Industry wary but confident of environmental law overhaul after talks with new minister
Business leaders remain wary of environmental reforms following the nature positive disaster but new minister Murray Watt is doing a better job of earning their trust than his predecessor.
Industry sources who attended an initial consultation on Thursday told The West they got a much better vibe from the new environment minister than Tanya Plibersek, who some said was more likely to take an 'it's my way or the highway' approach.
The main sticking points to landing the reforms within Senator Watt's ambitious 18-month timetable are the scope of a Federal environmental protection agency and whether climate impacts should be added as a consideration for project approvals.
The minister told the 30 groups represented at the roundtable — half in Canberra and half attending virtually — that he was determined to get the deal done and all sides would have to compromise.
'I think that people understand that we had a lost opportunity in not being able to reach agreement as a country about where these rules go,' Senator Watt said afterwards.
'If we don't pass these laws, then our environment faces more destruction. Businesses face more cost and delay in their projects.'
Business Council Australia chief executive Bran Black backed the aim to get the changes through in the first half of this term.
'We need more projects approved and more homes built, and the closer we get to an election the harder it can sometimes get to achieve consensus,' he said.
Peak bodies for resources, construction, agriculture and energy attended along with a range of environmental groups and key figures from Rio Tinto, BHP, AACo, Mirvac, Origin, Stockland and Lendlease.
Industry representatives described the talks as a 'strong start', productive, and a 'constructive reset' although acknowledged there was a long way to go yet.
It was the first time during Labor's efforts at overhauling the Howard-era laws that stakeholders from all sides had been in a room together and were able to put their views to the minister.
Senator Watt told those gathered for the EPBC Act consultations that he had deliberately mixed up the seating around the large table in one of Parliament House's committee rooms so that 'we don't have an industry corner and an environment corner' in order to better encourage people to work together.
He said there appeared to be genuine commitment from everyone to get something done.
The view was echoed by one stakeholder, who said most of those involved had already been through several iterations of talks and no longer wanted to go through the motions and let it die.
They thought Senator Watt was preparing to put forward something more achievable and acceptable than Ms Plibersek had tried.
She had split the establishment of an EPA out from the environmental protection rule changes and proposed a model that went further than the Samuel review proposed. Ultimately, the nature positive legislation couldn't find support for either the Coalition or the Greens to pass.
Others were encouraged that the minister's starting point seemed to be working with the existing Environment Protection and Biodiversity Conservation Act rather than seeking to write an entirely new Act.
He also committed to a more transparent process and a comprehensive package that incorporated both the proposed new watchdog and the rule changes.
Chamber of Minerals and Energy WA chief executive Rebecca Tomkinson said a 'robust and transparent consultation process that allows stakeholders to provide input at each stage and, crucially, to see the proposed legislative changes in their entirety before they are introduced to Parliament' was integral to achieving the objectives of better outcomes for the environment and business.
Association of Mining and Exploration Companies head Warren Pearce said while there were still differing views, there was a clear desire on all sides to get this done.
'Minister Watt is pretty frank, he is seeking a package of reforms that can find broad support – and that will pass the Parliament – and to get it done in the first half of the new term,' he said.
A top priority resources groups is removing the duplication between State and Federal processes, which will come down in part to the role of the new federal EPA and whether the Federal minister retains the powers to make ultimate approvals decisions.
'While a national EPA is clearly a key priority, questions remain around decision-making accountability,' Minerals Council of Australia head Tania Constable said.
Environmental groups are pushing for a climate trigger to be included in the new laws, which many on the industry side see as a deal-breaker, pointing out that it would stop far more than just coal and gas projects.
But Greenpeace's Glenn Walker said the environmental framework was already failing and needed fixing urgently.
'Central to all of this is an independent national environmental watchdog with teeth to enforce the laws and make decisions on approvals or large projects,' he said.
