In the face of mounting regulations and drawn out approvals processes, the mining industry has doubled down on its calls to slash red tape and allow more investment to flow into the sector. 

Over-regulation was one of the key agendas set out at this year’s Diggers & Dealers Mining Forum, with a number?of speakers calling for a less convoluted way of getting projects across the line, arguing that while regulation was a necessity, the costs just did not add up. 

One of the speakers at the forum, Westgold Resources Managing Director Peter Cook said the mining industry was being “hammered” by red tape. 

“Our prosperity, our engineering, our entrepreneurship is being smothered by over-regulation and it’s time for us to push back,” he said. 

Mr Cook argued the cost of unnecessary governance continued to grow unchecked and the mining industry was effectively paying for it. 

“They try to fine us for the smallest misdemeanours,” he said. “They charge the industry to regulate itself.” 

Findings from a 2017 Deloitte paper revealed government compliance measures cost the Australian economy around $94 billion a year, spawning an entire industry around consultancy. 

It was also revealed self-imposed rules and regulations at a company level amounted to a further $155 billion per annum for the mining sector. 

The report, Get out of your own way: Unleashing productivity, said there were “unquantifiable losses from forgone incentives, enterprise and innovation”. 

Research from the Institute of Public Affairs estimated red tape cost Australia around $176 billion each year in lost economic output. 

AMEC CEO Warren Pearce said it was difficult to put an exact figure on how red tape was a affecting the mining sector, but the number of hoops companies had to jump through had contributed to a range of projects across Australia being unable to get over the line during the last investment cycle. 

“The truth is the longer we wait for approvals, the longer we have to wait to put investment money into the project,” he told National Mining Chronicle. 

“Given the mining industry has short investment cycles, if you’re frustrated by an approvals process and that window closes on you, you are not going to be able to fund the project and you are going to have to wait until the next cycle comes around. 

“There are many projects across Australia that just missed the window last time, that have sat around for five to six years and are really struggling to get that interest back into the project.” 

Red tape review 

In a timely announcement on the first day of Diggers & Dealers, the Federal Government revealed it had instructed the Productivity Commission to conduct a 12-month review of regulation in the resources sector. 

Focusing in particular on improving the efficiency of environmental approvals, the review will look at best-practice examples of regulation that remove unnecessary costs for businesses. 

The announcement came off the back of the government’s post-election promise for a renewed focus on regulatory reform. 

Speaking to the Chamber of Commerce and Industry of Western Australia in June, Prime Minister Scott Morrison unveiled a plan to slash red tape and boost business investment. 

The move was compared to policies adopted by American President Donald Trump which have been credited with kickstarting the US economy. 

Speaking to media on the sidelines of Diggers & Dealers, Fortescue Metals Group CEO Elizabeth Gaines welcomed the Productivity Commission’s review. 

“There is a lot of red tape,” she said. “The challenge is state and federal, where you have different time frames and potentially duplication, which is the most frustrating.” 

Ms Gaines said the WA Government had a genuine willingness to create jobs and invest in the regions. 

In an Australian-first for the resources sector, the state approved a strategic proposal by BHP in July which covered the miner’s planned and potential operations across the Pilbara over the next 50 to 100 years. 

The long-term plan, which allows the EPA to consider the cumulative impacts of future proposals rather than assessing them on a case-by-case basis, works to significantly reduce green tape. 

In a statement, Premier Mark McGowan said the strategic assessment could cut subsequent approval times by?as much as 50 per cent while maintaining the highest environmental standards. 

Mr Pearce said it was an encouraging move, but it remained unclear if this sort of assessment could be used as best practice for other mining projects. 

“Hopefully they are able to apply that strategic approach to a wide range of companies,” he said. 

“The jury is still out on whether that will be there just for the major projects or companies that have that capability to work with government.” 

Mr Pearce said he hoped to see the formation of an overarching body that would cut out the need to have both state and federal approvals. 

“It would make more sense for there to be one authority that dealt with environmental approvals across state and national levels,” he said. “Obviously that is a really significant change and it’s easy to recommend that, but very hard to implement it. 

“If you are looking for one particular change that would deliver the most impact to industry, that would be the one.” 

Climate change ‘a substitute religion’ 

Proving the angst surrounding Adani’s Carmichael coal mine had not died following the Federal Election in May, some at Digger & Dealers pointed to the project’s convoluted approvals saga as a case study in what was wrong with mining’s regulatory systems. 

The Galilee Basin project took nine years to get final environmental approval, with its groundwater management plan given the green light in June this year after Queensland Premier Annastacia Palaszczuk ordered the process be expedited. 

Keynote speaker at the forum, former Prime Minister John Howard AO said the handling of Carmichael was a terrible advertisement for investment in Australia. 

“It was a monument of how not to attract investors into this country,” he said. “How not to play fast and loose with the economic future of this country.” 

Noting he was agnostic on climate change, Mr Howard said the issue had become the focal point of a “substitute religion”, with “climate change zealots” demonising one of Australia’s most important business sectors. 

“The mining industry has been put under attack and asked to apologise for its existence,” he said. 

“There seems to be a determination in some sections of the Australian community to vilify what we do best.” 

Mr Howard, whose speech was widely lauded by delegates at the forum, said the mining sector had played a major role in seeing the Australian economy through the Global Financial Crisis. 

“I don’t need to remind an audience such as this how much we are in the debt of the mining industry for the salvation of our economy after the Global Financial Crisis,” he said. “It’s something we should never forget.” 

Australia’s resources sector employed 247,000 people as at May 2019 and made up 73 per cent of goods exports in 2018, according to the Federal Government. 

 

Image: Former Prime Minister John Howard, The Kalgoorlie Miner.