Queensland Resources Media Club Address
Thank you to the Queensland Resources Council for hosting this event, and for this opportunity to speak.
I want to begin by thanking and congratulating everyone involved in the industry.
The sector has gone from strength to strength and is performing better than it was pre-pandemic.
Jobs in the mining sector have grown by 38,000 to sit at higher levels than before the pandemic – a remarkable performance.
The sector here in Queensland is no different – it continues to be the backbone of the state’s economy and is showing no signs of slowing down.
We should take every single opportunity, every day, every moment, every media opportunity to thank the industry for what they’ve done over the COVID outbreak.
I thank them for their employment, for their persistence, for their investment and the outcome has been remarkable.
The fact that you put $310 billion, a record number, into the Australian economy, is quite simply phenomenal.
And when the forecast a year ago was that it would only be $240 billion – that increase is the size of the agricultural sector added to the economy.
And you should be thanked for it and I want to do that publicly again.
That success if off the back of those hard working men and women of the resources sector.
And the fact that until a few weeks ago you didn’t have a single positive case – not one – just reflects on how strong the industry is, how strong your processes are, and how you do look after the health of your workers.
And without it, imagine where we’d be. 1.2 million people directly and indirectly employed would have been out of work. So congratulations one and all.
Every time you sit down and talk to everyone else in your industry and talk to your staff just remember what it is that you’ve achieved.
Across 2019 and 2020, the resources sector in Queensland contributed $82.6 billion to the state’s economy and supported around 80,000 full time jobs.
In the 2019-2020 financial year, Queensland’s coal industry directly employed 32,373 people, spent $19.7 billion on goods, services and community contributions, and paid $3.5 billion in royalties across the state.
What would the state government do if it lost that $3.5 billion in royalties?
How do they pay for the hospitals, the roads and schools and all the services we rely on? Well you do it through this sector and you do it by supporting the sector.
Not denigrating it, not talking it down, not talking down the people that work in it who do a phenomenal job.
Similarly, in the 2019-2020 financial year, Queensland’s oil and gas industry directly employed 4,560 full time employees, spent $3.8 billion on local goods, service and communities, and paid $466 million in royalties across the state.
And the list goes on and on, and on and on ……
So we should always reflect on what the sector does, and what it does for our country and the opportunities it provides for our kids and the skills and training it provides.
I come from the VET sector – a broken down electrician and yet here I am as the Minister for Resources in the federal parliament, in Canberra and it never ceases to amaze me.
Now we will always stand with the resources sector.
We don’t need to have a vote in our Party Room to decide whether we should have a new Basin Plan for gas.
We won’t have to try and disallow a regulation on whether we provide support for exploration – that’s just not going to happen.
So – a lot of noise from Victoria about gas recently, I’m sure some people have seen that.
As I said in a media interview a couple of weeks ago – this the chickens coming home to roost.
If you put a moratorium on exploration and you don’t develop new resources, well eventually you run out.
And if you think you can send gas from Darwin to Melbourne for the same price, well we’d better hook up Melbourne’s water supply to Cairns because that’s the equivalent.
It’s simple physics. I’m sure it can be done but at what cost.
Resources development across the country, including in Queensland, is vital.
The government will continue to support new resources development and open up new basins.
Work to explore five key regions for gas and other resources under our Strategic Basin Plans Program is also on track, a key element of our gas-fired recovery.
Our second Strategic Basin Plan is focussed on the North Bowen and Galilee Basins in central Queensland, with nearly $21 million of new funding this budget to help the region get market ready.
The potential is enormous - worth billions of dollars and potentially creating over 5,000 new jobs in central Queensland.
Briefly, let’s talk coal.
Coal seems to fill the headlines left, right and centre.
Everyone wants to talk about coal. No-one wants to separate the fact that there’s metallurgical coal and thermal coal. All coal just gets bundled together.
This is a difficult fight – but I’ll say something really easy: how good are coal prices at the moment?
People are making money because there’s demand – you’ve got a product they want. The fundamentals of business.
The International Energy Agency forecasts that coal will remain an important part of the world’s energy mix decades into the future – remaining as one of the largest sources of electricity in 2040.
