Industry Comment

Director training

Merryck & C Australia and KPMG

The responsibility of an incumbent board to ensure that the next wave of directors will have the breadth and depth of knowledge required to oversee the management of complex corporations has been largely ignored.

The comparative youth and comparative inexperience of the next generation of board members is an issue that current boards and shareholders need to address sooner, rather than later.

Reportedly 50 percent of Australian company directors have not undertaken any professional development since becoming a director, despite their assertions that ongoing training and development would benefit themselves and others.

Hydrogen Economy

Shell Development Australia

Australia is well-positioned to leverage off its world-class gas industry to develop a true hydrogen economy.

Australia's advanced energy infrastructure, vast natural gas reserves and expertise in gas processing, production and export will stand it in excellent stead to participate in any future transition to a hydrogen-based economy.

With its world-class reserves of natural gas, Australia may even be better placed than the United States to develop a true hydrogen economy within the next 2-3 decades.

Hydrogen could be perfectly suited to provide the step-change for Australia to overcome its increasing dependence on imported crude oil.

Land clearing

Pastoralists and Graziers’ Association

Hundreds of WA landowners would benefit if the WA Government followed Queensland’s lead in negotiating a Federal compensation package on land clearing.

Landowners throughout WA are suffering enormous personal stress and financial duress because of clearing bans on their properties.

Mining activity moratorium

Minerals Council of Australia

ATSIC chairman Geoff Clark’s call for a moratorium on "all mining activities in Australia… until indigenous owners of Australia’s minerals resources were paid properly", is fanciful, factually incorrect, and does not reflect the current nature of cooperation for building mutually beneficial relationships between mining companies and indigenous peoples.

In the more than 10 years since the MABO decision there has been a paradigm shift in attitudes to the consideration of Native Title and the interests of indigenous people, from one of confrontation about issues of ownership and the protection of equity, to cooperation and the sharing of equity.

To suggest that mining companies have had a virtually "free-ride at the expense of the indigenous owners of Australia’s natural

resources" belies two facts: minerals industry total expenditure estimate for Native Title and Indigenous development was put at $112 million in 2001-02, in addition to the $4.5 billion a year paid to governments in royalties, and taxes, part of which is repatriated to indigenous communities; and the High Court Ward decision last year confirmed Crown ownership of all minerals and petroleum in Australia.

Resource project development

KPMG

Uncertainties in global markets and lack of risk appetite for equity investors are increasingly making it difficult to fund the development of resource projects in Australia.

Even the coal sector may suffer from the potential change in mood due to the increasing Australian dollar.

Changes in sentiment and the impact of the Australian dollar could have the potential for a number of mineral projects to fail.

This could occur once the initial cash is consumed in the feasibility phase, without the entity being able to secure the support required to move into development and subsequent production.