Annual Minerals Week Seminar Luncheon
Wednesday, 28 May 2014
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I am glad so many of you could be in Canberra for this important week.
An important week for the resources sector is always an important week for our economy and indeed our nation.
Minerals Week gives all of us in Canberra the opportunity to learn more about the diversity of the resources sector – and its centrality to our economic strength.
It has been 50 years since Donald Horne described Australia as ‘the lucky country’.
When he wrote those often-misinterpreted words, Horne was raising an alarm.
He was worried about Australian complacency, an acceptance of mediocrity, a belief that something would just turn up.
But Australians embraced the description, without irony.
In doing so, they celebrated all that was great about their country: a generous safety net, a country that helps people adapt to economic change and encourages people to dream.
But adopting the ‘lucky country’ as our motto underestimates Australia.
It simplifies our success as due to good fortune and happy accident.
And sometimes that is the impression Canberra can give the resources sector.
That Canberra doesn’t get it.
That the resources sector just relies on striking it lucky.
Today I want to assure you, I and Labor understand it is much more than that.
I understand, as you do, that it is Australian determination, Australian innovation and Australian genius that has underpinned the prosperity of our resources sector.
And it is these same qualities that will see the Australian mining industry through the current challenges.
I believe in mining, and I want mining to prosper.
Australians want mining to be successful – and I want Labor to foster that success.
Mining, the technology and science of sophisticated minerals processing, petroleum and hydrocarbons are a key element in the regeneration of 21st Century Australia.
I know that the previous Labor Government didn’t always get it right in this area – the differences are a matter of record and I am not here today to rehash them, or politicise this event.
But Labor – and the Mining Industry - were also well served by two fine Ministers in Martin Ferguson and Gary Gray.
A duo that, I am reliably informed, were compared to Shane Warne and Stuart MacGill on Monday.
And we have a proud record of encouraging investment in mining infrastructure during the last decade.
Hundreds of billions of dollars in new investment flowed into mining during the Labor Government – and communities, states and our nation reaped the benefits.
Because when our mining sector thrives:
- High-skill, well-remunerated jobs are created
- Indigenous Australians enjoy rewarding work (and new hope) in their own communities
- Innovation, research and development in workplaces and in our universities are supported by companies keen to get an edge in competitiveness
- Superannuation funds, and the millions of Australians who have trusted their retirement savings to them, benefit from strong dividends.
- Developments support their local communities
- And State and Federal Governments can fund the best possible services and infrastructure with the increased revenue that a thriving mining industry delivers.
Your conference this year is focused on competitiveness – an important theme.
When it comes to mining, Australia can do more than ‘compete’.
We can win.
We can lead the world.
Perth is already the iron ore capital of the world.
There should be no limit to our ambitions.
Let us start talking about Perth as the mining capital of the world.
The iron ore, nickel, copper, LNG and floating LNG capital.
The mining technology and sophisticated metallurgy capital of the world.
I believe both the quantity and quality of Australia’s natural gas reserves can help us become a world resources capital.
To make Perth what Houston or Aberdeen are in oil and gas.
We know that this is possible.
When The Lucky Country was first published, Western Australia exported less than 10 million tonnes of iron ore a year.
By 2018 we will export over 800 million tonnes of iron ore.
All this before the new development at Roy Hill – the world’s largest ever private capital investment in mining.
I congratulate Ms Rinehart on this.
Because Roy Hill means new jobs, new industry, rewarding work for Indigenous Australians, and over the life of the project – a remarkable one billion tonnes of iron ore being exported.
It also means international investment from firms like Caterpillar Trucks.
In April I visited the world’s newest Caterpillar plant in Newcastle – and was deeply impressed by the high-tech, sophisticated operation – and astounded by the logistical scale.
I am ambitious for Western Australia – but I understand that when we talk about community-building, job-creation and wealth generation, every Australian state is a mining state.
250,000 Australians work in resource industry jobs – 90,000 of them in New South Wales.
Australia’s oldest mine is in Tasmania.
We mine coal in Queensland.
Brown coal in Victoria.
Uranium in the Northern Territory.
Copper in South Australia.
And in some of these states, your industry is confronting significant challenges.
In the coal sector most of all.
Australia is the fifth largest coal producer in the world and the world’s second largest exporter of coal.
The $40 billion of coal we export equates to around 12 per cent of Australia’s exports.
Yet around 12,000 jobs have been lost since 2012 as mines go into care and maintenance and our levels of production catch up with global demand.
American coal has an increased presence in our traditional North Asian markets and the combination of continuing low prices and a high Australian dollar is an ongoing issue.
But Australia is winning that competition and growing market share again in metallurgical coal- thanks to a concerted effort across your industry.
The bigger challenge is in thermal coal because of Indonesian growth but there is hope.
More is required to get margins up to where we will start investing again.
There are other challenges too: workplace relations, the constant need for innovation, rail and port charges and the costs of upgrading infrastructure.
I am glad that you dedicated Monday’s discussions to the future of coal mining.
Because coal mining does have a future.
The International Energy Agency has forecast continuing wholesale growth for coal prices as emerging economies increase their demand for electricity.
