QLD Mining and Energy Bulletin
Issue link: http://ebook.aprs.com.au/i/42546
MARCH QUARTER 2011 STATE OF THE SECTOR QUEENSLAND RESOURCES COUNCIL VOLUME 3 NUMBER 1 SOVEREIGN RISK CONCERNS LOOM LARGE AS ELECTIONEERING STARTS BY MICHAEL ROCHE CHIEF EXECUTIVE The decision of the Queensland Government to end QRC member Sibelco's sand mining on North Stradbroke Island by 2019 and abandon 650 jobs without due regulatory or public consultation process has seen member company concerns about uncertain and/or poor regulation continue to rise in our most recent CEO Sentiment Index (see page 4). With the quest for Green preferences at the next state election now seemingly exerting a disproportionate influence over state policy, this decision has introduced an unacceptable level of political and sovereign risk to the Queensland scene. The QRC believes this is the first time that a mining company operating within existing entitlements has had those entitlements withdrawn without recourse or compensation. STRATEGIC CROPPING LAND AND FOOD SECURITY – THE FACTS The Queensland Government's decision to pursue a strategic cropping land (SCL) policy that would quarantine—with potentially retrospective application—approximately 4.3 percent of Queensland from any development, represents another layer of high political and sovereign risk. In a previous edition I described SCL as a 'dud policy'. While I have recently publicly conceded that there are prime cropping areas on the Darling Downs such as Haystack Road and Jimbour Plain where open-cut mining could not be contemplated given the current state of mining and rehabilitation techniques, the QRC remains of the view that the government's SCL policy is unworkable and we will not standby and see this flawed policy go unchallenged. Whilst the QRC is heavily engaged in the process of briefing officials and ministers on the manifest scientific deficiencies and policy perils of this policy, we thought it important to publicly respond to one of the apparent central drivers for some supporters of this policy—that increased resources development will be a threat to domestic and global food security. IN THIS EDITION: • • • • Key indicators: QRC Production and Value of Production Indices Feature: Resources development on the Darling Downs: a threat to food security? The Japanese Situation QRC CEO Sentiment Index © QUEENSLAND RESOURCES COUNCIL 2011 Our feature article on page three outlines the results of our recent analysis that looks critically at the validity of claims that potential resources development on the Darling Downs poses a threat to food security. Applying optimistic assumptions under a range of scenarios, what is clear is that the resource sector's land use on the Darling Downs will be relatively minimal over the ensuing period and there is no threat to food security—either at the domestic or global level. Indeed, we encourage representative bodies and decision makers to recast the debate and seek policy solutions to those factors that reputable bodies such as Australia's ABARES and the United Nations Food and Agricultural Organisation believe are the true issues driving food prices higher and causing demand and supply imbalances. ONE TAX BEDDED DOWN, ANOTHER CLIMBS FROM GRAVE The QRC has welcomed the announcement that the Australian Government supports the 94 recommendations made by the Argus-Ferguson Policy Transition Group (PTG) regarding its technical design of the Minerals Resource Rent Tax (MRRT). As a package, the minerals industry feels that the recommendations are generally consistent with the July 2010 Heads of Agreement between the Gillard government and major mining companies. The government's support for the recommendation that all future state and territory royalty increases should be credited is also a plus. However, when it comes to climate policy, the QRC is disturbed at reports that the Australian Government is becoming increasingly wedded to re-running all the ugly features of the 2009 Carbon Pollution Reduction Scheme (CPRS), in particular the inadequate assistance to Emission Intensive Trade Exposed (EITE) companies. New economic analysis by the Minerals Council of Australia shows that a CPRS-style approach to the treatment of EITE firms under a carbon pricing scheme will expose the vast majority of Australian exporters to the full brunt of the world's highest carbon costs, ahead S ta te of the Sect or