INDUSTRY COMMENT
AUSTRALIAN METS READY TO RECONNECT AUSTMINE HIGHLIGHTS HOW AUSTRALIAN METS COMPANIES PLAN TO BOUNCE BACK FROM THE COVID-19 PANDEMIC BY REJOINING THE INTERNATIONAL MARKETPLACE.
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t is now approaching two years since the first case of COVID-19 was reported, which is an astonishing fact to reflect on. Since then, we have seen an essentially uniform imposition of travel bans and restrictions globally, creating an unprecedented decline in international travel and a breakdown of traditional international engagements. While businesses have adapted across this time and the pace of digital transformation has increased rapidly, the disruption to international business has brought with it significant challenges for the Australian METS (mining equipment, technology and services) sector, which is immersed in global trade and reliant upon accessing customers and supply chains overseas. According to Austmine’s 2020 National METS Survey, 65 per cent of Australian METS export products and services overseas and it is an $18 billion export industry for the nation. This figure has also grown steadily across the last few decades, with Australian METS capitalising on their competitive advantages of technological sophistication and mining expertise, along with the reduction of trade barriers, to access
new markets and grow their business. However, the survey also reports that the COVID-19 pandemic has had a more detrimental impact on Australian-owned businesses than their international competitors. Nineteen per cent (19 per cent) of Australian-owned companies reported a loss of export markets and 43 per cent a decrease in revenue, while there were just 10 per cent of foreign owned companies reporting a loss in export markets and 32 per cent a decrease in revenue during the pandemic period. While many businesses have innovated to service their global customers, these findings highlight the critical importance of reconnecting with international markets for Australian METS companies. Austmine has been in constant conversation with its members about export challenges and the impacts of COVID-19 on their business, reporting findings to government, partner associations and mining organisations. While businesses successfully pivoted at the start of the pandemic to set up remote working facilities and safety procedures, new challenges have arisen across the past 18 months, and continue to do so now. Speaking to Austmine, a leading
COVID-19 HAS HAMPERED THE AUSTRALIAN METS SECTOR’S GLOBAL TRADE NETWORK
AUSTRALIANMINING
METS exporter of communications technology discussed the emerging issues brought about by the pandemic and related global disruptions, including issues with red tape and market access. “Our initial hurdle was understanding how to keep employees and customers safe,” the spokesperson says. “We had a lot of face-to-face time with customers, including domestic and international travel that was impacted. “We were able to reorganise to deal with that, but then realised that every country we operate in had slightly different restrictions requiring different measures. We also know that this will last for several years, and the hurdles will keep appearing, requiring a change in operating practice. “We will need to find more efficient ways of cutting through the red tape in setting up overseas entities or financial matters, which have become difficult with COVID-19 restrictions. “Logistics and supply are also becoming a big problem and it is impacting our export business.” The escalating difficulties with international freight and shipping have been felt by Austmine members across the board, and we recently held a roundtable discussion on these issues. During the discussion it was reported that there has been a 900 per cent increase in container costs, airfreight rates have more than quadrupled and there is a severe short of container availability due to lack of carriers now servicing Australia. This combined with quarantine and deep cleaning requirements for equipment, makes the job of importing and exporting substantially more difficult and seriously compromises the competitiveness of Australian industry. Many Australian METS have carved out successful exporting journeys through years of careful preparation, research and market development. International customers are also relying on our ingenuity and innovation to tackle pressing challenges such as digital transformation, decarbonisation and waste management. It is therefore critical that the industry is supported in reengaging with the international community.
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OCTOBER 2021
TWO THIRDS OF AUSTRALIAN METS EXPORT PRODUCTS AND SERVICES OVERSEAS.
Along with assistance in securing travel permissions to service customers and develop new business, METS leaders would like to see reduced red tape and help with navigating logistics challenges. “Government support and guidance when importing to new countries would be very beneficial, especially in understanding various import restrictions, red tape and requirements,” a spokesperson for a leading safety equipment provider says. “Legislation or support in mitigating the price increases of international shipping and freight would also help keep Australian companies competitive internationally.” Austmine took its first steps back into the international arena by representing members and hosting the Australian METS – Next Generation Mining Pavilion at MINExpo 2021 in Las Vegas, USA. We have also been working through our Victoria and Western Australia Export Hubs to connect the METS sector with the right advice and networks to be successful when reentering the international arena. Recent export programs have discussed navigating procurement functions of mining companies and major original equipment manufacturers (OEMs), understanding the competitive environment globally and limiting risks and challenges of exporting. AM Austmine would appreciate feedback on your experiences of exporting and conducting international business during the COVID-19 pandemic. Contact membership@austmine.com.au to share your stories.