Protecting extractive resources for future infrastructure needs

The Victorian Government recently commissioned two studies that are relevant to our industry across Australia. The first – Extractive Resources in Victoria: Demand and Supply Study 2015 – 2050 – looks at the challenges the building and construction sector faces in maintaining access to supply of quality extractive resources. The projected demand for extractive resources across Victoria is expected to nearly double from 46.4 million tonnes in 2015 to 87.8 million tonnes in 2050.

The second study – Victoria’s Draft 30-Year Infrastructure Strategy – recommended to the Victorian Government a pipeline of infrastructure to be delivered over the next three decades. The strategy recognises the importance of aligning land use planning with infrastructure planning.

The building and construction sector faces a range of challenges in maintaining access to the supply of quality extractive resources, in particular the potential sterilisation of prospective extractive resources by urban and regional development and encroachment of urban and regional development into existing quarrying areas.

Over the analysis period 2015 to 2050, the report has identified local government areas and regions that will be important in support of the increased demand for extractive resources.

The majority of materials from these areas will be entering the Greater Melbourne region and are critical to the state’s development.

To avoid the realisation of supply shortfalls and the flow-on negative impacts this will have on infrastructure development, including residential and commercial construction and potential upward pricing pressures, it will be necessary to protect and develop new resource deposits in these regions.

If market price implications were to be considered, the cost of extractive resources resulting from supply constraints and increases in transport costs as the extractive resources are pushed out further from the Melbourne region, would result in increase of project costs across the state.

The nearly doubling of demand for extractive resources over the 2015-2050 period will lead to an increase in the need for transport infrastructure to transfer resources from quarries to the sources of demand. There is a great opportunity in Victoria for the draft infrastructure strategy to also look at the infrastructure needs of our industry to support efficient delivery of extractive materials to the market.

New quarry developments in those local government areas and regions identified by the study as critical to Victoria’s development must be supported to avoid supply shortfalls. Aligning land use planning with infrastructure and critical extractive industry resources will ensure that access to extractive industry resources that are critical to our future are maintained.

The challenge for governments is to implement the recommendations of the reports mentioned above or other similar recommendations in other jurisdictions across Australia. The challenge for our industry is not to just commit to comply with environmental standards but to demonstrate to the community the economic, environmental and social benefits of the extractive sector.

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