Karijini National Park - 13 August 2009

I have had my first big day of driving home. From Broome to Karijini.

I am camped in an overflow camping area, that could just be a carpark - I am not sure as I got here after dark. I arrived in Karijini and headed straight to Dales Gorge, to Fern Pool, a nice little waterfall and pool I remember loving as a kid. Low and behold it is exactly the same as I remember. Big fig and paperbark trees, beautiful green water, and the place to myself, given that the sun had almost set.

Fern Pool, Dales Gorge.

My brain is starting to switch modes, and change track to the things that will concern me working in Mingenew. Specifically I noticed today in the car I was paying attention to the ridiculous politics on the radio surrounding the emissions trading scheme - politics I would usually ignore. I was also running over what a farmer might want to know in relation to the scheme, what numbers regarding agricultural emissions we do know, and who are the people that are going to tell me what I want to know. It seems I might enjoy this real work thing! I guess we will see…

It is clearly evident up here that iron ore mining hasn't been hugely effected by the downturn. Along 250 kilometres of road today I would have passed over 50 trucks, mostly triple road trains, and three oversize load convoys. Port Hedland is as busy as ever, the main roads between Wedgefield, South Headland, and Port Headland are being upgraded, as are parts of the highway east and west of town.

Yet still it is all not happening fast enough for the miners, those pesky environmental and indigenous impact assessments are taking to long to assess and approve according to the industry report tabled in state parliament this week. They would have us create one body to approve everything.

The thing I love most about the way the reports chief author speaks is the way he says that approvals are too slow, and that a single agency would approve mines more quickly. It is clear that the possibility of a mine being refused approval on environmental or indigenous concerns has never been entertained. But indeed there is good reason for that. I cannot think of one mine that has been refused approval to mine in quite a while. Often the EPA will recommend certain restrictions and requirements, that must be agreed to by the government, but rarely are they so stringent as to have any effect on what can be mined. They only affect how much money the company has to spend on environmental initiatives.

I also wonder at the wisdom of our approach to our non-renewable resources. It seems the mantra is that we must mine what we find as quickly as possible. My brief contact with FMG executives when I was involved in an innovation workshop with them indicated that is the mentality. They were annoyed that Rio and BHP were not mining their leases fast enough, but had been sitting on a few for 5 to 10 years. They would like the government to renege leases if they are not mined. It sounds to me like the conditions placed on early agricultural land grants, that it must be cleared and cultivated within a certain time frame. That turned out to be a great idea, didn’t it!

Economics also suggests that we are better off to mine now because money is worth so much more now than in the future. How much more it is worth depends on the discount rate you use. However the discount rate is not a simple idea, it changes based on how far into the future we are talking. For example you would be happier to accept 100 dollars today, than next year, but if I offered you 100 today or 120 next year you might have a harder time deciding. If the $100 and $120 seem of equal value, then the discount rate for that year would be 20%. However if I offered 100 dollars in 2015 or 2016 you would hardly care which year I gave it to you in. So less discounting occurs further in the future than immediately because well, people are people.

Anyway the whole point of that lecture in economics was to indicate that the economic reason to mine now rather than later is based on a difficult assumption about discount rate. I do not know how they include in their calculations the likelihood of declining metal supply, the costs of recycling, and the increase in extraction costs as low grade ores replace exhausted high grade deposits. So I am not convinced we need to mine, and make approvals, at break neck speed. I think a steady as she goes approach would serve us just as well, and reduce the intensity of the infrastructure and skills headaches of the last few years.

A picture from my Karijini odessey: 5 gorges, 1 mountain in 9 hours. The perfect way to end an Australian adventure. Kalamina Gorge, Knox Gorge, Joffrey Gorge, Weano Gorge, Hancock Gorge, and Mount Bruce. This is a picture of Weano Gorge from above. The furthest you can go in, and get back out of the gorge without a rope, is the narrow section in the foreground. To get there you have to wade or swim through chest high freezing cold water. I was there about 20 mins before i took this. It feels much safer being in the gorge, than looking down on it!


Nearing the end of the odessey, halfway back down Mt Bruce. The pointy hill in the background is Chinamans Peak.


Salut