Bob Katter (Kennedy, Independent) Share this | Hansard source

I rise to speak on the Foreign Acquisitions and Takeovers Amendment Bill 2009, which is a subject very near and dear to my own heart. I live in a little town called Cloncurry, and we would have no sealed road connecting us to the coast if it were not for Mount Isa and the giant mineral deposits that were discovered about 100 kilometres west of Cloncurry. Cloncurry probably would not have even warranted a railway line. Most certainly, in our day and age you would never in a million years have had a railway line built by the government to a place like Cloncurry. It was built at the time by what we would today call a corrupt allocation of shares and it was rebuilt with an allocation of shares to the Queensland cabinet. So it was built and then rebuilt only because large parcels of shares were given to the various ministers in the government at the time.

That mine languished for 30 years. There was no real production there in the first quarter of the century until the Americans came in. They brought three things—markets, somewhere to sell the product; technology and know-how, which, arguably, we did have in Australia at that time but were never applied to Mount Isa; and capital expenditure. Mount Isa did not have any of those three things when Julius Kruttschnitt arrived there. His technology and know-how were equal to that of BHP, but BHP were not interested in opening up a mine that far away and the Americans saw a possibility that no Australian saw. With it came huge employment for north-west Queensland. In fact I started my first job there. In those days we had an enlightened government and we paid virtually no tax. As an unskilled labourer I was on the equivalent of about $110,000 in today’s money. The miners were paid the equivalent of about $370,000 a year in today’s money. That was really a marvellous thing. Many young people were able to buy cattle stations, sugarcane farms or whatever captured their fancy. Many of them got into the tourism industry in Cairns in the early days with the money they had made working at Mount Isa for two, three or four years.

If the government had seen fit to say, ‘We are not going to allow foreign investment or foreign companies into Australia,’ then large parts of Australia and our economy would simply not exist today. Senator Joyce went to my home town of Cloncurry and gave a speech there recently. I do not criticise Senator Joyce. He is one of the really good guys, in my opinion. But Senator Joyce is a great proponent of opposing Chinese investment. The Dugald River facility, north of Cloncurry, has been there now for close to 40 years. The Dugald River copper, silver, lead and zinc deposits were found some 40 years ago. They were found to be very extensive reserves. I quote from the annual report to shareholders by Conzinc Riotinto—or Rio Tinto, as it was at that stage. It says: ‘As always, the Dugald River resource remains one of our most important resources and one of the world’s most important resources.’

I think I am the only person in this parliament that has any experience in mining. I mined my own mines. I found, developed and produced from my own little mines and I also worked as a labourer, off and on, for mining companies, so I can speak with some considerable authority in this field. No matter how many times you drill it, you never really know whether the ore is in an ore body until you start mining it, so you have to commit yourself to $100 million worth of expenditure on the basis of a dozen or two dozen drill holes.

Let me be very specific. At Century mine, which has the richest zinc deposits in world history—not the biggest but the richest in world history—they drilled the entire hill except for one section at the back where there was no mineralisation. The wet came early and they could not get the drilling rigs out, so they found no payable ore whatsoever and they had put out millions of dollars on the drilling program. But there was the little section at the back where there was no mineralisation. They said, ‘Well, we can’t get the drilling rigs out so we may as well use them instead of having them sitting there doing nothing,’ so they drilled that sector and they found the richest deposits of zinc in the world, which have been a great contributor to the economy of that area. We have got electricity into a corner of the world where we would never have got electricity, we have had upgraded roads that we would never have got upgraded and, for our first Australian population right up in the gulf country north-west sector, we have 70 jobs for people who would never have been able to get those jobs, so it has been a wonderful thing for us.

Dugald River will be a wonderful thing for Cloncurry. But, outside the Chinese, I cannot see any other group—and I am a person who tenaciously believes, as I will go on in this speech to assert to the House, that there are decisions that a government has to take and they are not easy decisions. There are some times when I would be implacably opposed, and it is to the disgrace of the last government and, to some degree, the current government, even though they have only been there for two minutes, that they have allowed takeovers to occur. But clearly, in the case of Dugald River, you have had an ore body sitting there for 40 years and no-one has done anything about developing it. The state government had laws on the books put there by the great Ted Theodore: ‘Use it or lose it.’ You are not allowed to sit on an ore body and do nothing with it. But it is a hard decision for government to make because a company can say, quite rightly, that they are looking more closely at the ore body: ‘It’s a complicated ore body. We may not be able to process it as successfully as we would have hoped.’

Let me just give you a quick example. The Greenvale nickel mine went broke because the content of silicon had not been properly analysed. For those of you who are not familiar with silicon, after diamond it is the hardest rock known to man. When they put it into the crushers, they did not crush the nickel ore; the silicon in the nickel ore was crushing the crushers and destroying them. They found ways of overcoming this, but in the meantime the company went broke.

