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Rapidly rising costs moving mining investment offshore: Rinehart

29 July, 2014

Sky-rocketing costs of doing business in Australia are driving mining multinationals to pursue overseas projects, according to Hancock Prospecting Chairwoman Gina Rinehart.

The shift to invest in lower-cost projects overseas by companies, including many Australian ones, has the potential to drive down commodity prices and destabilise local projects.

"Sadly, too many multinational companies ... are focusing and preferring to invest in overseas countries with lower costs," she said.

"For instance, Rio Tinto, which has been in Australia for decades, and made most of its revenue from Australia, is now arranging multi-billions of dollars of investment for a major resource project with substantial infrastructure in ­Guinea in Africa.

"When that's operating, it will bring billions of tonnes of ore on to the market to compete against Australia, and push down commodity prices.

"Too few seem to recognise the impact this will have when we are competing with lower-cost countries and how it will hurt Australia for decades."

Necessary moves to make mining more competitive

Rinehart said it was imperative Australia must strive "to lower its costs" and provide a more competitive market for mining investment.

Rinehart said moves by the Abbott government to remove the MRRT, and more recently the carbon tax, were very "important and should be supported" as they were investment deterrents.

She took a swipe at detractors of the moves: "regrettably the critics are at it again, without any regard to the realities Australia faces, and the needs to ensure sustainable jobs and revenue in the future.

"One of the things Australia has to learn and appreciate is that for us to export, people aren't going to buy products because they like Australians - forget it," Rinehart said.

"They're only going to buy the products if we remain commercially competitive, cost-competitive. This is a really big challenge for Australia because we've got very high costs and we've really got to work hard on that if we want to sustain our future, and a good future."

Her comments came on the back of analysis recently released by the Business Council of Australia which ranked the mining sector as one of only three that the nation had comfortable international competitive advantage on.

The competitiveness of resources sector had however "declined over the last decade" due to "soaring costs of inputs, relatively low labour productivity and regulatory delays".

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Rob | Friday, August 1, 2014, 9:50 AM
That's ok, Gina. When you're prepared to pay reasonable costs and fair taxes in Australia, you will be welcome back.
Alison | Friday, August 1, 2014, 3:35 PM
The mining tax should not be removed. Apparently mining magnates have only been paying depreciation fees and the true benefit to Australians with mining tax revenue is still to come. Gina is only interested in her own interests - not that of Australia!