Feature Articles

Inland rail to unlock opportunities

As appeared in the Queensland Country Life on 29 September 2016

In your 22 September edition Mark Phelps wrote about the Queensland section of the proposed Inland Rail project – “Qld inland rail ‘preferred route’ raises concerns.”

I would like to add the voice of the Queensland Resources Council to those who are expressing concern over the opaque process for selecting the route and design of the inland rail project. The fact that this national project is large and expensive is no excuse for not having a very clear process for selecting the best route and designing the best possible rail line.

All sides of politics will agree that regional Queensland deserves the best possible infrastructure to encourage the creation of jobs and growth. Queensland’s resources industry is simply requesting that the route and design for inland rail is selected through an open public process. Let all the proposals be put on the table, so an informed decision can be made.

Done properly, inland rail will unlock development opportunities in regional Queensland for agriculture, resources and new industries

The Surat Basin has world-class supplies of coal and coal seam gas. These are Queensland’s energy resources that the global economy hungers for. These resource projects can contribute much needed traffic volumes on the inland rail corridor.

The challenge for inland rail is to demonstrate a business case for investment. That business case requires certainty of revenue. The resource industry stands ready to be a customer to the inland rail and thereby help get this important infrastructure project built. All the industry asks is that the design of the rail corridor and the route of the corridor be subject to a full and open market bid. Even if the open process simply confirms that the existing Australian Rail Track Corporation project is the best on offer, that confirmation generates confidence and delivers value to all the regional stakeholders who want to see inland rail proceed.

Yours sincerely

Michael Roche
Chief Executive
Queensland Resources Council

OP ED: Imagine a world without mining

As appeared in the Daily Mercury on 7 September 2016

With a solar farm being considered for Collinsville and wind farms popping up across the nation, Queensland Resources Council chief executive Michael Roche is reminding people that our renewable energy industry wouldn’t be possible without mining.

In Mr Roche’s own words:

Everything you do today will be possible thanks to the natural resources sector.

The alarm clock that you abused as it reminded you for the fifth time that it was time to get out of bed – made from metals, glass, plastics, all of which come from our resources sector.

The first cuppa of the day – you boiled the water using gas or electricity. Even the water came from a dam and water treatment plant made from steel-reinforced concrete. The milk on your cereal was chilled by a refrigerator made from metals found, mined, refined and forged by the resources sector.

The same water system gave you a hot, steamy shower and also used gas or electricity to reach the desired temperature. Possibly you used a solar hot water system instead – every solar panel contains 16 minerals and metals from the resources sector.

The bus or train that carried you to work or school or the shops – made from metals, powered by electricity, gas or petroleum… all from resources.

Now imagine life without our sector.

No alarm, you rely on sunrise and the birds to wake you. That’s fine if it’s a sunny day rather than bleak and raining.

The first cuppa of the day? Well, go find the nearest stream, rub a couple of sticks together and get the billy on the boil… oh, that’s right, no metals equals no billy. Sip the stream water if you dare.

That also means no hot shower. Extra deodorant? No, that comes from the resources sector as well, so off you go to work au natural. Perhaps a quick rub with a couple of squashed flowers will do the trick.

Ah, work… now that might be a bit of a problem too.

How do you get there without a train, bus, car or even a push bike? How good are your shoes? If you have rubber soles, you will be walking barefoot. And you should call work and say you will late.

No can do – your home phone relies on metals and plastics, and your mobile smartphone is the creation of 40 minerals and metals.

What work do you do? Does it involve using a computer or telephone? They are courtesy of the resources industry, so back to pencil and paper? No, the resources sector contributes to those as well.

And the list goes on.

The Queensland Resources Council this week launched an education campaign to highlight just how important the resources sector is to our everyday lives – now and, particularly, into the future.

From alarm clocks to solar panels, from toasters to microscopes and optical lenses, from bicycles to buses and trains, from HB pencils to desktop computers.

The resources sector touches you every day.

But what of the future as we all look to sustainable options for everything we do?

The key to a sustainable future is to harness the knowledge and skills of the natural resources sector to deliver innovative solutions. Indeed, there is no alternative to using our natural resources, there is no Uber on the horizon.

Let’s look at the sustainable energy innovations. Solar panels immediately come to mind.

Queensland has one of the highest rates in the world of penetration of domestic solar panels. But we will soon see large scale solar farms also injecting electricity into the power grid.

Indeed, the largest generator of solar energy in India, the Adani Group, is seeking to replicate that ranking in Australia.

