'The Economy' is often quoted as the reason to tread cautiously on action to address climate change. Even if this were correct, are we making the most of our exports? Are Australians and shareholders getting fair value from exports of raw materials such as coal, iron ore and woodchips?

Coal

"All we're doing is sending money offshore and not getting the coal out."
Brian Flannery, chief executive of Queensland-based coalminer Felix resources
The Australian 11-4-2007 Page 1

There is a large bottleneck at Australia's coal ports. The supply chain of railway and port infrastructure has led to delays in loading coal transport ships for export. Huge penalties apply while these ships are kept waiting for their turn at the coal loader. The Australian newspaper reported on April 11 2007 that 153 coal ships were waiting at anchor offshore New South Wales and Queensland ports for up to 25 days at a time. Delay penalties of more than $400,000 per ship were being paid to the transport companies while airships sat idle at anchor. At $400,000 per ship that is over $61 million in penalties going overseas just for the ships that were offshore when the paper went to press.

Iron Ore

"Australian ore lands on Chinese and Japanese wharves about 40% cheaper than competing ore from Brazil..."
John Phaceas and Michael Weir The Age, 22/09/2007 Business Day, Page 3

Iron ore from the Pilbara region of Western Australia is heamatite ore making it higher quality than the magnetite ore mined in much the rest world. Yet when it comes to selling it on contract the producers get about $US50 per tonne and it lands at Chinese or Japanese ports for about $US75 per tonne. This compares against Brazilian ore at to up to $US125 a tonne on contract and low quality Indian ore at a spot price of up to $US165 per tonne. Why are we supplying our high quality Australian ore at a 40% discount to market price? If we were paid at par with Brazil we could get the same return for a whole lot less work and at a lower cost to our resources base.

Woodchips

The price paid for Australian wood chips supplied to the Japanese market has declined significantly over the last decade as other countries have entered the woodchip export market reducing profitability significantly. Much Australia's woodchips come from old-growth forest in Tasmania logged by the Gunns Corporation and compete against woodchips from illegally logged forests in other parts of the world. Gunns have sought to build a pulp mill to turn the low value woodchips into pulp and in an attempt to get better value for the forest they cut down.
All this logging of course has another effect on the Tasmanian economy, that of tourism. Tasmania has an enviable reputation of purity and untouched wilderness which brings tourists from around Australia and all over the world, pumping large sums of money into the Tasmanian economy. Logging by Gunns and has a detrimental effect upon Tasmanian tourism and could end up costing the Tasmanian economy dearly in the longer term.