AMMA CEO Steve Knott accepted an invitation to present on IR challenges and cost pressures within the resource sector at a Macquarie University Symposium on November 29. Prior to delivering the speech, he spoke to Australian Financial Review reported Rachel Nickless about the BREE report and securing Australia’s future pipeline of projects.

(Australian Financial Review, 29/11/12)

The committed new investment in Australia’s resources and energy major projects has increased to a record $268.4 billion, the Bureau of Resources and Energy Economics has revealed, but a mining lobby says a much bigger potential sum is at risk.

The investment consists of 87 projects that have received a final investment decision, including 51 minerals projects, 18 gas and petroleum projects and 18 infrastructure projects, a BREE report says.

Treasurer Wayne Swan said the report showed Australia’s economic fundamentals remained strong.

“While the [investment] pipeline has not been immune to the recent decline in commodity prices, this report underscores that prospects for the mining sector remain very bright,” he said.

“Unlike much of the developed world, our economic fundamentals remain strong – with solid growth, low unemployment, contained inflation, low interest rates and a record pipeline of investment,” Mr Swan said.

But Australian Mines and Metals Association chief executive Steve Knott argued on Wednesday that both sides of politics should take little comfort in the BREE report.

He warned uncommitted projects potentially worth $383 billion and thousands of jobs for Australia “could possibly be lost to overseas competitors unless Australia’s prod¬uctivity woes and uncompetitive cost structure is addressed”.

“The nominal increase in the BREE report was driven by the $9 billion second train of Queensland’s Australia Pacific liquefied natural gas project.

“Rather than spruik the commitment of one project that was always anticipated to come online, the government should be addressing industry’s concerns about the future ¬sustainability of the 277 major projects that have not yet been committed,” Mr Knott told The Australian Financial Review.

He added that “the report also cautioned that in the past six months the investment climate has changed substantially”.

In a speech at Macquarie University’s Productivity Symposium on Thursday, Mr Knott will argue for major changes to the Fair Work Act, saying “employers are pressured to accept exorbitant claims or risk agreements not being signed”.

One West Australian offshore construction employer agreed to pay annual salaries of $317,734 to laundry hands and $373,701 to welders, under an agreement that had no productivity gains and where staff worked half the year, according to his prepared remarks.

“In terms of the cost competitiveness of the Australian resource industry, the excessive level of wages claims during bargaining has probably been the most damaging aspect of the Fair Work Act over the last three years,” his speech says.

Separately, the federal government has introduced amendments to the Native Title Act requiring mining companies to negotiate for two months longer with indigenous groups and to show they have negotiated in good faith if challenged.

Federal Attorney-General Nicola Roxon said that while many companies were acting fairly, there were some “at the fringes, who are acting capriciously or unfairly”.

Article courtesy of The Australian Financial Review
Reporters: Gemma Daley, Rachel Nickless and Marcus Priest