New Diggers and Dealers chairman opens his first show

THE CONFERENCE CALLER: Everything was as it should be: the auditorium was full, and expectation for the next three days high.

The only point of difference was that for the first time in seven years the Diggers & Dealers Forum would not be opened by big, bad Barry Aldridge.

Instead we were greeted by a more subdued character in new chairman Nick Gioretta.

Although he may have a different approach to his predecessor, Gioretta’s tone was no less demanding as he admonished governments past and present, state and federal in an address that demanded understanding for and action from the industry.

He acknowledged the problems the industry had faced the last 12 months, obviously touching on the drop in the iron ore price and the Western Australian government’s attempts at hiking up royalty rates on gold production.

“What no one could foresee was the slump in commodity prices,” he said.

“What is unusual this time is that the majority of the commodities have bottomed at the same time, hence the comment made by many people in the industry, that we have never seen it this bad.”

Giorgetta took aim at the WA government and its proposed gold royalty increases, saying it was the resilience of the industry that had seen it band together to re-educate Colin Barnett and his mates as to the importance of maintain equilibrium for the sector.

Despite the win he indicated damage had been done to the country’s reputation as a destination for future investment.

“Why don’t governments understand that to continually generate uncertainty that makes investors and financiers restless, is detrimental to an industry that already operates in the high risk category of business?” he asked.

Giorgetta’s next swipe was at a more obvious adversary – the environmental activists of the world.

He suggested these parties had gained the upper hand in recent arguments with the industry due to their better grasp and use of social media.

“It is interesting that environmental activists against the mining industry appear to be more skilled than us in the clever use of marketing and social media to win the support of the Australian community in driving a perception that our industry is not responsible,” he lamented.

“We tend to promote our contribution individually as corporates but not as an industry.

“Organised groups such as the environmentalists will always be more effective operating together than we are acting individually.”

Despite his concerns, Giorgetta also pointed to what he considered to be some positives that have emerged recently for the industry.

These include much of the merger and acquisition activity we have been seeing, including the frenzied accumulation race being battled out between Metals X and Northern Star for the Tanami Central gold project (the finalisation for which was announced the same morning in favour of Bill Beament’s company).

He also claimed raising money seems to be a bit easier for companies compared to 12 months ago, however, I’m sure there are a few managing directors out there prepared to disagree with that sentiment.

“Even though times are difficult for the industry, it is my expectation that we will leave here Wednesday afternoon buoyed with confirmation that companies are still delivering strong operational results and, having taken steps to align the business models to the economic circumstances, as business should, we still have a substantial industry in good shape and with a strong future,” he declared.