Their Australian solar generation projects would be in addition to Adani’s $16.5billion investment in the planned Carmichael coal mine in Queensland’s Galilee Basin and associated rail and port facilities.

Adani has identified two solar projects in Queensland totalling 250MW, which is similar in capacity to the gas-fired power station at Oakey in southern Queensland.

One of the two solar projects – a proposed 100MW plant – could be located near Emerald in central western Queensland. Adani is also looking at solar projects in South Australia with total capacity of 400MW.

The important thing to remember here is that the manufacture of each solar panel requires 16 metals and minerals, including coal, bauxite and alumina, copper, silica and titanium (both sourced from mineral sands), lead, lithium, tellurium, cadmium and iron ore. Each plays a vital role in the construction and operation of every solar panel on every roof.

And Queensland is a leading producer of coal, bauxite, copper and alumina, mineral sands and lead. Queensland also has some exciting lithium and graphite prospects.

Wind power is also attracting attention. Again, these towering structures require significant input from the natural resources sector of Queensland. For example, each part of a wind turbine relies on steel.

The generator is 66% steel and 35% copper. The blades are held in place by steel bolts, and the foundations are made from concrete that is reinforced with steel rods. The towers are 90% steel.

Queensland’s contribution to the modern day windmills is significant. Approximately 70% of the world’s steel is made using coking coal, with Queensland the world’s largest seaborne exporter of coking coal.

In simple terms, it takes 220 tonnes of coal to produce a wind turbine capable of generating one megawatt of electricity, which is sufficient to power around 40 Queensland homes when running at full capacity.

It should come as no surprise then that electric vehicles rely on the resources sector.

And for those who leave the car at home for their daily commute, the natural resources sector gets you to work on time.

Iron ore and coal are used to make steel for frames, seats, and wheels. Bauxite is transformed into aluminium for frames and fixtures. Factories that produce steel, plastics, rubber and paints use a long list of natural resources including natural gas.

Glass and plastic windows are manufactured from natural resources as well.

Natural gas is also used for air conditioning to make the commute more comfortable, while most of the new model commuter buses are powered by natural gas.

There are some who believe that they can leave the electricity grid.

But what happens to the lights – and the TV and drinks fridge – when the sun sets and the wind generators stop turning because the breeze has run out of puff just as Friday night football is about to start?

Two solutions – tap into large and still relatively expensive banks of batteries, or stay connected to the largest battery of all, the existing electricity grid.

Whichever you chose, both require massive contributions from the natural resources sector.

And that situation will not change for some time.

Michael Roche
Chief Executive
Queensland Resources Council

Resources innovating, long before it was a buzzword

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We keep hearing from media and governments alike that innovation will replace resources.  We’re hearing that Queensland is transitioning away from ‘rocks and crops’ into a new digital age or that the so-called ‘ideas boom’ will replace the mining boom.

These catchy phrases are being touted as though our sector doesn’t have a very long and very important future in this state. But you see, any program designed to ‘innovate’ or ‘advance’ the economy should not only include resources, it should look to the sector for inspiration.

QRC recently commissioned innovation and capital markets expert Robert Bladier to prepare a discussion paper on the subject of innovation and the resources sector, it is well worth the read but for the time poor I’ll provide a precis.

While the term innovation is synonymous with technology and start-ups, it’s actually wider than that, and business in Australia has been leading the charge for decades. Why? Well, in a competitive market the only way to turn a profit is by boosting production and bettering efficiencies, all while benefiting the company’s bottom line. And that – more so than a shiny tag line – is the true catalyst of innovation.  In fact, it’s never been more so the case than right now, when the resources sector is facing some of the toughest economic conditions on record.

You can put any name to it that you want – ‘Smart State,’ ‘Advance Queensland’ or the ‘Ideas Boom’ – to suggest that innovation is a brand new concept invented by governments, but the reality is that resources sector has been quietly innovating to extend the known production performance boundaries.

Google may wow the world with driverless vehicles but Stanwell’s Meandu mine has had driverless haul trucks operating in Queensland’s own backyard for more than a year. Up in the Pilbara, Rio Tinto not only has 69 driverless trucks operating 24 hours seven days a week, it is also testing driverless trains. At the smaller end, drone technologies are improving inspection and monitoring efficiencies on large sites while enhancing health and safety.

And might I remind you who picked up the Prime Minister’s award for innovation last year? A chemical engineer by the name of Professor Graeme Jameson who developed a new technology specifically for the resources sector. A technology that has been adopted by Queensland’s Mount Isa Mines and that is estimated to have contributed nearly $100 billion to the nation’s economy.

