The recently released Future Critical report: Meeting the minerals investment challenge highlights the crucial role minerals and resources play in the Australian economy and communities and the risks of missing the golden opportunity to secure the nation’s prosperity for decades to come.
The Minerals Council of Australia (MCA) report highlights the compounding investment risks associated with the construction and development of a new mine site, and the cost to the economy of any delays.
It puts the cost to the economy from a 12-month delay in environmental approvals at $51 billion cumulative GDP loss, based on the 16 years required to bring a new mine from discovery to production.
Australia is at considerable risk of ceding its advantage to global competitors as the world’s economies fight for prime position in the growing emergence of clean energy mining.
Deepening investment uncertainty, exhaustive delays in environmental approvals and the proposed introduction of rigid and costly industrial relations laws are hindering the nation’s ability to fully capitalise on this once in multiple generation mining boom.
MCA CEO Tania Constable stated that as global competitors ramp up their investment and development, time is running out for the nation to catch the wave of mining investment needed to achieve Australia’s collective global pursuit of net zero emissions.
Capital investment has traditionally been central in Australia’s productivity growth, including the flow of foreign capital, but remains under siege due to increased competition from global competitors.
Concerningly, the report shows that the mining industry’s net capital stock is plateauing at a time when it should be accelerating to take advantage of the boom in critical mineral production, a further dent to the nation’s lagging productivity.
It states that if a major expansion of mining were to occur, similar to the previous mining boom earlier this century, households would be $11,700 better off, real wages would be 9.4 per cent higher and the economy $290 billion larger by 2030.
From 2012-13 to 2021-22, mining companies have paid $252 billion in wages to hard-working Australians, on top of $295 billion in taxes and royalties that fund hospitals, schools, aged care, childcare and infrastructure.
The sector is a prolific job creator and wage booster, with the minerals industry supporting over 1.1 million jobs and paying the highest average wages at $151,500.
Importantly, the report shows that for every one new job created in mining, 6.14 new jobs are created across all industries.
The push to unlock this opportunity must be supported with enabling government policy that improves Australia’s competitiveness in attracting investment, clears regulatory impediments, and boosts productivity.
The report puts forward 14 recommendations in five key themes:
- Reduce the regulatory burden to attract investment
- Advance policies that support competitive project returns
- Deliver efficient public infrastructure and services
- Make support for mining a political imperative, and
- Put business and productivity at the centre of fiscal policy.
MCA believes that maintaining Australia’s competitive edge in mining will require immediate and coordinated action by government.
