Transcript of Question & Answer Session The Domestic Outlook and the Role of Mining

You actually give quite a reasonable outlook for coal, notwithstanding renewables and gas developments around the world it does still seem and even the Prime Minister alluded to this last week as I mentioned earlier to the audience, that really there is still a driving demand for coal in the developing world. Certainly India as it comes on stream and also it seems as though there is still base demand there in China.

Yeah so I think the bottom line is that the evolution of these economies and the size of these economies means that there will be demand for resources. It's very difficult to predict exactly how that will play out and what sort of combination will end up being demanded and that we'll be able to export. But ultimately these are very large economies that will have very strong demand. They need energy, they need - - -

Yes that's right they need to energy to develop, you also pointed out there very clearly that this is not only a supply side issue because there is clearly more supply of a range of different commodities coming out there, but even if then demand drops off just that little bit it's going to be reflected in price and that's almost what you're seeing right now.

Yeah so I think what I tried to convey is that there's short run factors, so if we have a decline in steel demand at the moment that will have an effect, but there's also these long run drivers of demand and the long run supply effects and they're really important as well for thinking about the long run prospects.

The systemic side of it though, populations in China and India do continue to rise and therefore development rises as urbanisation increases as you pointed out that means there is still some – there is going to be significant base demand for the commodities that build the cities.

Absolutely. So I referred to some Bank research that looked at what sort of demand for steel would come from residential construction and so they – I mean they have to make a lot of assumptions and use data that are imperfect but basically they suggested that the peak in steel demand could easily be something like 10 years after the actual peak in residential construction just because of the compositional shift and the increase in steel intensity, as the quality of the buildings they're building, increase they require more steel, they require more copper, they require a lot of commodities, I don't mean to just focus on iron ore and coal although from Australia's perspective they're clearly two of the most important commodities.