Opening statement to the Senate inquiry into the rehabilitation of mining and resources projects

Opening Statement by Minerals Council of Australia Chief Executive Brendan Pearson to the Senate Committee Environment and Communications References Committee Inquiry into the rehabilitation of mining and resources projects

The Minerals Council of Australia welcomes the opportunity to participate in this inquiry.

As you may be aware, the MCA represents small, medium and large firms engaged in the extraction, production and processing of minerals and energy commodities. 

A large share of this production is exported, with minerals and energy exports reaching record levels in the year to 30 June 2017, topping $200 billion for the first time.

The mining industry is a major contributor to the national economy.  Over the last decade, the industry accounted for 14 per cent of Australia’s economic growth.

According to the Reserve Bank, the industry’s growth over the last decade directly contributed to an improvement in the living standards of all Australians.

According to the RBA, household incomes – across the country, not just in the mining sector – were 13 per cent higher than they would have been without the boom.

Real wages were 6 per cent higher.

Unemployment was 1.25 per cent lower than it would have been.  That is 150,000 jobs.

That is not a bad dividend.  Better living standards, higher wages and more jobs.

Employment in the sector – most of it located in regional and remote Australia - has nearly tripled in the last 12 years.

Furthermore, any assessment of the contribution of mining must also take account of the mining services sector.

According to a recent report overseen by Professor Ian Harper at Deloitte, mining and METs activities support 1.1 million high-skilled, high-value, high-wage jobs across Australia.

The sectors, when combined, account for about 15 per cent of the Australian economy, according to the Deloitte report.

I think that is important background for our discussion today.

Madam Chair, mining activities are comprehensively regulated under state-based mining, development and planning legislation.  

Where mining and rehabilitation activities intersect with Commonwealth matters, assessment and approval under the EPBC Act are also required.

While modern mining rehabilitation practice is highly regulated, better implemented and more accountable than ever before, there a risk that a small number of operators may not be able to fulfil their rehabilitation obligation to the standards required. 

In these circumstances security bonds or equivalent mechanisms safeguard governments from incurring unfunded liabilities.

Security bonds and mining regulation state-based security bonds are regularly reviewed and updated to reflect changing community and government expectations, industry practice and variations in service costs. 

The overall pool of funds held by government has increased substantially in recent years, reflecting both these changes and significant industry expansion. 

The effectiveness of mine rehabilitation and closure policy remains a high priority for state governments and the Northern Territory.  Indeed, this inquiry has come at a time when many jurisdictions are reviewing and updating relevant regulation, processes or supporting guidelines.

The industry’s approach to mined land rehabilitation has continuously improved and significant advances have been made over recent decades. 

As you would expect, rehabilitation methods continue to evolve.  This has been driven by sustained company investment in research to strengthen the rehabilitation science, industry experience, evolving corporate values, community expectations and government regulation.

Industry collaboration has been central to improved rehabilitation and closure practice.  The industry has worked closely with government, CSIRO, universities and centres of excellence. 

The industry has established national and international networks to share knowledge to improve rehabilitation methods and performance.  Collectively funded research ensures Australian industry remains a leader in mine rehabilitation and management.

With consistent effort, investment in innovation and a focus on continuous improvement, the minerals industry is achieving positive rehabilitation outcomes and productive post-mining land uses – including cropping, grazing, recreation and nature conservation. 

These efforts ensure the community benefits extend beyond taxes, royalties, jobs and investment during operation to include a post-mining landscape that has ongoing social, economic or conservation values.

It is important to note that mine rehabilitation is only part of the environmental management story and the management of potential impacts on federal environmental matters.    

To the extent possible, industry avoids, minimises and mitigates its impact on environmental values.  If needed, companies will also ‘offset’ significant residual impacts on identified environmental values. 

This may include the establishment of protected areas for conservation, developing new or improved habitat on degraded land and/or the control of threatening processes including feral animals and weeds.

Further to these requirements, companies may also undertake voluntary conservation initiatives to augment their social license to operate.  These include species recovery programs, habitat restoration and the establishment of conservation reserves. 

These initiatives can have a significant positive effect on environmental and community values, including matters of national environmental significance. 

As recognised by the CSIRO, the economic and environmental opportunities provided by responsible mining practices are significant.

With respect to opportunities for improvement, state and territory governments are best placed to review and update regulation and policy in line with state priorities.  The Australian Government could contribute to improved rehabilitation and policy outcomes nationally through a variety of approaches. 

These include facilitating dialogue between jurisdictions and industry to share knowledge, and the promotion of leading practice through the publication of relevant guidance.

Once again, thank you for the opportunity to present this afternoon.

We welcome your questions.

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