Iron ore an export saviour

Article by Danielle Le Messurier courtesy of The West Australian Newspaper

The Australian economy has taken a multi-billion-dollar hit due to a drop in trade between March and April but annual exports remain historically high thanks to demand for WA’s natural resources in Asia.

Preliminary figures released by the Australian Bureau of Statistics yesterday showed merchandise exports fell by $4.4 billion, or 12 per cent, to $31.4b in April from a record high in March.

Despite the month-on-month fall the statistical agency said Australian exports “remain strong due largely to ongoing demand for Australian resource commodities, in particular iron ore from major trading partners across Asia, and gas”.

While down on the figure for March, exports still increased $301 million (one per cent) when compared to April 2019.

Driving the drop in exports in April was a $2.3b, or 8 per cent, fall in non-rural goods exported, including “significant decreases” in iron ore exports, which were down $456m, and coal, which dropped by $412m.

A massive $1.7b decrease in the sale of non-monetary gold, down 47 per cent, also contributed to the overall drop in international merchandise sales.

WA iron ore has been kept at arm’s length from a growing trade dispute with China, which has increased its demand for the resource after reopening its economy last month following a coronavirus shutdown.

The iron ore price is close to breaking through $US100 a tonne after surging 15 per cent over the past month to $US96.85 a tonne.

China has slapped Australian barley exports with an 80 per cent tariff, banned meat imports from four abattoirs and is reportedly considering restrictions on some coal imports after Australia led calls for an independent inquiry into the coronavirus pandemic.

Chamber of Minerals and Energy WA director of policy and advocacy Rob Carruthers said WA resources exports remained strong in March and April. “Australian gold exports were up 53 per cent in March and April 2020,” he said.

“Also, iron ore exports out of our largest bulk port of Port Hedland were up by 16 per cent in the months of March and April 2020, compared to the prior two months.”

Mr Carruthers said iron ore and gold in particular were enjoying record prices not seen since previous highs around 2013-2014 , adding the current market presents “big opportunities for many WA exporters”.

“WA has doubled its iron ore exports over the past decade and our main competitors in Brazil are profoundly challenged,” he said.

“This is positive news . . . and highlights how important the WA resources sector will be to the (State) and national economic recovery.”

Minerals Council of Australia chief executive Tania Constable said that post-coronavirus , world demand for metals and minerals — especially steel, copper and aluminium — would “grow in line with the expanding needs of highly populated nations”.

“While world economic growth is expected to contract sharply in 2020, the industry’s ability to keep operating through the COVID-19 crisis has positioned it strongly to take advantage of the global recovery and the ongoing resources demand of developing economies,” she said.

Year-on-year, the value of imports in April 2020 was down 7 per cent on the same month in 2019. The ABS said this was due to “large decreases in the value of imports of petroleum and road vehicles”.

 

Mining achieves record tax, royalty payments

 

Article by Tara Hamid courtesy of Australian Mining

Australia’s minerals sector has paid $39.3 billion in company taxes and royalties in the 2018-19 financial year, a record high for the sector.

This marks an increase of $8 billion from the previous year.

The increase was in line with revenue growth that reflected continued higher production and strong commodity prices, according to a Deloitte Access Economics report commissioned by the Minerals Council of Australia (MCA).

The report revealed that iron ore prices drove the increased revenue during the first half of 2019 as they climbed on the back of strong Chinese demand and reduced global supply following Vale’s Brazilian tailings dam tragedy.

The report, which sourced data from state and territory treasury budget papers, estimates that the minerals industry has paid close to a total of $230 billion in royalties and company tax over the last 11 financial years.

MCA chief executive Tania Constable said the report confirmed that the minerals sector did the heavy lifting on company tax collections, contributing close to 30 per cent of all company tax in 2018-19.

“High and consistent payments across the commodity cycle show that the minerals sector is a reliable and significant tax and royalty contributor,” she said.

Along with tax reports from a number of MCA member companies, Constable noted that the Deloitte Access Economics report showed that the minerals sector had reported its contributions regularly and transparently.

The report came out following the release of the Productivity Commission’s Trade and Assistance Review 2018-19, which stated that tariff and budgetary assistance to mining is “disproportionately small”. The effective rate of assistance – the ratio of total assistance to output – for mining was just 0.2 per cent in 2018-19, the same low rate for the last three years.

Constable said these tax and royalty payments demonstrated how the minerals sector had underpinned Australia’s economic prosperity for decades.

“The Treasurer has recently reinforced the importance of supporting a business-led recovery through competitive tax settings, workplace relations reform, deregulation and new infrastructure,” Constable said.

“Lower taxes, faster project approvals, modern skills and flexible workplaces will help the minerals sector make an even bigger contribution to both the national economy and regional jobs as Australia emerges from COVID-19.”

A JOBS PATH FOR ALL WORKERS

Article courtesy of the Bulletin

TRADESPEOPLE and university-trained workers alike are required for the mining and mining equipment technology services (METS) sectors that provide work for a total of 1.1 million Australians.

