Peabody attacks mining policies

26 Oct 2012, 5:33 pm   -   Source: AAP

The world's largest private sector coal miner Peabody Energy has slammed Australian government policies that have made the industry uncompetitive

The world's largest private sector coal miner Peabody Energy has become the latest global giant to attack Australian governments for policies they say threaten the industry.

Peabody Energy`s chief executive Greg Boyce has told a business lunch in Melbourne that it was alarming that $100 billion in Australian mining and energy projects had been put on hold in recent months.

Peabody, BHP Billiton and Xstrata have all slashed growth plans and cut jobs in the sector this year, while also complaining about costs of doing business.

While it would be easy to blame macroeconomic factors and falling commodity prices for the drop, government policies such as new tax burdens that damaged Australia's international competitiveness were also to blame, he said.

He called for the establishment of a National Commission on Resource Sector Competitiveness, representing politics, industry and academia to provide strategic direction over the next couple of decades.

It has become commonplace for mining executives to lament the cost of doing business in Australia - BHP Billiton's Marius Kloppers made similar comments in Brisbane last week.

Peabody's Mr Boyce also provided a raft of statistics to argue how uncompetitive the nation had become.

"The fact is that inflationary pressures, a strengthening Australian dollar, permitting delays and a barrage of additional tax burdens at both a federal and state level have compromised Australia's international competitiveness," he said.

"If you don't have any exports there will be zero tax."

He cited research from consultants Port Jackson Partners and PricewaterhouseCoopers showing more than half of Australia's mines had costs above global averages, including a tripling in the last five years to 66 per cent above the global average for thermal coal.

The average delay for project permits was 3.1 years compared to a global average of 1.8 years, taxes for miners in Queensland and NSW paid were above average and electricity prices for companies were up 80 to 130 per cent since 2005.

"We all need to step away from the near-sighted fixation on the mining boom that has characterised so much of the discussion on Australia's minerals policies in recent years," he said.

Booms are inherently short-lived and Australia must start taking a much broader view to ensure that its resource sector is sustainable and competitive in the long term.

"The time has come for a national approach to ensuring that Australia's mining sector is positioned to take full advantage of the opportunities presented by large-scale urbanisation in the Asia Pacific region over the next 30 years."

Queensland's Premier Campbell Newman has hit back at criticism of the coal royalty hikes, saying the mining industry was responsible for its own problems and saying management had allowed costs to increase and had failed on industrial relations.

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