JOHANNESBURG (miningweekly.com) – Despite facing times of market turmoil and lower commodity prices, it is not all doom and gloom for the Australian resources sector, says Minister for Resources, Energy and Northern Australia Josh Frydenberg.
Speaking at the National Press Club in Canberra on the strength and resilience of Australia’s energy and resources sectors, Frydenberg noted that in the years ahead to 2040, the liquefied natural gas (LNG) projects in Western Australia alone – Wheatstone, Pluto, Gorgon and North West Shelf – were expected to contribute $160-billion in taxes and royalties.
“This revenue flow is just part of the economic dividend that comes from being the number one exporter of iron-ore, the number one exporter of coal and the number one exporter by 2020 of LNG in the world; having the largest known reserves of uranium in the world and being in the world’s top five for deposits of copper, gold, bauxite, lead, zinc, nickel and lithium,” he added.
Further, he pointed out that between 2004/5 and 2014/15, almost $165-billion had been paid out in mining royalties and taxes. “This is more than the public health spending in 2014/15 and more than what was spent on education, including schools and universities.”
Meanwhile, Frydenberg stressed that the resources and energy sectors had been precarious positions before, during the global financial crisis, but that business investment in the country still experienced 5% growth between 2007 and 2009 compared to a fall of 17% in the UK and 11% in the US.
He warned, however, that there was no room for complacency. “We are operating in a fiercely competitive global market.”
Frydenberg further added that the global commodities crunch necessitated reform in business.
“I’m currently consulting with the industry on a range of new measures that could help derisk exploration in Australia and enhance our competitiveness. With pressures on company balance sheets leading to a significant decline in exploration activity, there is no better time for the government to undertake such a programme,” he said.
He identified the industrial relations space as another area where there was opportunity and need for reform. “Now, more than ever, Australian projects need to deliver productivity gains if they are to remain competitive. We need to leave the mindset of capital versus labour behind as both the worker and the investor stand to gain from better productivity, encouraging greater investment.
“International demand for Australian resources remains strong, our companies remain resilient and the depreciation of our dollar has acted as an automatic stabiliser, increasing our competitiveness. The reality is that over the decades ahead hundreds of billions of dollars will flow to Australia as both demand and supply increases,” he added.