If we want our standards of living to continue, we simply must have more investment in mines, and more mines developed. For that our governments must better understand mining and put policies in place that actually welcome, not deter, investment.

New mines take on average over 16 years to develop. But things are far worse in Australia, with more and more legislation that is unattractive to investors, and more and more coloured tape making approvals increasingly burdensome, time-consuming and risky.

It’s very popular now to restrict mining in the name of the environment, even for dangerous snakes, mice, weeds or stygofauna, which are so tiny they can’t even be seen with our natural eyes. All this environmental tape takes up staff time, costs money, and means less investment, which in turn means less philanthropy, less money available for salary increases, for improving conditions, for training and for other such benefits.

But forget self-interest. Geopolitical interests demand Australia remain a reliable energy supplier to our allies. As the recently departed Japanese ambassador Shingo Yamagami pointed out, ‘You only have to look at the vibrant streets of Japan’s never-sleeping capital. It’s hard to imagine the neon lights of Tokyo ever going out, but with Australia now supplying 70 per cent of coal, 60 per cent of iron ore and 40 per cent of Japan’s gas imports, this is exactly what would happen if Australia stopped producing energy resources.’ He added, ‘Alongside coal, Japanese investment and trade in Australian gas is a cornerstone of our partnership based on trust.’

Similarly, India imports around 50 million tonnes of steel-making coal each year, of which Australia provides about 80 per cent. India wants to double its steel production by 2030, meaning Australia should ramp up our critical metallurgical coal exports to help our ally. As the managing director of Tata Steel said on a recent visit to Australia, ‘If India does not see the coking coal supply from Australia increasing over the years then obviously India will have to start looking at other sources.’ When questioned whether Russia was the likely alternative, he answered unequivocally,‘It is.’

Takayuki Ueda, CEO of Japan’s Inpex said recently, ‘On the geopolitical front, Australia’s “quiet quitting” of the LNG business has potentially very sinister consequences. The question of who will replace Australian supply into the market is front and centre.’

If Australia fails to step up our mining investments and exports and allows Russia to become the preferred supplier of energy and metallurgical coal to Asia, it will have serious consequences not only for our own security but for that of all Western nations.

Yet Australia’s recent business delegation to India barely dealt with the issue of energy exports. And there was no mention of coal at all, even though coal makes up a staggering 70 per cent of Australia’s exports to India.

An International Energy Agency report stated recently that, ‘In a scenario consistent with climate goals, expected supply from existing mines and projects under construction is estimated to meet only half of projected lithium and cobalt requirements and 80 per cent of copper needs by 2030.’ The IEA also highlighted that under currently stated government policies, demand for lithium will increase an estimated 750 per cent, demand for nickel will increase 540 per cent, and demand for cobalt will increase 534 per cent, compared to 2020 levels. The reason for this is simple: the so called ‘green economy’ is built using massive amounts of metals and minerals that must first be mined. You can’t build minerals-guzzling electric vehicles without massive mines. The average EV contains over 206 kilograms of copper, lithium, nickel, manganese, cobalt, graphite, and rare earth elements; six times more than the average internal combustion engine car.

As the Fraser Institute noted in their recent report, ‘Policymakers across the globe should understand that mineral deposits alone are not enough to attract investment.’ Current government policies are clearly making Australia less attractive for investors. Ambassador Yamagami also noted that, ‘Probably for the first time, this word of sovereign risk is coming from the lips of Japanese business leaders, in discussion in boardrooms in Tokyo, and this is something we have to address.’

Concerningly too, certain government restrictions are imposed through delegated legislation, meaning they did not pass through the open-for-review parliamentary process. Governments that massively increase regulation, or who introduce regulatory uncertainty, cannot then expect investors to be forthcoming, even when commodity prices are high. We need to encourage our governments to understand these consequences and change direction.

The October federal budget noted that, ‘Although commodity prices are currently elevated, the pick-up in mining investment is still expected to be modest compared with the very large increase in investment during the previous mining boom around a decade ago. Business liaison suggests mining firms are only looking to invest to maintain their current production capacity.’ The recent budget also forecast mining investment will not noticeably increase in the next few years.

We’re simply not seeing the massive investments you would expect given high commodity prices, and despite the stated need for rapid expansions in metals and minerals supply to be able to meet the governments green policies.

The unit values of our commodity exports are currently 30 per cent higher than during the last mining boom, a time when annual mining capital expenditure peaked at over $100 billion. However, today we have just $40 billion in mining capital expenditure.This $60 billion investment gap is massive, and a missed opportunity for Australia, and can be explained in large part because of the increasing size of governments and their increasing regulation. Importantly the reduced investment has huge consequences for our future.

Looking at recent interventions in the gas market, Saul Kavonic of Credit Suisse noted that the formerly stable policy environment made up for ‘an otherwise uncompetitive cost base’ and that ‘now (with) the gas tax regime, Australia is losing its only competitive advantage in gas, and also putting at risk investment in other sectors’.

We can’t shut down our coal and gas, because there is simply nothing in place to replace them for reliable power generation. Without our critical resources industries, our living standards cannot be maintained, indeed, nor can our defence. Nor would our state and federal governments have their massive tax revenues to waste without our industries.

Kids need to be reminded that we all need mining, be that for mobile phones, iPads, refrigeration, air conditioning, electric vehicles and more. And that Australia wouldn’t have our high living standards, envied by those around the world, who would love to have our natural resources and the opportunities they bring.

In the current high school national curriculum, which mandates what every school child in Australia is taught, iron ore is referenced only twice. Yet climate change and renewable energy are mentioned 48 times. Mining, coal and iron ore do not receive even one mention in the entire high school economics and business curriculum.

It was said by France’s Louis XIV’s finance minister that the art of taxation is to pluck the goose in a way that delivered ‘the largest possible amount of feathers with the smallest possible amount of hissing’.

Mining is facing being that increasingly plucked goose.