South32 warns IR changes will hit productivity, investment

afr.com:

Mining giant South32 says cost increases are the new normal in the industry and that in terms of labour much more pronounced in Australia than other jurisdictions where it operates.

South32 boss Graham Kerr became the latest chief executive to raise concerns about the Albanese government’s industrial relations changes on Thursday, warning the same job, same pay policy was bad for productivity.

“I think the industrial relations reforms are going to probably set back productivity and not take it forward,” he said.

South32 chief executive Graham Kerr. Matt Jelonek

Mr Kerr said the IR changes threatened to make Australia less attractive for investment at a time when the US and European Union were offering huge incentives to miners able to supply critical minerals needed in decarbonisation.

South32 has forecast production cost increases across the majority of its global operations in 2023-24 with rising labour costs its biggest headache in Australia.

Perth-headquartered South32 said it was cheaper to operate in the United States, where the company is focused on developing its Hermosa base metals project, than in Australia. Labour costs pressures were also less of an issue in South America and southern Africa for South32.

“If we talk about labour costs, I mean clearly an area of higher inflation has been in Australia,” Mr Kerr told analysts.

A strike affecting operations at one of South32’s Illawarra coking coal mines in NSW is set to drag into a third week and has escalated with workers lodging a bargaining dispute with the Fair Work Commission.

Safety managers at the Appin mine are on strike after rejecting a new workplace deal that would have seen them pocket a 6.3 per cent pay rise this financial year.

Mr Kerr said the