Over the next 10 years, Australia will have a growing share of international coal trade.
Coal demand in developing countries, particularly in Asia, is projected to substantially increase to satisfy demand for electricity and for industrial development.
Whether it’s for electricity, whether it’s for making steel the reality is there is demand, there is need.
We are committed to supporting our coal industry, supplying Australia’s high quality coal for export markets as well as providing cheap reliable electricity to industry and families across Australia.
There are challenges and that’s why the Australian Government is committing $20.1 million in the 2021-22 Budget to a Global Resources Strategy.
This will identify new markets for our resources commodities and critical minerals and facilitate opportunities for expanding trade with these markets.
I want to talk briefly about critical minerals.
The forecast just for lithium alone is some $400 billion by 2030.
It’s a pretty big market and one that we want to be a part of and we do need to get it right because so does everybody else.
Let’s speak frankly, everyone wants a cut of a $400 billion market but we have a couple of advantages.
Our advantages lie in the fact that we’ve got all the resources.
But if we want to be competitive there are some things we have to get right.
The cost of electricity, the cost of gas, availability of workforce, red and green tape.
In my view, it’s pretty pointless chasing new opportunities if those opportunities are stymied, delayed and in some cases stopped by state governments, red and green tape and a general lack of urgency.
We still have activism that sees these projects get held up in the courts for years on end.
We are in a fight for this space and we need to be throwing any combinations of punches we can find and we need to throw them right now.
We all know the reality – most of the materials to get developed which are required out of this space come from China.
If we want to be able to extend, expand and provide opportunities for Australia, we’ve got to get the fundamentals right.
I think this is a real opportunity for Australia.
I want to turn now to the European Union and tariffs – that’s what it is a tariff – nothing else.
And it is directly from the impact of activism here and around the world.
The European Union has recently upped the ante, threatening to impose “carbon tariffs” on imported products from what they label as recalcitrant nations who have not yet signed up to the net zero carbon emissions pledge.
Never mind that so many of the pledging nations are not even meeting their current targets, let alone getting even close to a net zero by 2050 target, or in fact achieving significant reductions.
Individual nations are not named by the EU but here in Australia, the EU threats are being whipped up by activist groups, by left wing think tanks, and others as a political weapon against the Federal Government.
That is, we must abide by the dictates of the EU or the EU will impose its so-called “carbon border adjustment mechanism”.
The C-BAM, (the see-it, tax it, stop it proposal) would theoretically be imposed on Australian exports ranging from iron ore, steel, coking and thermal coal, gas, aluminium and fertilisers, severely denting our important trade to the EU which is worth around $12 billion annually, $2.77 billion of which is coal.
My colleague, Trade Minister Dan Tehan, has rightfully asserted that the measures may contravene World Trade Organisation (WTO) rules, labelling the C-BAM a new form of protectionism that will undermine global free trade and impact Australian exporters and jobs.
But you won’t hear the Labor Party criticise the EU.
Instead, Labor spokesman Chris Bowen’s only contribution is that he “fears” Australia will have to live with a C-BAM regime unless government policy changes.
And of course, Labor’s political allies, the Greens, have called on the government to reintroduce a carbon price and ratchet up Australia’s 2030 targets in order to protect exporters from the tariffs.
The questions for Labor are pretty straight forward:
Will Labor rule out a job-killing carbon tax if they form government? Will they put overseas interests ahead of the interests of Australian resources workers? And ultimately, it is a question of whose side are they on?
My view is they are definitely not on your side. We will continue to stand strong with the sector, particularly against these forms of protectionism.
Australia has shown that we can have a very successful resources industry and reduce emissions at the same time.
Even though it is rarely reported Australia has already reduced its emissions by 20 per cent on 2005 levels.
Is Labor prepared to sacrifice our resources-driven prosperity and the 1.2 million direct and indirect jobs chasing ideological fantasies?
That is a legitimate and real question.
I’m sure this is not a conversation each-way Anthony Albanese had with the coal miners in Moranbah during his secret mine visit the other week.
