A survey of 50 mining executives has revealed more confidence in the sector.
By Cameron Drummond
THE mining industry is showing signs of confidence for the first time in three years, but recovery could be hampered by government red tape, according to a report.
Newport Consulting’s latest Mining Business Outlook Report released 21 June stated that industry leaders were warning that red tape removal, particularly the project approval process, was crucial if the sector was to increase its international competitiveness.
Report figures showed a bounce back toward a sector revival, with 43 per cent of mining leaders optimistic about their prospects for the year ahead; up significantly from 2014 when confidence hit an all-time low. The gap between leaders who were not optimistic had fallen from 93 per cent to 55 per cent this year, with leaders who were more upbeat and confident rising from below 10 per cent to 43 per cent.
Capital expenditure was showing signs of trending upwards, with 27 per cent of companies either planning to moderately or significantly increase CAPEX in the next 12 months with 31 per cent of those leaders planning to increase spending by up to 15 per cent. Importantly, companies reducing staff had decreased from 80 to 44 per cent in the past year.
Newport Consulting managing director David Hand said it was the first time in three years that the industry had shown clear signs of a revival. “Companies are spending again, have more confidence in stabilisation of prices, and have prioritised growth strategies,” he said.
“It’s a fine line, however as at the same time, the industry wants to see Government take a proactive stance in reducing red tape; especially surrounding mining and project approval processes, which are seen to hamper growth and Australia’s ability to return to a more competitive position globally.”
Chairperson of Hancock Prospecting and Roy Hill Holdings Gina Rinehart echoed Mr Hand’s sentiments while pushing for more action. “The Australian mining industry has to act during this drastic commodity prices decline, to ensure that it continues to be internationally competitive,” Ms Rinehart said.
“We also need to significantly and urgently cut the Government-imposed regulations, approvals, permits, licenses and compliance cost burdens that are placed on Australia’s resource industry, yet little is happening. “Without this, we will continue to see declines in exploration and investment, instead of growth, and suffer the consequences that reduced exploration and investment brings, including the negative effect on our standards of living. The time to act is now before further opportunities are lost.”