OPINION: The great divide

It’s either a win for the community and the environment, or a threat to the economic future of the Hunter Valley. The Australia Institute and the NSW Minerals Council go head-to-head over the implications of the recent decision to overturn the extension of the Mount Thorley Warkworth mine.
Nanjing Night Net

Dr Richard Denniss is executive director of The Australia Institute:

WHILE it happens in movies all the time, for once in real life David really did triumph over Goliath.

In the recent court case between the Bulga-Milbrodale Progress Association, represented by the not-for-profit Environmental Defenders Office, and Warkworth Mining Limited, owned in part by Rio Tinto, the community did what the Kerrigans achieved in The Castle.

The court case revolved around what was ‘‘good for the community’’.

The miners wanted to massively expand a mine so that it would close a local road, destroy more than 700hectares of environmentally valuable woodlands, remove the local hill and build a giant waste mound.

The main upside to this proposal would be that the owners of the mine, most of whom live outside the community or outside of the country, would make a lot more money.

As is usually the case, the mining industry made exaggerated claims about the economic benefits to both the local and national economy, of allowing them to profit from the community’s distress. But this is where things got interesting.

Usually the claims and counterclaims about the economic consequences of mining simply fly back and forth with no resolution, but this week a judge dismissed the miners’ claims that the Warkworth mine extension was good for the community and the country.

In particular, Chief Justice Preston found that the evidence provided by the miners did not support their conclusion that the economic benefits to the owners and employees of the mine outweighed the social, environmental and economic costs to others in the community.

Further, he found that the modelling relied on by the miners was a “limited form of economic analysis” that “does not assist in weighting the economic factors relative to the various environmental and social factors, or in balancing the economic, social and environmental factors”.

Such a finding will no doubt send shivers down the spines of big developers and economic consultants around the country.

The judge also found that the claims made by the mining industry about the increase in employment that would accompany the mine were exaggerated.

In reality, big new mines

cannibalise the most highly skilled staff of other industries.

The miners are always quick to claim credit for the jobs they create in the broader economy but this week’s judgment accepted the argument that they should also take responsibility for the jobs they destroy in other industries.

I doubt it is a coincidence that a day after Chief Justice Preston’s landmark decision that the NSW Minerals Council was depicting anyone who questions the conduct of the big mining companies or speaks up for community concerns as unpatriotic.

How ironic that the Australian spokesperson for an industry that is 83per cent foreign-owned should make such a claim.

Like the minerals council, The Australia Institute believes that mining has an important role to play in the Australian economy.

But unlike the minerals council, The Australia Institute is also interested in the broader health of the Australian economy and Australian communities.

The high exchange rate and the skills shortages associated with the boom have had devastating effects on some of our most important long-term industries, such as agriculture and manufacturing.

These industries employ millions of Australians, while mining, which is highly mechanised, employs around 2per cent of the Australian workforce.

When the mining industry wants to expand at the expense of the broader economy, it is important that we have open and fair decision-making processes.

While mining booms come and go, good farmers usually think in terms of protecting their land for future generations. New mines might create jobs in the short term, but when the mines go the houses in the communities that are left behind become worthless.

The mining industry’s TV ads suggest that what is good for mining is good for Australia but this week’s court judgment found that this is not always the case.

Who knows how many other mines have been approved on the basis of dodgy economic modelling?

David Moult is the chairman of the NSW Minerals Council:

AGRICULTURE, tourism and mining are the three crucial economic pillars upon which the Hunter was built and continues to thrive.

Despite what anti-mining activists who run The Australia Institute would have us believe, removing any one of those pillars will have deep and lasting detrimental impacts on the economic and social fabric of the Hunter Valley.

Research undertaken by the University of Newcastle highlights that the 21 largest mining members of the NSW Minerals Council directly employed 10,842 employees in their mining operations alone in the Hunter Valley during 2011-12.

A total $1.29billion was spent on wages and salaries for these workers over the same period.

In terms of direct injection into the Hunter economy, these companies spent $3.3billion in contributions and purchases of goods and services from local businesses.

Our mining employees live and raise their families in local Hunter communities like Muswellbrook, Singleton, Maitland and Cessnock. They spend their money in local shops and use local services.

That’s why NSW mining engages so closely with the Hunter community, because our workers are part of that community.

Through programs like the Upper Hunter Mining Dialogue, we regularly engage with key community stakeholders including business chambers, local environment groups and health advocates.

All this presents a clear picture of what’s at risk if responsible mining is not supported in the Hunter.

The current lack of certainty and a lack of confidence in the NSW planning system will threaten thousands of mining jobs in the Hunter and across NSW, as well as see vital investment diverted from regional communities.

The level of scrutiny applied to mining applications is intense.

The process takes between three and four years and millions of dollars in assessments that are required by the government.

Added to this are a number of independent processes designed to provide transparency and ensure that all of the benefits and impacts are properly balanced when making the final determination about the project.

This process includes independent Planning Assessment Commission (PAC) reviews, PAC public hearings and PAC determinations.

This independent scrutiny and oversight, which has been ramped up in recent years, significantly increases the time taken to assess projects.

The mining industry is not afraid of additional oversight, however it should lead to greater certainty. Unfortunately the industry is facing greater uncertainty through projects that have already been thoroughly assessed, analysed and independently determined subjected to a further legal appeal process.

This uncertainty hangs over all new and current mining projects in NSW.

It puts thousands of jobs at risk, and makes NSW an uninviting place to invest.

There is no doubt that extreme green groups are using the legal process with the single aim of disrupting the mining industry.

In 2012, the Australian Anti-Coal Movement produced a clandestine document, outlining its strategy to ‘‘disrupt and delay key projects and infrastructure while gradually eroding public and political support for the industry …’’

The Australia Institute, among others, was acknowledged as contributing to this document.

The NSW government must realise that these extreme green activists do not have the interests of local communities at heart, but rather are pursuing a blatant anti-mining agenda that will result in significant job losses and leave many of our workers and their families without an income.

NSW Mining does not operate in a vacuum. We compete with other mining states and internationally for mining investment dollars.

If the burden for mining becomes too great in NSW, we will see jobs and billions in revenue flow away from our state.

The real victims of this will be the workers and their families in communities across the Hunter, not just in mining, but in almost every other sector as the impacts flow on.