And then there’s our Mining Equipment, Technology and Services (METS) sector that is contributing $90 billion in gross annual revenues to Australia. To the Palaszczuk Government’s credit, the new commonwealth METS centre – METS Ignited – now calls Brisbane and the Queensland University of Technology (QUT) home.

Let’s not forget resources explorers, who are the very definition of innovation. They start with an idea to seek economic return, they take risks – and they sometimes fail – but they also often succeed to the tune of billions for the Queensland economy, doing so by applying the latest in technology to discover the mines of the future.

I could go on and on and mention leading examples of ‘big data’- look to our LNG industry-  knowledge sharing and partnerships with universities, or the millions invested in research and development, but I’ll get to the point. The resources sector is the role model of innovation, not a sector to be cast aside as yesterday’s hero.

Australia and Queensland are renowned for cutting-edge practices, process and supply chain innovation and inventions. We should be celebrating these and encouraging collaboration between resources and other sectors.

It might sound catchy to claim we can replace the fortune of mining with the future of minds but if you think the resources sector is fading into the night, think again. Resources aren’t merely a chapter in our history – our continued prosperity is innately ingrained in Queensland’s vast energy and minerals resources.

There is no Uber around the corner for resources. Contrary to the dreams of many, renewable technology is decades away from being able to 100 percent power homes and businesses reliably and affordably. Furthermore, there is no substitute for the minerals and metals that are increasingly in demand for everyday products. Products such as computers, smart phones, prosthetics. The sector also provides the steel, aluminium and electronics for our public transport and cars. Even renewable technology requires resources.  The components for the recently released Tesla batteries are made of mined materials, solar cells are made from sixteen metals and minerals and wind turbines require steel, which is made from iron ore and coking coal.

Queensland’s resources are varied, world-class and we have a sector to be proud of. And south east Queensland in particular has a world-class concentration of universities, CRCs, CSIRO, and private sector R&D, not to mention leading SMEs, who go about their work almost unnoticed. Innovators start young, and the just-launched Queensland Minerals and Energy Academy’s Centre of Excellence for Robotics and Automation in partnership with Alexandra Hills SHS and QUT is the incubator for exciting our young people in applied resources technology and innovation.

Queensland dominates the world’s trade in coking coal used to make steel, and the International Energy Agency predicts this domination to continue for decades to come. Our LNG producers generated a brand new export industry within a decade and Australia is now in a position to become the world’s largest LNG exporter by 2020. And for our minerals and metals – well, Queensland has a lot to boast about on that front too. Globally we score a podium position for lead and zinc and a top ten spot for silver and bauxite. Queensland’s copper is an essential material for wind turbines and electric cars.

So in short, innovation isn’t tied to one industry – forging change and industry cross-pollination is the only way we’ll get the Queensland economy back on track.  In the resources sector, over many decades we have been growing a culture in which innovation is the norm. We honour our pick and shovel past, but relish the sophistication of emerging innovation now and the promise of evermore business-driven innovation into the future. Go Queensland!

Michael Roche
Chief Executive
Queensland Resources Council

OP ED: Decisive action prioritises workers’ health and safety

As appeared in the Courier Mail on 17 February 2016

The health and safety of our workers always has been, and always will be, the top priority for the resources sector.

Like everyone associated with the coal industry, the Queensland Resources Council believed that the system of screening and detection for the respiratory disease pneumoconiosis was working well which is why we were just as shocked as everyone to see cases emerge last year.

The re-emergence of pneumoconiosis among Queensland coal workers is a genuine concern for everyone in the industry but workers, their families and the public can be reassured that everything is being done to tackle the issue.

The QRC is in unison with industry, the Minister for Natural Resources and Mines Dr Anthony Lynham, his department, Queensland Health and the unions in our collective commitment to protect workers now and into the future.

We are all equally committed to an ongoing system that’s open and transparent as we progress through the various stages of discovering why the disease has crept back into the industry.

As of today, there have been six confirmed cases of coal worker’s pneumoconiosis reported in the Queensland coal industry since May 2015, although more cases may be confirmed over the coming weeks and months.

Minister Lynham acted swiftly and decisively last year in engaging a respected expert, Professor Malcolm Sim, of Monash University’s Centre for Occupational and Environmental Health to conduct an independent review of the Queensland Coal Mine Workers’ Health Scheme.

