As the iron ore price collapses, the shrieks from Australia’s most self-entitled, arrogant industrial sector are beginning to echo through public debate. Today, Gina Rinehart, whose primary contribution to public debate in Australia was to suggest Australians should work for $2 a day, is reported as demanding that “red tape” be urgently slashed in the mining sector to accommodate an industry facing dramatically lower prices for its key exports. As the Financial Review recounts, she says
“Falling commodity prices are not only forecast to continue but the government also needs to recognise the extra pressure new projects in low-cost Africa will bring should minerals from Guinea and/or other African countries be exported as planned.”
Alas, like many claims from mining magnates, the threat from Guinea to Australian jobs proves somewhat more elusive if you actually check it. It seems all is not well in the Guinean mining industry: a mere 24 hours ago, Reuters reported on the latest instalment of a long-running and bitter dispute over a vast iron-ore deposit between the Guinean government and a conglomerate of South American iron giant Vale and an Israeli billionaire. The Guinean government says rights to the huge deposit were obtained via corruption, and stripped them from the conglomerate. Rio Tinto owns rights to another part of the deposit, and has indicated it doesn’t want to go near the disputed deposit given the brawl with the government. Rio itself had to pay US$700 million to the government there to end a dispute over its end of the Simandou deposit in 2011.
And a quick check of Behre Dolbear’s most recent annual report on the best destinations for mining investment suggests that internationally Australia fares pretty well when it comes to mining regulation: Behre Dolbear ranked us equal best on regulatory restrictions involving social issues, declaring Australia had improved since 2013, while we were equal second best on delays caused by regulation.
What the mining analysts don’t cover is the extent of government subsidies that the mining industry enjoys in each country. Strangely, Rinehart doesn’t have anything to say about that. But an Australian Institute report from June revealed that state government alone have provided over $17 billion in subsidies to the mining industry since 2008-09, with Queensland handing over just under $10 billion and Western Australia $6.2 billion. Even without the massive assistance Queensland gives to coal miners to transport their product to port, states are still spending the best part of $10 billion helping the mining sector. Rinehart and Co would love us to think they’re rugged individualists and free-spirited capitalists who just need to be freed from the socialist shackles of Big Government to compete effectively. If only that meant ending handouts to the sector as well.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.