China relies on coal for 80 per cent of its electricity needs.
China has also recognised the need for high-efficiency, low-emission coal technology – indeed it leads the world in this area.
This represents a significant growth opportunity for Australian coal.
I wanted to briefly address another issue in the sector of particular concern for Labor - the proposed privatisation of the Australian Rail Track Corporation.
If the ARTC is privatised, then that change needs to be accompanied by an effective and efficient regulatory regime.
The same is true for access and ownership of logistics in the Pilbara.
We need systems that continue to maximise the tonnage of resources moved for the benefit of the Australian economy and the mining communities.
Unfortunately this is not what has occurred with the privatisation of Queensland Rail – and this makes developing new capacity even more challenging.
Another group feeling the pressure are Australia’s Bauxite, Alumina and Aluminium exporters.
In February, I met with workers and families in Gove – so many of them devastated by the decision to mothball the refinery.
The Northern Territory Government’s decision to renege on the supply of gas was a significant factor but the conditions in the global market place also had a major impact.
It is my strong hope that recent positive indicators in these markets are the beginning of a more substantial improvement…
…because there are whole regional communities in every Australian state that depend on this sector.
These are good people, skilled and dedicated employees – and they deserve a secure future.
And as my colleague Gary Gray has said, the manner in which a company exits a community is just as important as the way in which it enters one.
For Mining to succeed, we have to encourage the companies and the services sector, the contractors, engineers, software designers and geologists – big and small – to succeed.
This means continuing Labor’s record level of infrastructure investment, delivering the roads, rail and ports that speed the export process and boost productivity.
Another key element of that will be striking the right balance in workplace relations.
This area can sometimes be troublesome, and there has been a shortage of trust on both sides, particularly in coal.
Too often discussion of workplace relations in the mining industry is reduced to an argument about whether employee wages are too high.
Or the flawed notion that passing a law in Canberra will drive productivity growth and competitiveness in an individual enterprise.
Cutting wages is not the answer – or the issue.
Ours is a challenge of productivity – and competitiveness.
I’ve never met a CEO who begrudges a good wage to the truck driver or shovel operator who can produce a higher tonnage in working a shift across good quality ore.
I’ve never met a CEO who wants their geotech underpaid compared to the competition.
Leadership in the workplace comes from putting the focus on employee engagement – and on getting the best from the workforce.
This means giving middle management, and the shopfloor, to new leadership skills, to drive better workplace activity.
Labor’s focus will always be on getting the best possible outcome for employers, employees - and investors.
We believe in prosperity for everyone who works and prosperity which works for everyone.
Governments, and other businesses, can learn a lot from the way the mining industry encourages – and employs – innovation.
Just look at iron ore:
No sector of the Australia resources industry is more responsive or more innovative.
Automated trucks, remote-operated rail infrastructure and now sophisticated banking infrastructure that understands the challenging minerals process of magnetite.
I mention magnetite because Australia’s biggest and most rapidly growing market – China – has identified the significant environmental benefits of making steel from magnetite.
Of course, the best and cheapest way for the Chinese to reduce the environmental damage of their steel mills is to use more high quality Australian iron ore and less poor quality iron ore.
We know that innovation in mining is not confined to finding faster ways to dig things out of the ground.
It’s about pioneering new technologies.
- Delivering breakthroughs and specialist science to mineral processing and metallurgy.
- Developing world class methods of transportation.
- Improving workforce skills and the best site safety in the world.
- Making your workplace somewhere everyone wants to work.
Innovative Australian resources companies are striving to be primary and secondary industries.
- Looking for ways to value-add through sophisticated mineral processing and metallurgy.
- Constantly updating training methods to ensure employees are learning new skills that boost their productivity.
- Embracing workplaces safety as both a moral obligation and as a key driver of productivity.
And pursuing the fundamental balance that drives every business: getting the maximum mutual benefit from the time, labour and skills of your workforce.
All of you know the value of good ideas – and more importantly, you reward them.
You know the importance of investing and supporting research and development – and the remarkable benefits it can deliver.
Take just one example, the LANDTEM technology developed by CSIRO and led by the remarkable Dr Cathy Foley.
An innovation that has helped unearth $6 billion dollars in mineral deposits
It is Australian technology that would be familiar to many of you - a portable exploration tool that uses magnetic sensors to differentiate the ore from other conductive material.
Some of you use this technology – I’m sure some of you even co-invested in its discovery.
The underpinning technology of LANDTEM has also been applied to industries as diverse as oceanography, security and defence.
In the past eight years, ten LANDTEM systems have been built and deployed successfully on four continents.
LANDTEM’s development is a great example of science teams and the private sector collaborating to deliver new technologies to multiple industry sectors.
The future of the mining industry will not be determined purely by developing the high quality resources buried in the earth.
It will depend, above all, on Australia’s greatest natural resource – the genius and creativity of our people.
Your investments, your direction, your focus is helping make Australia a smarter, more productive and more prosperous nation.
You are giving Australia a competitive edge in the race to the top.
When mining succeeds, Australia succeeds.
And that is the goal we all share, and strive for.
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