Resources council warns of 'harder times' as $5bn wiped from Qld economy
Mining bosses have delivered a stark warning that Queensland's regions will bear the brunt of billions in spending cuts as the resources sector battles economic headwinds.
Queensland’s regions will suffer job losses as the resources industry slashes spending by billions of dollars to survive an economic downturn.
At the Queensland Resources Council’s State of the Sector lunch chief executive officer Janette Hewson said headwinds were strong for coal producers.
“Many of you in this room are feeling this keenly this year, with rising costs, challenging royalty regimes, despite lower prices, political instability, regulatory overlap, red tape and global uncertainty,” she said.
The sector’s economic contribution to Queensland is down $5bn from $120.2bn last year and Ms Hewson said “harder times will continue”.
The industry added $115.2bn to the state’s economy for a total contribution of $1.3 trillion over 16 years.
She said jobs would be lost as the $35.8bn in spending with Queensland businesses slowed as parts of the industry “shelter from the headwinds”.
“With some change we can keep Queensland competitive,” she said.
“The opportunity now lies in conversion, turning resource potential into bankable projects demands timely approvals, consistent policy and clear pathways to market.
“We need clear, stable and consistent policy settings, the kind to give investors confidence to put their capital to work here in Queensland.”
However, Ms Hewson praised Premier David Crisafulli for his government’s support of the sector but put pressure on him to change policy settings.
“With a renewed commitment and decisive reform, particularly around coal royalties, exploration and more production in Queensland, we can continue to underpin jobs, regional development, and importantly, Queensland’s future prosperity.”
It comes as the Premier will today announce a huge investment it claims will secure the future of 1000 mining jobs as part of a plan to make peace with resources sector/
The Courier-Mail can reveal a new mining consortium labelled Argo Australia will purchase investment firm AMCI’s 70 per cent stake in Fitzroy Australia Resources - which operates the Carborough Downs underground mine, the Broadlea open cut mine, and the Ironbark No. 1 development.
Japanese company Itochu controls the other 30 per cent of the entity.
Mr Crisafulli will unveil the deal in a speech to the Queensland Resources Council’s annual State of the Sector forum, where the issue of the government’s commitment to retaining the state’s coal royalties regime will also feature.
The new regime was brought in by the former Labor Palaszczuk Government, and miners have accused it of robbing them of cash they would otherwise use to keep workers employed in tough times.
The Resources Council has been outspoken in calling for Mr Crisafulli’s LNP government to reverse Labor’s regime, but the Premier and his ministers have been steadfast in their refusal to do so - arguing the government was instead delivering “stability” to the sector.
The Premier will trumpet his government’s respect for the mining industry at today’s lunch.
He last night revealed this latest deal between European and Japanese investors was struck in negotiations he led while on a trade mission to India and Japan in late August.
“This deal means long-term jobs, long-term investment and long-term confidence for the communities that power Queensland’s economy,” he said.
It is the third mining announcement made by Mr Crisafulli this week ahead of his speech today.
On Monday The Courier-Mail revealed the government would declare Peabody’s $662m northern expansion to its Centurion Mine a co-ordinated project to allow for streamlined decision making.
On Tuesday Harmony Gold Mining Limited said it would make a $2.3bn investment in the Eva Copper Mine 100km northwest of Mt Isa.
Queensland mining investment has fallen 16.7 per cent in the first half of this year, compared to last.
New South Wales, in comparison, has seen its mining investment rise 21.1 per cent over the same period.
Commodity Insights’ Head of Research and Consulting Matt Anderson, one of the nation’s leading mining experts, said Queensland’s resources sector was operating at two speeds.
He said while critical and future minerals miners were preparing to ramp up, the coal mining sector was struggling under burdensome taxation.
“The coal sector is desperately needing policy reform,” he said.
“When you get a bull run or a high price environment, miners will take that money and reinvest it for a lower time in the cycle.
“All that’s been stripped away.
“Royalties removes that financial buffer.”
Mr Anderson said coal royalties were a “poisoned chalice” left by the former government and said this government was “less willing to move on it that what you’d expect”.
Originally published as Resources council warns of 'harder times' as $5bn wiped from Qld economy
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