Australian Mining Companies Research Articles

Mineral resource drivers in the global south: A case study of Australia

Mineral resource depletion directly restricts sustainable mineral development. This study investigates the drivers of sustainable mineral resource development via an evolutionary game model involving mineral firms, the Australian government, and financial institutions. The tripartite model provides a guide to strategies and interactions with external influences based on company liquidity. Leveraging panel data from Australian mining companies from 2015 to 2022, this study utilizes unconditional quantile regression techniques, culminating in three salient discoveries. First, despite financial limitations, small-to medium-sized enterprises (SMEs) can accumulate ample resources to enhance their green technology R&D and corporate social responsibility (CSR) expenditure through diverse financing methods, thereby creating an internal strategic impetus for CSR perpetuation. Second, by participating in CSR, mineral firms can transmit positive signals in an asymmetric market, which promotes their sustainable development. Finally, despite the Australian government's R&D tax refund policy incentivizing R&D investment, SMEs' lack of innovative capacity has led to the diversion of operational funds, which negatively impacts their sustainable development. These findings provide valuable insights for sustainable mineral resource development that extend beyond Australia to other Southern Hemisphere nations.

Conzinc Riotinto of Australia — Foreign Ownership and Control

Conzinc Riotinto of Australia Limited (CRA) was the largest mining group in Australia after BHP. It had a major influence upon the post‐Second World War mining sector and Australian economy. It was responsible for some of the country's largest resource developments, establishing an integrated aluminium industry, playing the principal role in the development of Australia's iron ore export industry, and developing a major copper deposit on the Island of Bougainville. CRA was established in 1962 as the Australian arm of the British mining group, Rio Tinto Zinc Corporation Limited (RTZ), formed through the merger of The Rio Tinto Company Limited with The Consolidated Zinc Limited. Consolidated Zinc was also London‐listed, although with a deep Australian heritage based on its involvement in lead and zinc mining at Broken Hill. CRA's status as a foreign‐owned and controlled company had a major influence upon its corporate priorities for the two decades following its formation. The company's foreign majority ownership restricted its business opportunities, particularly during the 1970s. However, as early as the mid‐1960s, anti‐CRA sentiment was evident from politicians, public servants, Australian mining competitors and, to some extent, the public. CRA's standing as “un‐Australian” was viewed by company management as an impediment to attracting and retaining quality employees. These factors led CRA to engage with successive Commonwealth Governments to attempt to secure arrangements more accommodating to its business interests. This involved considerations as diverse as the takeover of the London parent company — to facilitate greater Australian shareholding in the Australian entity — through to the restructuring of CRA's interests in a new majority‐owned Australian company. Ultimately, CRA was instrumental in changing foreign investment legislation, providing a pathway for it as a foreign‐owned company to move to an Australianised or majority Australian‐owned status. With this, CRA had an ability to participate in resource investments on terms similar to those for Australian companies. CRA gained naturalising status in 1979 and, in 1986, that of a naturalised or Australianised company. Differences in perspectives relating to strategic direction and financial management between the parent company in London and CRA in Melbourne, brought to the fore issues of control. The situation became so serious that it resulted in the departure of the chairman and chief executive on the eve of CRA achieving Australian majority‐owned status. The events had a later influence on the formation of a dual‐listed company structure in 1996. Through this structure, RTZ regained majority share ownership of the assets previously held in the Australian company. CRA lost its naturalised status and its identity as Australia's then second largest Australian mining company.

Vincent and the Rainforest

The film presents a unique conversation between anthropologist Edvard Hviding and his long-term friend Vincent Vaguni, a community leader and sometime environmental activist from the remote village of Tamaneke in northern New Georgia, Solomon Islands. The film begins with a conversation at Vincent's home followed by a travel to the rainforest, where Vincent shows his knowledge regarding the use of plants and trees. The conversation gives insight into Vincent's "local" perspective on the issues of an outside world through descriptions of his career of cooperation and conflict with foreign actors (including Asian logging companies, Australian mining companies, and international environmental organizations such as the World Wide Fund for Nature). It also gives insight into the vast knowledge of the rainforest held by individuals like Vincent.

Accounting for waste: Waste reporting in Australian metals and mining companies

AbstractAustralian metals and mining companies are the focus of this study because mining activities are a significant source of waste products on a global scale, and to date, there has been no systematic review or comparison of how these companies report their waste management practices. Recognising that waste management is an important issue with future implications, this study is guided by one primary research question: What is the nature and extent of waste management disclosures by the top metals and mining companies in Australia?

