Is Red Tape to Blame?

(7 votes)

As the lynchpin of Australia's economy, mining is BIG business. This is no more true or real than it was five years ago but a recent increase in media coverage has revealed the resources industry is more of a crux than ever. Driving our competitive market share, especially as demand dwindles from mass importer China, desperate times call for not-so discreet measures, and the newly elected Abbott Government is calling to free a sector tied down in red tape

Knees shaking, palms sweaty in anticipation, it’s a widespread sentiment echoed throughout the country where education, family and general living standards are said to suffer. “Without mining in NSW, there would be less money for our schools and our hospital. There would be a lower standard of living for every single person in the state,” says Shadow Minister for Resources and Primary Industries Steve Whan.

As a major contributor to our economy, Western Australian Mines and Petroleum Minister Bill Marmion notes that the “flow-on benefits the mining industry provides to all West Australians” makes it an asset to our nation. Viewed as the key to Australia’s economic growth for the past two decades, economist Professor Henry Ergas believes that ‘excessive and inefficient regulation acts’ will be detrimental to our country.

In efforts to streamline work processes, Queensland and NSW are working to reduce approval time for exploration permits for coal and mineral mining. By removing duplications, where conditions are regulated in the Mining Act as well as other mine safety legislations, the number of policies for coal mining leases in NSW will fall from 24 to nine, and for other mining leases from 23 to eight.

Major coalminers, including Glencore Xstrata, Peabody Energy and Anglo American, have condemned Australian laws for burdening businesses with unnecessary regulatory processes, which ultimately delay approvals. “Australia is now considered a high cost environment to do business,” says economist Ergas. With the price of coal falling rapidly, these ineffective prices are doing little to aid struggling producers and the thousands of miners who have lost their jobs in the past year alone. Though eradicating outdated and redundant conditions in the hope of minimising the costs of commerce, and therefore fostering an increase in international investment, looks to be the Abbott Government’s plat du jour.

Only too glad to incite this change, the Prime Minister’s election campaign saw him promise to revive the mining boom by instating a 12-month deadline for signing off major projects. Allegedly 48 months less than the average project length. A pledge to cut green tape at the federal level and introduce a tax credit for exploration costs, are all ‘steps’ toward putting Australia back on the global - export - playing field.


Citing “unclear roles, confused accountabilities and a lack of expertise and commercial acumen," as approval process inhibitors, the Business Council of Australia, along with big business lobby groups, have high hopes for the Abbott Government and the future of Australian export business. Though many are saying the issue with ‘excessive red tape’ has only really come to light with Abbott’s desire to increase export productivity and in turn reduce regulation. 

Whether this is merely hearsay, is of little concern to environmental bodies and communities neighbouring mining sites. But WA’s Mines and Petroleum Minister Marmion says that streamlining the approvals process “does not mean development at any cost” and it does not mean a reduction in “protection for the environment and communities,” affirms Resource Minister Chris Hartcher. Though this does little to quiet the concerns of residents of the mining regions and they’re pleas are not going unnoticed.

A recent ruling whereby a NSW judge prohibited mining giant Rio Tinto from extending operations to within 1-1/2 miles of productive mining area Bulga – population 350 – was a win for the ‘little people’. So while the communities argue restitution and environmental concerns have too long been overlooked, there may be light at the end of the tunnel. 

Mining politics are not unique to Australia, however, administrative processes will always appear as ‘red tape’ to one side and necessary precautions to the opposing. Though Australia’s regulatory measures are tougher than in most mining countries a combination of weather, location, financing and safety legislations contribute to today’s industry climate. 

Do you think there is too much 'Red Tape' in our industry?

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o BHP A$33.65 ▲0.09 (0.27%)
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o Fortescue A$2.49 ▲0.01 (0.40%)
o Newcrest A$14.39 ▲0.46 (3.30%)


Company ID [ASX:BHP] Last trade:A$33.65 Trade time:4:10PM GMT+11 Value change:▲0.09 (0.27%)

Rio Tinto

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Minetalk Poll

Is the mining boom in Australia over?

Is the mining boom in Australia over?

No, it's just media hype.
Yes as a result of lower demand.
Still plenty of resources.
There will be a second boom.
1 Votes left

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