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The Advertiser
an hour ago
- The Advertiser
Iran says no to nuclear talks, UN urges restraint
Iran says it will not discuss the future of its nuclear program while under attack by Israel, as Europe tries to coax Tehran back into negotiations and the United States considers whether to get involved in the conflict. A week into its campaign, Israel said on Friday it had struck dozens of military targets, including missile production sites, a research body it said was involved in nuclear weapons development in Tehran and military facilities in western and central Iran. The Israeli military later said they had struck surface-to-air missile batteries in southwestern Iran as part of efforts to achieve air superiority over the country. Explosions were heard in Iran's southwestern Khuzestan province and at least four people there were killed, IRNA news agency reported. At least five people were injured when Israel hit a five-storey building in Tehran housing a bakery and a hairdresser's, Fars news agency reported. Iranian air defences were activated on Friday evening, Fars news agency reported. Iran fired missiles at Beersheba in southern Israel and Haifa in the north, causing damage to an Ottoman-era mosque, according to Foreign Minister Gideon Saar. A foreign ministry video also showed extensive damage to a nearby high-rise building that houses a branch of Israel's Interior Ministry. About 20 missiles were fired in those latest Iranian strikes, an Israeli military official said, and at least two people were hurt, according to the Israeli ambulance service. Israel's envoy to the United Nations, Danny Danon, told the UN Security Council his country would not stop its attacks "until Iran's nuclear threat is dismantled". Iran's UN envoy Amir Saeid Iravani called for Security Council action and said Tehran was alarmed by reports that the US may join the war. The head of the UN nuclear watchdog warned against attacks on nuclear facilities and called for maximum restraint. "Armed attack on nuclear facilities... could result in radioactive releases with great consequences within and beyond the boundaries of the state which has been attacked," Rafael Grossi, director general of the International Atomic Energy Agency, told the Security Council. Israel says it is determined to destroy Iran's nuclear capabilities but that it wants to avoid any nuclear disaster. UN Secretary-General Antonio Guterres, also speaking at the world body's Security Council, said the Iran-Israel conflict could "ignite a fire no one can control" and called on all parties to "give peace a chance". Russia and China demanded immediate de-escalation. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Trump presided over a national security meeting about Iran on Friday with top aides at the White House, a US official said. Iranian Foreign Minister Abbas Araqchi said there was no room for negotiations with the US "until Israeli aggression stops". But he later arrived in Geneva for talks with European foreign ministers at which Europe hopes to establish a path back to diplomacy over Iran's nuclear program. A senior Iranian official told Reuters Iran was ready to discuss limitations on uranium enrichment but that any proposal for zero enrichment - not being able to enrich uranium at all - would be rejected, "especially now under Israel's strikes". Israel's Foreign Minister Saar, speaking in Haifa, said he was very sceptical about Iran's intentions. "We know from the record of Iran they are not negotiating honestly," he said. Israel began attacking Iran last Friday, saying its longtime enemy was on the verge of developing nuclear weapons. Iran, which says its nuclear program is only for peaceful purposes, retaliated with missile and drone strikes on Israel. Israel is widely assumed to possess nuclear weapons. It neither confirms nor denies this. Israeli air attacks have killed 639 people in Iran, according to the Human Rights Activists News Agency, a US-based human rights organisation that tracks Iran. The dead include the military's top echelon and nuclear scientists. In Israel, 24 civilians have been killed in Iranian missile attacks, according to authorities. Reuters could not independently verify casualty figures for either side. Western and regional officials say Israel is trying to shatter the government of Supreme Leader Ayatollah Ali Khamenei. Iran says it will not discuss the future of its nuclear program while under attack by Israel, as Europe tries to coax Tehran back into negotiations and the United States considers whether to get involved in the conflict. A week into its campaign, Israel said on Friday it had struck dozens of military targets, including missile production sites, a research body it said was involved in nuclear weapons development in Tehran and military facilities in western and central Iran. The Israeli military later said they had struck surface-to-air missile batteries in southwestern Iran as part of efforts to achieve air superiority over the country. Explosions were heard in Iran's southwestern Khuzestan province and at least four people there were killed, IRNA news agency reported. At least five people were injured when Israel hit a five-storey building in Tehran housing a bakery and a hairdresser's, Fars news agency reported. Iranian air defences were activated on Friday evening, Fars news agency reported. Iran fired missiles at Beersheba in southern Israel and Haifa in the north, causing damage to an Ottoman-era mosque, according to Foreign Minister Gideon Saar. A foreign ministry video also showed extensive damage to a nearby high-rise building that houses a branch of Israel's Interior Ministry. About 20 missiles were