Across vast areas of Australia from the Kimberley, Pilbara, huge swathes of Queensland and the Hunter Valley, huge trucks, long trains and flotillas of ships are transporting colossal volumes of Australia’s mineral and energy wealth from 361 sites- over a billion tonnes of ore per year !
A mining boom that started in the 1990’s has reached its peak.
Iron ore, coal, copper, gold, diamonds, bauxite and natural gas resources are being extracted and new areas are surveyed and opened for production. Governments scramble to build infrastructure facilities.
The “boom” has had a tremendous impact on the economic and social conditions of Australia.
(John Krey) Hunter Valley Protection Alliance
The mining industry, its boosters and boasters, spout endless rhetoric about the benefits of the mining industry. Television and print media peddle and recycle these propositions. All governments Federal and State bow to their demands.
The main thrust of their claims is the “economic benefits” to Australia
In summary these are taxes and royalties paid, export value, employment and “development” of the country.
Not surprisingly these claims have been researched and found to be huge steaming crocks. Despite the millions spent on advertising most Australian people believe that the mining companies should pay more taxes (ABC Compass August 23 )
Job Myths
The mining industry is hugely mechanised. The sizes of buckets, trucks, conveyors and trains are colossal. They operate day and night. A shrinking well organised set of workers is timetabled to meet the rhythm of maximum extraction.
In Western Australia, huge driverless trains and trucks operate from control centres far from the mines, in Perth. Computerisation, automation and giant scales have eliminated the need for armies of miners. Only 1.3% of Australia’s work force is employed in the mining industry. (Various state statistics range from Victoria 0.3% Western Australia 4.9%)
And while the mining industry’s claim of a multiplier effect has to be acknowledged for all the jobs servicing mining, such as transport, material, hospitality. The multiplier effect claims by the mining industry of four jobs produced for each job in mining are exaggerated.
Mining companies spear headed by billionaire Gina Rinehart push governments to cut the cost of labour by importing cheaper workers. Rinehart in a speech said “African workers are happy on $2 a day”.
When miners take action on wages, conditions or safety they are threatened locked out or face mine closures. So much for the mining industry being for job creation.
Export Earning Myths
The mining companies claim they provide a huge export income for Australia and this ‘’pays for the life style we enjoy”. But information and research by various bodies and analysts shows this to be a series of falsehoods.
We are paying them to take our mineral and energy resources out at ever increasing rates. The Australian economy and the people are going backwards.
How can this be?
The pre-tax profits for the Australian mining industry were $204 billion (ABS 2004) and over the next ten years they are predicted to rise to $500 billion. (2014)
They also have the largest profit margin of 37.1%, whilst the average profit margin for all Australian industries is 11.2% (ABS 2009).
This money, denominated in U.S. dollars, does not arrive in Australia. It goes to mining headquarters in London, Tokyo, New York or Zurich. It must be remembered that the mining industry is 83% foreign owned. (See tables)
What comes to Australia is just enough for the wages and services.
The other big claim is that taxes and royalties are paid but unfortunately the average rate of corporate tax paid by the mining industry in 2008-09 was
13.9 %, well below the theoretical 30 % corporate tax rate.
This was why the previous Rudd ALP Government initiated the push for the Mining Resource Rent Tax (MRRT) in an effort to capture some of the wealth flooding out. The timid Gillard/Swan deal with the big 3 mining companies yielded just $126 million for 2011-12.
On top of the Federal taxes, there are State royalties. (See table)
| Industry Revenues and Royalties 2006-7 | |||
| Industry | Royalties ($million) | Revenue ($million) | Royalties as share of revenue (%) |
| Coal | 1,696 | 25,389 | 6.7 |
| Iron ore | 849 | 15,958 | 5.3 |
| Oil and gas | 2,990 | 25,988 | 11.5 |
| Other | 947 | 38,881 | 2.4 |
ABARES (2010) Australian commodities
The final deal of the MRRT negotiated by the 3 mining giants Rio Tinto, Billiton and X-Strata meant that the Federal Government would refund the cost of royalties to those companies paying it.
