'No guarantees' on Australia mining boom: BHP

15th September 2010, Comments 0 comments

Australia's Asia-driven resources boom is "not guaranteed" and needs foreign investment to thrive, BHP Billiton's chief warned Wednesday, urging competitive policies on tax and climate change.

Resilient Asian demand for resources helped Australia dodge recession during the global slump, and BHP chief executive Marius Kloppers said China's growth "underpins BHP Billiton expectations of the future demand for our products."

But he warned Australia not to be complacent about its economic advantage, warning that future success would rely on infrastructure investment, competitive taxation and a steady pool of skilled labour.

"This cannot be funded without capital from overseas and it is vital that the investment climate remains internationally competitive," Kloppers said in a speech in Sydney.

"While Australia has the mineral and energy resources and geographic location to prosper, success is not guaranteed," he added. "Over the last decade, Australia's share of production of most commodities has stagnated or declined."

Though he declined to go into detail, Kloppers said "infrastructure, immigration and tax policies" would be critical to Australia's fortunes, a reference to a planned 30 percent tax on coal and iron ore profits.

BHP, Rio Tinto and Xstrata brokered a deal on the tax earlier this year which watered down the government's original proposal for a 40 percent levy on a wider range of resources.

But its implementation has been cast into doubt by Prime Minister Julia Gillard's failure to win an outright majority at August 21 polls, forcing her to enter a fragile coalition with independents who oppose its current form.

Kloppers said Australia must also lead the way on policies to tackle climate change if it wished to retain a competitive edge, warning that a "single encompassing trading system" was not the answer.

"We need to instead reconcile ourselves to a multi-faceted solution, involving a combination of regulations, initiatives and market-based measures," he said.

Kloppers said there would eventually be global tariffs on carbon to fight pollution, and Australia must factor it into all investment decisions and "look beyond just coal towards the full spectrum of available energy solutions".

Australia, the world's worst per capita polluter, failed last year to pass laws for an emissions trading scheme. Prime Minister Gillard has called for a price on carbon, but her plans remain vague.

© 2010 AFP

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