BHP warns iron ore no longer enough to carry Australia

BHP boss Geraldine Slattery says Australia needs to find its competitive edge again, with decades spent relying solely on bountiful iron ore discoveries and natural gas for prosperity now firmly in the past.

Ms Slattery, who runs BHP Australia, told a national business summit that the Lucky Country would need to be “purposeful and ambitious” if it wanted to compete amid the “shifting geopolitical forces” and “unforgiving markets” currently defining the global landscape.

Despite affirming the mining industry had been, and would likely continue to be, the foundation of Australia’s economy, the executive said the new bevy of commodities linked to the energy transition were not as cheap or easy to come by as old-world commodities had been.

“Our current state is that a key strength underwriting Australia’s prosperity in past decades – large, easy-to-access deposits of iron ore, metallurgical coal, and natural gas – will not be sufficient to sustain us through future decades,” she said.

“The low carbon economy will not be possible without mining. But those resources are not as easy or economically attractive to access and extract as iron ore, coal and gas.”

Ms Slattery’s comments come during the pits of a bust for Australia’s nickel industry, which has largely pinned its demise on the flood of new supply brought into the global market by Indonesia, despite the promise of huge demand for the commodity’s use in electric vehicles.

The future of the Big Australia’s own nickel division, an employer of thousands in WA, rests on a knife edge.

She said the challenges in domestic nickel and lithium sectors showed Australia’s ability to remain resilient amid a downturn was being “severely tested”.

She said recapturing the country’s competitiveness was the greatest challenge facing business leaders, and that government investment was not keeping pace. “We need to adapt and change,” she said.

“Business investment as a share of the Australian economy is near a 30-year low. The past decade saw the weakest productivity growth in 60 years.”

It’s not the first time Ms Slattery has taken a stance on political matters. In December, she described the Federal Government’s same job, same pay overhaul as “retrograde and damaging”.