fired in those latest Iranian strikes, an Israeli military official said, and at least two people were hurt, according to the Israeli ambulance service. Israel's envoy to the United Nations, Danny Danon, told the UN Security Council his country would not stop its attacks "until Iran's nuclear threat is dismantled". Iran's UN envoy Amir Saeid Iravani called for Security Council action and said Tehran was alarmed by reports that the US may join the war. The head of the UN nuclear watchdog warned against attacks on nuclear facilities and called for maximum restraint. "Armed attack on nuclear facilities... could result in radioactive releases with great consequences within and beyond the boundaries of the state which has been attacked," Rafael Grossi, director general of the International Atomic Energy Agency, told the Security Council. Israel says it is determined to destroy Iran's nuclear capabilities but that it wants to avoid any nuclear disaster. UN Secretary-General Antonio Guterres, also speaking at the world body's Security Council, said the Iran-Israel conflict could "ignite a fire no one can control" and called on all parties to "give peace a chance". Russia and China demanded immediate de-escalation. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Trump presided over a national security meeting about Iran on Friday with top aides at the White House, a US official said. Iranian Foreign Minister Abbas Araqchi said there was no room for negotiations with the US "until Israeli aggression stops". But he later arrived in Geneva for talks with European foreign ministers at which Europe hopes to establish a path back to diplomacy over Iran's nuclear program. A senior Iranian official told Reuters Iran was ready to discuss limitations on uranium enrichment but that any proposal for zero enrichment - not being able to enrich uranium at all - would be rejected, "especially now under Israel's strikes". Israel's Foreign Minister Saar, speaking in Haifa, said he was very sceptical about Iran's intentions. "We know from the record of Iran they are not negotiating honestly," he said. Israel began attacking Iran last Friday, saying its longtime enemy was on the verge of developing nuclear weapons. Iran, which says its nuclear program is only for peaceful purposes, retaliated with missile and drone strikes on Israel. Israel is widely assumed to possess nuclear weapons. It neither confirms nor denies this. Israeli air attacks have killed 639 people in Iran, according to the Human Rights Activists News Agency, a US-based human rights organisation that tracks Iran. The dead include the military's top echelon and nuclear scientists. In Israel, 24 civilians have been killed in Iranian missile attacks, according to authorities. Reuters could not independently verify casualty figures for either side. Western and regional officials say Israel is trying to shatter the government of Supreme Leader Ayatollah Ali Khamenei. Iran says it will not discuss the future of its nuclear program while under attack by Israel, as Europe tries to coax Tehran back into negotiations and the United States considers whether to get involved in the conflict. A week into its campaign, Israel said on Friday it had struck dozens of military targets, including missile production sites, a research body it said was involved in nuclear weapons development in Tehran and military facilities in western and central Iran. The Israeli military later said they had struck surface-to-air missile batteries in southwestern Iran as part of efforts to achieve air superiority over the country. Explosions were heard in Iran's southwestern Khuzestan province and at least four people there were killed, IRNA news agency reported. At least five people were injured when Israel hit a five-storey building in Tehran housing a bakery and a hairdresser's, Fars news agency reported. Iranian air defences were activated on Friday evening, Fars news agency reported. Iran fired missiles at Beersheba in southern Israel and Haifa in the north, causing damage to an Ottoman-era mosque, according to Foreign Minister Gideon Saar. A foreign ministry video also showed extensive damage to a nearby high-rise building that houses a branch of Israel's Interior Ministry. About 20 missiles were fired in those latest Iranian strikes, an Israeli military official said, and at least two people were hurt, according to the Israeli ambulance service. Israel's envoy to the United Nations, Danny Danon, told the UN Security Council his country would not stop its attacks "until Iran's nuclear threat is dismantled". Iran's UN envoy Amir Saeid Iravani called for Security Council action and said Tehran was alarmed by reports that the US may join the war. The head of the UN nuclear watchdog warned against attacks on nuclear facilities and called for maximum restraint. "Armed attack on nuclear facilities... could result in radioactive releases with great consequences within and beyond the boundaries of the state which has been attacked," Rafael Grossi, director general of the International Atomic Energy Agency, told the Security Council. Israel says it is determined to destroy Iran's nuclear capabilities but that it wants to avoid any nuclear disaster. UN Secretary-General Antonio Guterres, also speaking at the world body's Security Council, said the Iran-Israel conflict could "ignite a fire no one can control" and called on all parties to "give peace a chance". Russia and China demanded immediate de-escalation. