New frontiers

AUSTRALIA was once famously called “the lucky country.” Hogsback reckons in 2017 that should be changed to “the myopic country”.
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Lou Caruana

Yes, we may have beaten the English cricket team in the second Test of the Ashes. Yes, we have claimed the Rugby League World  Cup Championship on home soil thanks to another sterling effort by captain Cameron Smith and half back Cooper Cronk. And yes our economy is humming along at a fair clip as we head into another Christmas.

But what about the big picture of our future as a globally competitive exporter of minerals to the fast developing nations to our north?

We don’t see entire news bulletins dedicated to this very important feature of our economy.

The Greens movement and other sundry protestors are getting a great lot of free publicity by telling everyone that Adani’s proposed $16.5 billion Carmichael coal and infrastructure project is going to kill the Great Barrier Reef.

They say we must stop this mine – and ultimately all coal mining – for the sake of our children and grandchildren.  

What they don’t say is the standard of living our children have enjoyed until now is due mostly to Australia’s success in providing energy and raw materials to the rapidly emerging economies in Asia.

It helped us sail through the global financial crisis while other countries sank into the great recession and also helped prop up our dollar, which meant inflation was kept down. This enabled a lot of struggling families to afford to stock up on flat screen TVs and other imported necessities.

However, if we were to curtail our coal mining industry – with its years of acumen and know-how – these young people’s standard of living would suffer terribly. 

They would have to rack up huge debts to make ends meet and not afford the little luxuries their parents could afford. 

Instead of closing down the coal mining industry, Hogsback reckons we should be looking to expand it and move it downstream into mining equipment, technology and services using Australian know-how.

The Minerals Council of Australia is launching a research project to identify opportunities for Australia to boost mining and mining services exports and outward mining investment in Asia.

Mining is already Australia’s biggest export industry, generating $146 billion in exports in 2016, and Asia is already the sector’s most important market, accounting for over 80% of these exports.

However, a key insight of the New Frontiers research is that Australia’s mining export success story in Asia has a long way to run.

As Asia’s economies grow, they will increase investment in infrastructure and resources and energy-intensive production activities, creating additional demand for Australian resources, according to the MCA.

Hogsback reckons Australia should correct its shortsightedness and look forward to a better future where mining could play an even bigger part of our economy.