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Resources - Mining

Cassy O'Connor MP  -  Thursday, 9 September 2021

Tags: Mining, State Budget, Subsidies

Ms O'CONNOR - Minister, I need to challenge your maligning of the Bob Brown Foundation. The work they do is on behalf of future generations. It also upholds Tasmania's brand, and we regard you as the parliamentary wing of the climate criminals.

Minister, the company Yunnan Tin -

Mr BARNETT - Point of order. I take offence to making any reference to the word 'criminal' and I ask the member to withdraw.

Ms O'CONNOR - I withdraw 'criminal' and insert 'wrecker'.

Minister, the company Yunnan Tin is the largest tin producer in the world. It's also a Chinese state owned company, yet your Government awarded this company two grants worth a total of $120 000 through your Exploration Drilling Grants Initiative. Why are Tasmanian taxpayers subsidising the activities of a massive foreign-owned mining company?

Mr BARNETT - This is more of the same from the Greens. This is amazing and some would say it's bordering on racist.

Ms O'CONNOR - Point of order. I ask the minister immediately to withdraw that accusation, it's an outright lie.

Mr BARNETT - I'm happy to withdraw the reference with respect to yourself, but I'm very concerned that the member is using the jurisdiction of an overseas company as a reason to object to Government support of the mining industry. The exploration drilling grants are very important. Foreign investment in Tasmania is likewise important. Let's be very clear. Foreign investment delivers jobs, growth and economic opportunity across the community. If the member wants to pick and choose certain companies from certain jurisdictions, she's entitled to do that, but I draw her attention to the concerns that may raise in the community about the impact on various community groups, including the Chinese community.

Ms O'CONNOR - I absolutely reject that assertion. In fact, it is more problematic, for the Chinese community in Australia, to have governments deny what's happening over in China.

Minister, my second question. If you're familiar with Sydney you may be familiar with the suburb of Vaucluse, one of the city's most expensive suburbs and home to the super rich. In 2018 mining executive Jin Jang purchased a home there for $20 million. In the same year your Government awarded his company Australian Hualong an exploration drilling grant. The company has since been awarded two further exploration grants.

You wouldn't answer my question earlier about why Tasmanian taxpayers would be subsidising super rich foreign-owned companies so perhaps you can tell the committee do you think giving grants to cashed-up mining executives is good value for money for Tasmanian taxpayers?

Mr BARNETT - The member is skirting very close to the line with the maligning and potentially derogatory and defaming remarks about individuals from a foreign country.

Ms O'CONNOR - They're not defamatory at all. I've observed that he bought a $20 million house and we're giving him taxpayers' money.

Mr BARNETT - I draw to the attention of this committee that more than 40 per cent of Tasmania's exports go to China and make it very clear -

Ms O'CONNOR - Too many eggs in the one basket.

Mr BARNETT - that exports -

Ms O'CONNOR - They're clearly vindictive on trade so we need to be very careful.

CHAIR - Ms O'Connor, please allow the minister to continue in silence.

Mr BARNETT - Exports equals jobs and 40 per cent of exports go to China. The Government wants to grow our exports to China but also give other jurisdictions. We have a trade strategy to diversify. We have just hit a record of exports. To be maligning certain individuals from certain overseas countries -

Ms O'CONNOR - I asked, do you think giving millionaires taxpayers money -

CHAIR - Ms O'Connor, the minister is answering the question.

Mr BARNETT - is not in the best interests of jobs in this state. We have a plan to grow our exports to $15 billion by 2050. We are on track with growth of 11 per cent at the last numbers in July 2021.

Ms O'CONNOR - Could you address the question? You won't talk about taxpayers' value for money while you're handing out public money to millionaires.

CHAIR - Order, Ms O'Connor.

Ms O'CONNOR - Can you confirm we charged the lowest mining royalties in the country?

Mr TUCKER - We know you charged the highest.

Ms O'CONNOR - You know we would bring them up to the national average.

CHAIR - Ms O'Connor and Mr Tucker, you will both allow the minister to answer in silence.

Mr BARNETT - Thank you for that question. There has been a doubling of royalties in the last 12 months to $60 million from the $31 million in the previous 12 months. That is a great result.

Mining and mineral processing is going well, turnover is increasing and we are talking about thousands of jobs in the sector. It is not only the north west coast, it is across the state. The flow-on benefits are significant. Even the computers we have here are using the mining and mineral processing products that we have in Tasmania. We are a mineralised state. This helps fund health, education and police services. We have injected record funds into our health system. Our budget has a range of initiatives for health and housing and record funding in infrastructure.

