Tuesday, 16 June 2020
Western Australia: Mining
I rise this evening to talk about the importance of industrial development in the north-west of my home state of Western Australia and the challenges facing Australia's world-leading resources sector. As many in the chamber are aware, Western Australia is a major economic player within the Australian economy, primarily driven by its globally competitive resources sector.
Last year WA's resources sector posted record sales of $167.3 billion; that was almost $200 billion shared by every Australian. A May 2020 report commissioned by the Minerals Council of Australia estimated that total royalties plus company tax payments from the minerals sector were $39.3 billion in the 2018-2019 financial year. This is $8 billion more than the previous year, and a tax and royalty dividend that, again, benefits every Australian. In the same year WA received $6.22 billion in royalties from the resources sector, and that projection is estimated to increase to $6.37 billion this financial year.
In 2019 the WA mining sector employed a record 133,000 workers—up from 120,000 in 2018. This indirectly created thousands of jobs in the transport, supply support and service based sectors throughout the Western Australian economy and, indeed, the whole economy of Australia. Significantly, the mining and resources sector has continued to operate throughout the coronavirus pandemic and has greatly assisted many families and businesses to weather this period of great economic uncertainty.
This point was well made by one of Australia's most senior officials. During a recent public hearing of the Senate Select Committee on COVID-19, the Secretary of the Treasury, Dr Steven Kennedy, highlighted the importance of mining to the Australian economy:
Mining represents 10 per cent of gross value added of the Australian economy and three per cent of employment.
Dr Kennedy also acknowledged that the early and decisive action by the Australian government substantially reduced the adverse economic impact of the health response to the pandemic:
… in Australia we have been able to continue a wider range of economic activities, such as construction, manufacturing and mining. Some countries have had no choice but to act more aggressively.
This view is reinforced by iron ore research analyst Philip Kirchlechner, who stated:
By keeping the mines open … Western Australia is supporting the whole country
Iron ore miners are paying company tax which goes to the Federal Government, so it's all the Australian people [who] benefit from the taxes the mining companies pay.
It's also important to note that both the WA and Australian economies are expected to recover from the impacts of the pandemic sooner, as a direct result of the resilience of the mining and resources sector. This is no surprise to many Western Australians who have long recognised the wide-ranging benefits this sector has brought to our local economy and our high standard of living.
But our mining and resources sector has many facets. Yara Pilbara, which operates two facilities in the Pilbara region of Western Australia, is a little known but critical feature of the state's industrial development. The Yara Pilbara's fertiliser plant is one of the largest ammonia production sites in the world, producing fertilisers which are exported globally. Yara Pilbara is the operator of the first modular technical ammonium nitrate manufacturing plant, located on the Burrup Peninsula, adjacent to Karratha. The technical ammonium nitrate facility converts ammonia into ammonium nitrate, a crucial material for mining and resource operations throughout the Pilbara, as the main chemical component of industrial explosives. Despite the obvious connection between industrial development and the prosperity of Western Australia and Australia, some operators are now finding themselves the subject of passionate but unsubstantiated claims of environmental vandalism. A powerful example is the poor treatment levelled at Yara Pilbara by environmentalists and the Western Australia state Labor government.
In November 2016, the Senate Environment and Communications References Committee established an inquiry into the protection of Aboriginal rock art on the Burrup Peninsula. The inquiry was tasked to examine whether industrial emissions were having an adverse effect on nearby rock art. The inquiry heard from a range of stakeholders, including the CSIRO subject matter experts. It examined: the Commonwealth-state regulatory framework; the strict environmental approvals process for the construction and operation of the technical ammonium nitrate facility plant and the requirements to undertake extensive air-quality and spectral mineralogical monitoring; the independent CSIRO monitoring being conducted to identify risks associated with industrial emissions impacting upon the rock art and the role of the Burrup Rock Art Technical Working Group, established by the Western Australia government to monitor the heritage rock art sites on the Burrup Peninsula from 2004 to 2016; and, finally, the CSIRO's role in conducting the monitoring work designed and commissioned by the Burrup Rock Art Technical Working Group.
Between 2004 and 2016, the CSIRO conducted independent monitoring of colour change and spectral mineralogy and conducted a series of art quality studies to assess any likelihood that industrial emissions could affect the nearby Aboriginal rock art. Its final report, released in September 2017, concluded that monitoring since 2004 indicated that industrial emissions had had no statistically significant or measurable impact on the rock art.
The Senate inquiry was initiated by the Australian Greens and was designed to undermine confidence in the activities of Yara Pilbara and future industrial development across the Burrup Peninsula. Central to claims by the Australian Greens, aided by the Bob Brown Foundation and others, was so-called evidence presented by Professor John Black that sought to destroy the scientific credibility of the CSIRO's monitoring and findings. For context, Professor Black is a former assistant chief of the CSIRO division of animal production and former adjunct professor in veterinary science at the University of Sydney. He is currently an honorary research fellow at The University of Western Australia and affiliated with the Friends of Australian Rock Art advocacy group.
Professor Black's criticism of the CSIRO's research was primarily directed at the methodology applied to measure colour and mineralogy changes at rock art sites. However, Professor Black's submission also addressed the health and safety effects of additional pollution from the plant, including nitrate poisoning, carbon monoxide poisoning and risks of ammonium nitrate explosion. None of these claims were supported by credible scientific evidence.
Further proof of the lack of evidence and unsubstantiated claims of Professor Black has been revealed in recent materials and analysis as part of Yara Pilbara's license extension approval, overseen by the WA state government. BenchMark Toxicology Services Pty Ltd was engaged by the Department of Water and Environmental Regulation to undertake an independent peer review of the information submitted by Yara Pilbara. The review made the following comments regarding Professor Black's claims. It said that John L Black Consulting 'did not consider' the concerns of other scientific studies about 'the additional complexities in the atmosphere that might affect the colours and chemistry of gases'. On the important point of nitrogen dioxide emissions, Professor Black claimed Yara's nitrogen dioxide emissions were 23 times higher than the ambient air quality guidelines specified. What did the independent review find? It found:
This conclusion is alarmist and not scientifically justifiable.
… … …
The exceedances quoted by JLBC in this period occurred as a result of daily recorded high emissions levels from calibration and drift span checks … not routine operational conditions.
On Professor Black's method for assessing nitrogen dioxide exposure health risks, the independent report said that the report 'is scientifically inappropriate and the outcomes are misleading'.
Having failed to make a compelling case in front of a Senate inquiry and had their claims repudiated by authoritative and independent advice commissioned by the WA state government, Professor Black and others have continued their advocacy. This time they have found a softer, more impressionable target in the form of the WA Labor government Minister for the Environment, the Hon. Stephen Dawson. In November 2017, approximately nine months after appearing before the committee, Professor Black and former senators Bob Brown and Christine Milne wrote to Minister Dawson, repeating their alarmist and unsubstantiated claims. I look forward to returning to the Senate very soon to continue my story about how the WA state Labor government Minister Stephen Dawson has now become the soft target for environmentalists and those wanting to undermine industrial development across the Burrup Peninsula.