BHP says proposed labour laws threaten $3.2b Australian investment
Article by Colin Kruger courtesy of the Sydney Morning Herald.
The world’s largest mining group, BHP, says the government’s proposed same job, same pay policy could jeopardise $US2 billion ($3.2 billion) worth of investment it has planned for its local copper business.
BHP chief executive Mike Henry told shareholders at its annual meeting in Adelaide on Wednesday morning that the bill would also damage the Australian economy.
“BHP strongly opposed the Same Job Same Pay Bill not only because of the damage it threatens to do to our business, but also for the hit it will have on Australia’s economy, to Australian jobs and to Australia’s productivity and international competitiveness,” Henry said.
“The bill could reduce the value of any potential growth plans for a copper province of BHP assets here in South Australia by up to $US2 billion,” he said.
His chairman, Ken Mackenzie, backed Henry on the potential threat to its copper plans in South Australia despite acquiring Oz Minerals in May this year, adding to its copper and nickel assets in the state.
“The right conditions will need to be met for [BHP’s] Copper South Australia to compete with other options in our capital allocation framework,” Mackenzie said.
The potential threat to its investment plans in Australia represents a step-up in the $225 billion miner’s campaign against the proposed laws. BHP has previously said the legislative changes would cost the organisation up to $1.3 billion a year, and threaten jobs if rushed through parliament.
The proposed changes would mean labour-hire workers are paid at least as much as directly employed workers doing the same job.
BHP employs 35,000 workers in Australia. About 8000 are service contractors.
The company says it supports the government’s goal of protecting vulnerable workers, but said in a submission that the same job, same pay policy in its current form would seriously affect its operations, harm productivity, and risk the future of all forms of labour hire.
BHP also talked up its prospects in potash after the board approved a further $US4.9 billion investment in Canada’s Jansen project this week. The miner said the investment would position it as a global leader in this industry.
“Potash, used in fertilisers, will be essential for food security and more sustainable farming, against the backdrop of a growing global population,” Henry said.
All resolutions were passed at the meeting with strong shareholder support.
BHP is not the only mining giant to criticise the Australian government this week for making the country a less attractive environment for miners.
Gina Rinehart’s privately owned Hancock Prospecting said Australia needed to do more to reduce the regulatory burden, while announcing a $5 billion net profit for the year ending June 30, 2023.
“Australia’s competitiveness when it comes to value add continues to decline against other developed economies, and its higher cost environment is increasingly uncompetitive against developing economies,” Hancock Prospecting said in a statement announcing its financial result.
“Australia can and needs to do much more to reduce regulatory burdens and make investment welcome and development easier for its essential resources and related industries.”
Hancock Prospecting has paid to dividends totalling $3.1 billion over the past three financial years.