Interview on 4CA Cairns
14 November 2016
Subject: Coal price rally; Adani Carmichael mine; President-elect Donald Trump
JOHN MACKENZIE: I've got Matt Canavan on the line. Of course, we know him as the LNP Senator for Queensland based in Rockhampton, and he's the Minister for Northern Australia more importantly again. Matt, good morning.
Good morning John, how are you?
JOHN MACKENZIE: This has got to be seen as very good news. I don't quite understand why there's a hesitancy from within the resource sector to go out and cheer from the rooftops?
Well look, there remains concerns that the recent price increases may not be sustainable. Obviously it's been a very difficult couple of years, so some are cautious about anticipating good news. But certainly in the week since the US election, this is good news on top of good news. Iron ore prices have already been up, but particularly coal this year. Thermal coal has more than doubled and coking coal prices have more than tripled. It's an amazing resurgence in a commodity that is denigrated by many, but bought by a lot and needed by a lot, particularly in our region and the Asia-Pacific region. So it's really good news for North Queensland, because we need these projects to keep going. We've got three coal mines that have reopened in the past month in Central Queensland, that's great news for our region.
JOHN MACKENZIE: Now things were starting to look better certainly well before Donald Trump won the election last Wednesday our time, but this is the surge since last Wednesday. Surely it must have taken a lot of observers by surprise. Has it?
Well it seems to have. Look, I'm not a market watcher John. It's not my job to forecast prices. But certainly going into the election, there was a lot of concern that if Donald Trump had been elected that markets would somehow crash and the sky would fall in et cetera et cetera. But that hasn't happened. The Dow Jones has surged to record highs. Obviously commodity prices that we are particularly exposed to have increased, as has copper, which is an important commodity for us as well. So look, I think a lot of that was overblown commentary. The world continues, the sun keeps coming up. But particularly on some issues that are important to us, it's clear that Donald Trump was a big supporter of the coal industry and was going to rescind some of the restrictions that Barack Obama has put in place on those. And we are still an economy where coal is our second biggest export. It's a very important industry for us as a nation, extremely important obviously in North Queensland and Northern Australia more generally. So this is good news for our part of the world.
Now don't go away. Because you're based in Rockhampton, you probably have a better view even than us up here about the prospects of Adani ultimately getting under way. Look, bit by bit, every challenge they seem to overcome. But as soon as they overcome one particular challenge in the courts, another one or two emerge from nowhere. What are the chances of Adani in the next couple of years getting over all those hurdles and ultimately starting production?
Well look, there's a lot of things that have to go right to get a $16 billion project off the ground, and it's not my project, it's not my call, it's not my money to put at risk or the government’s to put at risk. So we can never be sure until it starts happening. But there have been some positive moves over this past year. Certainly the coal price helps, but Adani have continued to invest, continued to employ people here, not withstanding some of those hurdles and barriers they've faced over the past couple of years. So that is a positive for us, and all we can do is remain open and welcoming to investments and projects like that, that are going to create thousands of jobs. I'm still very positive about its potential. But keeping in mind that it is always difficult to get these large projects agreed to and off and running, and I'm always going to have a fair amount of anxiety until they actually happen. That's why I'm so committed to supporting it. That's why it's important that I think governments at all levels show their support, so that they can have the confidence to take what is a very long lived investment, a very large investment, that'll employ thousands of people.
JOHN MACKENZIE: Are you coming into town soon Matt?
I am. I believe I am coming up there in a few weeks. Just excuse me for not just off the top of my head knowing exactly what I'm doing. Sometimes it's a matter of waking up in the morning and seeing what the diary says. But I am coming up I understand.
JOHN MACKENZIE: There's a standing invitation to come into the studio between nine and 12 and have a yarn.
MINISTER CANAVAN: Yes, I'll definitely try to do that John.
JOHN MACKENZIE: Good on you Matt. Thank you. He's basically the Minister for Northern Australia which is why his views are so important to us here.