Where is mining going in the west?

I penned this in 2005 in response to a question that kept popping up: where is mining going the west? It’s just as relevant today as it was 13 years ago.

I’ve been asked some interesting questions lately, among them:

• Would Western Australia be a mining state if mining ceased here altogether? Probably it would, because as local exploration is discouraged we are now seen to be more a fly-in, fly-out base that provides competent and skilled people to the south east Asia region. Moreover, we are in the same time zone (and don’t fiddle with our clocks twice a year).
• What does the future hold for Western Australian mining and business in the fast-moving Asian context?
• What are our challenges and opportunities? In short, what is our potential?

There are not only interesting, but vital questions. The simple answer to all three could be “an unlimited potential” with mutual benefits for each party conducting such business. However, the more complex answer results from the unintended consequences of the widespread benefits that flow to the broader communities of each country involved.

This is especially true if we ensure that business is done person-to-person, firm-to-firm and company-to-company, rather than government-to-government. Governments often create barriers between people an cultures, leaving the task of building bridges to the real business people like ourselves.

I remember the wise words of Sir Charles Court (Premier of Western Australia, 1972-1982):

“The miner, the industrialist, the trader, the financier and the banker, if they play their role correctly, will do more to achieve world understanding and peace in a generation than the politicians and diplomats could do in a hundred years. Why?Because they are closer to reality, closer to their opposite numbers, closer to the community in the countries where they operate. In other words, they have more to do with real people than with institutions.”

Australia’s continuing strengths will be natural resources, agricultural products and creative pursuits. Our overseas trading partners will continue to be called upon to provide us with all the other aspects of our lives that we have managed to regulate and price ourselves out of business.

Australians exhibit varying and interesting reactions to this trend for us to export so many jobs that were traditionally performed here, in our manufacturing and processing areas. Here’s one reaction, received recently from ‘Dorothy’:

“Joe Smith started the day early having set his alarm clock (made in Japan) for 6am. While his coffeepot (made in China) was perking, he shaved with his electric razor (made in Hong Kong). He put on a dress shirt (made in Sri Lanka), designer jeans (made in Singapore) and tennis shoes (made in Korea). 

” After cooking his breakfast in his new electric skillet (made in India), he sat down with his calculator (made in Mexico) to see how much he could spend today.

“After setting his watch (made in Taiwan) to the radio (made in India) he got in his car (made in Germany) and continued his search for a good paying Australian job.

“At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (made in Brazil), poured himself a glass of wine (made in France) and turned on his TV (made in Indonesia), and then wondered why he couldn’t find a good paying job in Australia!”

My friend and mining colleague Viv Forbes capably responded to her with the following:

“This is only half the story. The guy in China who made the shoes had Australian rice, butter and dried milk for breakfast, the lights in Hong Kong were powered by Australian coal, the Korean cars were made with Australian iron ore and coal, the gent in Japan ate Aussie beef for lunch, the Sri Lakan lady used Australian cotton in her factory, the Mexican was eating Australian Damara lamb for dinner, the German lady was wearing fine Australian wool (and complained about cheap Australian coal causing the closure of their state-subsidized industry), the Indians all drove to work over bridges made with Australian steel and their ladies adorned themselves with Australian gold, all factories in Taiwan were powered by Australian thermal coal, and the Frenchman is searching for ways to keep Australian wine out of Europe.

“The Brazilians must sell things to us so they can buy our coal. Over in England they are drinking Fosters, while Warman drilling rigs built in Brisbane are exported all over the world (and their drillers go with them because exploration here is constipated by the Greenies and Native Title industry). Holders drive the streets in the Middle East and, over in Indonesia, it is well-paid Australians who manage the mines.

“If Joe Smith got off his arse and smartened himself up there are jobs going begging in every mine, orchard and many businesses for people who want work. One of the biggest problems we had at the Tahmoor Coal Mine was getting workers. Edge regularly plows in food when it can’t get pickers. At Terang cattle property, we could not lure people off the generous welfare conditions to work as ringers. The whole wool industry is turning to chemical shearing because of the cost and worry of shearers. Farms rely on backpackers, moonlighters, cash workers, poorly paid family labour and illegal immigrants to supply their labour. There would be millions more jobs if Joe Smith voted for the abolition of all the stupid laws, punitive liability conditions, crippling taxes and red tape that make it a nightmare for anyone to face the risk and cost of employing people (or when they needed to fire them again next week). There would be millions more jobs if it did not take two years to get approvals from six departments of flexitime bureaucrats to start a new enterprise, disturb a butterfly or negotiate the payoff for some Native Title claimant living at Redcliffe.

Because of the enormous risks and costs of employing people in Australia, every mine, factory and farm inAustrlaia has highly more tools, machines and capital assets per employee than anywhere else in the world. That enormous collection of tools is the only reason slow working dopes like Joe Smith can afford all those imported luxuries he chooses to buy.

And Joe Smith, his defect and his three delinquent kids surf the welfare waves on the taxes paid by all the working stiffs in the real Australia who supply half the world with minerals, food and fibre. These kids, unable to be trusted to do anything properly, are then a liability in the workforce until they can be trained for accuracy, accountability, reliability, honesty and the basics in reading, writing, maths and science. 

And the Teachers’ Union spreads drivel like yours to all our children via our featherbedded and nationalised indoctrination industry so we end up with more taxes, more welfare and fewer real jobs. 

Please tell the whole story next time Dorothy.

Regards, Viv Forbes.”

So there are always two sides to every coin and we often have to seek out the truth, as it’s often not the version that arrives on our screens first.

To conclude, there are certainly interesting times ahead. And, I am encouraged by another important and expanding aspect of Australia’s regional dealings which will be enhanced by what we call the “permeability of financial frontiers”.

As the myriad federal and state government taxes increase in Australia, more and more successful Australian businesses will move their financial bases to more competitive and tax-friendly regimes in the Asian region.

Such is the nature of competition. There are some great prizes to be won from this intense competition and we can win – not only as investors and producers, but also as consumers.