The royalties from the mining and mineral processing sector are vital to help fund those initiatives. More than 60 per cent of our exports are mining and mineral processing. It is an important part of our economy.

Ms O'CONNOR - Minister, we have done the maths and Tasmania charges the lowest mineral royalties in the country. If you charged at even the national average, it would have been over $90 million this year, so your Government has ripped off the state by $30 million.

Minister, in the media release announcing the establishment of the Exploration Drilling Grant Initiative on 27 July 2018, you also announced $3.5 million payroll relief for the Avebury mine. The CEO of the mine was Geoff Summers, who is also the person behind Moina Gold. Mr Summers has appeared in press conferences with the former prime minister, Malcolm Turnbull, federal Treasurer Josh Frydenberg, former premier Will Hodgman and, of course, yourself. Is there any relationship between the Liberal Party and Mr Summers, who has been the recipient of significant taxpayer largesse?

Mr BARNETT - There's a whole range of questions in there.

Ms O'CONNOR - No. There is one,

Mr BARNETT - I can't answer the questions at the back end of that. It is a matter for the Liberal Party and clearly not a matter for me.

With respect to the Avebury nickel mine, we would like - and we do - support it. We made that statement at the time through a media release, and as a Government, of course we want to support the mining and mineral processing sector. We hope that is able to progress as soon as possible. In terms of royalties, the member was making accusations and allegations around the design of the structure and framework for the royalties to be paid in Tasmania. I would like to pass to one of my officials, Brett Stewart, to answer that question.

Ms O'CONNOR - Point of order, Chair. I’m not particularly interested in hearing -

CHAIR - I'm sorry, Ms O'Connor, but you opened your question by stating the Greens royalties policy, which means the minister is now entitled to answer that part of the question as well.

Ms O'CONNOR - Perhaps he could confirm if we charge the national average -

CHAIR - Order, Ms O'Connor.

Ms O'CONNOR - we would have $90 million instead of $60 million.

Mr BARNETT - I was attempting to answer the question to allow committee members, those who are listening, and to put it on Hansard the manner in which we designed the royalties in Tasmania. It is designed in such a way to support the industry, to encourage industry development and activity. I'll pass to Brett Stewart.

Mr STEWART - Through you, minister. The royalty scheme in Tasmania is designed in such a way to balance the aim to maintain Tasmania's attractiveness to industry for exploration and mining, while also ensuring that we get a fair return for state owned resources.

The scheme in Tasmania is split into two. There's an ad valorem rate of 1.9 per cent, which is the base rate at which royalties are charged. For metallic minerals we also have a profits-based component, which basically comes into play when companies are profitable and doing well, which they obviously have been in the last 12 months. That enables the rate to be increased, up to a maximum of 5.35 per cent.

The other states use a range of different techniques. It's very hard to make a direct comparison, but if we look at the 2020 21 royalties that we received as a percentage of the sales value of minerals, it's around about 3.68 per cent. Victoria just has a flat rate of 2.75 per cent. The Northern Territory has a similar scheme to us, where they range between 2 per cent and 5 per cent. Queensland has a different scheme again, charging different rates for different commodities. For example, iron ore is 2.5 per cent; other commodities are 5 per cent.

Our combined scheme essentially places us in about the middle of the other jurisdictions, if you look at our collection as a percentage of the sales value.

Ms O'CONNOR - Just in response to that, our advice is that Deloitte has confirmed Tasmania charges the lowest mineral royalties in the nation.

Minister, you've awarded Stellar Resources four grants totalling $185 000 in the most recent EDGI grant round. Stellar were also awarded two grants in earlier rounds. The Government support comes as Stellar is taking on more than 2500 square kilometres worth of exploration licences in the north of the state. Clearly, they don't need any incentive or public subsidy to explore for minerals in Tasmania.

Isn't the EDGI program just handing out money to companies for the sake of it, rather than being targeted at any particular need?

CHAIR - Ms O'Connor, Mr Stewart's contribution had nothing to do with your question about the Avebury mine, but it had everything to do with the fact that you led your question with a statement about royalties, and you just did it again at the start of that question. So, if the minister chooses to go to royalties again in his answer, you need to understand that he is completely within his rights to do so.

Ms O'CONNOR - Thank you, Chair. We've covered royalties and we need to understand why Stellar Resources is getting so much public money when they already have exploration licences over 2500 square kilometres.

CHAIR - Ms O'Connor, my point is that the easiest way to get an answer to that question would be to have not led with the royalties issue again in that question.

Ms O'CONNOR - The easiest way would be not to have this minister in the chair.

