Diggers & Dealers 2021: Roy Hill’s Gerhard Veldsman says COVID, labour shortages and red tape a worry

Roy Hill’s new chief executive Gerhard Veldsman has warned the mining industry will not be able to deliver on its massive pipeline of projects without improving mobility, saying recent outbreaks of the infectious Delta variant are a “massive wake-up call” Speaking for the first time at the Diggers & Diggers Mining Forum in Kalgoorlie-Boulder today, Mr Veldsman said COVID-19, labour shortages stemming from the hard border and red tape were the most pressing issues for the iron ore miner over the next two years. The former chief operating officer at Roy Hill in June replaced Gina Rinehart’s trusted, long-serving lieutenant Barry Fitzgerald, who has been a regular speaker at D&D in recent years. Mr Veldsman today urged the Morrison Government to set target dates for its four-step recovery plan from COVID, saying: “As miners know, a plan without dates is just a wish list”. Prime Minister Scott Morrison has said 70 per cent of the eligible population will need to have received both vaccine doses before the nation moves to the next stage of easing restrictions, and 80 per cent to end lockdowns. Mr Veldsman said it had taken a pandemic for the rest of the country to realise the importance of WA resources companies and mining, which accounts for 10 per cent of gross domestic product. However, he warned there were still challenging times ahead — as evidenced by COVID-19 cases growing in NSW and more recently Queensland. “We’re going to have to learn how to live with it, we’re going to have to plod our way out of it and — especially over the next 12 months — we’re going to have to make some tough decisions,” Mr Veldsman said. He encouraged leaders to think outside the box in looking at ways to improve mobility across Australia and from overseas into the country. In Germany, he noted, children are tested before they go to school for COVID-19 and results are available within 10 minutes, while patrons to beer gardens must either provide proof of vaccination or a negative virus test. “We’re going to have to start to think about implementing some of those in Australia and industry is going to have to work with government to make it happen,” Mr Veldsman said. “If we don’t do that, we will not get the resources we need to actually progress a lot of these projects we all talk about.” Evolution Mining executive chairman Jake Klein earlier told the Diggers forum he was “frustrated at how Australia has gone from leading the fight against this pandemic to being a laggard”. “In a bitter twist of irony, Evolution has six assets — five of which are in Australia and the only asset which we can really visit at the moment is in Canada,” he said. “There is clearly only one solution to this and that is for everyone to get vaccinated – no ifs or buts.” To counter the skills shortage issue, Mr Veldsman said Roy Hill was focusing on its New to Mining program — which involves training up new entrants to the industry to become truck drivers — and finding synergies to retrain former Defence Force and Qantas personnel. Mr Veldsman said that while still automating its truck fleet, with eight autonomous trucks in operation and another 74 to be converted, Roy Hill saw training truck drivers as an opportunity to bring people into mining. Another major risk Mr Veldsman cited was the regulatory environment, warning slow approvals could jeopardise projects. While commending the McGowan Government for committing $120 million in the September State Budget to fast-track major project approvals, he said it remained a live threat. “One of the biggest risks we’re facing is if we don’t get a cultural change around how industry and government work together to streamline approvals we’re really going to miss this boat,” he said. “Prices for iron ore, gold and commodities aren’t going to stay up ... we need to make hay while the sun is shining.” Roy Hill last year posted a record annual profit of $2 billion, up 60 per cent on the previous year, and paid a maiden dividend of $475m to Mrs Rinehart and its foreign owners. Roy Hill is 70 per cent owned by Hancock, with the balance held by Japan’s Marubeni Corporation (15 per cent), South Korea’s POSCO (12.5 per cent) and China Steel Corporation (2.5 per cent). As revealed by The West Australian today, it is understood the mining sector has secured a deal with the Federal Government to get access to thousands of vaccines to immunise its workforce from September.