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Australia’s Mining Industry Needs to Pay Up

When it comes to large-scale mining, congratulations must be given to Australia. The country ranks as the largest producer of iron ore, and a major source of coal, copper, and uranium . While having a massive impact of the Australian economy, the mining industry is also responsible for widespread environmental damage and carbon emissions. Mining companies are a formidable political power in the country, strong enough to oust the prime minister, if needed. The major issue surrounding the industry is question of taxation. Low tax levels on corporations have resulted in record profits while the world wallows in recession and Australia’s public debt pushes 27 percent of GDP.

A country extremely rich in natural resources, Australia is an important provider of minerals and energy to the world market. Feeding off of China’s industry boom, the mining industry grew to record size in 2008,  supplying much-needed raw materials for the economic giant. However, mining is never a clean process, and environmental damage quickly followed.

In order to extract valuable natural resources, mining companies tend to use the open pit method. This involves digging a massive hole into the earth in order to truck out ore, the largest such mine reaching 260 meters into the earth, and wide enough to be seen from space. Open pit mining creates super toxic lakes called tailings which hold concentrated deadly chemicals such as cyanide and sulfuric acid.If these ponds are not properly built, chemicals can leach into the surrounding soil and water table. Open pit coal mines also expose gas-rich rocks to the air, where release they release unknown amounts of ‘coal seam gas’ (CO2) into the atmosphere. Radon from uranium mining is released into the environment through ineffective management of waste products.The most obvious damage is of course the long term effects of removing massive amounts of soil and rock from an ecosystem. So given these consequences, is Australia profiting from mining?

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Not as much as it should. Taxation of mining is a very controversial issue in Australian politics, with mining companies fighting against high taxes with frightening effectiveness. In 2010 the then prime minister of Australia Kevin Rudd attempted to impose the Resource Super Profit Tax proposal, which would have raised the tax, level to 40 percent . However, he was removed from power by his own party and replaced by Julia Gillad, who immediately scrapped the proposal and replaced it with a modest 22.5 percent and exempted royalty payments from the tax.

With a sizeable public debt and budget cuts eminent, the government is still unwilling to implement a higher tax. Australians are not receiving the compensation adequate for the levels of damage being done to the environment, and mining companies are making more money than ever.

Despite the global recession, Pilbara (an iron mining company) turned a record 22.5 billion dollar profit at the expense of taxpayers. Given the environmental costs of current mining practices, the Australian mining tax is simply insulting to Australian citizens. The lowered tax hasn’t even preformed as expected, bringing in only 129 million dollars in the first half of 2012/13 as opposed to the 2 billion expected.This problem isn’t new to Canadians, where in the Alberta oil sands low royalties allow companies to turn massive profits. Resource extortion is a necessary component to the global economy, but it should be regulated in such a way that people are compensated for the damage done to the country’s environment.

– Emile Bouffard

 

(Featured photo: Attribution  Alberto OG, Creative Commons, Flickr

photo 1: AttributionNoncommercialNo Derivative WorksSheep”R”Us, Creative Commons, Flickr)

About Emile Bouffard

Student of Political Science at Concordia University. Emile is very interested in environmental politics and problems of social inequality. He joined the Political Bouillon as a way to find out more about the issues that appeal to him, and to frame them in a way that people can understand. Writing for this organization is something he sees as a great opportunity. He is excited to work with fellow students and discuss important political matters, and to get the word out there. He feels very lucky to be a part of this project!

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