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You can count on us: the resource sector powers on

Ian Macfarlane, Chief Executive, Queensland Resources Council

The end of 2021 will be a milestone for many Queenslanders. Almost two years since the start of the COVID-19 pandemic, many people will be reflecting on just how much the world has changed and how hard we have worked to return to our pre-COVID reality. The good news is we have had some significant successes this year, and with increasing rates of vaccination we are now tantalisingly closer to “normal”. While COVID will always be with us, Queenslanders do have cause to be optimistic.

For those in the Queensland resources sector, the end of the year brings the same opportunity for reflection and goal setting for the future. In some ways, the end of 2021 sees the sector in a similar position to where we were 12 months ago. In 2020, the Queensland resources sector was one of the beacons of strength that kept local economies ticking and kept local families in their jobs, despite the period of deep uncertainty. You could count on us to keep Queensland strong.

ECONOMIC CONTRIBUTION

In 2021 the resources sector has been resilient once again. Each year, the Queensland Resources Council releases data showing the economic contribution of the sector to the state and in each region. Our most recent figures show the sector supported more than 420,000 jobs. That includes more than 56,000 direct jobs. For every one of those jobs, there is a multiplier effect for local communities and local small businesses.

For example, in the Mackay/Isaac/ Whitsunday region, the resources sector creates more than 17,000 direct jobs and supports another 65,000 jobs in associated industries. Many of these jobs are in small businesses that service the sector.

Overall, the resources sector created $84.3 billion in economic activity for the state.

At any time this would be a major contributor to Queensland, but it is especially the case as the state makes its way towards a COVID recovery. The resources sector has a long history of working in partnership with regional Queensland, and we have been proud to continue this tradition even in the challenging circumstances created by the COVID pandemic.

NEW INVESTMENTS

In 2021, we have seen both the resilience and diversity of the Queensland resources sector. The year has been notable for investments in new and revived projects, both in our economic powerhouse sectors of coal and gas, and in new economy minerals that will underpin future growth. In the past few months, we have welcomed the approval of Queensland’s newest metallurgical coal mine between Moranbah and Dysart. Vitrinite’s Vulcan Complex project is expected to create at least 150 full-time jobs and create revenue for the state over its 15-plus life span. Queensland has also welcomed the first coal from the re-opened Millennium metallurgical coal mine at Coppabella in central Queensland.

The mine near Moranbah is a joint venture between Stanmore Resources and M Resources and was officially restarted in July, creating 330 jobs. It’s expected exports from the mine will begin by the end of the year.

Alongside these valuable coal investments there has also been significant investments in other minerals, including vanadium, which is one of the essential new economy minerals. The granting of mining leases for Multicom Resources’ $250 million Saint Elmo Project in the Julia Creek region will see the state’s very first vanadium project shift into production phase. This marks the start of Queensland’s strategic move to become a globally significant supplier of the in-demand new economy minerals needed to decarbonise the world.

Vanadium is used in a range of green technologies and products, though is most well-known for its ability to strengthen steel, and is already used in space vehicles, nuclear reactors and aircraft carriers.

Vanadium flow-batteries are also fast becoming an important energy storage solution alongside lithium batteries, because they are a stable alternative in areas of extreme temperature and offer greater storage capacity and efficiency for large scale storage. The Saint Elmo project is one of the first new economy mineral mines in Queensland to be approved.

Other resources companies are investing in the longevity of the sector through energy investments. For example, Rio Tinto will build a new solar farm and battery storage project in the state’s far north. The project will generate even more renewable energy for Rio’s bauxite operations at Weipa – tripling the local electricity network’s solar generation capacity. Rio’s move to incorporate more renewables into its operations and boost local access to green power was part of a resource industry-wide commitment to lowering emissions.

The Queensland resources sector also continues to power the state – literally, including through the supply of gas to underwrite domestic industry. One example is Senex Energy’s $40 million investment on increasing natural gas production at its Atlas operation in Southern Queensland. The expansion will enable Senex to increase its annual gas supply at Atlas, located near Wandoan, by 50% to reach 18 petajoules a year. Under a Queensland Government policy, Senex's Atlas gas project is classified as a domestic-only production tenure which means its gas can only be sold to Australian end users.

