Politicians split over mining boom

Resources Minister Martin Ferguson. The Gillard government is split on whether Australia’s mining boom is over in the wake of the shelving of BHP Billiton’s $30 billion expansion of the Olympic Dam mine.
Nanjing Night Net

Resources Minister Martin Ferguson this morning said Australia’s mining history had been the envy of the world.

‘‘You’ve got to understand, the resources boom is over,’’ Mr Ferguson told ABC radio.

‘‘We’ve done well – $270 billion in investment, the envy of the world. It has got tougher in the last six to 12 months.’’

But Finance Minister and South Australian senator Penny Wong disagreed with her colleague’s assessment.

‘‘No, I think the mining boom has got a long way to run,’’ she said.

The federal government put aside its differences on the mining boom’s expiration date, however, to criticise Opposition Leader Tony Abbott for running a ‘‘dishonest’’ fear campaign and linking BHP Billiton’s decision to delay the expansion of the Olympic Dam mine in South Australia to the mining and carbon taxes.

BHP had been consistently warning the two taxes were making Australia a less competitive place to invest, Mr Abbott said.

However, BHP chief executive Marius Kloppers made no mention of either tax in his lengthy explanation for stepping away from the expansion project.

Senator Wong said Mr Abbott was asking Australians to believe what he said was true even though BHP had cited other reasons for its decision, including subdued commodity prices and higher capital costs.

‘‘This is one of the most dishonest, self-interested fear campaigns that we have seen in Australian politics,’’ Senator Wong said.

Mr Kloppers said the company was not going ahead with the massive open-cut pit partly because of the Fukushima nuclear plant meltdown in Japan, which had led to a global fall in demand for uranium.

Senator Wong was more upbeat than Coalition frontbencher Christopher Pyne – who called the decision ‘‘catastrophic’’ for the economy – but conceded it had been ‘‘deeply disappointing’’.

‘‘Every South Australian knows that Olympic Dam is an incredibly important project for the state,’’ she said.

She welcomed BHP Billiton’s indication of its intention to extend the Olympic Dam project in due course.

‘‘The Gillard government intends to work closely with the South Australian government and BHP Billiton with the aim of seeing Olympic Dam reach its full potential as soon as it is commercially viable.’’

Nationals Senate leader Barnaby Joyce said it was ‘‘ridiculous’’ and a ‘‘nonsense’’ to suggest the carbon and mining taxes played no part in BHP’s deliberations.

‘‘The question today is how could you possibly argue that a new tax that will be paid by the company is not an issue in the decision they make?’’ Senator Joyce said.

‘‘Do we think for one second that this [the carbon and mining taxes] wasn’t an issue that was discussed around board tables at BHP and every other resource company in the world?

‘‘Expenses such as these become part and parcel of the decisions you make.’’

Cabinet Minister Stephen Conroy was in the ‘‘no’’ camp when asked if the boom was busted, declaring the mining boom was not over.

‘‘I think the investment pipeline is extraordinary,’’ Senator Conroy said.

He said Mr Abbott’s claim that BHP’s decision not to expand the Olympic Dam was due to the Mining Tax was ‘‘sheer stupidity.’’

This story Administrator ready to work first appeared on Nanjing Night Net.