Making the most of our resources in a post-COVID world

The Hon Keith Pitt MP, Minister for Resources, Water and Northern Australia

Making the most of our resources in a post-COVID world

What a year 2020 has been for Australia and around the world. Right across the nation, the COVID-19 pandemic has had a deep impact on our economy and the way we go about our day to day work and social life.

Meanwhile, Australian resources and energy exports reached a record $290B despite global downturns. That’s because we pulled together during the crisis to keep people in jobs and industry going.

We have learned to do things differently. We learned about social distancing and how to adapt when state and international borders closed. As a result, Australian resources are forecast to remain strong as the world recovers from COVID-19.

Australian resources – the men and women on the ground as much as the companies – continue to underpin our economy throughout the COVID-19 pandemic and subsequent downturn, just as it did throughout the turbulent years of the global financial crisis.

The Bowen Basin is a prime example – with some of Australia’s, and indeed the world’s most significant reserves of coal and gas.

Even through the global downturn, Australia has maintained a global reputation as a safe, efficient and reliable supplier of the resources needed to keep lights on and build steel for cities and manufacturing all around the world.

This supports Australia’s economy and our standard of living. Steel and energy will underpin recovery here and overseas. Trade income and royalty revenue ensures governments can pay for schools and hospitals, for roads, for police and the defence of our great country.

This also directly provides jobs for about 250,000 men and women. More than one million others are in jobs that rely on the resources industry, its services and supply chains. In this region, resources provide around 37,000 jobs – the lifeblood of a vibrant community.

There have been difficulties. In particular, coal producers in the Bowen Basin need no reminding of how the pandemic has affected business over the past year. COVID-19 has led to a fall in global coal prices and demand, placing pressure on producers. Some have announced production cuts and temporary closures, affecting both thermal and metallurgical coal exports.

Metallurgical coal suffered sustained declines in the first half of 2020 as COVID-19 impacted on the global steel industry, with steel production curbed in India, Europe and North East Asia.

Thermal coal also suffered declines in global demand and price due to a drop in demand for electricity, but is expected to grow again from 2021 as the world and our major trading partners in particular emerge from the pandemic.

Overall, however, coal will continue to play an important part in the world’s energy mix. And for now, there is no other way to make steel. The International Energy Agency has said coal demand in developing economies, particularly in Asia, is projected to substantially increase to satisfy demand for electricity and for industrial development.

As global energy demand increases, new coal projects will help to meet increasing energy needs. The Australian Government is committed to working with the industry to provide an economic framework and business environment that underpins the future sustained growth of the sector.

At home, the Government has committed to supporting the transition to a lower emissions economy while at the same time, providing reliable, secure and affordable energy to industry and regional Australia.

Coal remains a key energy source, especially for high energy-intensive and trade-exposed industries, which require reliable energy in their manufacturing processes. Coal continues to account for around 60% of Australia's electricity and ensures Australia has a reliable and affordable power supply with enough dispatchable generation to maintain grid stability.

Back in May, I had the great privilege of chatting with the Bowen Basin Mining Club’s Jodie Currie and Sarah-Joy Pierce for the first Crib Room podcast.

At the time, I mentioned one of my goals for the year was to make sure the resources sector was doing everything possible to support young people seeking jobs, apprenticeships and traineeships in the industry.

To that end, the Government has developed a new National Resources Workforce Strategy to help target jobs and training for the resources sector and support participation by Australians.

I was an electrician by trade, before becoming an engineer and then running a couple of farms and entering politics. I know first-hand how important that first job can be, and how an apprenticeship or traineeship can be a great way to start a career.

Now more than ever, as we emerge from the COVID-induced recession, we need to do everything we can to provide opportunities for our young people to be trained and skilled, and to have secure job opportunities in the resources sector and in regional Australia.

Post COVID-19, we need to make more of our resources, not less. That means a strong focus on new exploration, expanded projects, downstream processing and on local manufacturing.

To support manufacturing, Australia needs competitive gas prices. The Government has outlined a vision for a gas-fired recovery, to both support exports and to deliver affordable gas to the domestic economy. And there is potential for manufacturing to be done in regional Australia, close to our resources.

The Government is also supporting the development of a new critical minerals sector. We are working with international partners on ways to diversify supply chains while working at home to develop new projects and opportunities for downstream processing.

We will continue to support market access for Australian exports, to build trade links with new markets as they emerge, and to ensure Australia remains a global leader when it comes to innovation.

To support this development, growth and opportunity, the Government continues to support exploration though our expanded Exploring for the Future program, which provides free and open access information on mineral and water resources in vast areas of Australia.

We are also reviewing regulatory processes with a view to streamlining processes and reducing unnecessary burden and duplication. One example is the Government’s comprehensive review of the Environment Protection and Biodiversity Conservation Act, being led by the Minister for the Environment Sussan Ley.

As Australia emerges from the worst impacts of the pandemic, it again falls to our resources sector to be a global leader, and to be the foundation of our economic prosperity as we head into 2021.

The Bowen Basin will be an important part of this. That’s why the Government has committed $28.3M to develop five Strategic Basin Plans, including one for the North Bowen Basin and Galilee Basin. These plans will identify ways that we can unlock new potential and accelerate the development of resources, especially to increase domestic gas supply and lower energy prices for households and businesses.

The Government knows the potential that Australian resources hold – for the economy, for energy supply, for construction and manufacturing around the world, and for Australians and their families. As our economy recovers into 2021, we will remain a strong supporter of the sector and continue to realise Australia’s full potential.

Photo: Minerals Council of Australia