Departing Minerals Council chief Mitch Hooke has criticised the Abbott government for its rejection of a foreign takeover of GrainCorp, and warned the mining industry that too much focus on austerity and shareholder returns could jeopardise its future.
In one of his final public speeches as chief executive of the Minerals Council, Mr Hooke reverted to his time at the helm of the Grains Council by lashing out at the recent block on American company Archer Daniels Midland completing a takeover of Australia's GrainCorp.
"I'm not a fan of the decision on GrainCorp," he told the Melbourne Mining Club.
"That will have ramifications for some time, the challenge for government will be to ensure that it does not mask all the other foreign direct investments that have happened," he said.
Treasurer Joe Hockey last week blocked ADM from completing its takeover on the grounds that it could reduce competition and impede growers' ability to access storage, logistics and distribution networks.
But Mr Hooke, who said he had lost "skin off his back" setting up the local grains industry, said it was still an "unfortunate decision".
He took aim at the cost-cutting and risk adverse behaviour being exhibited by many of the big miners he represents on the Minerals Council, saying they risked slipping into "foetal position-like behaviour" if the era of austerity continued.
Mr Hooke said it was understandable that miners were deferring capital expansions, maximising cash flow and boosting dividends, but he said it came at the risk of not seizing the opportunities of today.
"The drive for cash flow and dividend returns to engender investor confidence tends to militate against counter-cyclical investment opportunities to capitalise on the inevitable market correction," he said, adding that the drive to reduce risk had led to "blanket discrimination" in favour of investing in wealthy, developed nations.
This week Rio Tinto revealed its capital spending would almost halve to just $US8 billion ($8.8 billion) within two years and said it would prefer to pay down debt than make any acquisitions in the near term.