Professor Sim is working with an expert team of academics and specialists from Monash University in collaboration with the University of Illinois and their credibility and reputation in this field is world class. He has made it clear that the greatest risk of workers contracting pneumoconiosis is to those who have had many years of exposure to coal dust.

Professor Sim was also emphatic that there is no risk to the general public from coal trains along rail corridors, especially given the fact that Queensland is the only jurisdiction in the world where 100% of coal wagons are covered with a polymer veneer which forms a skin over the coal load to prevent dust emissions.

These corridors also have a system of continuous air quality monitoring stations run by the Department of Environment and Heritage Protection (EHP) with data publicly available in near real time and any exceedances are required by law to be reported to EHP.

It’s widely acknowledged that the risk to workers at open cut coal mines is very low given that they are equipped with personal protective safety gear with the majority of employees operating in machinery with protected cabins and air filter equipment. It is understood that all Queensland coal mines are presently compliant.

While Professor Sim is conducting the official review with the appropriate high level of expertise and broad consultation, a second inquiry was announced last week with the Senate Select Committee on Health seeking submissions by 26 February and holding public hearings next month in Brisbane and Mackay.

The QRC and industry will co-operate with the Senate inquiry although it’s unclear what this exercise will achieve that the Sim Review won’t.

The CFMEU has cast doubt on whether there is enough qualified radiologists to check for pneumoconiosis in x-rays, but the Royal Australian and New Zealand College of Radiologists says the union’s fears are “misguided” and there is ample local expertise among its members to meet the current demand for screening X-rays.

But the QRC and its members in the coal industry are in agreement with the unions in ensuring that whatever reforms need to be made to our system of checks, balances and compliance are made to ensure that pneumoconiosis is again eradicated from Queensland coal mines.

Michael Roche
Chief Executive
Queensland Resources Council

Resources 2015 and beyond: the facts, the fiction and the future

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Earlier this month the Queensland Resources Council launched its sixth annual economic contribution report at Parliament House with Treasurer Curtis Pitt and as expected, the statistics sparked a fair amount of online chatter. I would like to say that the chatter was evenly balanced, with a fair representation on the value of resources to Queensland. Unfortunately though, much of the online discussion post-launch was one-sided and based on simple mistruths.

For me, it was the straw that broke the camel’s back. I feel compelled to rally the troops and indeed, anyone who uses electricity, lives, works or plays in a building made of steel and concrete, drives a car, rides a bike, catches any form of public transport or uses a smartphone. Logic would say that if you have a LinkedIn account – you fall into this group.

There’s no denying that it has been a tumultuous few years for the resources sector, but when we have the Leader of the Australian Greens Party on national TV lauding wind turbines and solar panels as energy and job creation alternatives (when they are in fact made of mined resources), it’s clear we need to go back to basics. We need to re-educate the nation on the importance of minerals and metals for everyday life.

The facts:

Resources are the lynchpin of the Queensland economy. In 2014-2015 the resources sector contributed an estimated $65 billion contribution to the state’s economy*. What does this mean? Directly and indirectly the resource industry is responsible for one in every $5 dollars in the Queensland economy and one in every six jobs.

It’s important to note that yes, this is slightly down from the year prior but it is reflective of the new norm. We’ve moved from a period of significant capital expenditure on new mine, gas and infrastructure projects to operational expenditure. That is, we’re spending more on the day-to-day running of resources projects than outlaying big dollars on building new projects. Welcome to business-as-usual.

When it came to the various commodities, coal contributed 11% of Queensland’s entire gross regional product (the standard measure of the size of the economy), with oil and gas contributing 7% and metals and other resources another 4%. Now there’s been a lot of bleating about the death of coal but 50% of all the resource spending in Queensland came from coal, so that doesn’t sound like a dead industry to me. Yes there’s been a cyclical slump in commodity prices, but in fact, Queensland coal exports for the first nine months of this year are up 3.5% on the same period from 2015. This puts us on track for yet another record-breaking year.

Last financial year, minerals and energy companies paid $5.2 billion in wages to full-time employees and spent $24.7 billion on goods and services from some 24,000 Queensland businesses. Some 937 community groups received supported from resource companies. Every Queenslander – regardless of where they call home – has a vested interest in seeing our minerals and energy industries succeed and grow.

The fiction

The hypocrisy of activists calling for the end of mining by tweeting on their smart phones is totally lost on both the perpetrators and, sadly, also on the broader public. Smartphones you see, contain about 40 mined metals and minerals.

