2012 Annual Report - Minerals Council of Australia

Chairman’s review

This is my final annual report contribution to the MCA as Chairman of the organisation and I am very proud of what has been achieved over the past three years.

The MCA has been a strong and credible advocate for the minerals industry and bulwark against bad policy ideas on issues ranging from green and red tape, workplace reform, shipping, indigenous relations, the public image of mining, economic policy and resource taxation.

Mining has been a critical driver of Australia’s prosperity and I am confident that it will continue to be a pillar of the economy for many years to come, as long as we start to get our policy settings right.

Unfortunately, for much of the past three years there has been an unhealthy focus on how to further tax the minerals industry rather than grow it.

In 2012, the Federal Government introduced the Minerals resources rent Tax and the carbon tax - both adding billions of dollars to the industry’s $20 billion a year in tax and royalty payments. These new costs, on top of existing taxes made Australian mining one of the highest taxed minerals industries in the world.

The need for pro-growth policies will become more critical as the mineral industry faces a more constrained environment characterised by lower commodity prices, high industry costs and the scaling back of capital expenditure plans. 

I hope that as we look forward we can move on from the debate over minerals taxation and start to concentrate on measures that will ensure Australia remains a premier global supplier of commodities.

Safety

The industry recorded two fatalities in 2011-12, each one a tragic reminder that there is more to be done to secure the goal of zero harm in the workplace. 

MCA member companies maintain that all fatalities, injuries and diseases are preventable, no task is so important that it cannot be done safely, all hazards can be identified and their risks managed and that we all have an ongoing responsibility for the safety and health of our work mates and employees.

Industry performance

The value of minerals exports (excluding oil and gas) increased more than seven per cent to $163 billion in 2011-12. reflecting weaker prices, the Bureau of resources and energy economics (Bree) is forecasting exports of $147 billion in 2012-13.

Both demand and supply factors suggest Australia has moved past the era of premium export prices. The challenge for the industry is to transition from an era of price-led growth to a period where companies are focussing on costs, dividends and margins.

Direct employment in the minerals industry reached 240,000 in november 2012, which is almost 60 per cent above the level of three years earlier. wages, workplace training and skills development in the industry continue to be higher than the national average.

By september 2012, the total number of apprentices and trainees in the mining industry had increased by 19 per cent to more than 13,000. That is a figure the industry can be very proud of. we have an unwavering commitment to employing and training Australians for work in our industry.

The MCA was also actively engaged with government to ensure that Australia’s resources continued to be developed in a socially and environmentally responsible manner. The industry’s social license to operate is a critical asset that the MCA works hard to maintain and enhance, often in the face of spirited opposition from a misguided minority.

Ensuring Indigenous Australians realise opportunities on offer from minerals resource development also continues to be a major focus of industry activities. It is one of the sector’s most under-acknowledged achievements that we are now the largest private sector employer of Indigenous Australians. we have achieved this without fanfare, just by getting on with the job and making it happen.

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