Wake up call: World’s largest iron ore mine set to start in Brazil

The commercial start of the world’s largest iron ore mine by Australia’s biggest competitor, Brazil, is a reality check for Australian politicians looking to use the sector as a bottomless cash cow. 

Chamber of Minerals and Energy Chief Executive, Mr Reg Howard-Smith, said commercial operations at the $19.7 billion Eliezer Batista S11D mine were expected to begin this month, with mining giant Vale taking advantage of the country’s lower cost taxation and royalty regime.

At peak construction there were 40,000 workers on site. Almost 30,000 will be required once the mine is fully operational.

“At the same time as the world’s largest mine creating thousands of jobs is getting under way, Brendon Grylls and the WA Nationals are proposing a new iron ore mining tax which will make us even more uncompetitive on the world stage against our major competitor Brazil, destroy 3,400 WA jobs and kill off investment,” Mr Reg Howard-Smith said.

“Australia is currently the second highest taxing jurisdiction for iron ore but the WA Nationals’ new tax would make us the most expensive jurisdiction in the world. Royalties here are currently four times higher than our biggest competitor, Brazil. They would become the equivalent of seven times higher with the WA Nationals’ new tax.

“Significant decision makers from both Japan and China have indicated concern over the Grylls mining tax and the Brazilian project is a very real reminder that Australia is not the only player in the iron ore market. At least one of the miners directly targeted by the Grylls tax has placed a question mark over further mine investment in WA due to the high costs that will be in place as a result of the Grylls tax.

“The repercussions of this tax are real. We must remain competitive on the world stage otherwise we lose jobs and investment.

“For Brendon Grylls and the WA Nationals to ignore this reality and the damage their new tax will wreak is irresponsible and a huge threat to WA’s future.”