Article by Chris Herde courtesy of The Australian.
The chief executives of the country’s largest miners are looking to 2024 with optimism with Australia in a prime position to take advantage of the global demand for resources but they warn there are challenges ahead.
BHP chief executive Mike Henry said Australia was is a good position to take advantage of the “megatrends” that were reshaping the global economy – decarbonisation, electrification and population growth.
“The energy transition and population growth will drive huge demand for metals and minerals: copper and nickel for electric vehicles, wind turbines, solar panels, batteries and wiring, and steel to build this new infrastructure,” he told The Australian’s 2024 CEO Survey.
“Australia has significant critical mineral resources, but many other nations around the globe are equally – or even better – endowed and are moving with pace to capture this same opportunity. Australia must be ready and able to compete.” However, Mr Henry warned that the Australian economy faced significant underlying structural challenges such as the cost-of-living crisis, the tight housing market, an ageing population and currently inflation.
“Productivity growth is at 60-year lows. Business investment as a share of GDP is at low levels not seen in 40 years. Australia needs a greater diversity of sectors to match the leading economies with which we compete” he said.
Fortescue Metals CEO Dino Otranto said inflation and the tight labour market had taken its toll. However, he said Fortescue looked at 2024 with optimism with demand for about one billion tonnes of crude steel coming out of China. “So our products, and the Australian iron ore sector which is a major contributor to our economy, should be well-positioned for the immediate future,” he said.
Lynas Rare Earths CEO Amanda Lacaze agreed that cost of inflation for both materials and labour had hurt while global uncertainty was also a concern.
“We are a global firm; all our direct customers are outside Australia. Our customers are affected by changes in the global economy and the Chinese economy in particular,” she said. “The global economy remains muted and we are seeing that global economic uncertainty translating to more conservative choices by consumers.” Gold miner Northern Star Resources boss Stuart Tonkin said he expected Australia’s GDP to continue to grow this year.
‘Growth over the past year hasn’t been out of control so I wouldn’t expect a major correction in Australia’s economic fortunes. Having said that, I wouldn’t be surprised if the RBA again increases the cash rate,” he said.
Mr Tonkin called on the federal government to focus on industrial relations policies that improved productivity. “On an investment front, I would like to see the Commonwealth maintain its spending on infrastructure that enhances the economy, and we need to continue to take in skilled migrants,” he said.
Pilbara Minerals CEO Dale Henderson said the Australian resources industry as a whole was well-placed to continue to be the “backbone of the national economy” with the investment outlook underpinned by demand for critical minerals.
“That said, Australia can’t afford to rest on its laurels. In Western Australia, for example, there are $148bn worth of projects in the pipeline,” he said. “Opportunities, especially in critical minerals, won’t realise themselves. It’s an extremely competitive global space and to capitalise the sector needs to continue to improve productivity, remain cost competitive, invest in innovation and develop the workforce of the future.
“Tightness in the labour market is one of the challenges and it’s essential that we can access the skilled workers we need now and in years to come.” Rio Tinto CEO Jakob Stausholm said Australia needed to maintain and improve its competitiveness at what is a pivotal time for the world and the resources industry because of the global energy transition.
“Commodities demand is growing and shifting to energy transition materials, and Australia needs to make sure it grasps opportunities and does not price itself out of the market,” he said.