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Trump presided over a national security meeting about Iran on Friday with top aides at the White House, a US official said. Iranian Foreign Minister Abbas Araqchi said there was no room for negotiations with the US "until Israeli aggression stops". But he later arrived in Geneva for talks with European foreign ministers at which Europe hopes to establish a path back to diplomacy over Iran's nuclear program. A senior Iranian official told Reuters Iran was ready to discuss limitations on uranium enrichment but that any proposal for zero enrichment - not being able to enrich uranium at all - would be rejected, "especially now under Israel's strikes". Israel's Foreign Minister Saar, speaking in Haifa, said he was very sceptical about Iran's intentions. "We know from the record of Iran they are not negotiating honestly," he said. Israel began attacking Iran last Friday, saying its longtime enemy was on the verge of developing nuclear weapons. Iran, which says its nuclear program is only for peaceful purposes, retaliated with missile and drone strikes on Israel. Israel is widely assumed to possess nuclear weapons. It neither confirms nor denies this. Israeli air attacks have killed 639 people in Iran, according to the Human Rights Activists News Agency, a US-based human rights organisation that tracks Iran. The dead include the military's top echelon and nuclear scientists. In Israel, 24 civilians have been killed in Iranian missile attacks, according to authorities. Reuters could not independently verify casualty figures for either side. Western and regional officials say Israel is trying to shatter the government of Supreme Leader Ayatollah Ali Khamenei. Iran says it will not discuss the future of its nuclear program while under attack by Israel, as Europe tries to coax Tehran back into negotiations and the United States considers whether to get involved in the conflict. A week into its campaign, Israel said on Friday it had struck dozens of military targets, including missile production sites, a research body it said was involved in nuclear weapons development in Tehran and military facilities in western and central Iran. The Israeli military later said they had struck surface-to-air missile batteries in southwestern Iran as part of efforts to achieve air superiority over the country. Explosions were heard in Iran's southwestern Khuzestan province and at least four people there were killed, IRNA news agency reported. At least five people were injured when Israel hit a five-storey building in Tehran housing a bakery and a hairdresser's, Fars news agency reported. Iranian air defences were activated on Friday evening, Fars news agency reported. Iran fired missiles at Beersheba in southern Israel and Haifa in the north, causing damage to an Ottoman-era mosque, according to Foreign Minister Gideon Saar. A foreign ministry video also showed extensive damage to a nearby high-rise building that houses a branch of Israel's Interior Ministry. About 20 missiles were fired in those latest Iranian strikes, an Israeli military official said, and at least two people were hurt, according to the Israeli ambulance service. Israel's envoy to the United Nations, Danny Danon, told the UN Security Council his country would not stop its attacks "until Iran's nuclear threat is dismantled". Iran's UN envoy Amir Saeid Iravani called for Security Council action and said Tehran was alarmed by reports that the US may join the war. The head of the UN nuclear watchdog warned against attacks on nuclear facilities and called for maximum restraint. "Armed attack on nuclear facilities... could result in radioactive releases with great consequences within and beyond the boundaries of the state which has been attacked," Rafael Grossi, director general of the International Atomic Energy Agency, told the Security Council. Israel says it is determined to destroy Iran's nuclear capabilities but that it wants to avoid any nuclear disaster. UN Secretary-General Antonio Guterres, also speaking at the world body's Security Council, said the Iran-Israel conflict could "ignite a fire no one can control" and called on all parties to "give peace a chance". Russia and China demanded immediate de-escalation. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Trump presided over a national security meeting about Iran on Friday with top aides at the White House, a US official said. Iranian Foreign Minister Abbas Araqchi said there was no room for negotiations with the US "until Israeli aggression stops". But he later arrived in Geneva for talks with European foreign ministers at which Europe hopes to establish a path back to diplomacy over Iran's nuclear program. A senior Iranian official told Reuters Iran was ready to discuss limitations on uranium enrichment but that any proposal for zero enrichment - not being able to enrich uranium at all - would be rejected, "especially now under Israel's strikes". Israel's Foreign Minister Saar, speaking in Haifa, said he was very sceptical about Iran's intentions. "We know from the record of Iran they are not negotiating honestly," he said. Israel began attacking Iran last Friday, saying its longtime enemy was on the verge of developing nuclear weapons. Iran, which says its nuclear program is only for peaceful purposes, retaliated with missile and drone strikes on Israel. Israel is widely assumed to possess nuclear weapons. It neither confirms nor denies this. Israeli air attacks have killed 639 people in Iran, according to the Human Rights Activists News Agency, a US-based human rights organisation that tracks Iran. The dead include the military's top echelon and nuclear scientists. In Israel, 24 civilians have been killed in Iranian missile attacks, according to authorities. Reuters could not independently verify casualty figures for either side. Western and regional officials say Israel is trying to shatter the government of Supreme Leader Ayatollah Ali Khamenei.
