Aust mining needs rethink: Nasser

By a staff reporter

Australia's resources industry has reached a tipping point and a rethink of the role the sector plays in the national economy is long overdue, BHP Billiton Ltd chairman Jac Nasser says.

In an address to the Australian British Chamber of Commerce in Melbourne, Mr Nasser warned the resources industry cannot simply be an income source when governments need revenue. 

"Australia's resources industry is a major part of the national economy," he said.

"Given the continued growth in China and Asia, over the next decade the potential investment and jobs created could be as big as the last ten years."

The resources industry had a crucial responsibility for it's own future and to improve productivity as it represented 50 per cent of exports and was a significant taxpayer, Mr Nasser added.

However it needed to be a national priority as almost every Australian had a financial stake in the success of the resources industry, including indirectly through superannuation.

Combined effort required

Mr Nasser said the Australian industry had the potential to be the best in the world, but it would require the combined efforts of companies and government.

He reaffirmed his view that on a government level, the two key levers that make a positive difference to the resources industry are a fair tax system and a robust and fair industrial relations framework.

"These two levers...have always supported the confidence that generates long run investment, productivity and wealth creation," he said.

Mr Nasser said the industry had historically been, and should continue to be, one of Australia's greatest competitive assets, but warned of stronger, smarter competitors.

"Our industry is the driving force for Australia’s opportunities and is aligned with every Australian’s aspiration for a better life," he said.

"Australia’s resources underpin the once in a century urbanisation and industrialisation of countries like China and India."

Companies need to focus on productivity

Mr Nasser said in order for the industry to become "the world's best" companies needed to look in their "own backyard."

"We need to run our businesses more efficiently, more flexibly and at a higher level of productivity," he said.

Mr Nasser added productivity was much more than having fewer people and less equipment.

"Productivity is also about getting more from what we put into our business and wasting less, to increase our competitiveness and attractiveness to global capital – and to protect the environment," he said.

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Jac has always been a two faced clown: I just love the way he describes productivity: Saying it is more than having fewer people and less equipment. "Productivity is also about getting more from what we put into our business and wasting less, to increase our competitiveness and attractiveness to global capital – and to protect the environment," he said. Getting more from less.....well DUH..He means less pple, biting into his pot, or better machines doing more to bring the head count down and no doubt clean up after it is switched on. What this clown never brings down is..his own wage..his own perks....and those of his managers, they are all to get more from the pie, we should get legislation limiting how much jac takes home as well as his managers...seems fair to me.
Regardless of what you think of Jac Nasser, the fact remains, that Australia, needs to get it's act together. Debt is a state of propinquity, that is, right now we can manage it. However to suggest that this will be the case, in 12 months time, is absurd. No one can predict the future and no one has the right, to claim understanding, of unseen parameters of change. So, productivity, stage one, is not trying to sell bananas, to people that want mangoes. Stage 2, is recycling all input supplies, to produce (new) revenue streams. Stage 3 don't over capitalise. Stage 4 understand critical mass (or your profit margins, will blow up in your face. Stage 5 understand that commodity prices mean nothing, currency value means everything. Stage 6 understand that low cost (clean) energy, is the only way productivity makes sense. Stage 5 understand that all problems that BHP (other than unions and governmment) face can easiliy be solved by physics. So, Jac, if BHP stops trying to sell bananas and starts selling clean energy, that comes from shale but uses Einsteins principles of superconductivity (this allows you to change carbon pollutants into carbon products). Then BHP will create research (cyclotron, superconductivity), create carbon fiber with the related offshoot industries, SMEs etc. Every element on our planet (with no exceptions), was created by the process of correct temperature (therefor correct molecular density), Einstein explains this process using superconductivity. I am only explaining how to make that paradigm, profitable. Our world is now, pure physics, only dinosaurs don't understand that and look what happened to them.
"Australia's resources industry has reached a tipping point" ??????? Central bankers all over the world, especially Fed Res, BOJ, BOE saying every day that money printing goal is to improve economy. I repeat, 'to improve economy'. They not saying money printing goal is to give more profit for financial speculators. As such, why resource guys constantly complaining ? Do we supposed to have higher industrial commodities prices (i.e. iron ore, oil, copper, etc.) when real economies constantly growing as global money printing constantly accelerating ?
Tony Holland any merit in your argument got destroyed by the offensive way you attacked Jac Nasser who incidently I have never met.His points deserve debate and if you can pick a fault in his argument then by all mens do so.While lots of people point out that the resources in the ground belong to Australians or more specificaly under the constitution to the state in which they are located a reserve of minerals under the ground in some remote locality has vastly less value there than when it is mined and delivered to customers.Building the mining infrastructure including railroads to port facilities which also have to be built and supplying the machinery and housing the mine workforce are all vastly capital intensive.Operating mines is also expensive.Years are taken up in mining projects before resources can be shipped to buyers.The policy skill involved by government lies in determining the optimum tax/royalty rates at which the mining projects will continue to attract capital investment.Too high and new mining projects or expensive expansion of existing ones dont occur and no royalty ,tax or employment benefits accrue in Australia.Alternatively set too low and we get less tax or royalty benefits than could have been the case.The physical evidence of iron ore and coal prices falling significantly from the peak and of deferral of new projects is demonstrating that some projects are no longer feasable under current economic/tax/royalty settings.Capital is mobile and will move to projects elsewhere on the globe which offer acceptable returns.There are allways advocates for taxing miners more heavily but they tend to put their arguments too emotively with too little fact.It as been conclusively demonstrated that overwhelmingly the value of the iron ore and coal mined in Australia remains in Australia via company tax,payroll tax ,state royalties,wage paid to mineworkers,payments to contractors providing a range of services to minrs and of course the the government collects a vast amount of payg tax deducted from the wages of mine workers.The fact that some mines have are being shut down and projects like the big expansion of Roxby Downs deferred are sending the message to government that now is not the smart time to hit the miners for more tax.
Who"s tipping point Mr Nasser as i see it, your robbing the Australian People blind. BHP, RIO The four large banks need to be Taxed more to pay for services that are needed badly. If it's so bad to do Business in Australia why don't you hand in you Mining Claims! The people in Norway don't get ripped off, they make you Corporate Crooks pay up.
Hmm if this is true why is Australia rated the No. 1 country in the world to be in the mining business? Poor, Poor little multinationals!
http://www.miningaustralia.com.au/features/australian-mining-sector-still-beating-off-competi