BHP exec looks inward on failings

The mining industry itself needs to shoulder a lot of the blame for its shrinking competitiveness, says one of BHP's leading executives.

Mike Henry is BHP's health, safety, environment and community, marketing and technology president.

He told Thursday's Bureau of Resources and Energy Economics conference that while China's prospects were bright its demand was shifting towards those commodities in which Australia had less of an advantage.

One was copper. In the early stages of urbanisation newly industrialising nations need a lot of steel. As they move into consumption-led growth they start wanting copper.

While Australia leads the world in supplying iron ore, in copper it is eclipsed by other suppliers including Chile and Peru. In energy, while Australia has abundant gas, it is not as well located as the supplies of other nations.

"Unfortunately as hard as we might try, we can't change our geographic position," he said.

"We need to be pretty serious about addressing the things that we do control to remain competitive.

"Mining is currently one of the highest taxed industries in Australia. We alone, BHP Billiton, paid around $9 billion in taxes and royalties last year, an effective tax rate of greater than 45 per cent.

"I reference Australia's taxation, but let me be very clear: our perspective and that of industry more generally is that the bulk of the responsibility lies with industry. A couple of areas we might focus on would be the scheduling of projects and the utilisation of capacity."

Incumbent operators had been competing against each other for scarce resources bidding up costs.

"There's a lot we can do from within our current businesses to drive better productivity," he said.

"We acknowledge the bulk of the responsibility lies with industry. My firm has taken strong action to contain controllable costs, and we have only just begun."