The Age
2 hours ago
- The Age
Dark clouds gather over Australia's red earth riches
Spearing out of the deep-red Hammersley Range in Western Australia's Pilbara region is an 18-kilometre conveyer belt. It rumbles day and night on rollers transporting a steady flow of iron ore from a monster four-storey crusher at the area's newest open-cut mine. Rio Tinto's $2.4 billion Western Range iron ore mine – officially opened this month – is the latest in a long line of mega-projects that have carved up the desert here for the past 60 years, sending mountains of crushed rock to the port and onto huge bulk carriers bound for steel mills in Asia. China's voracious appetite for iron ore, the reddish dirt that's turned into steel inside giant blast furnaces, has kept the Australian economy prosperous for decades, bringing in hundreds of billions of dollars in revenue and creating the world's two most valuable miners, BHP and Rio Tinto, along the way. Loading To this day, the commodity still ranks as Australia's single biggest export earner, fetching $138 billion in the past financial year alone, accounting for up to 5 per cent of the country's gross domestic product. But demand in China is starting to cool, which is a cause of considerable concern because Chinese steelmakers are the biggest buyers of our iron ore by far. Deteriorating conditions in the Chinese property sector, which accounts for 30 per cent of its steel demand, is crunching building activity, just as US President Donald Trump's tariffs loom as another economic threat that could hinder the effectiveness of Beijing's stimulus measures. At the same time, a wave of additional iron ore from the next generation of mines in Africa and Australia is raising the risk of an oversupply, while the declining quality of Australia's iron ore output means it will be unsuitable for less-polluting steel-making practices becoming more popular in the push to avert catastrophic global warming. All of these headwinds are leading to one important question: could Australia's iron ore earnings powerhouse be finally facing the beginning of long and gradual structural decline? The risk, analysts warn, is real. The fundamentals are certainly 'less constructive' than they have been in the past, says Lachlan Shaw, a mining analyst at UBS. 'The downside case for iron ore rests on a combination of supply growth from new projects including Simandou in Guinea, Onslow and Iron Bridge in WA and recovering production in Brazil,' he says. 'This, coupled with expectations for China's steel production to ease lower over coming years, results in an outlook that would, if it comes to pass, put downward pressure on iron ore prices.' However, it's also worth remembering that the iron ore price has long defied repeated predictions it is overdue for a fall, he adds. China's steel output has probably peaked, but this is unlikely to spell disaster. Production in China is likely to plateau at 'relatively high levels' for some time, UBS says, and demand growth in the emerging steel sectors of South-East Asia, India and the Middle East could help offset weakening conditions in China. The development of projects to unleash new iron ore supplies may also come under pressure from higher costs and more costly and complicated approvals and heritage management processes. 'The collective market has a long history of over-confidence in forecasting iron ore's demise,' Shaw says. 'There are important offsets that may see iron ore trade stronger than the more bearish forecasts on the street.' The slowdown in China presents the most immediate threat to demand. But a debate has also begun intensifying among the Pilbara iron ore giants about a longer-term question: could the shift to less-polluting steel-making methods which require higher grades of iron ore than Australian mines are producing hasten their demise? 'We're going to be in the Pilbara for decades. It has got a strong future if we do the work.' Rio's head of iron ore, Simon Trott Chinese steel mills' shift from traditional blast furnaces to cleaner processes, which use electricity instead of coal and require iron ore with fewer impurities, could turn the Pilbara into a wasteland, Andrew Forrest, the billionaire chairman of Western Australia's third-largest iron ore shipper, Fortescue Metals Group, said recently. 'They are going to shut down the old-fashioned, two-century-old technology of burning sticks and logs, putting in coal, putting in iron ore, burning it all and sending up masses of pollution into the atmosphere and producing steel,' Forrest told a mining summit in Perth. 'They're looking straight into a future that may or may not include WA.' Analysts agree that the momentum in the industry towards cleaner steel-making processes makes the outlook for lower grade iron ore 'more challenged' relative to higher-grade products. To maintain demand for the Pilbara's mid- to low-grade iron ore, technical innovation would be required to secure their use as feedstocks for lower-carbon steel-making processes, they say. BHP and Rio Tinto have partnered with BlueScope Steel to build an electric iron-making furnace as part of a demonstration project at Kwinana near Perth. Forrest's Fortescue is investing heavily in a push to diversify into green hydrogen as a substitute for coal in the steel-making process, and has plans to build a commercial-scale green iron plant in the Pilbara. 'Australian industry is starting to do the work here,' says Shaw. The opportunity for Australia to shift to a green iron producer and away from an iron ore miner and shipper is 'real', he adds, but will face technical and economic challenges. 