Director – Infrastructure & Economics

Andrew Barger

Heavy Haul Rail Conference

Long term sustainability of the

Queensland’s resource sector

25 August 2016

Mackay

WHO IS QRC?

• The Queensland Resources Council (QRC) is a not-for-profit

peak industry association representing the commercial

developers of Queensland’s minerals and energy

resources

• 72 full members – explorers, miners, mineral processors, site

contractors, oil and gas producers, electricity generators

• 160 service and associate members – the providers of

goods or services to the sector

A multi-commodity, state-based advocacy body

RESOURCE CONTRIBUTION TO QUEENSLAND

‘WE ARE CONFUSED AND CONCERNED’** Recent QRC member submission & ** Quotes from CEO survey

“How long

would a Mayor

last if they

proposed a

500% increase

on all their

ratepayers?” * *

QRC’s recent

CEO sentiment

survey – the

lowest score on

regulatory

uncertainty in

five years

“This Bill has

been a

catastrophe of

unintended

consequences,

…an absolute

debacle” * *

Minister Lynham

working to

deliver reforms

to streamline

Land Court

processes.

Treasurer’s

commitment to

no change in

royalty rates is

very welcome.

LEGISLATIVE COMPLEXITY

Industry is looking for a chance to engage on the issues,

rather than just react to a decision.

• Chain of Responsibility Act – a guideline soon?

• Mining amendments – the ‘hokey-pokey’ of MER(CP)

& MOLA

• Water Act – new groundwater framework & proposed

changes in Environmental Protection Act for mining

• Offsets in Vegetation Management (Reinstatement) and

Other Legislative Amendment Bill

• North Stradbroke Island reforms – new rehabilitation tenure

BUSINESS ENVIRONMENT –

QRC asks members: ‘How does Queensland compare as a cost of doing business?’“

Achieving sustainability

Work with the State government to drive down the costs of regulation to

boost the sector’s competitiveness and productivity.

This would deliver a much stronger position to take advantage of the next

upturn.

Policy certainty – industry needs:

> Certainty of timing – decisions cannot continue to be open-ended and

subject to endless appeals.

> Certainty of scope – projects should be assessed against relevant criteria

that are agreed by stakeholders upfront.

> Regulatory certainty – regulatory frameworks should not be constantly

revised, revisited and updated.

COMMODITY PRICES HAVE DECLINED SINCE MID 2010

COMMODITY PRICES - INDEX 2013/14 = 100

Source: Reserve Bank of Australia

MOVING OUT OF A RECORD CAPITAL EXPENDITURE INTO BUSINESS-AS-USUAL

DIRECT EXPENDITURE OF RESOURCES SECTOR – QUEENSLAND ($ BILLION)

Source: Economic Impact of the Minerals and Energy Sector on the Queensland Economy 2014/155

RESOURCES HAS DELIVERED A SHARP BOOST IN EXPORTS (LHS) QUEENSLAND HAS STRONG FURTHER POTENTIAL UPSIDE (RHS)

Source: Queensland Treasury, Queensland Budget 2015-15, Budget OverviewSource: Reserve Bank of Australia

Source: QRC

COAL EXPORTSQUEENSLAND COAL EXPORTS 2010-16

9 OF 37 COKING COAL MINES NOTCOVERING CASH COSTS (Jan 2016)

12

1 July $91.55

13 OF 22 QLD THERMAL COAL MINES NOTCOVERING CASH COSTS (Jan 2016)

11

1 July $56.50

QLD MINES HAVE WORKED HARD TORESTORE COST COMPETITIVENESS

14

LONG TERM OUTLOOK: COAL

Source: IEA World Energy Outlook 2015

EVOLUTION OF COAL DEMAND IN KEY

REGIONS

Source: BP Statistical Review, Feb 2016

INPUTS TO POWER IN CHINA

The global picture – coal & renewables

Source: BP Statistical Review (2015)

MTOE

Renewables

Coal

Millio

ns

of

ton

ne

s o

f o

il e

qu

iva

len

t (M

TOE)

GREAT BARRIER REEF - MEANS TO A GREEN END

> Misrepresent threats to Great Barrier Reef from shipping,

dredging, port development. Major focus – blocking

Galilee Basin coal projects

> Litigation: use the courts to stop or delay mine and port

projects (Queensland Land Court)

> Change the perception of coal as backbone of the

economy (The Australia Institute)

> Create investor uncertainty: ‘create perception of risk

over coal investments’ (divestment campaign)

> Create a powerful link in the public mind between coal

and health problems (dust from trains)

DID YOU KNOW?

Director – Infrastructure & Economics

Andrew Barger

Heavy Haul Rail Conference

Long term sustainability of the

Queensland’s resource sector

25 August 2016

Mackay