PERTH (miningweekly.com) – The resources sector has welcomed Prime Minister Julia Gillard’s appointment of Gary Gray to the Resources and Energy portfolio, following the sudden resignation of Martin Ferguson.

The Western Australian Chamber of Minerals and Energy (CME) said on Monday that Gray’s ties to his native Western Australia, which accounted for some 46% of the country’s national merchandise export income, was good news for the resources sector.

“Gray is well known to the Western Australian resources sector. As Parliamentary secretary, he chaired the National Resource Sector Employment Taskforce, which brought together employment and training agencies, unions and employers to examine ways of dealing with the skills shortages on major resource projects,” said CME CEO Reg Howard-Smith.

“Without being too parochial, getting key political and bureaucratic figures from Canberra to understand the operating context of the Western Australian resources sector is a challenge. Gary brings to the portfolio significant understanding of that operating environment,” he added.

He noted that the resource sector’s major challenge was the rising cost of doing business in Western Australia.

“Policy initiatives that focus on reducing costs, duplication and red tape will deliver ongoing economic benefits to all Western Australians,” Howard-Smith said.
 
The Queensland Resources Council’s (QRC’s) CEO Michael Roche also welcomed Gray’s appointment, saying he had a unique understanding of the political process and the resources sector through previous roles as national secretary of the Australian Labor Party and as an executive with a major West Australian-based resources company.

“The Minister’s leadership of the 2010 National Resources Sector Employment Taskforce has also given him extensive insights into the Queensland resources sector and the opportunities that lie ahead.

“The potential for Queensland and Minister Gray’s home state of Western Australia to continue their evolution as the world’s next great minerals and energy province is a policy opportunity for Australia of historic proportions,” Roche said.

Meanwhile, the Association of Mining and Exploration Companies (Amec) has also welcomed Gray’s appointment, and has used the opportunity to call for reform.

“Minister Gray is today taking on a portfolio that is in desperate need of reform. Australia’s mining industry is no longer internationally competitive with production costs continuing to rise dramatically,” said Amec CEO Simon Bennison.

“Smaller mining and mineral exploration companies are experiencing an environment where cost pressures are increasing due to a range of additional operating expenses, taxes and levies; discoveries are reducing; and equity investment is being lost to competitive offshore projects.”

The industry body has previously suggested a policy reform to combat the difficulties facing the industry and to secure the mines of the future.

“Amec is looking forward to working with the new Minister to ensure these recommendations are implemented,” Bennison said.