The Influence of Investment Decisions and Corporate Financial Performance on Tax Avoidance: A Cross-country Study

This study investigates the influence of investment decisions and corporate financial performance on tax avoidance. We employed mining companies listed on the Asia Pacific Stock Exchanges from 2017 to 2021. The purposive sampling technique was applied to select 40 out of 97 top Australian, Indian, and Indonesian mining companies (200 firm-year observations). To test the hypotheses, the data was then analyzed comparatively using multiple linear regression analysis. The results show that investment decisions and corporate financial performance simultaneously affect tax avoidance. Partially, investment decisions has a significantly positive effect on tax avoidance, and corporate financial performance also has a significantly positive effect on tax avoidance. The results suggest that investment decisions and firm performance motivate managers to tax avoidance.

Geofetishism and the Tender Violence of Rare Earths

Abstract: This article addresses the geospeculation of Kuannersuit, a mountain in southwest Greenland that holds a major deposit of rare earth minerals, including uranium. Through the concepts of “geofetishism” and “tender violence,” we consider the history of mineral speculation in Greenland, and how its colonial history bears on the now independent (Inuit) Greenlandic government, and the township of Narsaq. With a focus on the anti-uranium activist group, Urani? Naamik! , we show the challenges posed to Greenlanders in their resistance to the mobilization of their mineral resources by the Australian mining company, Greenland Minerals and Energy (now renamed Energy Transition Minerals). A highlight of this resistance, in our view, is Urani Naamik’s counter-analysis of GME’s environmental assessment report.

Multiple health-related behaviours among Fly-In Fly-Out workers in the mining industry in Australia: A cross-sectional survey during the COVID-19 pandemic

BackgroundFly-In-Fly-Out (FIFO) workers travel to work at isolated locations, and rotate continuous workdays with leave periods at home, and such work practice is common in the offshore oil and gas and onshore mining industry worldwide. The COVID-19 pandemic and accompanying public health actions appear to have had a negative impact on several health-related behaviours among the general population. However, little is known about the impact of the COVID-19 pandemic on the health behaviours of FIFO workers, who have shown higher pre-pandemic rates of risky behaviours than the general population in Australia. This study examined the health-related behaviours of FIFO workers in the mining industry during the COVID-19 pandemic.MethodsA descriptive cross-sectional study was conducted. FIFO workers from an Australian mining company who underwent COVID-19 screening between May and November 2020 completed an online survey about their regular health-related behaviours. The independent sample t-test and Pearson’s chi-square test where appropriate were conducted to examine the differences between males and females for the behavioural outcomes.ResultsA total of 768 FIFO workers (633 males and 135 females) participated in the study. Prevalence of smoking was high (32%). Males smoked more cigarettes per day than females (15.2±7.0 vs 13.1±7.1, p = .174). Most participants (74.7%) drank alcohol on more than two days per week. Compared to females, more males (20.2% vs 8.0%) consumed alcohol at short-term harmful levels (p = .010). About a third (34.4%) of the workers (33.5% of males and 38.5% of females, p = .264) engaged in inadequate moderate-vigorous exercises/physical activity. About a third (33.1%) of workers (33.7% of males and 30.4% of females; p = .699) had multiple risk behaviours.ConclusionsPrevalence of multiple risk behaviours was high. Interventions aimed at the prevention of risky health-related behaviours should target the different behavioural patterns and may require emphasis on gender-informed techniques particularly when addressing alcohol consumption.

The long uphill journey of Australia’s rare earth element industry: challenges and opportunities

ABSTRACT In recent years, several mining companies worldwide have made efforts towards establishing sustainable value-adding rare earth element (REE) supply chains to compete with China. Lynas and Iluka are two Australian mining companies that recently announced their plans to construct REE refinery plants to process and separate REE oxides in Western Australia and Texas, US. Though promising, such investments entail high risks. This work discusses the status of the Australian REE industry and uses SWOT and risk analyses to identify and evaluate the challenges and opportunities with respect to building an integrated rare earth supply chain outside of China.

De.mem extends service agreement with Australian mining company

Australian-Singaporean water and wastewater treatment company De.mem Ltd has signed a three-year service contract with a mining company in Australia.

