BHP Billiton on the need for economic reform in Australia
Economic reform in Australia is vital to securing the country's mining industry and general future prosperity, mining giant BHP Billiton has said.
Speaking at the Melbourne Mining Club, BHP Billiton President Operations, Minerals Australia, Mike Henry said shared responsibility for reform was required to help successfully transition after a long period of investment in resources projects.
“As a nation we have stepped up and met the challenges and opportunities that come with competing in a fast-paced, global economy,” he said.
“Government and business can share credit for Australia’s economic success, but we also share the responsibility for securing Australia’s future prosperity.
“Our industry has a role in continuing to make the case for reform, and needs to continue to engage with all stakeholders to help achieve the changes that will make us and the nation more competitive.”
Mr Henry outlined a number of key areas for reform to ensure the social and economic gains of the past decade were sustained.
“This means continuing to work internationally to bring down barriers to trade and making the tax system simpler, to attract ongoing investment,” he said.
Mr Henry also spoke about the need to reform the workplace relations framework in a way that supports safe productivity and enables workplaces to be more flexible and innovative.
“The current legislation operates in a way that isn’t always as balanced as it needs to be. It is a factor in constraining innovation and limits the creation of workplaces that have the flexibility to be productive and truly competitive in global markets,” he said.
“We have proposed changes that are moderate and targeted. They are intended to help us be competitive, and in doing so would protect jobs.”
Building on his theme of reform, Mr Henry spoke about the Company’s drive to sustain competitiveness and growth.
“We have streamlined our functions and brought our operating assets together geographically in a way that will enable a sharper focus and accelerated deployment of best practices, including the more rapid adoption of new technologies,” he said.
“It is through innovation in technology and in the way we work that we will lift ourselves to the next level of performance.”
Mr Henry also reinforced that mining was still fundamentally important to the Australian economy despite a period of intense investment in new resource projects coming to an end.
“There is no other single sector that contributes as much to the Australian economy,” he said.
“Our industry employs more than 230,000 people in Australia with many more benefiting indirectly.
“The resources sector contributes 8 per cent to GDP and accounts for more than half of our merchandise exports. Earnings from resource and energy exports was almost $150 billion in the financial year 2015.”
Gerald Group resolves iron ore dispute with Sierra Leone
Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.
Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence.
As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.
Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.
Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.
Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."
Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.
"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.
Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is set to deliver six million tonnes of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.
"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”