The head of one of the world’s largest integrated resource companies has fired a warning shot as the Gallop Government embarks on its second term.
The head of one of the world’s largest integrated resource companies has fired a warning shot as the Gallop Government embarks on its second term.
Alcoa Australia managing director Wayne Osborn told a recent lunch, hosted by the Australia-Israel Chamber of Commerce, that Western Australia had “a once in generation opportunity” to be a major player in the current global resources boom.
“We now have the opportunity to build sustained economic growth in WA for generations to come,” Mr Osborn said.
Yet while the state had significant advantages, he said there was plenty of room for improvement if WA was to fend off competition from other jurisdictions looking for growth opportunities, such as South America (Brazil) and Africa.
“This state should be among the most attractive and competitive destinations for resource, manufacturing and service sectors,” Mr Osborn told the well-attended lunch.
“But it will need to lift its game if it is to maintain a competitive position into the future.”
Mr Osborn said the state’s increasingly difficult industrial relations and regulatory environments were not conducive to business investment.
He also pointed to the highly publicised issues of skills shortages and infrastructure investment as areas of concern. And with newly appointed State Development Minister Alan Carpenter in the audience, Mr Osborn hammered his point home.
“We think that there are real opportunities for the Gallop Government to use its second term to focus on achieving predictability and consistency in decision-making and approvals processes,” Mr Osborn said.
The Gallop Government’s first term was criticised by some for its so-called academic approach to decision making and claims of a lack of timely and clear cut direction.
Miners have been particularly critical of WA’s approvals process.
Mr Osborn said WA was ideally located to take advantage of the proximity of the global growth engines of China, India and Asia. As such, Alcoa was planning almost $2 billion worth of project expansions at two of its three WA refineries.
Alcoa – the world’s largest aluminum company and one of WA’s largest exporters, accounting for 7 per cent of exports – is spending $440 million upgrading its Pinjarra refinery and has proposed to spend $1.5 billion building a third production unit at Wagerup.
This will lift its annual alumina production in WA by 2.6 million tonnes to 10.9mt.
Mr Osborn said demand for resources, and particularly aluminum, was being fuelled by the rapid urbanisation of China, India, Brazil, Russia and South Korea.
“The world’s urban population is growing by 60 million each year. This is equivalent to building a new Paris or Beijing every two months,” he said.
The demand for Alcoa’s products was coming from building and construction materials, the transport industry and packaging and consumer products.
In a statement, Mr Carpenter said Mr Osborn’s comments were interesting and intended to be constructive. However, he said the Government was continuing to streamline the approvals process, invest substantially in infrastructure and was addressing WA’s skills shortage, with little assistance from the Commonwealth.
He made no reference to industrial relations.
