The Blackhawk Mining Medium: Social Investment

Mining industry social investment outstrips miners' corporate tax bill

TONY EASTLEY: The mining industry's chief lobbyist says there are still corporate laggards who are not giving mining communities a fair share of benefits from the resources boom. The criticism by the Minerals Council's chief executive Mitch Hooke come as a study shows the resources industry spent $35 billion on community infrastructure in the 2011-2012 financial year. That's a lot more than the $21 billion the industry is estimated to have paid in company tax and royalty payments in the same year.

On this side of the story:  Blackhawk Mining

The research by the consultants Banarra has been released as the political debate over the proposed repeal of the mineral resource and rent tax hots up. Mitch Hooke from the Minerals Council is speaking with our business editor Peter Ryan.

MITCH HOOKE: This is not some philanthropic exercise that we're measuring here. There still has to be a business case to it. But the benefits of that community investment and that community contribution, they extend beyond the direct benefits of the company. And so therefore there's knock on effect to the community as a whole.

PETER RYAN: But if you're looking at $35 billion pumped into communities over one year, will the mining industry be at least be able to replicate that in coming years? Or will that be matched to how strong the mining industry is?

MITCH HOOKE: Oh, there's a correlation between the extent of economic activity and the level of investment. But it's not going to fall off the edge of a cliff. It’s peaked, but it's coming off down the other side. Doesn't mean it's fallen off the edge of the cliff.

PETER RYAN: But what is going to happen as the investment phase of the mining boom winds down and projects end? Is the mining industry still going to be there if there is social fracturing as contracts end and workers leave town?

MITCH HOOKE: Well I think you've got to have the social license. You've got to have the confidence of the communities in which you're operating and the business case for investing in those communities, not only as a source of skills and as a source of goods and services and supplies, but also confidence that the mining industry is part of their local community and therefore part of their quality of life.

PETER RYAN: What do you say to the argument that this is what the mining industry should be doing anyway, as part of their corporate social responsibility policies, regardless of any mining tax?

MITCH HOOKE: Well I agree. We agree wholeheartedly. The argument is, from the former government, was that we weren't doing it. So we agree that we should be investing in those communities. We agree that a social license to operate is a fundamental platform for the manner of our business. And we agree there's a very strong business case for having vibrant and strong communities.

PETER RYAN: And would you say on that note that attitudes in the boardrooms of mining companies have changed over the years when you take into account the way the whole profile has been raised because of the super mining profits tax and now the MRRT? (Minerals Resource Rent Tax)

MITCH HOOKE: Yes. It's been a transformation. It's almost been a renaissance over the last decade or so. They had a bit of an epiphany. Even our harshest critics will tell you that there's been a massive transformation in the way the industry operates. The cheer squad of enthusiasts will always keep prompting us to do better and that's a good thing.

PETER RYAN: Do you think there are still gaps in the community where the mining industry needs to do a better job?

MITCH HOOKE: Yeah, I think so. Communities are voting with their feet. And they're actually picking on the companies, and identifying the companies that they'd like to be a part of their community. So if you extrapolate that across the industry as a whole, you'd come to the conclusion that we've got some laggards and they need to pick up their act if they're going to be part of the new dimension and the new equation.

TONY EASTLEY: The Minerals Council's Mitch Hooke speaking to Peter Ryan.