Australia’s infrastructure regulator has sounded an alarm for the future of quarry supply. Quarry breaks down the concerns and suggestions from its latest report.

Infrastructure Australia has sounded an alarm over the future of the country’s quarry supply in the years to come.

The regulator has detailed its latest concerns for the sector within its 2023 Infrastructure Market Capacity report.

The third iteration of the report highlighted “acute quarry shortages”, especially in Melbourne, NSW’s Mid North Coast and South East Queensland, as critical issues for Australia’s infrastructure market.

Infrastructure Australia chief executive Adam Copp said these concerns were amplified by a historic increase in demand for building materials and construction activity in Australia.

“With so much construction activity underway, the industry is finding it increasingly difficult to source key building materials and workers – particularly engineers, skilled trades and labourers,” he said.

“A clear message in this year’s report is that limited access to local steel and cement, as well as localised shortages of quarry products, is contributing to price uncertainty in the supply chain, leading to delays and cost overruns.

“The infrastructure sector is delivering a major public infrastructure pipeline valued at $230 billion over five years. This is occurring alongside a plan to build 1.2 million new homes and a major investment in the energy sector, which is quadrupling over that same period.”

Infrastructure Australia released 14 recommendations for the federal government in partnership with state and territory governments to solve concerns about quarry supply and additional infrastructure issues.

Quarry examines the report’s concerns and solutions for the future of Australian quarrying.

QUARRY SUPPLY 

The latest report from the infrastructure regulator suggests the country’s local materials supply, particularly for quarries and especially within regional areas experiencing construction growth.

“Acute quarry shortages loom in several regions nationally, with long lead times from quarry approval to extraction making it difficult to source alternative supplies when and where they are needed, increasing project schedules, costs, and carbon emissions,” the report stated.

The differing levels of raw quarry data available per state impact the data within the report. Overall, the regulator highlights concern about the long lead times for quarry approvals.

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Infrastructure Australia releases 2023 market capacity report

On one hand, this impedes the construction industry’s ability to supply materials for residential and larger infrastructure construction. It also impacts the ability to plan to replace extinguished quarry supply or quarries with expiring licences and approvals.

The regulator suggests several issues contribute to the delay of quarry approvals, including external regulation and policies around environmental standards, cultural heritage, and net-zero targets.

The report highlighted three locations of concern, including Melbourne, South East Queensland, and Mid North Coast New South Wales.

According to its research, Melbourne’s chief concern is that several quarry consents are due to expire before new quarries are established.

While it highlighted the Victorian government’s Quarry Approvals Coordination Unit as a positive for the state’s quarrying sector, it was concerned about how significantly construction costs would increase without more quarries being approved.

Quarry operators, who were kept anonymous within the regulator’s report, shared concerns about the length of the approval process.

“Developing quarries is. five-10-year process, and a lot of people are just giving up, saying it’s just too hard and too costly. And there’s no guarantee of a return,” one said.

The regulator believes the lack of quarries in regional areas will impact South East Queensland and the NSW Mid North Coast. The two regions have significant investments tied up in the Brisbane Olympics in 2032 and the Coffs Harbour Bypass, which could suffer due to the lack of quarries, serviceability, and quarry capacity to serve those infrastructure projects.

Two suppliers echoed the sentiment within the report about serviceability with concerns about the road network.

“Generally, across the company, road access networks for our trucks are fairly prohibitive, and assets and reserves are moving further and further away from metropolitan areas, which means they’re getting more expensive,” one supplier told the report.

Another supplier added: “Clearly, we use more truck drivers than anything else. So, that’s where we’re feeling the labour shortage the most.

“But (even) quarry operators are very hard to find now. Even admin staff in offices are very difficult to come by.”

The report finds that Australia’s overall infrastructure workforce must grow by 127 per cent to meet demand. It is the third time in three reports that the regulator has highlighted workforce shortages.

SOLUTIONS

Many of the concerns Infrastructure Australia shared within its reports would be familiar to those in the industry and those within state and federal governments.

The Victorian Government’s joint ministerial statement from 2018, signed by state treasurer Tim Pallas and then Planning Minister Richard Wynne, highlighted streamlining the approval process, protecting resources of extractive resources of strategic importance, and preventing the incursion of new development into quarry buffer zones.

“We need a ready supply of raw materials as Victoria grows. That’s why we are supporting the industry by putting in place the right protections for our quarries,” Pallas said.

“The challenge facing Victoria is a significant one. This statement is part of our proactive plan to drive affordability of extractive resources.”

The State of Victoria Department of Energy, Environment and Climate Action released its Extractive Resources Supply and Demand Study 2022-30. The report estimated demand for the extractive resources would continue to grow by 2.5 per cent until 2030.

According to its data, the level of demand would service an extra 32 quarries in 2030 based on 500,000 tonnes per year.

However, that report notes the current quarry replenishment rate is “deteriorating” with community attitudes and competing land uses, creating “uncertainty” and longer timeframes.

“While market forces may stimulate new quarry developments as material prices rise, barriers to entry for new quarries are increasing and may be reducing competition,” the Victorian report reads.

“Without a response, it is likely that Victoria will face significant transport distance and material cost increases up to 2030. Determining the response is complex. The state must balance competing land use policies and priorities, particularly in peri-urban areas.

“It must also consider regulatory reform, better enable the approval of new quarries and quarry expansions and maintain carbon emission reduction targets.”

The Victorian report suggested the state government should consider “multiple smaller work authorities” located in regional areas, which would work on the limited existing greenfield areas for “explicit use” of extractive resources. But what does Infrastructure Australia want to do about it?

The regulator has made two critical recommendations as part of a targeted solution to boost quarry output to match the “historic” local demand level.

The first recommendation would see Victoria’s quarry approvals coordinator model replicated across the states and territories. According to Infrastructure Australia, this model would support applications to increase quarry supplies for priority infrastructure projects.

The regulator has also asked the federal government to consider exploring options to improve data collection and transparency of national quarry supplies to support longer-term planning.

The regulator suggests the recommendations need to be commenced within six months.

“Australia’s lack of domestic capacity to supply building materials exposes investments to cost-overruns, delays and future global supply chain risks,” Copp said.

“Currently, there is no method for collecting or analysing data on local manufacturing and production outputs at the national level, hindering the ability to predict supply and mitigate shortfalls, as we can do with labour.

“We urge governments to work together and with industry to address this structural workforce shortage. While broad skills and workforce reforms are underway nationally, we need to urgently boost the pipeline of workers into the sector and develop a national infrastructure workforce strategy.” •

This feature appeared in the February edition of Quarry.