Shareholder use of CSR reports: an accountability perspective

Purpose This paper aims to investigate the extent of shareholder engagement and satisfaction with corporate social responsibility (CSR) reports of a Chinese-owned company compared to an Australian-owned company in the Australian mining industry. The study is motivated by the speed, extent and nature of Chinese foreign direct investment in Australia, the resulting negative social attitudes and the impact on the perceptions of a report’s credibility. Design/methodology/approach The authors conducted a survey of 202 minority shareholders of two Australian mining companies, one has a Chinese majority shareholder and the other an Australian majority shareholder. The responses highlight users’ comparative perceptions of corporate motivations for reporting, the level of perceived shareholder power over reporting decisions and the resulting propensity to read CSR reports. Findings The authors found that, contrary to decision-usefulness theory, which posits that users will read CSR reports only if they are deemed to be reliable, that perceptions of poor credibility and poor CSR performance actually result in a higher propensity to read the reports. This suggests that the minority shareholders of the Chinese acquired firm are using reports to monitor the level of corporate accountability. Originality/value The findings have implications for firms operating in politically or socially sensitive industries that are likely to use CSR reporting as a legitimising strategy. The paper also provides guidance to regulators in the provision of information, which is meaningful to minority shareholders.

Transfer pricing: The Glencore appeal. To hedge or not to hedge? That is the question

The Full Federal Court decision in the Glencore Case raises very important questions in relation to core concepts underlying Australia’s previous and current transfer pricing rules. The case involves the pricing structure that an Australian mining company used for the copper concentrate it sold to its Swiss parent, the largest global trader in copper concentrate. Broadly speaking, the price for copper concentrate is worked out by deducting selecting a copper reference price from a listed metals exchange, like the London Metals Exchange, and deducting an allowance for treatment and copper refining costs (TCRCs). This was the main issue in the case. There were two options realistically available to the taxpayer: the use of market benchmarks that took account of both the prices set by the major mills and those set by the spot market; and, another method known as price sharing where the TCRCs are set at a fixed percentage of the copper reference price, which had the effect of protecting the seller from the risk that copper prices and TCRCs may trend in different directions. In February 2007 when the taxpayer switched to a price sharing formula that set the TCRC rate at 23% of the copper reference price, the benchmark rate set by the Japanese mills was much lower, and the TCRC rate established for the purposes of the mining company’s budget, which was approved by its parent around August to September 2006, was 6.5% of the copper reference price. The Appeal Court accepted the taxpayer’s argument that the 23% was an arm’s length rate because there were contracts between independent parties that used price sharing, and 23% was the midpoint of the rates in those cases, and because the taxpayer’s expert witness testified that for such a high cost mine price sharing was “a conservative and reasonable approach to minimising risk”. The Court did not consider how independent parties dealing at arm’s length (or wholly independently) with each other would have gone about deciding whether or not to hedge the risk, or the comparative benefits of market benchmark pricing relative to price sharing. A question therefore arises as to whether the Appeal Court correctly applied the statutory tests, a matter that would benefit from a High Court review.

The state of disclosures on Aboriginal engagement: an examination of Australian mining companies

PurposeThis paper aims to examine the nature and level of disclosures on engagement with Aboriginal communities by Australian mining companies.Design/methodology/approachContent analysis of annual and sustainability reports of Australian Stock Exchange listed companies was undertaken to address the central research aim of this paper. An Aboriginal engagement framework was developed based on the five dimensions suggested by Reconciliation Australia.FindingsThe findings of the study report an overall low level of disclosures on Aboriginal engagement by mining companies and reveal that corporate disclosures largely focus on Land and Native title agreements, Aboriginal employment and corporate investment in Aboriginal socio-economic development. The least reported issues include Aboriginal immersion experience, Aboriginal inclusion in leadership roles and commitment to the reconciliation process. The findings of the study suggest that although corporate engagement practices have started to recognise and incorporate marginalised stakeholder rights and issues, only a few companies have created necessary avenues to empower Aboriginal communities. Regarding the reconciliation process, the findings reveal that the companies are mostly reporting on only three out of the five dimensions of the framework.Practical implicationsThis study provides a better understanding of the current state of Aboriginal engagement practices in the mining sector, in particular the issues and gaps in reporting Aboriginal engagement to align it with the national reconciliation process, which will be useful for policymakers and, possibly, standard setters to develop future Aboriginal engagement and disclosure policies.Originality/valueIn spite of the rapid development of corporate social responsibility (CSR) disclosure, disclosure of corporate impacts on Aboriginal people and reconciliation with Aboriginal communities has been given little attention in business CSR practice and previous CSR disclosure literature. This research fills this gap and investigates the increasing uptake of Aboriginal engagement disclosures by business corporations.

