Let’s not ignore mining and exploration amid heightened global tensions

Warren Pearce, Chief Executive Officer Association of Mining and Exploration Companies

Queensland’s mining and exploration industry understands all too well that we operate in a cyclical business. Companies plan and build strategies to accommodate this reality. However, it’s important to recognise the last 12 months have provided far more challenges than the cyclical nature we are used to.

Considering the many threats to the ongoing strength of our industry, it’s more important than ever for leaders, policymakers and the community not to take our critical industry for granted. Not just in Queensland but nationally, where one of the most pressing challenges currently faced is the growing regulatory approvals burden.

It is imperative that we maintain a balanced approach to development, one that respects the environment and protects cultural heritage, while also ensuring the stability and growth of our resources sector.

A case in point is the controversial decision in August by the Federal Environment Minister, Tanya Plibersek, to block the McPhillamys gold mine, a project that would have injected $1 billion into NSW's economy with $200 million worth of royalties to follow. This isn’t just a NSW problem, it’s a national problem and could impact projects in Queensland as well.

The Minister invoked Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act. The decision was handed down after Regis Resources spent seven years obtaining state and federal environmental approvals. The Orange Local Aboriginal Land Council (OLALC) also consented to the mine, saying it would not “impact any known site or artefacts of high significance.”

It sets a dangerous precedent in Australia for a project on private land, even with all required approvals, to be halted at the last minute. AMEC is aware of multiple companies across the country, facing a similar fate. All they can do is sit in limbo as they await the very real prospect of a Section 10 halting their projects. Nobody is denying that regulation is essential for ensuring sustainable and responsible mining practices. This includes ensuring Indigenous cultural heritage is preserved. But these last-minute, opaque processes are threatening investment, which will ultimately deny traditional owners the benefits they deserve to receive as a result of the project going ahead.

Then there are the proposed new ‘Nature Positive’ laws that only exacerbate the approvals process and timeframes. Designed to replace the Environmental Protection and Biodiversity Conservation Act (EPBC), and while well-intentioned, the implementation of these laws could further restrict mining and exploration activities, making it even more difficult for projects to get off the ground.

Talk of these laws being watered down or even abolished are promising. With a federal election around the corner, it appears the government isn’t looking to pick further fights on this front - positive news for the industry.

The cumulative effect of these decisions is to create a climate of uncertainty, which is the last thing our mining industry needs as it faces increasing global forces and rising costs.

It leaves investors thinking twice as to whether Australia is the stable investment it once was. In place of stability, investors both locally and overseas are evaluating the sovereign risk that Australia poses right now.

On a positive note, AMEC is encouraged by early discussions with the incoming Queensland Liberal National Party and the Hon. Dale Last MP, new Minister for Natural Resources, Mining, Rural and Regional Development. Mr Last has shown an early commitment to drive progress, growth and innovation in our industry.

Considering the many threats to the ongoing strength of our industry, it’s more important than ever for leaders, policymakers and the community not to take our critical industry for granted.

Meanwhile, the energy transition and the critical minerals required to fuel a new wave of power received a massive shot in the arm earlier this year.

The Federal Government announced the Critical Minerals Production Tax Incentive (CMPTI) in the May Budget, which provides companies that downstream process critical minerals in Australia with a 10% tax credit.

By recognising the strategic importance of these minerals, the Federal Government has taken a policy setting presented by AMEC, designed to bolster the production of these vital resources and create new supply chains. This incentive is not just a boon for the mining sector but promises to bring new opportunities for Australia and bolster our national security.

Critical minerals such as lithium, cobalt, and rare earth elements are essential for the production of batteries, wind turbines, and solar panels. By incentivising their production, the CMPTI directly supports the global transition to renewable energy.

Those opposing the policy claim there is too much risk associated with it and that the government is throwing away billions of dollars.

However, that’s a narrow-minded view, because unlike most direct subsidies given to companies or sectors, the tax credits are only paid out once the companies are producing. This means that if they don’t produce, they don’t receive a tax credit. And no loss to the taxpayer.

Done right, it will foster economic growth, enhance global competitiveness, promote technological innovation, ensure environmental sustainability, and revitalise rural communities.

And that’s why it is so important we resolve the challenges hanging over the industry’s head.

There is little wonder why investors are nervous about Australia's sovereign risk, considering:

• President-elect Donald Trump threatening higher tariffs early next year

• A Federal election in the first half of 2025

• Section 10s providing uncertainty for future project

• Nature Positive legislation threatening to duplicate and

further slow approval timeframes

• Global supply chain pressures

• Market volatility

These factors (among many) will have a telling impact on how the industry performs over the next 12 months - not to mention the state of our economy.

Queensland has long been an important cog in the nation’s economy, and indeed, the resources sector is the backbone of this state’s prosperity. The mineral wealth beneath our feet provides jobs and opportunities for countless Queenslanders.

In fact, research published in The Courier-Mail earlier this year, showed a quarter of Brisbane’s workforce is directly or indirectly connected to the mining and energy sector. Put into dollar value, it’s $1 in every $5 in Queensland that is coming from the mining industry, or about $40 billion annually.

Despite this, recent events have highlighted the vulnerabilities and complexities that accompany such a vital industry.

It is imperative that we maintain a balanced approach to development, one that respects the environment and protects cultural heritage, while also ensuring the stability and growth of our resources sector. Otherwise, the flight of capital has choice.

AMEC will continue to advocate for policies that support sustainable growth, reduce regulatory duplication and delays, while encouraging investment in exploration. Now is not the time to take our resources sector for granted, it is a time to reinforce our commitment to its success. 