2012 Americas School of Mines

Transcription

1 Americas School of Mines Australia Wayne Huf

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3 Section One Some Background on Australia 3

4 Top 10 Deadliest Animals in Australia 1. Box Jellyfish 2. Inland Taipan Snake 3. Saltwater Crocodile 4. Blue Ring Octopus 5. Stone Fish 6. Redback Spider 7. Brown Snake 8. Tiger Snake 9. Great White Shark 10. Funnel Web Spider 4

5 Comparable in Area Mainland USA

6 Population - 22,000,000. Six states and two territories. Major cities located on the east coast. 70% of Australia is desert. 21,262 miles of coastline. 2,547 miles from east to west. Sixth largest country by area. 6

7 The Great Sandy Desert 7

8 Rabbit Proof Fence Nullarbor Plain The longest straight section of sealed highway in the world (91.1 miles) is located in Western Australia. The Rabbit Proof fence was erected to help control the infestation of rabbits introduced by Europeans. The fences took six years to build. When completed in 1907, the Rabbit-Proof Fences stretched 2,021 miles (3,253 km). 8

9 Government Lower House - a Hung Parliament 9

10 General State of the Economy The unemployment rate remains steady at 5.2%. Poor consumer sentiment and under-performing housing sectors through 2011 and early 2012 have weighed on domestic demand. Housing prices have started to stabilise in Home mortgage rates around 6.5 to 7.0% - Reserve Bank is easing Retail sales remain near multi-decade lows. 10

11 The Two Speed Economy Strong growth in the mining states of Queensland and Western Australia For example, rental costs in mining areas in WA and Qld have risen dramatically since the mining boom. In 2011 final demand for goods and services grew by In towns such as Port Hedland in WA weekly rents have increased from $600 in 2007 to $1,500 in Western Australia 16.4 % - Queensland 9.3 % - Rest of Australia 1.3 % Sources: ULC School of Energy & Resources Australia 11

12 Section Two Australian Mining Industry 12

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14 Mining investment most favoured jurisdictions 2012 Country Total Points Australia 57 Canada 52 Chile 51 Brazil 45 Mexico 43 United States 41 Colombia 39 Botswana 37 Peru 36 Ghana 36 Sources: Behre Dolbear 2012 Ranking Of Countries For Mining Investment Where Not To Invest 14

15 Iron ore production 2011 useable ore Country Mt Australia 480 Brazil 390 India 240 Russia

16 Ensham Coal Mine Queensland floods

17 Value of advanced mining projects, by state and territory, October 2011 $231.8 billion Northern Territory 0.2% Tasmania 0.1% South Australia 0.4% Western Australia 63.6% Queensland 29.6% Victoria 2% New South Wales 4% 17

18 Australian energy and minerals export earnings 18

19 Australia s resource exports by selected commodities $ millions Sources: BREE, ABS 19

20 Forecast value of export sales Forecast export production values Iron Ore Metallurgical Coal Thermal Coal Aluminium* Copper Gold Nickel Uranium $ billions Sources: ABARES / Foreign ownership of Australian mining profits 20

21 Breakdown of iron ore output typical dollar Profit to Australian Owners 12% Foreign Profits reinvested in Australia 32% Tax 11% Interest 1% Depreciation 5% other costs 19% Foreign Profit outflows Wages and 8% contractors 12% Sources: Foreign ownership of Australian mining profits Now are we selling the farm? 21

22 Employment in the Australian mining industry 22

23 Employment in the Australian mining industry Mining companies are lowering their recruitment standards in order to find desperately needed workers. Strong investment in delivering fly-in fly-out workers. Non-mining firms in WA and Queensland are finding it harder to find staff than similar firms in other states (e.g. hospitality industry). Last week, Rio Tinto announced it was launching one of Australia's largest recruitment drives to fill 6,000 positions in four months. 23

24 FIRB approvals mining industry $ billion Iron Ore Copper and Gold Coal Uranium Bauxite Nickel Other Sources: Foreign Ownership of Australian mining Now are we selling the farm? 24

25 Three Tiers of Mining Taxation in Australia Tier 1 State Taxes Tier 2 Mining Tax Tier 3 Company Income Tax Mining Royalties Turnover based tax. Calculated as % of value or $ per tonnage. Payable quarterly (quarterly returns). Non-refundable, therefore still a cash cost when no MRRT payable. Profit based tax. Effective tax rate of 22.5%. Focused on the implied profit at the point the resource is extracted. State Royalty deduction grossed up at MRRT rate. Immediate deduction for capital expenditure. Losses carried forward increase in value (LTBR+7%). Profit based tax. 30% rate. Deduction for State royalties/mrrt paid (rather than tax credit). Generates tax offsets for shareholders (full imputation system). Stamp Duty Tax on transfer of certain assets including mining rights 25

26 Carbon price the basics Carbon price mechanism will start on 1 July 2012 Fixed price phase (1 July 2012 to 30 June 2015) $23 for each permit to emit a tonne of CO2 above 25,000t threshold Price increased annually by 2.5% until 2015 when flexible price phase / ETS begins on 1 July 2015 Flexible price phase subject to a transitional $15/t floor and a ceiling of $20t above international price increasing by 4% and 5% annually 26

27 Carbon tax who will pay? Approximately 500 companies are expected to have a direct permit liability: Number: Electricity generation 60 Mining 100 Natural gas retailers 40 Industrial processes (cement, chemicals and metal processing) 60 Oil and gas, LNG 40 Waste disposal

28 Questions? 28