WHERE WILL OUR FUTURE QUARRY PRODUCTS COME FROM?

BRUCE McCLURE General Manager of the CMPA comments on the emerging shortage of materials around parts of Victoria.

HISTORY often shows that humans have a habit of not remembering the issues that have impacted on our society in the past and keep making the same mistakes time and time again.

We are watching with increasing concern the way in which Victoria is starting to run out of readily available sources of quarry products right across parts of the State, products that will be needed to enable the infrastructure projects that are required if our state is going to be able to prosper and cater for the projected million people increase in state population over the next fifteen years.

Identification and protection of “stone” resources (i.e. all construction materials including sand, stone and clay) has been a fundamental aspect of town planning since the inception of the Victorian colony.

Surveyors involved in setting out the original parish cadastral boundaries would identify and mark out “Stone”, “Gravel” and “Quarry Reserves” on these plans. They understood that these reserves along with their designated “Water and Timber Reserves” were essential for the development and maintenance of communities and community infrastructure.

The Extractive Industries Act 1966 and subsequent planning scheme changes provided further protection of strategic stone resources for the Melbourne area with the introduction of “Special Extractive Zoning” over identified stone, sand and clay resources on private and crown land. The then Victorian Mines Department Geological Survey (now Department of Primary Industries) actively undertook drilling and testing programs to outline these resources and encourage their development. The Department also maintained a confidential record of reserves and production in existing quarries to highlight impending supply shortages in different regions. The Department was then able to act in instigating searches to supplement supply well in advance of supply shortfalls.

This process served the Victorian community well with most areas identified having been extracted to supply local construction works and then land filled to receive local wastes and converted into parkland or reverted to agricultural use. This was a win, win, win situation which minimised the operational and transportation impacts of extraction and waste disposal on the wider community and ultimately provided recreational parkland or productive agricultural/development land.

The “Industry” alone has not shown itself capable of providing these essential stone resources to ensure competitive supply to the community from the nearest viable sites. The tendency in the major markets is for the larger operators to dominate supply from a few sites which leads to lack of competition and increased costs to the community. This has been the case in the Sydney market where average price of crushed stone products is significantly higher than in Melbourne.

The Sydney market is about to suffer substantial increases in quarry product costs as traditional major supply areas are nearing depletion with new sources being over 160 km from Sydney. This is a direct result of lack of identification and protection of stone resources.

Recent ill conceived environmental and heritage constraints in Victoria have both greatly reduced access to stone resources and greatly increased the cost of access to the available stone resources in this state. This reduced access and increased cost of access to stone resources will restrict competitive supply and drive up the cost of quarry products and increase amenity and environmental impacts to the community at large.

Many Victorians do not want quarries in their back yards and do not or will not recognise their importance to our society’s development.

Modern societies cannot exist without extractive industry products and when our government departments take their eyes off the ball, we end up with what is occurring in Victoria at present, a shortage of good quality quarry products.

This shortage of material has been brought home by a recent meeting held in Western Victoria to discuss how the area can provide all the materials needed to support the construction of approximately 2500 wind generators and associated road works on various sites and upgrades required to local roads to cater with future anticipated traffic from these farms.

There are sources of suitable materials but these sites are not at a Work Authority (WA) stage and given the track record of the time taken to get approval for a WA from initials meetings declaring an interest to final approval taking between two to four years then it will be a while before product is actually coming from a site.

Getting WA approval is only the start as the site itself has to be developed and equipment brought in to set up the crushing and screening plant. I am aware that a number of sites are close to Work Authority approval but it will still be at least 12 to 18 months before product is available.

This same problem is becoming evident in the Melbourne Metropolitan area as sand and crushed rock is brought in by trucks from regional areas to cater for current shortages of suitable products.

This situation will only get worse as existing quarries either reach end of life or the need outstrips completely the product available in the Metropolitan area. As work by the CMPA and CCAA has shown, Melbourne basically will not be able to source extractive industry products from around 2025 to 2030. For a thriving growing city this situation will have enormous ramifications.

There may be many who would suggest that they can source the necessary products from Regional areas but that is also unlikely under the current restrictions and requirements in place that are having major impacts on the industry. The impact on our transport network of catering materials into Melbourne from regional areas by trucks also will have major implications.

Over the last four years there has been a decline in the number of WA approved and only ONE substantial quarry site has actually started to produce products in the last four years.

As the Western District problem has also highlighted we need to act now. We need to still have requirements and regulations but they need to be balanced. They need to be fair, they need to be cost effective and the industry needs to be able to get approvals for sites in a matter of months not years if we are going to have a viable industry providing the products required right across Victoria.

An article on the ARI website aggregateresearch.com on the 19th October 2012, highlights a similar problem in the UK:

AGGREGATES LAND BANK IS SHRINKING

The future supply of rock, sand and gravel for the construction industry is looking precarious, according to a survey by the Mineral Products Association (MPA). Its latest annual mineral planning survey (AMPS) reveals that the plan-led system is failing to free up sufficient land for extraction. This means that adequate reserves of materials might not be available when needed to fuel economic recovery.

The MPA blames inertia in the planning system, with local authorities failing to make necessary planning decisions. At the end of August 2012, only 44 out of 95 mineral planning authorities in England had an adopted core strategy, when the original target for completion of these documents was the end of 2007. In Wales, only five out of 25 authorities had an adopted local development plan.

Sand/gravel approvals took an average of 28 months in 2010 and hard rock approvals 36 months. The statistics indicate that pre-application discussions do nothing to shorten this process. The majority of applications still take in excess of 12 months, MPA said.

Average replenishment rates of aggregate reserves (i.e. the rates at which production is being replaced with new permissions) are continuing to decline. Less than 50% of sand and gravel reserves have been replenished in the last 10 years to 2010 and only around 67% of hard rock reserves.

There has been a 40% drop in the total tonnage of land banks in England and Wales since 1997. The MPA said that the survey showed that it was getting increasingly difficult for mineral operators to work with the regulatory system to obtain their
licence to operate.

MPA chief executive Nigel Jackson said: “It’s not surprising that the planning applications aren’t coming forward. Whilst the overall approval rate of applications is adequate, they take too long, they cost too much – between £100k and £800k – and lengthy pre-application discussions don’t help.”

The fact that 80% of sand and gravel appeals are successful also shows that a lot of applications are being initially turned down that should not be.

“The performance of the plan-led system has been extremely disappointing in spite of recent changes,” said Mr Jackson. “Costs are rising as charges are levied for services that were previously considered part of statutory duties in the past and the costs of new and often pointless additional regulation are being heaped on top of that. There is a continual drift towards increased planning fees and charges for discussions with no commensurate improvement in planning performance.”

Operators feel that the system is now about finding reasons to refuse. The national planning policy framework (NPPF) is supposed to change all that but the early signs are not encouraging, he said.

“With too few plans, low land banks, diminishing replenishment rates, increasing costs, and planning inertia fuelling uncertainty we are storing up supply problems for the recovery. Lack of demand is masking underlying supply problems for the future,” he said.

“Government needs to get a grip on the realities rather than assuming things will improve. The Department for Communities & Local Government and the Planning Inspectorate need to step up their monitoring and put pressure on local authorities to ensure that the plan making system is more streamlined and responsive.”

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