There are so many mistruths bandied about by activists for political or fundraising gains that it’s hard to know where to begin. So let’s start at the top. This isn’t a debate about the existence of climate change, no one here is denying that. The crux of the debate is around the critical role of current resource options, particularly with the emergence of cleaner technologies, to feed an energy-hungry world.

I mentioned it earlier, but it’s worth repeating, wind turbines and solar panels are dependent on resources.

Not everyone loves wind turbines but if you are a producer of coking coal, you love them. Why? Well every one megawatt of wind turbine capacity requires 220 kilograms of coking coal because wind turbines are made of steel (and lots of copper for the wiring) and steel requires coking coal.

But I must be anti-solar energy you say. Well the answer is no for several reasons. First, a solar panel uses 16 mined metals and minerals, many of which we produce in Queensland. Second, solar energy makes a lot of sense to some of our remote mining sites – much more sensible than burning lots of diesel. Finally, I will never take a position that it is a case of renewables OR fossil fuels. The reality is that the world will need both for many, many decades to come.

We have all read that the breakthrough for solar energy is storage – a new generation battery that means we can enjoy solar power after the sun sets. Well guess what, the leading edge battery technologies like the Tesla Powerwall use the mined mineral lithium.

Yes, we should be investing in the development of new technologies, but until it can be built – both in terms of materials as well as machinery – it is time to call time on disrupt and delay tactics halting job-creating resources projects.

Resources companies in Queensland are facing setback after setback with special interest groups dragging them through court multiple times knowing the outcome and knowing they will not achieve any increase in environmental protection.  Stalling resource projects through litigation was actually front and centre in the Greenpeace-led anti-coal strategy document Stopping the Australian Coal Export Boom.

However, it would seem Australians – from former the Prime Minister to the man and woman in the street – are starting to wise up to the consequences of these stalling tactics. People are beginning to ask how a paperwork glitch can halt thousands of jobs and how activists groups with barely a dollar on their balance sheets can get away with accumulating hundreds of thousands in legal costs, leaving taxpayers to foot the bill.

What I’d like to do is ask another question – how can these special interest groups walk the moral high ground when the consequences of their actions actually cause greater harm to the environment? How you might ask? Another good question. Not only does Australia have some of the strictest environmental and regeneration policies in the world, we also have some of the highest quality coal in the world, coal that can be burnt with up to 40% fewer emissions. That’s not even taking into consideration the latest technology, which is closer to 90% or carbon capture and storage methods. So when I say they’re doing more harm, I mean to say that halting resource projects in Queensland forces coal-fired powered generators to use lower-quality, higher-emission alternatives from overseas.

The future

Which brings me to the future. Ahead of the Paris climate summit in December, there have been a lot of media reports about India’s commitment to reducing emissions and uptake of nuclear, hydroelectric and renewable power. What the reports have seemingly failed to mention is that even if India can meet these bold targets, coal will still have a very large and incredibly significant role within that fuel mix.

The current energy situation in India is dire. 360 million live without power, forced to rely on fuel wood, charcoal or dung for cooking. Roughly 3.5 million people – mostly women and children – die prematurely because of indoor air pollution from these biomass fuels. With the country’s population rising at approximately 10 million per year, the hunger for cost-effective, efficient energy supplies is only growing. It is morally-remiss for media and activists to ignore the importance of coal and gas for nations on the path of providing their population with access to power.

Another developing region, much closer to home, that will bring demand for Australian resources is Southeast Asia. A recent report from the International Energy Agency predicts that by 2040, coal will surpass oil to become the most consumed fuel in the region. The demand comes down to being able to provide a reliable base-load power that is both affordable and accessible. The IEA Report also notes the growing opportunity for reduced emissions with investment in high-energy, low-efficiency (HELE) plants. Recent research from the agency’s Clean Coal Centre found that there are 670 HELE generation units currently in operation across Asia with an additional 1,066 under construction.

Our Queensland coal and gas sectors are well-placed to supply developing nations on a course of rapid modernisation so long as we compete for every contract, innovate to stay globally competitive, earn the support of our governments, and of the people who elect them.

The Queensland resources sector remains a tremendous good news story with a strong, ongoing operational future so long as people share and seek the facts, not the fiction.

*The economic data is collected from QRC members who report their spending in each postcode across the state and represents about 98% of direct employment. The methodology is the same model used by the Reserve Bank of Australia in a research discussion paper in 2013 and has been peer reviewed by Central Queensland University.