The CEO of BHP Billiton says that Australia must become more competitive as a nation if it is to reap the tremendous rewards that the global resources sector has on offer.
In his maiden speech in Australia BHP Billiton chief executive Andrew Mackenzie said that the country stands to derive continued economic benefit from the mining and resources sector if it can heighten its competitiveness in certain key areas.
While reports have long circulated of the China-backed mining boom’s demise, Mr. Mackenzie said that upcoming years hold even greater promise for the resources sector – especially in Australia’s backyard of the Asia-Pacific.
“There are even greater opportunities ahead. Global demand for commodities is expected to grow by up to 75 per cent over the next 15 years,” Mr. Mackenzie said.
While highlighting the outstanding prospects for the resources sector, Mr. Mackenzie also stressed the importance of Australia raising its competitive capability in order to take advantage of the lucrative opportunities on offer.
“The question is not if Asia’s demand for commodities will be met but rather which countries will deliver the supply.”
“Australia is in pole position to do so…but must compete hard against both existing and merging suppliers.”
“For a country to secure investment it must create the conditions for the resources industry to prosper…industry and policy makers must now recommit to Australia’s future competitiveness to make sure Australia remains a supplier of choice.”
Mr. Mackenzie pointed to strong overseas sources of competition, including China’s low cost coking coal, thermal energy coal in the US, and LNG from the US, Canada and Africa.
In response to these rising sources of competition, Mr. Mackenzie said it would necessary for us “all [to] get sharper at productivity,” while also calling for government to “provide efficient regulatory systems, foreign, fiscal and trade policies that encourage stability and open markets.”
The global resources sector has weathered tough times of late as spot prices for key commodities such as iron ore and coal dwindle, and demand from chief export market China declines. Australian miners have found it especially difficult to deal with the harsher market conditions, due to the Australia’s high operating and labour costs, and until just recently its loft exchange rate.
The BHP chief also expressed his wish that the party which wins the September Federal election would establish an industrial relations framework which would put employers and workers “onto the same page,” as well as BHP’s hopes for a carbon policy consistent with other countries.