Mr BARNETT - Thank you, Chair. Let's be very clear. The Greens have a policy to put out of work thousands of Tasmanians in the mining and mineral processing sector. They have a super tax designed to kill off the mining industry. That's what it would do. That is my opinion and the opinion of many - including in the industry - who totally reject the merit of the Greens super tax.

There have been a number of questions attempting to besmirch the credibility and reputation of those who have applied for the EDGI grants. I would like to pass to Kevin Robinson, the director of Mineral Resources Tasmania, to outline the process for those grants being made available and the objective independent process that is undertaken.

Mr ROBINSON - The EDGI process provides grants of up to 50 per cent of direct drilling costs, capped at $50 000 per drill program. To encourage exploration in remote areas and to minimise environmental impacts, a payment of up to $20 000 is permitted to defray helicopter mobilisation and demobilisation costs.

The applications are competitive and are reviewed by a committee comprising two staff from Mineral Resources Tasmania, an industry representative and an academic representative. The grant applications are assessed based on technical merit, the extent to which the proposal is a greenfield target, and the applicant's technical and financial capacity and past performance in complying with the Mineral Resources Development Act.

With the EDGI process, we call for tenders. The tenders are supplied to that committee, which then goes through those tenders, and that committee then selects which ones are in the best interests of the state at that time.

Ms O'CONNOR - Minister, perhaps you could avoid the cheap politics. I've got a question for you.

Venture Minerals reports to the Commonwealth Environment Department for the six years up to 2019 20. Reported no commencement of mining with only minor roading and installation of a portable office. Permit conditions issued by the Environment Protection Authority stipulated that the permit would lapse in the absence of substantial commencement by 24 September 2019, which clearly has not commenced. Minister, how is it that this mine is allowed to proceed in the absence of an Environmental Approval Permit?

Mr BARNETT - I'm not the minister for the Environment but let's be very clear, another day, another Greens attack on our productive industries.

In answer to your question, I've made it very clear of the importance of the mining and mineral processing sector. I've given an update on Venture Minerals. The advice I have is that the company has invested approximately $50 million in its Tasmanian projects over a period of 10 years and employed up to 60 people. Venture recently completed commissioning a wet screening plant at Riley Creek and have now booked their first iron ore shipment. This is welcome news, after years of opposition from Green front groups and others. The recent protests on site, unfortunately, underline the continuing opposition to jobs and hardworking Tasmanians seeking to earn a living.

Ms O'CONNOR - No, that's not true. That's the end of your non answer. Okay. The second question, which you probably are not going to answer either, because the only questions you are answering are the Dorothy Dixers.

The Planning Appeals Tribunal issued amended permit conditions to Venture Minerals prohibiting vehicle movements on Pieman Road and Murchison Highway between dusk and dawn in order to protect the critically endangered Tasmanian devil. In June, the director of the EPA removed these conditions. Is it your Government's belief that the Appeals Tribunal should be circumvented by the director of the EPA to enable this operation, which threatens the Tasmanian devil? If so, what does it mean for the planning system if appeals against the decisions can be overturned by the director of the EPA?

Mr BARNETT - I thank the member for her question. I advise that I am neither the minister for Environment, nor the minister for Planning and those questions should be directed accordingly.

Ms O'CONNOR - Are you not concerned that, as a result of a decision of the un independent EPA, a decision that was made to restrict the conditions under which Venture Minerals can operate in order to protect the devils, was overturned? Does it not concern you that delivers brand damage to the mining industry, for example, if it is willing to drive an endangered species closer to extinction?

Mr BARNETT - To confirm again, I am not the minister for Environment but I do understand that certain environmental groups have made an application for a judicial review in relation to the EPA director's decision to vary the Riley Mine permit. This matter is a subject of legal proceedings and process and I won't be commenting in that regard.

Ms O'CONNOR - So you don't care about the Tasmanian devil, we have established that.

Ms O'CONNOR - This is a pretty straightforward question, I don't think it will take long. The guidelines for submissions of applications for the EDGI program states that the results of the drilling program will be made public by Mineral Resources Tasmania a maximum of six months after the drilling is complete. We can only find the results for five projects, where are the others?

Mr BARNETT - Thank you for the question, I will pass to Kevin to respond.

Mr ROBINSON - Could you repeat the question?

Ms O'CONNOR - The guidelines for submissions of applications under the EDGI program states the results of the drilling program will be made public by MRT a maximum of six months after the drilling is complete. We can only find the results for five projects, where are the others?

Mr ROBINSON - I will need to look at our technical work to provide an answer.

Ms O'CONNOR - I will put that on notice.