Queensland Resource Council State of the Sector Forum Key Learnings

1) Resource regions need to support the industry and be “more vocal” with that support;
2) Resource companies contribute significant finances to government via royalties. These royalties are finite and need to be matched by demonstrated government efficiencies and financial management measures.
3) The high energy costs in Qld are becoming a deterrent to further investment.

These were the three take-outs Economic Development Manager Neil Lethlean took when attending the Queensland Resources Council “State of the Sector” Forum (Wednesday, 16 November) which brought together a well credentialed list of resource sector leaders to provide an overview of the current and future “climate” for the sector.

The Annual Forum was attended by approximately 700 delegates from across the nation representing resource companies, their supply chains plus politicians and industry representatives.
Moderated by well-known and respected media presenter, Melissa Watter, the forum covered an array of topics from commodity prices, energy security and sustainability though to innovation and the need for greater collaboration and meaningful asset and resource partnerships across competitor companies.

Each of the six panel members presented to the forum on their specialty areas and responded to questions from the chair and forum attendees.  The overriding messages across the panel were:
 High labour costs which in some operations accounted for approximately 50% of all operating expenses;
 High levels of government compliance, approvals and licensing requirements (bureaucracy and red tape) negatively impacted on the efficiency of resource operations;
 The need for government to support resource companies, particularly coal and gas, to innovate and reduce carbon influences;
 Increase in the cost of power, particularly in Queensland, was not sustainable and affordable;
 The need for all forms of power generation for a sustainable energy future;
 Resource companies to be more innovative and collaborative in sharing assets and infrastructure across companies and operations;
 Industry to be more customer alert and provide value for money;
 Governments to implement efficiency measures to ensure the most effective use of the massive royalties contributed by resource companies.

The six forum panel members were:
Mr Yun Choi, Chief Executive Officer, Sun Metals Corporation – Sun Metals Corporation is focusing on a solid future and growth in the Townsville area with several significant projects recently completed including a 100 MW solar farm with the construction of a new Zinc refinery currently being evaluated by the company.  Mr Choi outlined the price fluctuations and surge in power charges in Qld which had risen from a pmh rate of $40 in the early 2000’s through to $52 (2014) and currently $69 resulting in Qld power charges being more expensive that South Australia.

Cecile Wake, Vice President Commercial Australia, Shell Australia – Gas has a long term role in energy generation as a sustainable and efficient supply. There is clear evidence of gas companies working together to save duplication through the multiple usage of assets and infrastructure. Gas companies also support their local communities. Shell acknowledges the need for market reform and the importance in advancing the COAG Energy Council to improve collaboration across the industry.

Mike Westerman, Chief Operating Officer North Queensland Copper Assets, Glencore – For a variety of reasons, including location and resource availability, the North West Minerals Province needed to implement continuous improvement strategies to remain profitable. With labour expenses increasing to almost 50% of all production and processing costs it was inevitable that automation and new technologies would play a big part in advancing production across the region. Mike emphasised the need for government(s) to reduce regulation and compliance requirements due to associated high costs of administration.

Charles Meintjes, President Australia, Peabody Energy Australia –  The continued development of the Asia Pacific region is dependent on sustainable and efficient energy supply.   70% of power in Australia comes from coal while 40% of the world energy comes from coal. The need for all forms of energy supply, which includes coal, gas and renewable sources requires greater investment in research & development, and for coal ports to be more efficient.

Nicole Hollows, Chief Executive Officer, Sunwater – The Challenge for Sunwater is to be more customer focused by providing a better more efficient service overall.

Dean Mehmet, Chief Executive and Managing Director, Hastings Deering – Market place volatility due to massive changes in the resources sector saw the requirement for Hastings Deering to ‘do more with less”.  The company has transitioned to be more efficient by reducing direct costs by 40%, be more customer responsive, be innovative through strategic investment in new technology and be more transparent.

For more information on the 2016 QRC State of the Sector Forum go to: www.qrc.org.au
Forum presentations will be uploaded in the coming days.

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