The economic gains from streamlining the process of resource projects approval
Over recent years, a range of analytical work has sought to identify the scale and impact of delays in the processing of applications for major resource projects. Research for the Minerals Council of Australia (MCA) by Port Jackson Partners in 2012 showed that the average Australian thermal coal project experienced an additional 1.3 years’ delay relative to those elsewhere (3.1 years compared with 1.8 years for the rest of the world). Project delays in Australia have increased over the past decade, with the gap relative to other countries likely to be higher now than it has been for some time.
In 2013, the Productivity Commission's inquiry into Major Project Development Assessment Processes provided new evidence on the scale and costs associated with project delays. Glencore noted in its submission, for example, that approval timeframes for major projects in Australia increased from 7 months on average in 2002 to 18-36 months in 2012.
Modelling undertaken by PricewaterhouseCoopers on behalf of the NSW Minerals Council concluded that delays and uncertainty are crucial factors that negatively affect investment decisions made by the mining industry. The research identified a delay of 12 months as a tipping point at which up to a third of planned mining projects would be cancelled, leading to significant reduction in creation of jobs, investment, revenue and royalties. In a scenario where projects were delayed by 12 months or more the potential losses to NSW alone over the next 20 years were estimated to be:
- 6,445 direct jobs in mining and 22,400 indirect jobs would not be created;
- $10.3 billion in investment in 2013 dollars would be forgone; and
- the NSW government would miss out on $600 million per year in direct revenue from mining royalties.