K&L Gates partner Robert Milbourne, an international corporate transactional attorney who has dealt with the likes of Vale, BHP Billiton and many others during his more than 15-year career, says politicians seem content to blame “the end of the mining boom” for Australia’s economic decline, using this as justification not to attempt to improve the situation.

Milbourne, also adjunct Professor of Law at the University of Queensland School of Law, believes this is not only counter-productive but “extremely dangerous” to the long term health of the country.

“Leaders in Canberra and each of the states may look at the mining and resources sector as purely local investments and operations, raising royalties, changing policies and even completely rewriting their mining codes [as in Queensland] almost at whim, but the industry decidedly does not see the sector as local,” Milbourne told Energy News.

“Rather, global mining companies see states and provinces compete against each other – and invest only where there is efficiency, effectiveness and a fair bargain between investment and local tax and royalties.

“This is a global industry that some estimate at close to 11.5% of global GDP. Mining firms will go where there is certainty and attractiveness.”

Australia’s power brokers need to fully understand and heed the recent survey results of Canada's Fraser Institute think tank – which has become “a default grammar school teacher marking how seriously local and national governments are in attracting and retaining mining and resources investments”, according to Milbourne.

The survey results, he says, reflect global sentiment – “and the sentiment is appalling”.

So how did Australia rank?

Queensland came out below Namibia and Botswana, while New South Wales came out under Burkina Faso (which just had a coup), Zambia, Morocco and Myanmar (which has not yet reformed its mining code).

South Australia, which topped Australia’s states in RESOURCESTOCKS’ annual World Risk Survey, came out below countries like Ireland and Sweden. Milbourne noted this as particularly concerning considering neither Ireland nor Sweden “rely on mining for a major portion of state revenues” as Australia does.

Western Australia, meanwhile, came out under Finland, Canada and the US.

What does this mean and what must Australia and its jurisdictions do to rectify the situation?

From one perspective Milbourne believes more stringent regulations are good for safety, environment and other social requirements, but the Fraser Institute doesn't claim that a lower ranking necessarily means enhanced protection.

Myanmar certainly does not have systems in place to regulate the environment better than NSW, Milbourne noted.

“Could it be that these other countries simply waive social or other requirements to ensure high rankings?” he said.

Yet Milbourne says that doesn’t add up either as the top ranked countries all have serious and well established mining regulations (Western Australia, for example, is in the top 5 provinces).

Rather, the rankings seem to reflect a "thermometer" reading of global mining industry opinions as to how effective local regulations are at enabling world class assets to be explored, defined, developed and operated, he said.

“Australia is without doubt facing a mining downturn (if not in some parts, an absolute collapse),” Milbourne said.

“But global commodity demand certainly hasn't collapsed, and indeed in some categories demand is increasing. This means new projects are being developed elsewhere, even while Australia has the mineral deposits, capital, expertise and history in developing world class assets.”

If the Fraser Institute's findings are to be believed, Australia's mining downturn is due, at least in part, to a failure to implement innovative regulatory responses to support the industry, he says.

Milbourne warned that without active leadership in global resources regulation, Australia may continue to lose projects to countries that are more considered in their approach to effectively attract, support and regulate mineral projects.

“State coffer royalties and high paying jobs are likely to be lost,” he said.

“What stronger reprimand can Australia face than to be told by the global industry that its policies are less attractive than a country facing a coup in Western Africa? This is no longer a problem, but a crisis. Government must take these reviews seriously and respond accordingly.