These are just some of the examples of the investments in the future of the resources sector that mean decisions taken in 2021 will ensure returns in the years and decades ahead.

QUEENSLAND RESOURCES INDUSTRY DEVELOPMENT PLAN

As we plan for the strong future of the resources sector, the work the Queensland Government is undertaking to develop a Queensland Resources Industry Development Plan (QRIDP) will be vital to map out the direction of the sector for the decades ahead.

QRC sought a commitment from the Government prior to the last state election to develop a plan to ensure continued investment and growth in resources projects that create resources jobs. We have spent the last 12 months working with resources communities and resources companies on input for the plan.

We look forward to further consultation on the draft plan in the months ahead. We have to get this right to ensure the diverse resources regions of Queensland continue to prosper. Queensland can’t take future investment for granted, it is essential that we send the right signals to attract the investment to create jobs.

The QRIDP will be an important roadmap to ensure this ongoing investment and opportunity for the Queensland resources sector.

LOW EMISSIONS ECONOMY

The great news for Queensland is that our resources sector has an ongoing role to play in a low emissions economy. Queensland’s coal and gas are world-class resources that continue to be in strong demand. The International Energy Agency’s (IEA) most recent publication of its World Energy Outlook 2021 has mapped a series of scenarios for emissions reductions, including stated policies and more ambitious emission reduction trajectories under net zero pledges. Under each of the scenarios, there will continue to be demand for coal in significant volumes centred around the Asia Pacific region.

Given Queensland’s high quality coal reserves, it is Queensland coal that should be used to meet the market as long as demand exists, given our coal is more energy efficient and with fewer emissions than much of the coal sourced in other nations.

Queensland’s metallurgical coal will be essential to economic growth in the pandemic recovery phase. Demand for natural gas in the Asia Pacific also increases under all scenarios modelled by the IEA. There are significant economic opportunities for Queensland gas as a transition fuel for nations that are pursuing a net zero emissions goal.

Queensland’s resources sector will become more diverse with a broader commodity base as the world makes the transition to a lower-emissions economy. Queensland’s resources sector has a role to play to deliver on the increasing focus on Environmental, Social and Governance (ESG) issues which are front of mind for investors.

Not only does the Queensland resources sector operate under the highest environmental, safety, social and governance regulations, but also the commodities we have the potential to mine, process and value-add will be at the centre of the global transition to a low emissions economy.

In a net zero world where countries (including Australia) are increasingly focused on the building blocks for low emissions energy and technologies, Queensland is in prime position to open a new chapter in our resources prosperity.

In a net zero world where countries (including Australia) are increasingly focused on the building blocks for low emissions energy and technologies, Queensland is in prime position to open a new chapter in our resources prosperity. Queensland has vast potential to provide the critical minerals needed to manufacture everyday items such as smart phones and renewable energy products such as wind turbines, electric cars, solar panels and batteries.

THE ROAD AHEAD

As we look ahead to the opportunities for the resources sector in 2022, there is every reason for optimism about what lies ahead. While commodity prices and global markets play a large role in the overall direction of the resources sector, there is one important thing we can all do to maximise our chances of prosperity and success. The QRC is encouraging all people who work in the resources sector and everyone who lives in regional resources communities to ensure they are fully vaccinated against COVID-19.

Our resources sector workers have been rolling up their sleeves right across the state to get the COVID-19 vaccine. It’s important that the resources sector continues to do all we can to protect the community against the spread of COVID-19. We encourage everyone working in or with the resources sector who has yet to get the jab to register for a vaccination as soon as you can. This is an important step we can all take to put the resources sector and resources communities on the strongest footing for 2022.

Finally, thank you to the 420,000 people who worked in or with the Queensland resources sector in 2021. You are an important part of the industry that delivers for all Queensland: from Cairns to Coolangatta and from Mount Isa to Mount Gravatt. We look forward to working with all our resources communities in the year ahead. 

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