2011 Annual Report - Minerals Council of Australia

Chairman’s year in review

A recovery in minerals production and exports following severe floods early in 2011 has underpinned the nation’s export performance with minerals exports (excluding oil and gas) reaching $154 billion in 2010-11. That is 52 per cent of Australia’s total exports.

Key commodity prices are down from levels reached in the September quarter 2011 and further easing is in prospect given the weaker global economic outlook. Costs are also rising dramatically in Australia.

This underscores the challenge for Australia to transition successfully from a period of price-led mining growth to an era of long-term volume growth. Realisation of the massive pipeline of mining projects in Australia on time and on budget is critical to this objective.

Safety

The minerals industry’s number one value and commitment is the safety and health of its workforce, where everyone who goes to work in the industry returns home safely.

The minerals industry recorded seven fatalities in 2010-11 and two so far in 2011-12, each one a tragic reminder that more needs to be done to secure the industry’s goal of zero harm.

This is not an unrealistic goal. Ours is a hazardous industry but it does not have to be dangerous. We are committed to an industry free of fatalities, injuries and diseases.

Taxation

For much of the past 12 months, the industry has been forced to defend its contribution to Australia in the face of co-ordinated attacks from unions, green-aligned think tanks and some senior politicians.

Given that mining’s tax and loyalty contribution this year is likely to exceed $30 billion after the introduction of the Minerals Resource Rent Tax and the Carbon tax, these attacks have been hard to fathom.

Since 2004-05 the resources boom has added about $250 billion to federal government coffers and over the same period, state governments have earned more than $30 billion from royalties.

This is why the Reserve Bank says there is a clear chain linking the mines of the Pilbara to the cafes of Sydney and Melbourne. Australians are benefitting from the mining boom.

In 2011, the MCA played a key role with other major business groups in pushing for a better-designed carbon tax.

While we were unable to convince the Government to improve the deeply flawed carbon tax, there is little doubt our efforts to identify the faults with the scheme embedded a broad public recognition that there is a better way to deal with the challenge of climate change.

The MCA was also instrumental in 2011 in ensuring the new Minerals Resource Rent Tax was implemented in line with the agreement struck in July 2010 following the bruising and highly public debate over the Resources Super Profits Tax.

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