MINING companies face similar challenges to the broader agricultural industry when it comes to beef production.
In an address at the Crawford Fund conference field trip to Alcoa Farmlands last week, Citic Pacific health safety and environment and corporate logistics executive director Warren Fish said Citic Pacific purchased Mardie station in an effort to secure land access.
It now runs 8000 Droughtmaster cattle on the 230,000 hectare property which lies 100 kilometres south of Karratha.
Established in 1865 as a sheep station, Mardie is now home to hand-selected stock chosen for high quality beef production, which is run separately alongside the Citic Pacific mining operation.
And although the beef production system has been a valuable asset for Citic Pacific, the company faces similar challenges to other station owners who work in beef production in the area.
Mr Fish said the difficulty in sourcing potential beef markets was a challenge to the profitability of the mining company's beef enterprise.
"I think Australian agriculture's sourcing of markets is going to becoming increasingly difficult and I think the industry faces significant challenges over the next handful of years," he said.
"We find some government decisions fairly perplexing, particularly the management of live export a year or so ago, which was severely debilitating to the cattle industry here.
"I am not the sure the repercussions of the decision were properly thought through before the commitment was made.
"There is an ongoing dialogue at the moment that needs to be opened up, government departments need to look at a new way to get out into the market.
"We need to be a lot more free thinking in the way that we start selling Australian products overseas."
Mr Fish also cited the tyranny of distance as a distinct challenge to beef production in WA.
"The distances in this country are massive so for us, to send our cattle to slaughter we need to send them 2000km by truck, and I am not too sure how to get around that," he said.
Mr Fish said the high cost of labour was also a barrier to profitability of the beef operation.
"Labour costs in this country are traditionally high and of course that has a severe impact on the way we are able to market our products overseas and it affects our competitiveness as well," he said.
The decision to purchase the land permitted flexibility in the company's mining operation.
"We were keen to be left alone on our patch of dirt to settle ourselves into the project without having interference from other landowners," Mr Fish said.
Citic Pacific is the largest Chinese-owned development in Australia and is a new entrant into the iron ore market.
"One of the principles we have that is different to some of the other mining companies is we have decided to run the station as a station, not as part of a mine," he said.
"There was a high emphasis on safety which made the stations unable to be run to a certain extent the audit requirements for mining companies made it difficult to run the station.
'"So we have separated the station from our mining operations."
The introduction of Chinese management to Citic Pacific saw an increased focus on beef production for profit, with Australian executives more concerned with securing land access.
"A couple of years ago we had some Chinese executives join our company and the shift was fundamental," he said.
"The station is linked to all our approvals so we have commitments in the project and company that we can only fulfill by ownership of a station."
Despite the challenges faced by Citic Pacific in its agricultural division, Mr Fish was optimistic about the future.
"I reckon if we play our cards right we could actually start to turn a healthy profit at the station, but it is contingent on some fundamental changes to the way we do business," he said.