standards and approval times,” BHP writes.
It says a risk-based approach to permitting with a focus on speed to decision could have dual benefits, including improving environmental, heritage and community outcomes.
This sentiment is consistent with CCIWA’s recent report, Green Web: How Environmental Approvals Could Trap Australian Investment, which finds environmental approvals delays are placing $318b of WA projects at risk.
The Federal Government’s ‘nature positive’ legislation should not be rushed, BHP cautions, but informed by consultations with all stakeholders.
Additionally, it emphasises the importance of reducing process duplications between Federal and State Governments, and providing sufficient support and resources to Indigenous stakeholders for heritage surveys and other processes.
Industrial relations reforms stifling investment
BHP says it is “strongly opposed” to the Federal Government’s proposed Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, particularly the ‘Same Job, Same Pay (SJSP)’ provisions, which would have a major impact on investment appeal.
SJSP would require employers to pay all employees doing the same job the same rate of pay, regardless of their employment status or contract type.
CCIWA CEO Chris Rodwell says SJSP would have a ricochet effect throughout the mining supply chain, especially in WA.
“All Australians know that the success of WA’s mining industry underpins the success of our entire national economy,” he says.
“What’s less obvious is how crucial mining is to many small and medium businesses in WA who supply equipment and services to mining operations in sectors like manufacturing, transport, professional services – even caterers and cleaners.
“Most of these employers don’t rely on labour hire yet they will suffer under this ill-advised reform – and that will cost jobs.”
The widespread impact of the reforms will likely filter into investment appeal.
BHP claims the “unsustainable cost pressures” that SJSP would create will “further erode Australia’s competitiveness as an investment destination”.
It says it would disincentivise the creation of permanent jobs, could create disharmony in workplaces and increase the risk of industrial disputes.
A common goal
CCIWA is working constructively with the State Government on reforms to approvals and advocating to the Federal Government to ensure the impacts that the proposed IR reforms will have on businesses and the economy are heard and seriously considered.
“Australia needs to be positioning itself as the most attractive place in the world to do business if we’re going to capitalise on the green energy revolution, with critical minerals like lithium,” Rodwell says.
The report identifies four pillars required for Australia’s mining sector to remain competitive:
- Stable and globally competitive policy, regulatory and fiscal settings
- Robust, transparent and streamlined permitting
- Best-in-class enabling infrastructure
- A world-class METS (mining equipment, technology and services) sector and workforce of the future
“Recapturing Australia’s Competitiveness is a proposal for government and industry to work together on a policy agenda that is positive, productive, ambitious and actionable,” Slattery says.
“It is about acknowledging the reality of our present situation, recognising the urgency of the task, and determining a plan for action. We hope this is the beginning of a conversation about how Australia can get ahead and stay ahead.”
To be part of WA’s peak business organisation, get in touch via 1300 422 492 or [email protected].