SACOME Annual Report 2015-16

president’s report
chief executive’s report
There is no doubt that the past year has been
very difficult for most resources companies
and for the services companies which provide
essential support to the sector.
The big topic for the year has been electricity
prices, with South Australia’s rapidly increasing
power prices set to impact across all sectors,
particularly those that compete globally.
Many veteran commentators suggest that this is just another cycle,
but recognise that this cycle is delivering a longer than normal
downturn phase.
There has been a traditional response to this cyclical downturn from
most companies in the resources sector and that is to reduce costs,
stop discretionary spending and to improve operational efficiencies.
Many companies have been successful in curtailing the decline
in their margins with these initiatives and some companies are
reporting signs showing that the cycle might be bottoming out.
However, cuts in capital expenditure, exploration budgets and
staffing levels may have negative longer-term consequences which
may reduce future growth alternatives for the sector.
SACOME’s members include five of the top six electricity users in
the State and to deal with the crisis, SACOME established an Energy
Markets committee towards the end of the financial year to identify
our lobbying strategy and also determine what actions we can take as
an industry that isn’t reliant on the regulators.
The unsung success of the Chamber has been defeating the diesel
excise rebate’s proposed removal by the Federal Labor Party in the
lead up to the Federal Election, which would have come at a cost of
$2bn to industry nationally.
The excitement of the year came with record attendance at our jointly
held SA Exploration and Mining Conference along with near record
attendance at the SACOME/GMUSG conference held in Port Augusta.
It is also possible that these traditional responses may not result in an
expected favourable outcome and a new approach will be needed.
Many industries outside of the resources sector have made major
changes to the way they implement new and innovative ways of
working. The general sentiment across the resources sector is that
the implementation of innovative strategies is an area that has room
for improvement.
It is with this challenging backdrop that SACOME has maintained its
support to its members and provided services over the last year.
The SACOME Council remains focused on delivering on the strategy,
providing greater value for our member companies, engaging with
all levels of government and building support within the South
Australian community for the resources sector.
The Council also recognises the initiatives within South Australia,
which the Government has supported, to develop the resources
sector such as the Copper and Magnetite Strategies, PACE Copper
and the recently announced program to incentivise companies to
extract more gas for local supply.
SACOME is well positioned to support its members in this changing
resources environment and Council is very appreciative of the efforts
of the small, but dedicated staff at SACOME which has been led by
Jason Kuchel over the last nine years.
As has been previously announced, Jason is leaving SACOME in
November 2016 to take up the CEO position at the Wakefield
Regional Council and, on behalf of Council and SACOME members, I
would like to recognise his significant contribution to SACOME and
wish him well for the future.
In closing, I would like to welcome Rebecca Knol as the new CEO of
SACOME who will be joining in early November 2016 and very much
look forward to her contribution to the Chamber.
Terry Burgess
President
The positive news came in the closing months of the financial year
as exploration companies trended from difficulties in raising a few
hundred thousand dollars, to successfully being able to raise millions
at a time. With exploration usually the last section of the industry to
recover, this is indeed a good sign that a corner has been turned.
The hard yards continued in the public communications space around
oil & gas, as the anti-fossil fuel campaigners continue to paint fracking
as one of the greatest evils of our time whilst ignoring the fact we
have undertaken the practice safely for 40 years. The parliamentary
inquiry continues and SACOME is providing valuable information into
this process. Like all that have gone before it, we expect the inquiry
will find that oil & gas activities in South Australia have been - and will
continue to be - carried out safely.
On a positive note, our polling shows that this State enjoys some of
the highest support for mining in the nation.
Most importantly, this year we continued to work for companies to
reduce their operational costs through productive policy engagement
with the State and Federal Governments and to help others with their
bottom line by connecting them with those that matter most to their
business outcomes.
For the future, we have set up a positive 2016/17 with Government
grants totalling $400k towards an Industry Connections Manager,
Innovation Summit, Safety Summit and our Mines Emergency
Response Competition. From a financial perspective, our organisation
is in a strong position to serve our members well, although as many of
our members attest we provide excellent value for money services.
Lastly, I’d like to thank our team who have worked tirelessly
throughout the year to deliver the services you desire. Each one of
them is passionate about making a brighter future for the resources
sector in South Australia - and the flow on benefits to the community
that come with that.
Jason Kuchel
Chief Executive
4 South Australian Chamber of Mines and Energy
Annual Report 2016 5