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Too much luck: The mining boom and Australia’s future

By Everald Compton - posted Tuesday, 8 November 2011


Paul Cleary is a senior writer with The Australian - one of their better ones. He is also a researcher with the Australian National University, and has written a very readable book called Too Much Luck: The Mining Boom and Australia’s Futurewhich is about the mining boom and its possible adverse impact on Australia’s future. He has set-out a very bleak forecast of the legacy of the boom.

Expressed as concisely and simply as I can, he believes that we are living in the dreamtime on the unsustainable financial benefits of mining royalties and taxes.

By the end of this century, he forecasts that we will have mined-out most of our major resources and will fall on hard times, while lamenting the vista of an array of large empty holes in the ground.

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He declares that mining is the prime cause of our highly valued dollar and, in turn, this over-valued currency can be blamed for the demise of our manufacturing and tourist industries, as well as making our rural industries marginal.

He asserts that miners have been able to get away with murder in cutting corners with the environment - especially coal seam gas - and he believes that the ‘fly in fly out’ strategy for mine workers is disastrous for declining rural communities.

The crux of the book’s message is that miners are making profits way beyond that which is reasonable, and they must become major contributors to a sovereign wealth fund that will sustain our way of life when the mines run out of resources - something similar to the one that Norway has successfully established.

The statistics that he outlines in Too Much Luck are devastating and, if taken on its face value, we should all become very alarmed. Indeed, if Cleary is correct, our governments can be charged with having been very negligent, living for the moment like drunken sailors - especially State Governments - who are totally addicted to mining royalties and sell themselves like prostitutes to anyone willing to take on a mining investment.

Another valid reason for getting rid of them!

However, there are always two sides to every story, and I am surprised that the mining industry has not yet made an aggressive response, particularly as Cleary’s book is selling well and is written in a style that the average voter can easily understand.

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State Governments are totally addicted to mining royalties, and sell themselves like prostitutes to anyone willing to take on a mining investment.

I know, from my dealings with miners over 15 years of serving as a director of railway companies, that the risks taken by investors in opening and operating mines are enormous.

For example, millions are spent on exploration for minerals, only to find that a mine will be unviable and more must be spent on an alternative site. Then, hundreds of millions are spent on opening the mine, while taking the risk that commodity prices will be adequate to cover those costs when the mine is open for business many years later.

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About the Author

Everald Compton is Chairman of The Longevity Forum, a not for profit entity which is implementing The Blueprint for an Ageing Australia. He was a Founding Director of National Seniors Australia and served as its Chairman for 25 years. Subsequently , he was Chairman for three years of the Federal Government's Advisory Panel on Positive Ageing.

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