Mining industry sends warning to NT Govt

Posted: 12th Apr

THE Territory Government has been warned by the mining industry to get cracking or run the risk of missing out on critical revenue and job creating projects.

The Minerals Council of Australia NT said mining will generate $350 million in royalties for the NT in this financial year alone.

The message to the NT Government is clear, ‘If you want more revenue to fund essential public services like undergrounding power lines in Darwin or building roads, bridges and schools in remote communities, it’s time to get cracking and work with industry so projects are evaluated in good time and encouraged to start construction quickly’,” said its chief executive Drew Wagner.

Our world-class mining companies and resource developers have worked hard to get these projects ready.

“It’s critical on May Budget day that the Chief Minister Michael Gunner and his government supports them with the stability and confidence they need in royalties and regulatory settings to ensure investors can get behind these projects and more Territorians get jobs as a result.”

As Australia moves into Budget season, Mr Wagner said governments need to recognise what drives job growth – especially the NT – and choose wisely when making revenue and spending decisions.

“While Western Australia and Queensland tend to dominate national news about mining and resources development, the NT mining sector is hugely important as a source of revenue and has massive future potential,” he said.

Drew Wagner, The Minerals Council of Australia NT

“With only a handful of operational sites, mining still contributes 14 per cent of gross state product. For the government, it is the second largest contributor to NT self-generated funds (after payroll tax, which is also drawn from mining companies).”

Mr Wagner said the last few years have seen significant advances with several major projects. He said final investment decisions are imminent on hundreds of millions of dollars in projects which would bring huge benefits to Territorians.

“Verdant is looking to sign off in coming months on a $450 million investment in its Ammaroo phosphate project – starting in the first quarter of next year and bringing 300 jobs in construction and a further 165 jobs in ongoing operations,” he said.

“KGL Resources are looking at commencing its project in the middle of next year".

This is a $190 million investment in a copper concentrates venture that will need 360 people to build, and generate a further 300 long term operational jobs.

Arafura’s Nolan’s Bore rare earths project is also close to a final decision with environmental approvals in place and it is looking at a $700 million investment that will generate 500 jobs in construction and 300 in ongoing operations. This also has potential for further value-add.

And TNG’s Mount Peake vanadium, titanium pigment and pig iron project is looking at an $1.8 billion investment with construction to start in 2nd half 2019. This would mean several hundred jobs.

“In all, there are projects close to final investment decision with planned construction starting next year involving around $5 billion of investment, generating 2500 jobs in construction and almost 2000 jobs in ongoing operations".

And this is just for projects potentially starting construction in 2019.

These projects will underpin long-term jobs and economic activity in the NT for years, including valuable NT government royalty revenue.

The NT has great resources but suffers from being remote and sparsely populated. The last Fraser Institute Annual Survey had the NT slip seven places to 27th of 91 jurisdictions on mining investment attractiveness. “Domestically, the NT is behind Western Australia, Queensland and South Australia – which would all love to snare mineral exploration and project investment from the NT.

The Commonwealth Grants Commission looks at the actual amount of revenue a state raises to the amount of tax revenue it could raise if it applied the national average. From mining, the NT government is raising 129.2 per cent of the national average!

“It is critical the NT Government does not strangle an industry about to boom.”