Prevalence and association of discrimination and bullying and the impact on mental health in an occupational setting

PurposeDiscrimination and bullying contribute to mental ill-health in the workplace. At face value, they would seem linked but are often dealt with by different legislations. Workplace studies generally focus on bullying and population studies on discrimination. The authors aimed to evaluate the prevalence and relationship of discrimination and bullying in a male-dominated workforce, associated factors and relative impact on mental ill-health.Design/methodology/approachAn online cohort survey was conducted amongst employees of an Australian mining company, measuring discrimination, bullying, demographics and workplace and health factors over two months. Cross-sectional and prospective analyses assessed the prevalence of each, their association and their effects on depression and anxiety.FindingsA total of 580 employees (82% male) participated. There was no association between workplace bullying (n = 56, 9.7%) and discrimination (n = 160, 27.6%). Discrimination, but not bullying, was associated with higher depression, anxiety and suicidal ideation and lower well-being and resilience. After controlling for demographic, workplace and health and well-being factors, depression had the main effect on discrimination ß = 0.39, p = 0.003. Discrimination predicted an increase in depression scores at follow-up F (1, 129) = 4.88, p = 0.029.Originality/valueIn this male-dominated industry, discrimination was more prevalent than bullying. Discrimination, but not bullying, was associated with poorer mental health both cross sectionally and prospectively. Supporting the need to assess and manage discrimination and bullying in the workplace independently and the need for interventions to reduce a broader range of adverse interpersonal behaviours.

Liquidity and information asymmetry around unscheduled mining announcements

AbstractThis paper examines liquidity and information asymmetry around unanticipated disclosure events of Australian mining companies. We do so via bid‐ask spread decomposition in order to isolate the spread’s adverse selection component, around ‘progress report’ disclosures pertaining to mining activities. We find that abnormal bid‐ask spreads rise significantly leading up to progress report announcements, before rapidly dropping following the event. This effect is most pronounced in small firms, and announcements not preceded by another within the prior month. Upon controlling for the spread’s liquidity‐related component, we find that the abnormal spread significantly increases before initial announcements, with the effect continuing post‐announcement for positive surprise events.

Short-term supply and demand of graduate mining engineers in Australia

This study advances a means for estimating the short-term demand for Australian graduate mining engineers using simple linear correlation with mining “building and structure” capital expenditures. Although only a loose correlation was achieved, the method is comparable with the current methods which either assume employment growth rates or calculate them by applying auto regressive integrated moving averages to time series data. The latter can fail to adequately reflect rapid changes due to commodity price cycles. Using the new model, it is possible to estimate that Australia requires approximately 160 mining engineering graduates per year over the next 3 years. The deficit in mining engineering graduate numbers is likely to be around 60 this year, climbing to 90 in 2021. The Australian mining industry therefor faces a shortfall of graduates. The mining industry will look to attract mining engineers under the Australian government’s skilled immigration program. However, Australian mining companies will essentially be competing with North American mining companies for scarce talent. For large surface mining operations involving bulk earth movement, the industry will look to substitute graduate mining engineers with graduate civil engineers. Because of the shortage of graduate mining engineers in North America, underground metalliferous mines are likely to draw expertise from Latin American and African countries, most notably Peru, South Africa, and Ghana. Underground longwall coal mines are likely to source foreign mining engineering graduates from Turkey, Poland, Germany, Ukraine, and Russia. In bulk mining operations, technology is changing some of the planning and operational roles currently conducted by young graduate mining engineers. Some routine planning tasks (for example, drill and blasting planning for strata deposits) are becoming transactional in nature. Remote operating centers are changing operational roles that were traditionally the domain of young graduate mining engineers.

