SHIFT MINER Monday 24th May 87th Edition 2010
The Queensland mining community’s best source of local news
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M A G A Z I N E
CHINATOWN THE largest influx of Chinese miners into Australia since the gold rush could be about to begin if Waratah Coal’s China First project gets off the ground. During the 1860s gold rush more than 40,000 Chinese arrived in Australia - a third of the mining workforce and more than three per cent of the entire Australian population at the time. Now, with the Chinese signaling they’ll invest $7.5 billion to develop the untapped Galilee Basin, the small central Queensland town of Alpha could be about to experience an extraordinary cultural change. Under the current deal being negotiated by the the owner of Waratah Coal Clive Palmer, virtually all the engineering work and the lion’s share of the mining process would be undertaken by Chinese. The Metallurgical Corporation of China would be the primary mining and construction contractor, with three other Chinese businesses listed as the sub contractors. According to Phil McNamara, managing director of Waratah Coal, the massive project would be almost exclusively built, operated and designed by the Chinese - but under Australian supervision. “We will need to make sure everything is done to Australian standards,” he told a conference in Mackay recently. “There will be a high level of input from Australian engineers, but the bulk of the heavy structures will come from China.” Mr McNamara said that given the sheer number of engineers required for the project - and the current skills shortage in Australia they would need to look at other options.
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News Miners ready to bid on QR » page 5 News Apprentice bonuses for employers extended » page 5 Feature What’s happening in the Surat Basin? » page 12 It was a day of high fashion under the autumn sun in CQ. BMA’s annual race day in Moranbah was a huge success with horses, jockeys and trainers travelling from across Australia to join locals for the big day out last Saturday. It was a memorable day for local race club officials John and Kay Juhas, whose horse Treasure Cay won the BMA cup in the final race for the day.
Around Town Blackwater’s “Super Saturday” at the footy » page 10
» More pictures & trackside action page 11
» continued page 6
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Money Matters Who’s been caught out by the tax office? » page 24
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CONTENTS 87th EDITION. 2010
8 QR SPIKE ALERT!
MORANBAH SPOILS MUMS
STIR FRY FRENZY
FROM THE EDITOR
IF you havenâ€™t read an article on the mining industry over the past fortnight - or seen a TV news story or heard something about it on the radio - then you must be living under a rock. Everywhere you turn, someone is talking about something to do with the industry - and if you live in CQ chances are it is the big players doing the talking. Both the Deputy Prime Minister and the Opposition Leader were in central Queensland last week. While Julia Gillard was here to announce the federal government will extend it apprentice bonus scheme for employers, not surprisingly she spent a lot of her time talking about the new super profits tax. Tony Abbott was also out canvassing in the marginal seat of Flynn with the LNPâ€™s new candidate. The big action was happening elsewhere - mining chief executives were
meeting treasury officials about the new tax, and quietly behind closed doors the final polishes were being put on the minersâ€™ joint bid to buy Queensland Railâ€™s tracks. All the hoop-la surrounding the sell off of QR has died down of late, as the mining sector has grappled to deal with the new tax - but behind the scenes the industryâ€™s bid for the coal tracks has continued. Former New South Wales Premier Nick Greiner is spearheading the group of 13 miners who are expected to put their money where their mouth is sometime this week. Mr Greiner has said the bid will rival the IPO, which is estimated to raise somewhere in the vicinity of $3 billion. If it does, it will be interesting to see the reaction of the Treasurer Andrew Fraser who has, so far, dismissed the miners as â€œbluffingâ€? in regards to their plans of an offer.
