FORMER Howard government Treasurer Peter Costello has defended the resource industry’s role in Australia’s innovation agenda and warned against labelling mining as an ‘old economy’ industry.
The chairman of Australia’s Future Fund yesterday spoke of how at the turn of the century, mining was considered ‘in the doldrums’ before it experienced an unprecedented investment boom that now sees the industry generate 50 per cent of Australia’s exports.
“Australia was not let down by its ‘old’ industries. It was dragged up,” Mr Costello told delegates of the Minerals Council’s annual mining lecture in Melbourne.
“The view that we needed to chase technology to restore the currency could not have been further from the mark. The dollar would double. It had nothing to do with technology. It was that old ‘hamstring’ – the mining industry – that recovered and sprinted off, taking the Aussie dollar with it.”
Arguing that Australia’s ‘ideas boom’ as coined by Prime Minister Malcolm Turnbull should not be a case of tech versus mining, Costello used ride sharing app Uber as an example of how digital innovations can enhance industries rather than replace them.
“This kind of innovation has already transformed mining. Mining today does not involve a man climbing down a deep shaft to dig out rock with a pick-axe. State of the art mining, comprises an open cut mine where automated trucks run from Global Positioning Satellites and carry production to driverless trains which carry it hundreds of kilometres under operation from a control-room using sophisticated software and GPS,” he said.
“The prices are set on an automated online exchange. Sophisticated miners hedge out their risk with complex financial derivatives on prices and currencies, demand, and supply.
“The ‘new’ technology has re-organised many aspects of mining and enhanced productivity. It has not replaced it.”
Declaring that the tens of billions of export dollars the resource industry earns Australia ‘is not going to be surpassed by tech start-ups any time soon and certainly not in our lifetimes’, Mr Costello warned that the real threat to mining is growing environmental activism.
“The enemies of mining thrive at the theatre of public debate. Miners tend to avoid it, which means that although the mining industry has a good story to tell, it rarely tells it as well as it could,” he said.
“…One advantage these activists now enjoy is that the law has been widened to allow multiple avenues of court actions that can be used to stop things – a process now described as ‘law fare’ in respect of the proposed Adani development.
“In the clash of ideas to influence public opinion and through that, the actions of lawmakers there will be a constant need to argue the case for mining over and over. It’s a cost that is not going to fall any time soon.”
Mr Costello concluded by reiterating that the ‘ideas economy’ will not replace the resource industry, but rather the industry can be the chief beneficiary of digitisation and the productive benefits it brings.
“Australian mining has to harness these developments to stay at the forefront of the global industry,” he said.
“Ideas generally are not the problem. It’s the bad ones we should worry about because they are a threat to our prosperity.”
Click here to view Peter Costello’s full address.