Home   >   Features   >   ERR 2022/23 Annual Statistical Report

ERR 2022/23 Annual Statistical Report

By on February 27, 2024

DR ELIZABETH GIBSON, General Manager of CMPA reports on the ERR 2022/23 Statistical Report.

Earth Resources Regulation (ERR) has recently released (22 December 2023) the 2022/23 Annual Statistical Report (available at www.earthresources.vic.gov.au). Well done to all that submitted their returns as required – it would be good if the ERR Report was also published promptly. The upturn in annual construction material tonnages continues to its highest level ever. However, it was noted that ERR had amended the tonnages for the previous four financial years (in comparison to figures shown in the relevant past statistical reports). Due to these amendments, published comparison figures for past rock type ($/tonne) cannot be presented with any accuracy.

Table 1. Rock type and $/tonne for 2022/23

*The $/tonne figure for granite does not appear to reflect current market trends.
**Sedimentary (usually rippable rocks, including sandstone, shale, siltstone, chert, mudstone, claystone).
***Concrete sand (product type) was included for information.

Figure 1 gives the production in tonnes; $ per tonne and projected tonnes of construction material against the financial year. It can be clearly seen that the:
• The Victorian Government Extractive Resources Supply and Demand Study 2015-2050 underestimated the future needs for construction material in Victoria by approximately 27% (20 million tonnes) for 2022/23.
• Of interest is the steady increase in tonnages of construction material over the past 8 years.
• The average unit rate ($/tonne) has increased by 14% indicating that the predicted shortage of supply is imminent

Figure 1 Extractive industry $/tonne and tonnes sold by financial year.
Figure 2 Number of Work Authorities against tonnages produced by financial year.

Figure 2 raises concerns that the total number of Work Authorities is declining whilst production is increasing. This becomes even more evident when considering only those Work Authorities actively producing construction material (green column). Not included in Figure 2 are the tonnages for the production of recycled construction and demolition waste which is approximately 6.5 million tonnes in Victoria (2019/20), https://www.sustainability.vic.gov.au/research-data-and-insights/waste-data/annual-waste-data-reports

Figure 3 Work Plans (new) by financial year against stage in approvals process

Figure 3 depicts the number of new Work Plans* submitted and the approvals pathway through Statutory Endorsement to approved Work Plan. Some that have been submitted may also be withdrawn by the proponent or refused by ERR. From 2017/18 to 2022/23 the number of approved Work Plans is on a downward trend.
*Until the Work Authority (WA) is granted, an approved work plan does not provide security to the resource described in the Work Plan. Other Government agencies may change their regulations etc. in the interim which until the WA is granted may still influence/change the Work Plan.
The failure of the Work Plan approval process does not rest solely with ERR: it is a reflection of other Government regulation with departments unaware or ignore its ramifications. It would be beneficial to have separate columns for refusal (ERR decision) and withdrawal (proponents decision).

Figure 4 Work Plan variations by financial year against stage in approvals process
Figure 5 New approved Work Authorities and resource estimate against financial year
Table 2. Breakdown of newly approved Work Authorities (WA) for 2021/22 and 2022/23

Table 2 gives a breakdown of the type of resource with a new approved Work Authority. Note the Code of Practice resource type is not included which whilst essential for meeting local needs are small in size (<5 HA). A number of the hard rock quarries approved in 2021/22 may be supplying wind farms and are also located far from the metropolitan Melbourne market (increased transport costs, wear on roads and carbon footprint). Note that no new hard rock or sand quarries were approved in 2022/23.

Figure 6 Rehabilitation bound totals versus percentage increase with financial year.

The steep increase in the rehabilitation bonds is due to ERR having modified the rehabilitation bond calculator in 2020/21. Some CMPA Members are experiencing unwarranted sharp increases (up to 4000% in some cases) in rehabilitation bonds that impact the financial viability of the operation. The manner in which the rehabilitation bond calculator is applied by ERR is resulting in the disproportionate application of regulation leading to a distinct competitive advantage to Work Authority holders that have not had their bonds reviewed (currently the majority), and, hence, is an unreasonable regulatory process. Construction material prices are already increasing: 14% in 2022/23 at a rate far greater than inflation.

Further increases in construction material costs would result in (if this unreasonable regulatory process continues) dire implications for Victorian Government Major Projects and housing construction if these rehabilitation bond increases are applied across the industry. There is no evidence of need for these increases given the good historical track record of the extractive industries with the Victorian Government having undertaken negligible rehabilitation of extractive industry sites over the past 25 years.

Additionally, the majority of Work Authorities are undertaken through a business lease with the private landowner who benefits from the extractive industry activity.

You must be logged in to post a comment Login

Sponsored Ads