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Event Wrap: BBMC Luncheon November 2024

26 November 2024 | BBMC Events

People power: C-suite panel reflects on industry progress

Skills, royalties and decarbonisation have a surprising element in common, as revealed by the Bowen Basin Mining Club’s guest C-suite panel at their November luncheon. That element is people – working together to solve the problems, seize opportunities and create a long-term future for the mining industry.

This year’s C-suite panel featured Nick Jorss of Bowen Coking Coal, Shane Hansen of Kestrel Coal, Danny McCarthy of TerraCom Limited and Craig McCabe of Jellinbah Group. Over the lively 90- minute discussion, the panel covered topics from royalties to ESG, divestments, decarbonisation, critical industry skills shortages and safety.

Opening on royalties, the panel got straight to the heart of the matter: the outlook for change under the new Crisafulli government. While election promises to maintain current royalty arrangements are not likely to change in the short-term, there is optimism around the ‘long game’ of industry and government sitting down to negotiate.

Nick Jorss believes this should happen in the near future, saying “Older mines will deplete and shut down over time, so we need to be planning now to keep the pipeline of projects open and attractive to investors.”

Danny McCarthy agreed, saying the costings and alternatives needed to be clear. “Everyone’s project has a different cost base so a tiered option is difficult to orchestrate – it will take some cool heads and everyone to have a seat at the table to get a working solution on royalties.”

Decarbonisation and ESG were also hot topics, with some frank discussion about the future of net zero and the energy transition for the sector. While decarbonisation remains a priority in line with Safeguard Mechanism targets, views differed on the long-term outlook of the energy transition.

Some operations, like Kestrel’s single-mine operation, were heavily affected by Safeguard Mechanism legislation due to methane escaping ventilation. Their solution, incorporating treating ventilation air and capturing methane to power the site, is in development, according to Shane Hansen.

“We’re looking at technology that treats ventilation air to reduce our emissions, as well as channelling some of that captured methane into gas-fired power. These solutions should be up and running in the next few years, with the opportunity to generate more Safeguard Mechanism credits than we’re using from our baseline. The capital investment was significant but it was the push we needed.”

Other executives agreed that the focus of operations on reducing emissions made good business sense, with Craig McCabe calling the reduction of diesel a “mining engineering problem”. Nick Jorss agreed, saying that at Burton mine alone, the cost of diesel for generation was well over $1 million each month. However, on a question around whether a switch from diesel-power to coal-fired grid power was simply ‘shifting emissions’, Danny McCarthy made the point that site-level solutions aren’t going to solve bigger problems in the energy transition.

“The right thing to do is to transition to some other form of cost-effective sustainable energy but it must be done together – individual solutions aren’t going to move the needle enough,” said Mr
McCarthy.

The theme of an industry-wide approach to problems continued throughout the discussion, particularly around regional liveability and skills. A particular concern is the skills drain in the industry, both as experience leaves the workforce and other industries offer the same pay as mining.

As Craig McCabe said, “The grey hair and knowledge that’s leaving the industry isn’t being replaced in terms of breadth of experience, and compounding the problem is the fact that younger people aren’t willing to relocate to the regions. That presents a concern going forward, particularly with the Olympics and the building program that will lead up to 2032 – in terms of skills, we’ve already tapped most of the regions, and if qualified tradies or engineers can stay in Brisbane and earn the same money, they will.”

Agreeing, Danny McCarthy said “We have a skills crisis, not a skills shortage. Until we face this reality, we’re not going to move the needle – we’re just stealing each other’s people from site to site. We need a whole-of-industry strategy to fix the skills crisis and ensure we have a pipeline of skilled workers for the future.”

Shane Hansen also agreed, saying, “We face significant challenges in attracting experienced trades people, operators and professionals who are in high demand, as many prefer flexible fly-in-fly-out (FIFO) or drive-in-drive-out (DIDO) arrangements over committing to residential roles.”

Regional liveability compounds the skills crisis, which Nick Jorss believes is linked in part to a lack of investment in the regions. Citing the example of the state of disrepair of the Peak Downs highway, Mr Jorss said that the regions that generate royalties are overlooked.

“If people can’t be safe on the Peak Downs highway while they’re driving to work to create royalties, why would they want to live in the regions? There’s just not the pride in the industry that there once was – the regions that generate coal royalties should be seeing the benefit of that money.”

Danny McCarthy said that FIFO isn’t the answer to skills shortages either, even if direct flights are offered in and out of the Bowen Basin.

“While not everybody wants to live in Central Queensland, putting on planes and turning CQ into the Pilbara isn’t the answer either. Regional liveability is really important – it’s not just about attracting the mining workers, it’s the support people and the families whose lives are regional. Pride in the industry is a big part of that: in the 90s, every kid whose parent was a miner saw their future in working at a mine, and that was a clear career path for them. You just don’t see that anymore.”

On predictions for 2025, people power was once again the focus of discussions. Following a significant political shift in the regions, Danny McCarthy summed up the sentiment as a “groundswell of people with a voice who haven’t had one before.”

“There’s a realisation that voices are being heard around how tough it is in the regions – this is a space to watch in 2025, as the Bowen Basin is not to be underestimated,” said Mr McCarthy.

Nick Jorss ended the event with a call to join Coal Australia and continue the growing momentum of grassroots support for the industry in 2025 and beyond.