The previous story outlined the enormous changes that have taken place in the industry but, given the benefit of hindsight, many were unexpected.
For Mike Cameron and Greg Goodsir, the least expected development was the ascendancy of international cement producers in the Australian market.
“Boral is one of the oldest Australian companies in the industry, whereas if you look at Readymix and all of its manifestations and Hanson, they are now run by cement companies [Holcim and HeidelbergCement],” Cameron explained. “Those companies and other cement manufacturers like Adelaide Brighton, which owns a significant share of EB Mawson & Sons and has an involvement with the Barro Group, now dominate the market. That wasn’t predicted 30 years ago but clearly the cement operators see quarries as a value add.”
The consolidation of the quarrying market along foreign ownership and cement production lines has not necessarily impacted on competition, according to Cameron. “The smaller players have grown a little bigger, and have defined markets and they are operating in the traditional way that the big players did 30 years ago,” he reflected. “They’re not seen as a threat by the big cement producers.”
Goodsir also agreed that “competition is still there, there are just not as many operations, partly because of an environmental situation where some of them just now can’t operate”.
Mike Cooper and Dayne Steggles, along with Cameron and Goodsir, identified urban encroachment, distance to market and protection of deposits as industry challenges.
“The expected lifetimes of quarries have really stretched, and that’s been due to restrictions on greenfield developments as a result of urban engulfment,” Steggles explained. “But that’s also meant that in terms of volumes extracted, the reserves are utilised too quickly. The optimisation of resource extraction from quarries is something we wouldn’t have thought about 30 years ago.”
Goodsir similarly emphasised the importance of conserving deposits around Australia. “It’s important that we protect resources, not just develop with the great urban sprawl, sterilising quarry sites,” he said. “Deposits for quarrying are not everywhere. It is about putting in corridors and protection zones to conserve resources for the future.”
Cooper agreed, saying difficulties with securing regulatory approvals for greenfield extractive resources can influence distance to market. He said that even in rural and regional areas, there are “costs and barriers to entry for small operations which means fewer, larger capacity sites that are further away from market. The Boral Peppertree and Holcim Lynwood quarries in the Marulan area are prime examples. The hard rock resources that supplied Sydney in the past have now been replaced by sites 200km from market, with rail transfer to intermodal transfer hubs in (or close to) the market. We’re seeing that with Boral’s rail to road facility at Maldon and Holcim’s at Rooty Hill”.
According to Cameron, greater metropolitan Melbourne, like Sydney, is struggling to cope with a growing population and an urban sprawl to its east and west will likely affect larger quarries. “We have a massive sprawl and quarries like Oakland’s Junction will be right in the middle of it. They will still have a long term future but the pressures placed on them will be huge in terms of compliance.”
Cameron has been disappointed that Australia never “developed super quarries distant from major centres and then used rail and rail sidings for processing, like in America and the UK”. He argued that ideally this should have been tackled a long time ago to address the issue of distance to markets.
“The biggest issue that quarries face is road transport, dust, noise, traffic movements and urban growth. You can control vibration, dust and noise but if you have trucks up and down school routes that are worrying parents, guess what’s going to close you down? I would have thought super quarries a couple of hundred kilometres apart in areas with less sensitivity to the community and less haul areas would have been the ticket to addressing these problems.”
Unfortunately, Cameron added, the window for super quarries may well have closed. “We can’t be thinking of super quarries – and even a quarry the size and volume of Deer Park – when around it you have communities growing and freeways being built. I just don’t think our kids will accept that in 50 years.”
MORE COMMUNICATION, VISION
Cooper added that opposition from more highly educated, more internet-savvy communities to greenfield developments and brownfield capacity increases is making the right to operate harder.
“Even when such developments achieve approval, the sophistication and prescriptive nature of the conditions of operation can escalate investment and operational costs,” he said. “The costs of gaining the approval are also escalating. You only have to look at Boral’s investment in the Reedy Creek application on the Gold Coast – and it’s still yet to achieve final approval. Where development applications have to go to court, the costs and time delays involved for both sides of the argument can be significant.”
Steggles said that consultations between quarry operations and stakeholders had improved markedly in the past 30 years but what “hasn’t necessarily changed is the community appreciation of what quarries deliver to communities”.
“There still isn’t an understanding that the product that emanates from the extraction of resources impacts on people’s environments in very positive ways,” Steggles continued. “We’ve opened up a channel to communication but what is being communicated?
“At the moment, as an industry, we still work in isolation, not to a project base, and so we have varying stories and outcomes to community partnerships and education because we are very localised. The challenge is to be proactive in a determined, designed way, to get uniformity, consistency, positive common themes and effective ongoing outcomes. To me, that’s important, particularly when you’re facing more challenging community experiences with associated sectors like mining and coal seam gas.”
The quarry industry could be more aggressive in making plays for infrastructure projects that have been the domain of the construction industry, Cameron argues. He referred to a speech by former IQA president Ian Stainton in the lead-up to the millennium which urged the industry to “be the generators of the capital to build infrastructure”, not just suppliers of raw materials.
“Stainton’s argument was that as an industry, we should be going to government and offering to build roads, airports, etc and drive some of the planning and provision of resources,” Cameron explained. “You would become proactive. The greatest example of an organisation that broke every record was East Link for the quantities of materials laid in a day, be it asphalt, concrete, tunnelling, laying of sub-base and base course materials.
“However, the only quarrying company that gained from the East Link project was Boral because it was prepared to be visionary and provide the massive resources that were needed. I still think Stainton’s vision is right for today and it can be achieved now that we have international players in the industry.”
Cameron and Steggles agreed that the industry will require strong leadership and unity going forward, particularly on the part of organisations like the IQA and the CCAA, if it is to address public perceptions about quarrying and promote the industry’s positive contribution to society.
“It’s human nature to sometimes take an ostrich approach to external issues and only concentrate on getting your own project over the line,” Steggles said. “But eventually the collective group are impacted by outcomes in isolation and perhaps, more importantly, external factors such as mining and energy extraction activities. We need to make sure that we’re not disadvantaging ourselves by leaving that space unattended.”
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