Issue link: https://viewer.e-digitaleditions.com/i/122153
miningreview "Our mining labour costs are growing much more quickly than the national average and are now among the highest in the world." global averages. Even in iron ore, Australia has lost its operating cost advantage for all but established Pilbara projects," the MCA report said. Our mining labour costs are growing much more quickly than the national average and are now among the highest in the world. "Only five years ago we could build coal and iron ore projects as cheaply as our competitors … Now, Australian iron ore projects are 30 per cent more expensive than the global average. For thermal coal, the figure is 66 per cent," the report said. Almost half of Australia's copper production is among the most expensive 25 per cent of mines globally, and cost pressures last year forced BHP Billiton to postpone its expansion at Olympic Dam in SA. A lot is at stake. If Australia can keep its share of the export market, our resources sector revenue will increase by $121 billion a year by 2031, the MCA report estimates. Between 2003 and 2011, iron ore exports more than doubled, as did the price of the steel-making commodity. But the MCA reckons that can't last. To keep growth strong, 60 low-cost projects – expansion of existing mines or new projects – need to be implemented. Only growth in export volumes will keep us pointing upwards, the MCA report said, because the higher prices of the past are not guaranteed. BAEconomics undertook modelling to forecast the outcome for Australia of a scenario where government policies (resource rent tax and carbon tax) have a negative impact on trade. According to the forecast, coal exports could drop by 37 per cent and iron ore exports by 21 per cent by 2040. The MCA recommends a shift in dialogue to "the opportunity and benefits at risk" rather than how to distribute the earnings via taxation. Looking back at today from a few years hence, concern over Australia's prospects in 2013 could just end up being a blip of negative sentiment. But with minerals and fuels contributing more than half of our income from exports, and with LNG looming as a big earner, there are some things well worth worrying about. Fast Fact China's consumption of the world's metals will increase from 40% today to about 50% in 2020.