Vam was the third biggest mining company in Australia at the time of the metals boom in the sixties. One of their major deposits was at Gunpowder. They drilled at a particular place and intersected a characteristic ore body at a depth of, let us say, 100 feet and then, a kilometre away, they put drill holes down again and again intersected the ore at exactly the same level they had intersected it in the other place. They extrapolated then that they had an ore body stretching for a kilometre, which was quite a reasonable conclusion for them to come to based upon the evidence they had. One would say it was an absolute conclusion: they could say conclusively that they had an ore body that was a kilometre long. When they started mining—they had a bit more money—they drilled in the centre and they got no ore body at all. In Charters Towers, you can clearly see where a block has moved. You have an ore body here and an ore body there, and they were a continuous ore body at some stage, but a block in between has simply moved downwards in what we know now as the Brilliant Deeps.

Of its very nature, mining is a very, very risky business. The markets, of course, are a roller-coaster. We had a situation where the prices three years ago were double what the prices were five years ago. The metal price doubled. The metal price, you can say now, has halved, or gone down 50 per cent, but it has really gone back to what it was six or seven years ago. So you also have to ride the roller-coaster of the markets.

In the case of Dugald River, I am a very strong and enthusiastic supporter of the Chinese coming in both there and at Century—the old zinc deposits now belong to them. We have virtually run out of ore body there, but we have very extensive phosphate deposits there. For an Australian company trying to break into the world markets with that phosphate it would be very, very difficult indeed. But if you have a deal with the Indians, such as Joe Gutnick has with Legend’s phosphate in that area, then you have connected into the world’s biggest consumer group except for China. Similarly, at Century, I am very, very optimistic that what has been the richest zinc mine in the world will become one of the premier phosphate deposits in the world, but I dare say that nobody in Australia is going to develop those. We have four of the 24 world phosphate deposits in north-west Queensland. Only one was ever developed and that was the Duchess phosphate deposit, developed by Western Mining Corporation—and even that involved 20 years of painful leaning on them by the Queensland government: ‘Use it or lose it.’ I was the minister leaning upon WMC to proceed with that.

There would be no Mt Isa and no Century if, the case for foreign investment having been put, the government had then said, ‘You can’t come in.’ Foreign corporations developed these mines. Australians had 40 years in which to do it, and we never did it. These are clear-cut cases. For the coalmining industry, if the government had said, ‘No, you are a foreign corporation, you can’t come in, Mr Japan,’ then we would have had no mining industry in Australia. The man responsible for the Australian export coal industry was Sir Leslie Thiess, who at all times had the closest of close relationships with the Japanese. When he started mining, it was through a combined company with the Japanese.

We were vilified as a government at the time for allowing the Japanese—and we are going back to a period not that long after the Second World War—to get involved The people who were running Australia were men who had fought in that war. My father was in this place; he was a captain in the Army in the Second World War. My uncle fought at Milne Bay in the Second World War. These were people who had great sensitivities—and the Australian population had great sensitivities—towards the Japanese. Bjelke-Petersen showed very great strength of character in standing his ground. He was of Germanic background—Danish, technically, but of a Germanic background. He showed an awful lot of courage. Of course, the famous Jack McEwen was the person who really spearheaded the Japanese involvement.

Without the Japanese we would have had no markets for our coal. There was no-one in the world to sell it to. America was awash with coal; they did not need it. God has been good to Europe as far as coal goes. We had no technology, either, and we needed to bring the Americans in for that as well. Finally, we needed the capital, and we could not get any Australians to invest after the crash of the mining boom in the sixties. Everyone was terrified to touch mining, so these men could raise no money. These people built most of the Snowy and half of the great developments that you see as Australia today, including the giant highway from Geelong to Melbourne and the casino in Townsville. But even this Thiess family—this company—as big as they were, were run to their last cent in developing those coal resources. If they had not got the Japanese to come in on time and did not have a government that was positive towards the Japanese coming in, then it would have been a very sad day indeed for Thiess.

I will now switch to the other side of the coin. And I am criticising the last government very stridently here. I fought like a tiger and took belated action to try to stop the takeover of Mt Isa Mines by Xstrata. The government remained totally unconvinced. During that period the six great mining companies in Australia all became foreign owned. The government sat on its hands while the six great mining companies of Australia were all taken over by foreign investors. The price of metals went up by nearly 300 per cent. A town like Mt Isa was costing $2,000 million a year to run—around about that figure—and they were just breaking even. When the price went to $6,000 million, there should have been $4,000 million profit for Australians. But there was not. For those who, like me, like looking at statistics, it is very curious that Australia is making profits at long last, as a trading nation, on what we buy and sell and yet, when the current account comes in, we are in a dreadful, desperate state. And that is because we are selling the product overseas; we get the money to come in and then we just write out a cheque to the owners of the company, who live in London or Geneva or New York or somewhere like that. Those cheques would have gone to Australia. Australia was cheated out of hundreds of thousands of millions of dollars because the last government allowed those six companies to go.

In summary, these are not easy questions, and I think the government is probably setting it right here in admitting that they are not easy questions to answer. But to sit on your hands and idly say that every single foreigner who wants to come in here and buy shares can do so, because it will boost the share market price in Australia and people living in the big cities will make a big quid for themselves, is not an enlightened government position. We are moving to a slightly more enlightened position today, and we thank the government for that contribution.

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