Thank you so much and it is a great honour and privilege to be here this morning. I am limping to the stage this morning because I did my knee on the weekend playing cricket with the kids. I was bowling to my 14 year old and he was giving me a bit of stick in the backyard so, inspired Jofra Archer the night before, so I came in off the long run to show my 14 year old who was still boss.
Anyway I had forgotten that a few months ago I had done my knee and while I had recovered well, once my front foot landed, I realised I had not recovered fully. Hence my limp.
I use that story this morning because I want to focus on something a bit different today. I often speak of the mining sector’s strengths and opportunities and they are legion. But we should not forget to remember our weaknesses too. If I had done that I wouldn’t be limping this morning!
I don’t want to completely ignore our strengths though. The resources sector remains the powerhouse of the Australian economy. We exported a record $278 billion of resources last year which represent now more than 70 per cent of our goods exports. There is the amazing stat that are iron ore, coal and gas exports combined are greater than all our other goods exports.
And that’s just the direct mining sector. There is then the mining services industry represented at so much of this conference today. When you add your sector the mining and mining services industries employs over 1 million Australians. More than our manufacturing industry.
But we must acknowledge that as a sector we have weaknesses. I am only going to focus on a few this morning given the limited time that I have.
First, we haven’t made a tier one mineral discovery for decades. Our first major mineral find was here in South Australia. South Australia is truly the birthplace of our mining industry. Back in 1859 a stockman at Wallaroo noticed a wombat kicking up some funny, green looking rocks. He had them assayed and they turned out to be the first copper find in Australia.
Almost all of our mineral discoveries since have been found in a similar way, although not usually through the use of wombats. But people saw surface mineralisation and then drilled in these locations.
The main reason our mineral discoveries are drying up is because we have basically searched the 30 per cent of the country that has mineralisation on the surface. All is not lost though because the 70 per cent of the country without mineralisation probably has as much gold, copper and nickel as the other 30 per cent.
We just need to use the latest techniques of aero magnetic and seismic testing to search for it.
Our second main weakness is the red tape that is stifling approval processes and investment decisions. It takes too long to get things approved in Australia now. While we have made some changes at the Federal level we must do a lot more especially in unison with state governments. That is why I have established a Productivity Commission inquiry into red tape in the resources sector. That inquiry will help highlight the best practices in resources regulation here and overseas and help to streamline practices for the sector.
Our third main weakness is the remarkable increase in energy prices we have experienced in the past decade that is hurting our competitiveness. That is especially having an impact here in South Australia and especially to the proud and historical metals manufacturing business based here.
The lead smelter here in Port Pirie is such a crucial part of our nation’s history. It was the rail line from Broken Hill to here that supercharged Broken Hill and the South Australian economy forward. There is no reason it should not continue but energy prices are perhaps the greatest challenge facing our value adding businesses in the resources space.
I am not going to focus on all of the energy issues this morning but I want to focus on gas given my portfolio responsibilities.
Gas prices have surged for two reasons. One the oil of the Bass Strait has basically gone and the gas that is left is more costly to produce. This has materially increased gas production costs in southern Australia. Two, the costs of coal seam gas production are higher again given there is no oil by definition and they require a lot more wells to produce the same amount of gas.
I can’t fix our geology. We have, however, ensured that domestic gas users get gas first under export control framework. That has helped reduce gas prices by 25 per cent over the past 2 years.
But prices are still not low enough to maintain the competitiveness of many energy intensive businesses. The only way to fix that is to find new, more productive supplies. That is why the bans on gas production by state governments, including those here in South Australia, make no sense.
I have announced that the Federal Government would like to explore the establishment of a National Gas Reservation scheme to ensure that for future projects Australia’s domestic gas needs are put first.
I am seeking to work with state governments about the details of our reservation scheme but I would like them to reconsider their positions on gas development too. It is pointless to have such a system if we are not allowed to produce gas in the first place.
We also must keep in mind the long term options to find another Bass Strait. That is why I fully support the sustainable development of the Great Australian Bight. On the eve of September 11, Australia produced enough petroleum to meet 96 per cent of our domestic needs. Today it is less than 50 per cent. While the world has become much more fragile our energy security has done the same.
We cannot just recklessly close the door to potential options that could enhance our energy security. During the election we committed that our Chief Scientist would review the process around the evaluation of
Equinor’s proposed exploration activities in the Bight. We are committed to a robust and rigorous evaluation of all offshore activities to ensure the environment is protected above all else. That local industries like seafood are not harmed and that safety is a priority for the businesses operating in our offshore areas.
The Chief Scientist will be providing his report to government within weeks and I and the Environment Minister will have more to say shortly. There
are always ways we can get better but simply saying no it is all too hard is it not the right approach for Australia’s security or the South Australian economy.
Our fourth main weakness is the direct weakness of some of our mining or mining service business in not standing up to the bullies and cowards in the green movement. Today we hear that a large engineering company, Aurecon, is withdrawing services from Adani in response to pressure from green activist groups. They are not getting out of coal, indeed they don’t provide coal mining services to Adani but they are a contractor at the Abbott Point port and also provide services associated with Adani’s Whyalla solar farm, and their decision will have no material impact on Adani’s project.
I want to say three things about this.
First, Aurecon’s announcement is weak as piss and a load of rubbish.
Aurecon today say they are making the decision for reasons of “sustainability”. But if that is the case why they are only withdrawing services from Adani including not helping them build a solar farm here in Whyalla! And they are apparently still providing services to the coal industry. Don’t treat us like mugs. Aurecon aren’t making the decision because they are concerned about the environment, they are doing it because they are letting a few bullies who blockade their office dictate what they do.
Basically they are a bunch of bedwetters and I don’t know how anyone who works for Aurecon can hold their head up high with any kind of pride after such a weak willed decision. Just lucky for us Aurecon aren’t being asked to open the batting against Jofra Archer this weekend.
Second, Aurecon’s decision is an insult to the working people of Australia and also to the growing needs of India. The Australian people clearly voted to support Adani at the federal election especially in regional Queensland. We want jobs in regional Australia and we don’t have much respect for businesses and political parties who seem more interested in meeting the interests of a few privileged greenies rather than the vast bulk of Australians who just want a job.
Third, the mining sector needs to shun and shame companies like Aurecon who are clearly only fair weather friends. They’re clearly happy to take the profits from the industry when things are easy good but at first sniff of grapeshot they run for the hills. Why would anyone want to do business with people who act like that?
I will keep fighting for the industry because I love it and provides so much for average Australians. But you have to help us fight too. You can’t rely on government to fight the whole battle.
The challenges are great for the industry but so are the opportunities. They are worth fighting for and I look forward to working with you to achieve more benefits for South Australia and the entire South Australian economy.