Now, more than ever, we should be buying local and supporting the communities of the Bowen Basin as an absolute priority, writes Bowen Basin Mining Club director Jodie Currie .
As we surge ahead towards the last quarter of 2015, the mining industry landscape continues to change, particularly in the Bowen Basin. With economic improvements still a glimmer in the distance, our industry is accepting a ‘new normal’ .
This new normal, evident for some time now, is one of budgetary discipline, savvy purchasing, sensible employment, and most importantly of all, responsible local content policies .
Recently, I attended the review for the Queensland Resources and Energy Sector Code of Practice for Local Content (2013) administered by the Queensland Resources Council (QRC). This voluntary code is a step in the right direction with a number of companies adopting the code and either meeting or exceeding the code’s requirements .
The QRC is working collaboratively with members, governments and local supplier groups to improve how suppliers engage and also continues to encourage more members to adopt the code .
From the review meeting and from the perspective of hundreds of industry operators that I regularly interact with, I believe that now, more than ever, we should be buying local and supporting the communities of the Bowen Basin as an absolute priority .
So why is it important to empower and encourage our resource sector to buy local?
Local content is by no means a new issue, but as some of Queensland’s current major projects move into the operational phase, buying local for community sustainability becomes important. According to the latest QRC Local Content Code Effectiveness Report, resource sector spending reached $42.5 billion in 2013-14, with $29 billion supplied by vendors located in Queensland . By adding up the Local Government Areas in our region, we estimate this equates to just over $10 billion in the Bowen Basin.
This has had a huge impact on regional areas, especially those who have progressed from been heavily reliant on agriculture, such as the Central Highlands and Mackay . The mining industry has, for better or for worse, changed the economic composition of regional Queensland. In acknowledging that, the industry’s Code of Practice for Local Content is a way of making sure that regional communities have a ‘full, fair and reasonable’ opportunity to supply in to the sector .
The Local Content Code also helps to gently enforce best practice in proponents’ social licence to operate – ensuring that local communities and businesses are engaged with major projects as well as ongoing operations, and participating in the supply chain where possible .
WHAT IS LOCAL?
To truly enable successful local content strategies, as an industry we need to clarify what we really mean by ‘local’ – is it the $29 billion spent in Queensland, or for the Bowen Basin, is it the smaller $15 billion spent regionally?
The definition of the ‘local’ aspect of local content is somewhat of a grey area. The Australian Industry Participation Plan (AIPP) defines a local business as an Australian or New Zealand-based business – a very broad scope. Meanwhile, the QRC definition links local content to local communities around a major project, taking a step in the right direction towards a definitive answer .
Individual companies may define ‘local’ differently, but there is certainly room in the industry for a more standardised, regionally focused definition of local content .
WHO IS LOCAL?
The QRC Code Effectiveness Report also identifies over 4000 local businesses that benefited directly from resource sector purchasing in the Bowen Basin .
This spend was spread over oil and gas, coal and metals, and was a mixture of capital and operational expenditure – but the statistics show a consistent performance with previous years in terms of local content .
I would argue that ‘consistent’ is good, but not ideal. There is room for improvement and there is always room for more local content. There’s no need to bring in outside contractors when Bowen Basin businesses are operating and capable .
Regional businesses can be price-competitive (they’re already established in the area), plus there are positive corporate social responsibility implications for purchasing directly from a local community .
In recent years, these businesses have also been trained and upskilled in procurement, tender writing, and the servicing of large contracts, thanks to government initiatives and support .
It is also important to note that local business does not necessarily equal small business, nor does it necessarily mean family owned. Large companies with a presence across the state certainly qualify for local consideration when they invest in the community by establishing a regional presence and employing locals. Every bit of investment in our Bowen Basin communities helps to keep regional Queensland alive .
“…breaking in to the mining industry may seem to be near-impossible for a business that has no existing track record of capable supply to the industry.”
I’M A LOCAL BUSINESS – HOW CAN I GET WORK?
For local businesses not yet in the resource sector supply chain network, the barriers to entry can seem sky-high. Even if they offer services that are in demand, breaking in to the mining industry may seem to be near-impossible for a business that has no existing track record of capable supply to the industry .
Thanks to local content policies and a government development focus on the sector, there are many opportunities for local businesses to get their foot in the door of the mining industry .
It’s no secret that well-placed connections are helpful in our industry – so make it along to as many networking opportunities as possible . From independent events like the Bowen Basin Mining Club to local and state government initiatives, there are plenty of events (both informational and training-focused) in regional Queensland for SME’s to attend. Events are hosted by the local Chambers of Commerce, regional development organisations and state government departments .
Programs like the Federal Entrepreneur’s Programme (formerly Enterprise Connect) are aimed specifically at upskilling local businesses in supply chain facilitation and business growth. Organisations such as ICN Gateway and Austmine frequently supply members with information on upcoming supply opportunities. The work is there, if you know where to look for it and aren’t afraid to put in face time with prospective connections .
WHAT DOES THIS ALL ADD UP TO?
For larger businesses, it’s about putting thought into your supply chain and using local content where possible. For small businesses, it’s about making yourself as visible as possible and taking opportunities that come your way, no matter how small they may seem .
For proponents, local purchasing decisions mean reliable access to goods, skills and services, as well as continuing to consolidate a social license to operate. And it’s not just proponents who should be responsible with their local content – local industry participation in major projects should flow down to second and third tier companies as well .
Within the pages of this issue are plenty of Bowen Basin businesses that are competing every day to win the attention of major companies, and ultimately to put food on the table for their families. To them, a resource supply opportunity is not just another line item, but a livelihood .
Choosing to buy local keeps the spirit of our regional communities alive. Local content supports local jobs, local entrepreneurs, and ultimately helps to make the Bowen Basin a sustainable economic ecosystem for yet another year .
Contractor Awards The QLD Mining Contractor Awards recognise project excellence and achievements by contractors and suppliers across the resources sector . The 2016 awards will showcase innovation resulting in safer, smarter, faster or more efficient project delivery. Submissions open soon .
September 24, 2015
Town Hall, Emerald
November 27, 2015
South’s Leagues Club, Mackay
Bowen Basin Mining Club
Jodie Currie is the director of the Bowen Basin Mining Club operating bi-monthly functions for the mining industry in Mackay, Moranbah and Emerald. The BBMC’s mission is to connect all levels of operation, supply and service delivery within the sector to create better outcomes through the provision of up to date information on projects and quality networking .
For more information regarding the Bowen Basin Mining Club and upcoming speakers and events, visit bbminingclub.com.au.