'Innovation, commitment and supportive policy settings will likely be needed in combination to realise such an enormous transition,' he says. 'They are going to shut down the old-fashioned, two-century-old technology of burning sticks and logs, putting in coal, putting in iron ore, burning it all and sending up masses of pollution into the atmosphere and producing steel.' Fortescue's Andrew Forrest While the industry is responding to growing efforts to decarbonise the steel sector, which accounts for at least 8 per cent of global greenhouse gas emissions, Forrest's suggestion that the Pilbara is at risk of becoming a wasteland is one that Rio Tinto's head of iron ore, Simon Trott, rejects. 'We're going to be in the Pilbara for decades,' he says. 'It has got a strong future if we do the work.' Asked to explain the progressive decline in ore quality coming out of the region, Trott says: 'You tend to start with the best bits first. That's what happened when the Pilbara got developed through the '60s, and since then, as a whole, the Pilbara has gradually declined.' Rio Tinto says its new mines, such as Western Range, will shore up growth. The Anglo-Australian mining giant also believes it has an ace up its sleeve at its Rhodes Ridge development, which is expected to be ready by the end of this decade and contains more than 6 billion tonnes of higher grade ore. 'The good news for us is that it's in front of us rather than behind us,' says Trott. Loading Rod Sims, the long-serving former chair of the Australian Competition and Consumer Commission, paints a more optimistic picture of the Pilbara's future. Where the industry sees a threat, he sees lucrative potential to create a green iron manufacturing hub for which, he says, Australia is 'superbly well positioned'. Now chair of the Superpower Institute, a think tank he co-founded with energy expert and economist Ross Garnaut, Sims says Australia's abundant iron ore, when coupled with world-class wind and solar resources, could power a green steel export industry potentially worth $386 billion a year by 2060. 'Green iron is the next great chapter in Australia's export story,' he says. 'As the world decarbonises, our fossil fuel exports will inevitably decline – but by using our unparalleled renewable energy resources to make green iron, we can replace those exports with high value, zero carbon products that the world will need.' One way to fulfil that vision is to use green hydrogen to replace coal in the steelmaking process, creating an emission-free product, a technology Forrest is placing big bets on. The hydrogen is sourced by splitting water into hydrogen and oxygen using electrolysis powered by fields of solar panels or wind turbines. However, the technology remains far more expensive than basic furnaces, and is not widely used yet. Loading With big challenges ahead, how Australia's mining giants position themselves for the next decade will be critical. BHP and Rio Tinto are searching for new leadership talent to steer them through. Both companies are heading into capital-intensive, construction-heavy periods with a focus on projects aimed at boosting their supplies of commodities that stand to benefit from growing global efforts to tackle global warming, such as electric battery raw material lithium, and copper, a key ingredient in electric wiring. BHP is focusing on several new and expanded copper mines, while Rio Tinto is concentrating on copper and lithium. 'Both businesses will need to pivot to a more technical, execution-driven capability within senior leadership ranks,' says Shaw. 'It will come down to the right balance of senior leaders being able to surround themselves with the technical skills and talent they need and can trust, versus potential new leadership with stronger technical experience.' Rio Tinto chair Dominic Barton surprised investors with his disclosure three weeks ago that chief executive Jakob Stausholm will leave later this year. The miner didn't name a successor, prompting speculation the transition was hasty and a result of friction between Stausholm and Barton. Stausholm has rejected talk of a rift. There is 'no disalignment', he told reporters at Western Range last week. 'We have completely agreed between ourselves that it is the right time to look for succession, and I will be stepping down. I am very happy and proud about my what will be five years as CEO of this company,' he said. Any incoming boss at Rio Tinto will need to 'double down to deliver greater operational performance', Barton said, intimating the company is focusing on candidates for the top job with deep mining experience. Change at the top of resource giant BHP has been smoother. Former National Australia Bank chief executive Ross McEwan seamlessly took over as company chair from eight-year veteran Ken MacKenzie in March, although there are now suggestions the Big Australian is looking to replace CEO Mike Henry but no official acknowledgement. For Shanghai-based Baowu, Rio Tinto's partner in Western Range, there is no equivocation on the Pilbara's future. The world's largest steel producer, wholly owned by the Chinese government, is firmly rooted in the region's red earth, owning 46 per cent of the joint venture since 2002. Its chairman, Hu Wangming, describes it almost poetically as a place 'where partnership and friendship flourish, like the ore veins of the Western Range: strong, deep and everlasting'.
Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
Dark clouds gather over Australia's red earth riches
Spearing out of the deep-red Hammersley Range in Western Australia's Pilbara region is an 18-kilometre conveyer belt. It rumbles day and night on rollers transporting a steady flow of iron ore from a monster four-storey crusher at the area's newest open-cut mine. Rio Tinto's $2.4 billion Western Range iron ore mine – officially opened this month – is the latest in a long line of mega-projects that have carved up the desert here for the past 60 years, sending mountains of crushed rock to the port and onto huge bulk carriers bound for steel mills in Asia. China's voracious appetite for iron ore, the reddish dirt that's turned into steel inside giant blast furnaces, has kept the Australian economy prosperous for decades, bringing in hundreds of billions of dollars in revenue and creating the world's two most valuable miners, BHP and Rio Tinto, along the way. Loading To this day, the commodity still ranks as Australia's single biggest export earner, fetching $138 billion in the past financial year alone, accounting for up to 5 per cent of the country's gross domestic product. But demand in China is starting to cool, which is a cause of considerable concern because Chinese steelmakers are the biggest buyers of our iron ore by far. Deteriorating conditions in the Chinese property sector, which accounts for 30 per cent of its steel demand, is crunching building activity, just as US President Donald Trump's tariffs loom as another economic threat that could hinder the effectiveness of Beijing's stimulus measures. At the same time, a wave of additional iron ore from the next generation of mines in Africa and Australia is raising the risk of an oversupply, while the declining quality of Australia's iron ore output means it will be unsuitable for less-polluting steel-making practices becoming more popular in the push to avert catastrophic global warming. All of these headwinds are leading to one important question: could Australia's iron ore earnings powerhouse be finally facing the beginning of long and gradual structural decline? The risk, analysts warn, is real. The fundamentals are certainly 'less constructive' than they have been in the past, says Lachlan Shaw, a mining analyst at UBS. 'The downside case for iron ore rests on a combination of supply growth from new projects including Simandou in Guinea, Onslow and Iron Bridge in WA and recovering production in Brazil,' he says. 'This, coupled with expectations for China's steel production to ease lower over coming years, results in an outlook that would, if it comes to pass, put downward pressure on iron ore prices.' However, it's also worth remembering that the iron ore price has long defied repeated predictions it is overdue for a fall, he adds. China's steel output has probably peaked, but this is unlikely to spell disaster. Production in China is likely to plateau at 'relatively high levels' for some time, UBS says, and demand growth in the emerging steel sectors of South-East Asia, India and the Middle East could help offset weakening conditions in China. The development of projects to unleash new iron ore supplies may also come under pressure from higher costs and more costly and complicated approvals and heritage management processes. 'The collective market has a long history of over-confidence in forecasting iron ore's demise,' Shaw says. 'There are important offsets that may see iron ore trade stronger than the more bearish forecasts on the street.' The slowdown in China presents the most immediate threat to demand. But a debate has also begun intensifying among the Pilbara iron ore giants about a longer-term question: could the shift to less-polluting steel-making methods which require higher grades of iron ore than Australian mines are producing hasten their demise? 'We're going to be in the Pilbara for decades. It has got a strong future if we do the work.' Rio's head of iron ore, Simon Trott Chinese steel mills' shift from traditional blast furnaces to cleaner processes, which use electricity instead of coal and require iron ore with fewer impurities, could turn the Pilbara into a wasteland, Andrew Forrest, the billionaire chairman of Western Australia's third-largest iron ore shipper, Fortescue Metals Group, said recently. 'They are going to shut down the old-fashioned, two-century-old technology of burning sticks and logs, putting in coal, putting in iron ore, burning it all and sending up masses of pollution into the atmosphere and producing steel,' Forrest told a mining summit in Perth. 'They're looking straight into a future that may or may not include WA.' Analysts agree that the momentum in the industry towards cleaner steel-making processes makes the outlook for lower grade iron ore 'more challenged' relative to higher-grade products. To maintain demand for the Pilbara's mid- to low-grade iron ore, technical innovation would be required to secure their use as feedstocks for lower-carbon steel-making processes, they say. BHP and Rio Tinto have partnered with BlueScope Steel to build an electric iron-making furnace as part of a demonstration project at Kwinana near Perth. Forrest's Fortescue is investing heavily in a push to diversify into green hydrogen as a substitute for coal in the steel-making process, and has plans to build a commercial-scale green iron plant in the Pilbara. 'Australian industry is starting to do the work here,' says Shaw. The opportunity for Australia to shift to a green iron producer and away from an iron ore miner and shipper is 'real', he adds, but will face technical and economic challenges. 