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7 Happy birthday! Can Count On* Gregory Crinum turns 30
14 Back to work Q-COMP awards
25 First home pain Qld price squeeze
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16 STUFF TO THE EDITOR
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Page 3 - Shift Miner Magazine, 24th May 2010
87th EDITION. 2010
Councils want first dibs at royalties AS the politicking over the proposed super profits mining tax intensifies - with daily reports emerging of projects on hold as the government and miners battle it out - councils have weighed in with their demands. No longer content to be the poor man’s cousin during the resources boom, councils in the mining belt of central Queensland want direct access to royalties generated by mining companies. Under the current system, royalties fill the state government coffers - and it is up to the Treasurer to decide how the money is spent and where. But councils met in Brisbane last week for a Royalties for the Regions Workshop, and at the time of print were considering demanding Queensland adopt Western Australia’s system. In WA, a percentage of the royalties is automatically set aside for local councils in the regions where the mining actually takes place. Whitsunday mayor Mike Brunker told ABC radio he wanted to be able to negotiate deals directly with the mining companies involved. “I have to go to the coordinator-general and ask with a cap-in-hand and say,
‘please can you ask this mining company for a water treatment plant or a sewerage treatment plant’ - it’s not right,” Cr Brunker said. “We should be able to negotiate that with the company before the lease is even granted.” He said councils are better versed than the state government at knowing exactly what sort of pressure mining will create in their towns. “In Collinsville, when the mines open up there, the traditional owners - rightfully so sit around the table and get their requirements met,” Cr Brunker said. “Yet, as a mayor of a community, I have to go to the coordinator-general and ask him politely in the EIS [environmental impact statement] process, could he ask the mining company to provide infrastructure for us”. “Clearly, that’s not right.” Meanwhile, the war of words over the super profits tax continues between the government and the resources companies. In the past fortnight, Xstrata, Fortescue Metals and Oz Minerals have all announced the proposed tax means some of their future projects will go on hold until the outcome is known. BHP Billiton has launched a series of
Mackay’s MAIN brains get together Manfred Luttenberger, John O Keefe, Chelsea Ivors, Teresa Kaluci - Mastermyne
Shayne Padgett Workforce Solutions, Darren Crocker - MAIN
Mick Gamble - Team Engineering services, Ray White - ABC Heavy Engineering
shareholders meetings to warn investors about what they say are the dangers of the tax, and the Australian Workers Union has retaliated to all of this with an advertising campaign attacking the mining companies and accusing them of scare tactics. Mining chiefs at BHP and Rio Tinto met Treasury officials for talks last week, and central Queensland has played host to visiting politicians including the Deputy Prime Minister Julia Gillard and the Opposition Leader Tony Abbott. Mr Abbott said there was widespread concern among workers in Gladstone about the new tax. “Particularly from the subcontractors and others who depend upon the mining industry for work,” he told ABC radio. “Now there’s been pretty strong work in the sector over the last few years but any slowdown in the expansion obviously poses a serious risk to livelihoods.”
But speaking to local media in Mackay Ms Gillard said jobs would not be compromised. “I can understand there’s a lot of confusion out there and where there’s confusion you’d expect people to express concern,” Ms Gillard said. “Confronted with change it’s always easy for people to be concerned but when (people know) the details it’s nowhere near as concerning as people might think.” The resources sector wants the government to scale back the tax rate, which is proposed at 40 per cent, and push up the profit threshold at which it kicks in - currently it is proposed at six per cent. The resources companies have an ally in the Queensland Premier Anna Bligh, who discuss her concerns with the Treasurer Wayne Swan next week. *For the QRC’s perspective on the super profits tax turn to page 26
Mr Abbott said there was widespread concern among workers in Gladstone about the new tax. EACH month the Mackay Area Industry Network (MAIN) holds a breakfast meeting of the minds. A guest speaker gives local business and industry leaders the opportunity to learn more about new projects going ahead in the region. The managing director of Waratah Coal
Dominic Jones - Delta SBD, Greg Porter - Porters
Phil McNamara was the latest to speak at the meeting (see our front page story). Here are some of those who attended to hear what Mr McNamara had to say about one of the biggest projects proposed for central Queensland - Waratah’s China First Project.
Ben Travers - Strike, Murray Gibbs - Ready Workforce
Phil McNamara - managing director Waratah Coal
Workplace & Motor Vehicle Accidents Medical Negligence & Asbestos Claims Local Call 4972 7567 Page 4 - Shift Miner Magazine, 24th May 2010
Local Contact John Golinelli - Old Court House Building, 16 Yarroon Street, Gladstone QLD 4680
87th EDITION. 2010
Miners to put QR bid on the table FAST NEWS QUIETLY, and behind closed doors, a consortium of mining companies has been putting together a bid to rival the share sale of Queensland Rail. When the group first approached the Premier and the Treasurer about making an offer several months ago, they were told very clearly that the state government was not interested. The Treasurer Andrew Fraser has repeatedly said the IPO of the coal track and freight business will go ahead in the September quarter, and that he believed the coal companies were only bluffing. But former New South Wales premier Nick Greiner, who is heading the group now known as the Queensland Coal Industry Rail Group (QCIRG), has made it perfectly clearly they are not bluffing. Later this week he is expected to lay the group’s cards on the table and reveal an offer he says will rival the windfall of the IPO conservatively estimated at about $3 billion. Mr Greiner told Sky Business the bid has to be comparable. “Nobody would expect the Queensland government is going to take a less valuable outcome than they can get,” he said.
The coal companies are only interested in buying the tracks, but not the “above track” component of the deal the government is pushing which includes the trains and freight business. Mr Greiner said the QCIRG was in discussions with the Australian Rail Track Corporation - which currently manages the track system in other states. He said he expected it would be a part of the group’s bid for QR. Meanwhile, Asciano - which is also opposed to the sell off of QR - has applied through the National Competition Council to have access to the rail network in Queensland brought under federal control. If successful, it would mean the company and others like it would have the right to negotiate access to the track with the service provider.
“If track access is declared it will create uncertainty not just for the float, but for access pricing and it could take up to 12 months before a final outcome is known,” Asciano chief executive Mark Rowsthorn told the Australian newspaper. But the Treasurer said the move won’t affect the timing of the float, and the government is satisfied there is already a strong and robust rail access regime administered by the Queensland Competition Authority (QCA). In fact, Mr Fraser said the government had itself already sought certification of the regime through the NCC. “We will also be announcing a range of regulatory enhancements to the QCA’s rail access regime that will be the subject of legislation to be introduced in the postBudget sitting.”