Mining billionaires, like Andrew Forest, boasted that they could pay as little as
0-$50million of the MRRT over the next five years. (SMH May 2 2012)
Only part of the profits stays in Australia:
“In the next five years foreign owners will earn about $265 billion from their investments in Australia’s mineral resources. Around $50 billion of this will leave the country as dividends while $205 billion will be re-invested in further mining development. This, however, is written off against tax. About $41 billion per year of foreign capital investment will be generated from existing mining profits, as opposed to new foreign investment. The profits will pay for more expansion of production and profits.” #Naomi Edwards
The Federal Government showing complete cowardice caved in to the mining companies with the MRRT, while state governments roll out the red carpet with tax exemptions and incentives welcomed them in.
Incentives and Benefits
There are bucket loads of benefits flowing to the mining industry. $10 billion per annum from Federal and state governments*
This assistance comes in many forms, tax concessions (e.g. increased depreciation payroll tax exemptions, royalty exemptions), research and development assistance, diesel fuel rebates, power and water concessions, infrastructure provision like airports ,wharves, harbour dredging, road and railway construction.
Mining dominates other industries
The Australian dollar has climbed against the U.S., European, Japanese and British currencies. In the short term this has made many imported goods cheaper. This has been an outcome supported by free trade treaties and policies promoted by the World Trade Organisation. On the surface this means an expanded and growing range of imported goods are more readily available for people because the relative prices have dropped. This has taken some pressure off wages and salaries and the overall inflation rate.
The same combination of free trade and cheaper imported goods has devastated a range of local industries. Manufacturing, food processing and agriculture are the hardest hit. Despite token hand-wringing by governments, imported goods flood in and replace Australian-made products and produce. Food processing plants dotted around the country that support local agriculture are forced to close. Steel, aluminium and glass factories are “consolidated” or closed.
Oil refineries are folding in NSW and Victoria. Even car manufacturing has gone Mitsubishi, Ford GMH and Toyota have left Australia
There’s no money
When we balance up all the money flows- the profits, plus all the incentives, minus the wages and royalties it exposes a colossal sleight of hand.
The mining companies boast about the money they make for Australia however, very little returns to the people of Australia. Vast sums accumulate in the miners accounts in New York, London, Tokyo and Zurich.
The Australian people get left with a distorted economy, monstrous holes in the land, ruined agricultural land and polluted aquifers.
Can we take back our sovereignty?
State and territorial governments are swept up in the powerful centrifugal force exerted by mining companies and their banks. Secessionist and parochial notions abound; at odds with the broad aspiration of Australians for nation building, true sovereignty and independence. People sense we are being dudded.
All governments are slashing health and social services and restricting budgets. Infrastructure for people goes unbuilt while railways, roads ports for mining interests given are given top priority. The torrents of supposed riches and benefits to Australia are invisible for those outside of the mining industry. There isn’t enough revenue coming in to government coffers.
The Australian people need a government to stand up the vultures of the mining industry and their financier backers in New York, London, Tokyo, and Zurich. One with the zeal and back bone to control and exact a proper toll, to guarantee the people long term share in the riches of their country.
A government that will follow the wishes of indigenous nations as well as protecting the country for farmers and graziers so that we are not left the legacy of thousands of Bulgas pockmarked across this land.
| Company Foreign Ownership | |
| BHP Billiton | 76% |
| Rio Tinto | 83% |
| Woodside Petroleum | 24% |
| Newcrest Mining | 75% |
| Fortescue Metals | 40% |
The Weekend Australian 2011
| Industry Revenues and Royalties 2006-7 ABARES (2010) Australian commodities | |||
| Industry | Royalties ($million) | Revenue ($million) | Royalties as share of revenue (%) |
| Coal | 1,696 | 25,389 | 6.7 |
| Iron ore | 849 | 15,958 | 5.3 |
| Oil and gas | 2,990 | 25,988 | 11.5 |
| Other | 947 | 38,881 | 2.4 |
* Richardson, D. and Dennis, R. (2011) Mining the Truth: The Rhetoric and Reality of the Commodities Boom, The Australia Institute,
# Briefing paper prepared for The Australian Greens by Naomi Edwards BSc (Hons) FIA FIAA FNZSA MAICD