'Innovation, commitment and supportive policy settings will likely be needed in combination to realise such an enormous transition,' he says. 'They are going to shut down the old-fashioned, two-century-old technology of burning sticks and logs, putting in coal, putting in iron ore, burning it all and sending up masses of pollution into the atmosphere and producing steel.' Fortescue's Andrew Forrest While the industry is responding to growing efforts to decarbonise the steel sector, which accounts for at least 8 per cent of global greenhouse gas emissions, Forrest's suggestion that the Pilbara is at risk of becoming a wasteland is one that Rio Tinto's head of iron ore, Simon Trott, rejects. 'We're going to be in the Pilbara for decades,' he says. 'It has got a strong future if we do the work.' Asked to explain the progressive decline in ore quality coming out of the region, Trott says: 'You tend to start with the best bits first. That's what happened when the Pilbara got developed through the '60s, and since then, as a whole, the Pilbara has gradually declined.' Rio Tinto says its new mines, such as Western Range, will shore up growth. The Anglo-Australian mining giant also believes it has an ace up its sleeve at its Rhodes Ridge development, which is expected to be ready by the end of this decade and contains more than 6 billion tonnes of higher grade ore. 'The good news for us is that it's in front of us rather than behind us,' says Trott. Loading Rod Sims, the long-serving former chair of the Australian Competition and Consumer Commission, paints a more optimistic picture of the Pilbara's future. Where the industry sees a threat, he sees lucrative potential to create a green iron manufacturing hub for which, he says, Australia is 'superbly well positioned'. Now chair of the Superpower Institute, a think tank he co-founded with energy expert and economist Ross Garnaut, Sims says Australia's abundant iron ore, when coupled with world-class wind and solar resources, could power a green steel export industry potentially worth $386 billion a year by 2060. 'Green iron is the next great chapter in Australia's export story,' he says. 'As the world decarbonises, our fossil fuel exports will inevitably decline – but by using our unparalleled renewable energy resources to make green iron, we can replace those exports with high value, zero carbon products that the world will need.' One way to fulfil that vision is to use green hydrogen to replace coal in the steelmaking process, creating an emission-free product, a technology Forrest is placing big bets on. The hydrogen is sourced by splitting water into hydrogen and oxygen using electrolysis powered by fields of solar panels or wind turbines. However, the technology remains far more expensive than basic furnaces, and is not widely used yet. Loading With big challenges ahead, how Australia's mining giants position themselves for the next decade will be critical. BHP and Rio Tinto are searching for new leadership talent to steer them through. Both companies are heading into capital-intensive, construction-heavy periods with a focus on projects aimed at boosting their supplies of commodities that stand to benefit from growing global efforts to tackle global warming, such as electric battery raw material lithium, and copper, a key ingredient in electric wiring. BHP is focusing on several new and expanded copper mines, while Rio Tinto is concentrating on copper and lithium. 'Both businesses will need to pivot to a more technical, execution-driven capability within senior leadership ranks,' says Shaw. 'It will come down to the right balance of senior leaders being able to surround themselves with the technical skills and talent they need and can trust, versus potential new leadership with stronger technical experience.' Rio Tinto chair Dominic Barton surprised investors with his disclosure three weeks ago that chief executive Jakob Stausholm will leave later this year. The miner didn't name a successor, prompting speculation the transition was hasty and a result of friction between Stausholm and Barton. Stausholm has rejected talk of a rift. There is 'no disalignment', he told reporters at Western Range last week. 'We have completely agreed between ourselves that it is the right time to look for succession, and I will be stepping down. I am very happy and proud about my what will be five years as CEO of this company,' he said. Any incoming boss at Rio Tinto will need to 'double down to deliver greater operational performance', Barton said, intimating the company is focusing on candidates for the top job with deep mining experience. Change at the top of resource giant BHP has been smoother. Former National Australia Bank chief executive Ross McEwan seamlessly took over as company chair from eight-year veteran Ken MacKenzie in March, although there are now suggestions the Big Australian is looking to replace CEO Mike Henry but no official acknowledgement. For Shanghai-based Baowu, Rio Tinto's partner in Western Range, there is no equivocation on the Pilbara's future. The world's largest steel producer, wholly owned by the Chinese government, is firmly rooted in the region's red earth, owning 46 per cent of the joint venture since 2002. Its chairman, Hu Wangming, describes it almost poetically as a place 'where partnership and friendship flourish, like the ore veins of the Western Range: strong, deep and everlasting'.