Half of the workforce has a vocational perspective, with 38 per cent of workers holding a certificate III or IV qualification, 8 per cent holding a diploma , and 4 per cent pursuing an apprenticeship or traineeship.

Meanwhile, more than one-fifth of the mining workforce has a university qualification. Minerals Council of Australia chief executive Tania Constable says demand for highly skilled workers from vocational as well as tertiary backgrounds to provide minerals and metals will remain strong long into the future.

Constable says most things that Australians use in their daily lives are made from mined minerals, and with global population growth and a rapidly escalating demand for energy and infrastructure, people are using minerals and metals more than they ever have.

“There are a lot of exciting developments in the mining industry in recent years which make it a great place to be for a long-term , rewarding and challenging career,” she says.

“The mining industry has undergone a period of significant expansion in the past decade; massive investment supported many construction jobs in the industry as new mines, processing plants and infrastructure were built. “Now that these projects have been built, Australia is producing new record volumes of iron ore, coal, bauxite, gold and lithium, along with nickel, copper and other commodities to meet growing global demand.

“This production phase of the boom will last for a much longer period – mines typically take a few years to build but can run for considerably more than 20 years. These operating mines are offering many new positions in the industry, with more than 17,000 new jobs in the resources sector created since 2016.”

Constable says Australian mining companies invest heavily in training and certification, providing employees with frequent opportunities to upskill on as well as off site during their careers. It is in addition to the apprenticeships and traineeships available to school leavers and career changers, who can gain on-the-job experience and a nationally recognised qualification while getting paid at the start of their careers. The industry employs apprentices and trainees at double the rate of the national average (2 per cent).

More than 35 per cent of apprentices are employed in traditional trades such as metal trades, automotive and electrical. “The mining industry has a great story to tell: our high-skill , highwage workforce is younger, betterpaid , better trained and has a much higher share of apprentices than other sectors, with average full-time weekly pay of $2659 more than 65 per cent higher than the all-industries average ,” Constable says.

 

Trade surplus soars on ore

Article by Meilin Chew courtesy of the West Australian

WA’s resources sector continues to be the bedrock of the national economy during COVID-19, with new data revealing a surge in iron ore shipments boosted the country’s trade surplus.

Australia’s trade surplus rose to a record high of $10.6 billion in March, up from a surplus of $3.86b in February. The result beat market expectations, with analysts having forecast a median surplus of about $6b.

Total exports of goods and services in March rose 15 per cent to $42.4b, data from the Australian Bureau of Statistics showed yesterday. But the real story in the numbers for WA was Australia’s annual exports to China reaching a record high of $149.8b in March.

Iron ore remained the star performer of the sector, rising 32 per cent in March after falling 14 per cent the prior month.

“For an economy like Western Australia’s that’s very dependent on iron ore exports, it does show that China is getting back to work, the demand for iron ore in particular is rebounding, and we have seen iron ore shipments from Port Hedland jump by 20.5 per cent in March, with exports to China up by 21.6 per cent,” CommSec senior economist Ryan Felsman said.

The ABS data also revealed that coal exports were up 6 per cent, liquefied natural gas was up 10 per cent and gold exports more than trebled to $2.5b.

Mr Felsman said increased exports of iron ore, coal and natural gas would provide some comfort to policymakers that China may be through the worst of its coronavirus economic downturn.

“In fact, shipments of iron ore totalled 17.6 million tonnes in the week to April 24, up from 16.2 million tonnes earlier in the month,” he said.

Federal Resources Minister Keith Pitt said despite the global challenges the nation was facing, iron ore from WA could still become the first Australian export commodity to top the $100b export mark.

“We know the resources sector will not be immune from the challenges posed by COVID-19 in the months ahead, but it will still continue to employ thousands of West Australians in highly skilled jobs,” he said.

Shadow minister for trade Madeleine King said the resources industry should be recognised for underpinning Australia’s success as a trading nation.

“In WA, the McGowan Government worked closely with the industry to help keep people in work while protecting employees and communities.

The result of this decisive action is evident in today’s highly encouraging data on exports,” she said.

The ABS data also confirmed the impact on many trade exposed sectors of the Australian economy had been severe.

“We saw a large decline in tourism-related exports, education, passenger transport – they fell by 15.4 per cent to about $4 billion,” Mr Felsman said.

“We saw a lot of weakness because with the international borders being shut, there were less international tourists here spending money.”

 

 

‘Georgina Hope’ arrives in Port Hedland

 

Eye-catching vessel named in honour of our Executive Chairman

completes maiden voyage under new name.

 

History was made at the weekend as the ‘Georgina Hope’ arrived in Port Hedland on her maiden voyage.

Renamed in honour of our Executive Chairman Mrs Gina Hope Rinehart, the 294-metre long vessel has also been painted an eye-catching pink in support of Mrs Rinehart’s long term commitment to breast cancer research and enabling better care, treatment and support for breast cancer patients. The vessel is owned by Hebei Ocean Shipping Co., Ltd. (HOSCO) based out of Hong Kong. Although the global COVID-19 outbreak prevented us from celebrating in the usual manner, a special water display will be carried out during the vessel’s inbound passage to mark her safe arrival.

