Eighty percent of proposed energy and resources projects never see the light of day, costing Australia an estimated $68 billion each year.
A Minerals Council of Australia (MCA) review of the Federal Government’s Resources and Energy Major Projects list and project pipeline found, on average, $68 billion worth of potential investment was lost annually, with major mining projects put in the too-hard basket because of the investment environment in Australia.
MCA CEO Tania Constable said the analysis highlighted the number of projects that dropped off the list before they moved to final investment decisions.
“This sharp decline in projects shows not only the increasing risk of mining developments, but the considerable wealth Australia is missing out on.” Ms Constable said.
The analysis showed 5 percent of projects at the feasibility stage moved to a favourable financial decision each year.
“Only 20 percent of projects that debut on the list are progressed to completion, while 80 percent of projects are abandoned altogether,” Ms Constable said.
She said the problem facing the industry was not a shortage of potential projects, but rather the challenging investment environment that had been created by policy settings.
“That investment isn’t waiting for a rainy day. To Australia’s great detriment, it is heading overseas, where investment settings are conducive to growth.”
Ms Constable said Australia’s mining sector was grappling with unprecedented cost pressures, burdened by restrictive policies that are impacting the global competitiveness of current operations, and thwarting investment in new projects.
“The sector is dealing with higher labour costs, higher energy costs, higher transport costs, higher royalties, while being asked to absorb more red tape, more regulation, and more emission-reduction standards,” she said.
“While there is some merit in timely incentives, the biggest bang for taxpayers’ bucks is simply creating an operating environment that is conducive to growth, and attractive for investment; by lowering the cost of doing business in Australia.
“Australia is one of the most expensive countries to do business. This needs urgent redress if we are to realise this enormous opportunity to lead the world through the clean energy transition, fuelled by our critical minerals.”
