7 reasons you should know about the Australian resource recovery

1. “Why aren’t you rich?
You're in the resources industry
after all…
7 reasons..
Grant Musgrove
ACOR CEO
E-mail: grantm@acor.org.au

2. Reason 1: We are creating positive
“Externalities” and NOT being paid for it!
• E.g. Carbon abatement, finite resouce
recycling
• The ERF may bring hope following ACOR
representations, (but unless you’re
organisation is an ACOR member I’m not
going to tell you how :)

3. Reason 2: Secondary resource prices are NOT
telling the truth- they are too Expensive!!
• P- price
• Q – quantity
• D- demand
• MPC – marginal
production cost
• regulatory cost–
marginal cost from
regulating a resource
as a waste
• Regulation should be
risk x probability
basedD
MPC
MPC
+Prescribed
waste cost
P
Q

4. Reason 3:Resource scarcity is Multidimensional
but the focus has been One dimensional
Physical
Not accessible
Decline of ore
grade
Depletion of
reserve
Economic
Price volatility
Profitability
metrics and
markets
Skill supply/
shortage
Geopolitical
Resource
nationalism
Political
stability
Regional
conflicts
Technological
Supply
bottlenecks
Lack of
innovations
Environmental
Social license
to operate
Climate
change
Environmental
standards

5. Reason 4: “Imperfect information” is
pervasive
• Focus of government strategies has been on
increasing the quantity of Recyclate VS Landfill
• Need to refocus on profitability through quality
recyclate (e.g. ACOR’s material specifications in
packaging across other streams)
• Markets “fail” through lower prices/profitability
for fear/risk of receiving contaminated/ variable
feedstock

6. • Two thirds of manufacturing costs are
materials.
• The productivity debate has been
dominated by labour productivity
• Lets take the agenda back to
business, not ideology
Reason 5: Need to focus on “total factor
productivity”

7. Reason 6: Governments are not
focussing on sector profitability and
industry development
• Levy revenue that does not go back to industry
development is a tax on the resource recovery
industry via residuals to landfill
• Commonwealth Product Stewardship schemes
have been policy and commercial failures
because they are not focused on industry
sustainability (eg TVs and Computers)

8. Reason 7: Waste Crime is costing governments
and the community up to $1 billion per year
through:
• Levy avoidance
– waste “disappears”
– high value recyclables waste re- classified as low value waste  exported or gets
dumped
– waste sent out of jurisdiction
– illegal dumping & stockpiling
• Tax avoidance
– Cash transactions, GST avoidance
• Market distortion
– E.g. lower prices, jobs lost
• Money laundering
– Metal theft and metal being traded in cash in black market
• Illegal exports
– Breach Basel Convention, e.g. e- waste, used oil, used batteries
• Environmental degradation

9. Reason 7: Waste Crime
• Criminal elements:
• Launder money (metals)
• Stockpile/ Dump
• Illegally export (international organised
crime)
• Effect: lower prices/unprofitability
Market distortions govt subsidies