Governments would be foolish to ignore the threat to the Australian economy posed by mineral development in West Africa.
WOMEN in business often ask me what else should they be doing? I suggest attending international leadership forums if the opportunity becomes available do so. I would certainly recommend attending the Forbes CEO Forum, and I additionally hope this will also benefit university students by having their vice-chancellors attend and hopefully pick up and implement ideas that will assist the education of Australia’s future leaders.
Another highlight closer to home was being asked to launch the book of a fellow Western Australian, Kellie Andersen, called Truck Gal. I was delighted to prepare this launching speech, not just because I empathise with Kellie being in a male-dominated industry, the transport industry, but because I was impressed with her struggle and determination and persistence to get through a disadvantaged past and pursue her dream – driving big trucks in our outback.
It is an inspiring story from a fellow Western Australian. Again, in starting your own business, driving your own business to grow, you will need tons of determination, persistence even perseverance; and of course lots of hard work.
Among all these highlights of my year, I did manage to get some work done too, and am pleased to advise that earlier this year we welcomed our partners from South Korea into our Roy Hill iron ore project, and have started mining at Nicholas Downs, our ferruginous manganese mine, which I have named after my mother’s family, pioneers of Western Australia.
And we have achieved credit approval and are finalising documents for another $700 million loan for our company group to continue investing in WA.
I would like to acknowledge three leading Australian banks, including CBA, which are helping us to make this possible. Thank you, and thank you especially to my hard working staff.
The growth of our mining industry in WA has, for instance, helped to enable Kelly to achieve her dream of driving large trucks in our outback, and other truck gals too, as they deliver many goods needed for the mining and related industry in our north.
Too often those outside WA forget that livelihoods and dreams depend upon our mining industry and related industries and their growth – think of how the accounting and legal industries, the environmental industry, the advertising industry, the trucking industry, machinery and equipment industries, HR firms etc, etc. would fare without having mining and related industry work.
It’s amazing how many industries would be affected by a diminishing mining industry. Think too of what revenue from the mining and related industry provides for Australians, contributing significantly to our defence, hospitals, police, roads, senior citizens etc, and, income from the mining and related industries spent in restaurants, retail, on cars and boats, and travel. The continuing growth of our mining industry is simply critical to our standard of living. I would hate to see Australia’s future with less revenue and less income from our mining and related industries, via policies that make investment less attractive and stymie our industries’ ability to compete internationally.
Yet many Australians think we’ll just keep enjoying the many benefits of the growth of our mining and related industries simply because China’s needs are growing.
Of course China’s needs are growing, few would argue otherwise. But importantly, unless Australia stays competitive in our export industry, we won’t be growing with China as China will increasingly be investing and buying elsewhere. It is critical that we understand this and adapt.
Australia is a high-cost country, with high wages and high taxes, plus increasing government-related expense and risks for approvals, permissions and licences.
We are approaching a crossroad.
WA’s high costs have been protected for decades by a freight advantage – but this advantage is jeopardised. Very large ore carriers enabling lower freight costs are being built overseas and Asian ports are being expanded to carry high-grade ore from Brazil and, in the near future, West Africa.
West Africa is a new frontier with a mineralised zone stretching thousands of kilometres from Mauritania to Congo, with people desperate to work for less than $2 per day.
Australian companies are flocking to invest there. Former foreign minister Stephen Smith reported 300 Australian companies were now investing in West Africa. This alone should be a wake-up call; a call for action to make investment in our country more attractive.
But just imagine how many more companies will now invest in West Africa given the RSPT shock and looming MRRT, and additional carbon tax fears. If anyone knows the current tally, please send me. This should be publicised every week.
And of course it is not just Australian companies that are investing in West Africa. Rio Tinto, Chinese state-owned enterprises, Vale and BHP Billiton are among those multinationals also investing heavily in West Africa. In approximately five years time, thanks to this investment being diverted away from Australia, high-grade iron ore provinces in West Africa are due to commence production, with their very low-cost labour, which will very seriously compete against Australia.
And West Africa is not the only low-cost region where investment is happening and which will provide Australia with increased competition in near future. Nor is iron ore the only commodity that will be affected; other commodities also will be, but iron ore is especially important to WA’s economy.
We are left with precious little time to adapt, and with diminishing freight advantage protection. We must bear in mind what happened to high-cost manufacturing industries in Australia, the US and Europe when lower-cost countries such as China and India exported lower-cost manufactured items.
Our company has started ANDEV, Australians for Northern Development and Economic Vision, and I am delighted to say that among our ANDEV executives is the chairwoman of the Port Hedland Progress Association, who has been at the forefront of similar ideas to improve the future of the area she lives in, as well as other active women and concerned executives.
[ANDEV aims to influence federal and state governments and other interested parties to secure the lowest possible tax rates for the remote north of Australia, and to create a range of practical incentives to achieve investment and attract and retain a competent sufficient workforce.]
ANDEV started just before the RSPT and we were very active against the RSPT. We remain concerned and active regarding aspects of the MRRT making future Australian projects less attractive such as financing cost deductibility and important infrastructure aspects.
Our future competitiveness and living standards are not just matters that should be left to men, and I urge concerned women to at least support ANDEV, be it with your time and/or financial assistance.
• This is an abridged version of the speech given by last year’s winner of the Telstra Business Women of the Year Awards, Gina Rinehart, at this year’s awards ceremony in Perth, during which she discussed some of the highlights of her year.