The ‘Georgina Hope’ continues the tradition of Roy Hill painting its vehicles and locomotives pink in honour of our Executive Chairman’s commitment to breast cancer, and in honour of roys lady staff members. In 2016, we launched our first pink trucks, many of which have been named in honour of Roy Hill and Hancock Prospecting employees who have battled breast cancer. Last year, we also rolled out our first pink locomotives, for mothers and women of our north, and unveiled our bright pink Wet High Intensity Magnetic Separator (WHIMS) plant, the largest in the Pilbara. Currently, breast cancer is the most commonly diagnosed cancer in Australia with 53 people diagnosed with the disease every day.

Mrs Rinehart personally and through her family foundations has a long history of supporting medical research, being the founder of the first ever Breast Cancer Foundation in the early 1990’s and also one of the major donors to the Bendat Comprehensive Cancer Centre at St John Of God Hospital in Subiaco. She is currently involved in an international study, the Alliance, to trial different treatment options to enhance care of COVID-19 sufferers and reduce hospital time.

 

With gratitude to Captain Matt Berringer and Captain Chris Cooper

for supplying the images as seen above.

 

Mining to help recovery by the truckload

Article courtesy of the Australian.

The challenges of the COVID-19 pandemic have again thrown into stark relief the willingness of Australian mining to step up in tough times. As many sectors shut down and many Australians lose their jobs, the minerals industry has kept operating, with health and safety its highest value and first priority. The industry doesn’t take for granted that ability to continue operating. We are fortunate to be able to keep people in work and mines running, based on our responsible action to protect workers, families and communities.

Developing and implementing national COVID-19 protocols and guidelines — along with locally led responses in remote Aboriginal and Torres Strait Islander communities — helped keep the industry operating even as state and territory borders closed. This responsive and responsible approach was recognised by Australian resources ministers, the Australian Workers Union and the Construction Forestry Maritime Mining and Energy Union — all acknowledging the importance of the protocols in protecting workers and local communities.

When bushfires raged over summer, our members rallied to provide practical and financial support to firefighters and affected communities. That same spirit is alive within the industry as we learn to live with today’s crisis.

The industry has protected and supported local communities by greatly reducing fly-in, fly-out workforces and using supply chains to meet vital health needs of local schools, remote communities, doctors and hospitals.

The resources sector not only underpins Australia’s success as a trading nation — generating $290bn in export earnings last year — it’s also part of the identity of many communities and regions. So what’s next when Australia begins to emerge from the pandemic and look for high-growth policy options to support a stronger economic recovery?

Two things are clear: stronger business-led growth, as noted by the Prime Minister, will lead Australia to recovery; higher taxes will discourage investment, impede growth and threaten jobs.

The minerals industry pays its fair share of tax and royalties, with annual contributions of $31bn funding doctors, nurses, hospitals, police and other essential services and infrastructure. In 13 years, the industry has paid $234bn in company tax and royalties. That’s enough to build 9500 schools or 340 hospitals.

For it to continue as a global leader and be competitive, Australia’s fiscal settings should encourage investment and growth.

A balanced approach provides governments and the community with an appropriate share of the benefits from Australia’s rich resources bounty, and benefits industry and the economy through a competitive business tax system that attracts investment, encourages risk-taking and creates jobs in our regions.

Globally, company tax rates have been reducing since 2010 — except in Australia, which has not reduced large business taxes for two decades. Australia’s company tax rate is 3 per cent higher than the G20 average and the second highest in the developed world.

With the Reserve Bank governor warning of the severity of the coming economic downturn and emphasising the importance of pro-growth, pro-productivity reforms, the post-COVID recovery provides a great opportunity using the national cabinet model to supercharge economic recovery through sensible policy reform.

We already have a Council of Australian Governments strategic agenda for resources. This should be recast as a blueprint for national recovery and reconstruction.

When mining projects can take more than a decade to deliver, it’s clear that faster project approvals — including streamlined environmental assessments to remove wasteful duplication between federal and state systems and create a one-process, one-decision model — can help deliver our economic recovery without compromising environmental protection.

Government support for R&D incentives should be broadened to accelerate innovation by Australia’s mining production, equipment manufacturers and services providers, which also could benefit other industries including the defence sector. Retraining and skills development could be fast-tracked by expanding the Mining Skills Organisation pilot, Queensland’s Centre for Mining and Manufacturing and the Western Australian School of Mines.

There are also opportunities to support exploration for minerals of strategic importance (such as copper, rare earth elements and battery minerals) in priority greenfield areas across Australia.

Post-COVID-19, world demand for metals and minerals — especially industrial metals such as steel, copper and aluminium — will grow in line with the expanding needs of highly populated nations. The shift to lower emissions also will drive increased demand for new metals and rare earth elements used in renewable energy and batteries. Australia should consider how to add value to exports by processing minerals into refined products.

The mining industry has always underpinned Australia’s economic prosperity. If governments grasp the chance for sensible reform as the post-COVID era dawns, the industry can do even more for Australia.

Helen Coonan is chairwoman of the Minerals Council of Australia.