Now as an electrician I’m not much of a philosopher but I know this one.
If a tree falls in the forest and no-one is there to hear it, did it make a sound?
If Anthony Albanese has a secret visit to a coal mine, and no-one knew he was there – did he really go?
For his inner city constituency he has plausible deniability.
On our side of politics we don’t view talking to coal miners as something to be ashamed of.
We are proud of the sector, it workers and its success.
Back to the response to the EU threats of C-BAM - as Resources Minister, I would like to make the a few points.
Firstly, if the EU wants to impose a carbon border adjustment mechanism, it should be proportionate to each countries’ carbon emissions.
In other words it should be a level playing field and it should be fair.
China produces 23.92 per cent of global emissions, so should be taxed accordingly.
The United States is the next highest global emitter, producing 11.84 per cent of global emissions, India 6.84 per cent, Russia 4.07 per cent, and Indonesia 3.48 per cent.
Australia produces just 1.27 per cent.
Secondly, we need to point out that the world (and Europe) will continue to rely heavily on the global supply of critical minerals, including and especially from Australia.
To manufacture their batteries, and their electric cars, and their solar panels, and their wind turbines if they want to successfully transition to energy economies that only rely on intermittent wind and solar.
Lithium, to cite just one example, is a particularly critical component for batteries.
Australia is the biggest producer and exporter of lithium, contributing more than 55 per cent of global production, and holds the third largest reserve of lithium globally.
Australian lithium exports are predicted to rise more than five-fold in real terms by 2025-26.
And we are just at the beginning of this extraordinary demand.
The EU itself has predicted it will need 18 times more lithium than current levels by 2030, and 60 times more by 2050.
According to the Chair of ASX listed European Metals Holdings, as reported in the Australian Financial Review, Volkswagen alone will need 125,000 tonnes of lithium carbonate by 2025.
Thirdly, the EU is far from pure when it comes to emissions.
While Australia produces high quality met and thermal coal – the sort of coal that is required for the steel and aluminium that goes into making Teslas for example – a number of EU member countries continue to produce electricity using lignite.
Poland generates 84 per cent of its electricity from coal. Hungary is even higher at 85 per cent.
And even Germany, which has an extension cord across the border to access nuclear electricity, relied directly on coal for 30 per cent of its generation and 15 per cent from gas last year.
Data from the European Commission show that 69 per cent of all energy consumed in the European Union came from coal, crude oil and natural gas.
So before we get too carried away with beating up on Australia, which has actually reduced its emissions significantly and in line with our Paris obligations, we need to ensure that other countries are not misusing their market power to impose financial penalties on other countries that they claim are not toeing the line that they choose.
This is protectionism.
And finally, trade is by its nature a two-way transactions.
Trade tariffs can also work both ways.
Australia imports a lot of European products – around $47 billion worth of products.
This includes almost $4 billion worth of luxury passenger vehicles – Mercedes Benz, Audis, Volkswagens, BMWs, Volvos and even the odd Ferrari, Maserati and Lamborghini.
Australia does not want a trade war, let alone one based on an extremely rubbery data about carbon emissions, which some countries manipulate.
How is the EU proposing to monitor and assess whether the CBAM would be applicable?
Would Australia be penalised for simply refusing to mislead our citizens and paying lip-service to a target, while a large industrialised country like China commits to decarbonising by 2060, but just last year built more than three times as much coal-fired electrical power capacity as the rest of the world combined, and have increased not reduced their emissions since 2005 in fact they’ve gone up.
But we should be prepared to warn the EU that we will not be bullied into accepting a carbon tariff without a fight.
My view is we will not be dictated to by the UN, the WTO, by the EU, by the UK or others.
Our job is to govern Australia based on the things that we take to you as the voters of this country.
You determine the government of this country. You’re not electing someone to the UN, to the WTO, not electing another country to determine what the policy of this nation is.
For me it’s about ensuring that your success, and your growth continues.
And the forecast for next year is another record $344 billion into our economy and that will mean more jobs and more opportunities for Australia.
The government is right behind the sector, we stand shoulder to shoulder.
Congratulations on what you’ve done.