Employees prefer information to free food

PurposeThis paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.Design/methodology/approachThis briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.FindingsA study of the eating habits of 881 employees at a rural Australian mining company revealed that almost two-thirds (61.7 per cent) wanted to eat better and nearly three-quarters (74.5 per cent) desired assistance with nutritional advice. The authors of the research also showed that despite the desire to eat better, less than half the workers surveyed wanted to take part in individual nutritional coaching schemes. A slightly higher percentage (53.9 per cent) of workers was happy to take part in group information sessions provided by expert nutritionists.Practical implicationsThe paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations.Originality/valueThe briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

United Nations Decade on Biodiversity

PurposeThe purpose of this paper is to explore the biodiversity reporting practices and trends of the top 50 Australian mining companies before and after the United Nations (UN) declared the period 2011-2020 as the “Decade on Biodiversity”.Design/methodology/approachUsing content analysis and interviews, this study compares the extent and type of biodiversity disclosures made by the Australian Stock Exchange’s top 50 metals and mining companies both before and after the UN’s “Decade on Biodiversity” declaration in 2010.FindingsA significant increase in the amount of biodiversity reporting is observed between the 2010 fiscal year preceding the UN’s declaration and the 2012 and 2013 fiscal years following the declaration. The findings reveal, however, that the extent of biodiversity reporting is quite variable, with some companies showing substantial increases in their biodiversity reporting and others showing modest or no increases. In particular, the larger companies in the sample showed a statistically significant increase in their disclosures on biodiversity in 2013 compared with 2010, while the increase in biodiversity disclosures by smaller companies was not significant. While interviewees spoke about their companies being more open and transparent, the biodiversity information that is being reported would not enable external parties to assess the company’s biodiversity performance.Research limitations/implicationsTo minimise an organisation’s use of biodiversity reporting as an impression management tool, it is suggested that biodiversity reporting should be more impact based and organisations should provide a report of their activities and their direct and tangible impacts on short-term and long-term biodiversity in and around their operating sites. A possible limitation of the present study pertains to its focus on companies’ voluntary disclosures made in their annual reports and sustainability reports, as opposed to other possible formal or even informal disclosure mediums.Social implicationsAustralia is one of 17 mega-diverse wildlife countries in the world. Finding ways to support the country’s biodiversity framework and strategy are crucial to this continued status. Due to the mining industry’s significant impact on Australia’s biodiversity, a strong need exists for biodiversity reporting by this industry. Furthermore, this reporting should be provided on a site-by-site basis. At present, the reporting aggregation typically conducted by mining companies produces obscure information that is neither useful for stakeholders who are impacted by the mining companies’ activities nor for policymakers who are vested with responsibility for protecting and sustaining the world’s biodiversity.Originality/valueThis study examines the biodiversity reporting and discourse practices of mining companies in Australia and develops a 50-item biodiversity reporting index to measure the biodiversity reporting practices.

What determines the efficiency of Australian mining companies?

We examine the firm‐specific determinants of technical efficiency in Australian mining companies using data envelopment analysis (DEA). To do so, we employ panel data sourced from individual mining companies listed on the Australian Securities Exchange (ASX) over the period 2010–2014. To ensure valid statistical inference in the presence of serial correlation between DEA efficiency scores, we apply Simar and Wilson's two‐stage bootstrap method. We find that ownership concentration, firm size, firm age, product portfolio, product diversification and growth status significantly contribute to efficiency gains. However, other firm‐specific factors, such as capacity utilisation, financial risk and overseas operations appear to have limited impact on the technical efficiency of mining firms.

BHP Billiton: Mining Potash

BHP, an Australian mining company, threatens to enter the potash mining industry through a hostile takeover of the Potash Corporation of Saskatchewan. Complicating matters is the fact that the Canadian potash industry has operated as a legal cartel in which the provincial government has a stake. This case enables students to assess BHP's strategy in terms of value creation and value capture, how it relates to its existing investments in the industry, and the risks and rewards of alternatives to BHP's strategy-How cartels help firms capture value in an industry and how the threat of entry can limit the cartel members' ability to do so -How firms outside a cartel can capture value though a competitive threat -The range of strategies available to incumbents and

Analyzing the efficiency performance of major Australian mining companies using bootstrap data envelopment analysis

We identify the balance of efficiency gains and losses for 33 Australian mining firms over the period 2008–2014 using bootstrap data envelopment analysis (DEA). We ascertain which companies climbed the efficiency ladder and which companies slipped back in efficiency over time. We find that mining companies involved in metal processing or mining services have been more efficient than those involved in exploration and extraction activities. Assuming variable returns to scale (VRS), on average, we find that mining firms could improve their performance between a minimum of 17% in 2010 and a maximum of 34% in 2008, relative to the best practice performers. We find that, overall, most mining companies became more efficient over time, with the top performers generally maintaining a ranking in the top third of companies in terms of efficiency throughout the period.