“Later this week he is expected to lay the group’s cards on the table and reveal an offer he says will rival the windfall of the IPO - conservatively estimated at about $3 billion.”
Apprentice incentives still on offer THE federal government has extended its bonus scheme for another six months for employers who put on apprentices in areas where there is a skills shortage. Last summer, around 24,400 apprenticeship positions were granted in three months under the Apprentice Kickstart program. Over the next six months the Government will more than triple the commencement bonus from $1,500 to $4,800 for small and medium businesses for each apprentice they take on. The Deputy Prime Minister Julia Gillard made the announcement at Gregory Crinum mine last week.
FIRST HAND: Deputy Prime Minister Julia Gillard and local MP Chris Trevor meet apprentices at Gregory Crinum mine
She, alongside the Member for Flynn Chris Trevor, met mechanical and electrical apprentices working on the site.
The funding is part a $600 million package to tackle the skills shortage, which includes a $200 million investment fund to partner with industry and provide up to 39,000 new training places in areas like the resources sector that don’t have enough skilled workers. “Pre-apprenticeship training and extra support during an apprenticeship are central to making sure young Australians stick with their training and move into secure, long-term careers,” Mr Trevor said. “Increasing the number of apprentices will also help us meet the demand for a skilled and dynamic workforce.”
Fight for Flynn
The political fight for the marginal seat of Flynn in central Queensland has begun in full earnest. Last week, the Opposition Leader Tony Abbott was in Gladstone with the newly endorsed LNP candidate Ken O’Dowd talking primarily about the new super profits tax on mining. The next day it was Resources Minister Martin Ferguson’s turn to kick a footy round with sitting Labor MP Chris Trevor. The pair announced funding for a swag of sporting facility upgrades in the region. .....................................................................
ABC denies rural cuts Nationals Senator Barnaby Joyce set the cat among the pigeons last week when he announced the ABC could be planning to axe two rural and resources reporter positions from regional Queensland and New South Wales. Senator Joyce said the two jobs in the firing line were Mackay and Lismore, and the cuts were as a result of a $500,000 funding shortfall. But the ABC says while it is reviewing its rural programming as part of the budget process, no final decisions have been made. .....................................................................
Ready for work The Mackay Area Industry Network (MAIN) is encouraging local businesses suffering from the current skills shortage to employ graduates from the Skilling Queensland For Work Program. The program is designed to make people “work ready” and helps link businesses workers with the right qualifications they need. The graduates have already undergone Certificate II in engineering training, which is useful for apprenticeships in local industry. It also means the cost of training is considerably less for employers, and the apprentice won’t have to leave work for a six week TAFE block. .....................................................................
Fortescue on hold Fortescue Metals has put its $17 billion expansions plans in Western Australia on hold because of the proposed super profits tax. It puts 30,000 jobs on the line, and the man at the helm Andrew “Twiggy” Forrest says it is because they will not be able to secure funding in the current climate. Treasurer Wayne Swan does not seem perturbed by continuous stream of projects going on hold - he says it is to be expected and is all part of the negotiations process.
Page 5 - Shift Miner Magazine, 24th May 2010
87th EDITION. 2010
FROM PAGE 1
Chinese future for the Galilee Basin New library helps with autism “When we talk about engineers in Australia we talk about hundreds - in China they talk in thousands,” he said. “For other workers like welders, if the skills shortage means you can’t get them locally, you need to look at other options.” He made the comments at a conference attended by about 150 mining and industry business leaders hosted by the Mackay Area Industry Network. Mr McNamara also outlined the staggering dimensions of the proposed coal development. Waratah Coal and its Chinese partners intend to develop a coal mining complex that will include four underground longwall mines, and two open cut coal mines that will collectively produce nearly 40 million tonnes of blended thermal coal a year. Mr McNamara says the Galilee Basin is extremely stable in comparison to the Bowen Basin and less interruptions to the coal seam means previously unheard of longwall mining processes are being considered. Mr McNamara flagged plans to install long-
wall miners nearly half a kilometre long, working on coal “blocks” up to 7 kilometres in length. To put that in layman’s terms, they plan to be cutting and removing coal from an uninterrupted underground coal face seven thousand metres in length. If achieved, that will rewrite the record books for longwall mining, and will also mean the mine will need to have a prodigious power supply, and would become one of the largest electricity users in Queensland. The other infrastructure plans are equally staggering. It is proposed there would be an accommodation complex for more than 6000 miners and a 500 kilometre strip of brand new heavy haul gauge railway built from scratch linking the mine to Abbot Point. Workers would fly in and out of the site in a jumbo jet, and would drink water piped 50 kilometres from the Belyando River. These are just some of the many and enormously expensive infrastructure plans if the project gets the go-ahead.
“For other workers like welders, if the skills shortage means you can’t get them locally, you need to look at other options.”
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