Michelin presentation - Paul Heithersay

1. OVERVIEW OF SOUTH AUSTRALIA’S
RESOURCES SECTOR AND INITIATIVES
Dr Paul Heithersay
Deputy Chief Executive, Resources and Energy, DMITRE
and
Chief Executive, Olympic Dam Task Force

2. THE STATE OF SOUTH AUSTRALIA
•
KEY LOCATION FOR SUSTAINABLE BUSINESS
•
A robust, resilient, knowledge based economy – with capacity to
grow.
•
World leading minerals and energy assets – ranked as Australia’s
top destination for resources investment.1
•
Leading agricultural region producing premium quality food and wine
for global export markets.
•
A strong manufacturing base, including automotive, submarines and
warships and high-value advanced manufacturing.
•
Home to Australia’s wind and solar power industries.
State population
1.6 million
Adelaide population 1.2 million
• A world-class
education system; leader in research and
development; flexible and skilled workforce; and the fifth most
liveable city in the world.2
Minerals &
Energy
1
2
Agriculture
Renewable
Energy
Resourcestocks 2012 World Risk Survey
EIU: A Summary of Liveability Ranking and Overview August 2012
Advanced
Manufacturing
Defence
Education
Health
2

3. ECONOMY OF STRENGTH
Gross State Product $91 billion
Progressive and steady growth
• Over two decades of uninterrupted economic growth
• Linked to fast growing Chinese, Indian and other Asian
economies
• Major developments nearing $100 billion fuelling future
growth
• 6.0% unemployment – seasonally adjusted (September
2013)
Services (44%)
Construction, housing and utilities (19%)
Retail & wholesale trade (9%)
Manufacturing (9%)
Agriculture, forestry & fishing (6%)
Mining (5%)
Major Developments $94 billion
Minerals & Energy (42%)
Defence (20%)
Urban Development (16%)
Manufacturing & Industrial Development (7%)
Health, Education & Other Services (5%)
Infrastructure (5%)
Industry highlights
• 7% of Australia’s population
• 80% of Australia’s uranium reserves
• 70% of Australia’s copper resources
• 60% of Australia’s wine exports
• 50% of Australia’s wind power capacity
• 40% of Australia’s automotive manufacturing
• 30% of Australia’s defence industry
• 25% of Australia’s onshore gas resources
• 20% of Australia’s grain production
Water Management (4%)
Exports $11 billion
Metals (34%)
Wheat (14%)
Wine (10%)
Meat (6%)
Other (35%)
Export Destinations
East Asia (excl. China) (33%)
China (20%)
United States (9%)
Middle East (8%)
European Union (8%)
India (7%)
Source: ABS 5220, 5368, 6202, Department of Treasury & Finance
Rest of the world (16%)
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4. ADVANTAGES OF SOUTH AUSTRALIA
Low cost Australian business location
•
•
•
Labour Costs – South Australian labour costs are 10% below the Australian
average (including 20% below Western Australia, and up to 10% below New
South Wales, Queensland and Victoria).
Property Prices – Adelaide’s residential, commercial and industrial property
prices are amongst the lowest of Australia’s mainland capital cities.
Construction Price – Adelaide is competitive in terms of construction costs
for the development of new multi-residential, commercial and industrial
properties.
•
Average Weekly Earnings ($)
1,400
1,200
1,000
800
600
400
200
0
Location
•
•
South Australia is located at the centre of Australia’s road, rail and air
logistics networks; with time and cost advantages for air and sea freight
transport to key Asian markets.
The South Australian time zone (Greenwich Mean Time +9.30 hours, or
+10.30 during Daylight Savings time) is within two hours of major Asia
Pacific centres.
Government open for business
•
•
•
•
•
•
The South Australian Government is pro investment, supporting business
including:
Direct access to key government decision-makers.
A dedicated Invest in South Australia team and renowned case management
service to streamline investors’ establishment and approvals processes.
An ambitious and successful red tape reduction program.
A commitment to create 100,000 training places within broader activity to
meet industry demand for skilled workers.
Pro-investment programs including the Plan for Accelerating Exploration
(PACE), which has resulted in extraordinary growth in the State’s minerals
and energy sector.
South Australia
Australia
ACT
NT
WA
NSW
QLD
VIC
TAS
KPMG ranked Adelaide as having lower
business
location
costs
than
Sydney, Melbourne and Brisbane in their 2012
international business location costs study
Adelaide: The most liveable city
•
The 5th most liveable city in the world by the
Economist Intelligence Unit.
•
The most liveable city in Australia by the
Property Council of Australia.
•
The cheapest of the Australian mainland
capital cities according to Mercer’s Cost of
Living Survey.
•
The safest city in Australia by Suncorp
Bank’s Family Friendly City Index.
4
Source: ABS 6302, 6416, AECOM: The Blue Book 2012, KPMG: Competitive Alternatives 2012, EIU: A Summary of Liveability Ranking and Overview August 2012,
Property Council of Australia: Australian City Liveability Index 2011, Mercer: Worldwide Cost of Living Survey 2012, Suncorp Bank: Family Friendly City Report

5. THE SOUTH AUSTRALIAN RESOURCE
SECTOR
World Class Deposits
A WORLD CLASS DESTINATION FOR
RESOURCE INVESTMENT
Over the last decade, major operating mines has
increased from 4 to 21, with another 30 major
developments underway.
With continued exploration now is an opportune time
to become involved in some of these projects, many of
which are requiring cornerstone investors to develop
their full value.
Copper
67% of Australia’s economically
demonstrated copper resources
Gold
30% of Australia’s economically
demonstrated gold resources
Uranium
South Australia is resource rich with significant
deposits of copper, gold, iron ore, uranium and
mineral sands.
78% of Australia’s identified
resources
Iron Ore
14 billion tonnes in identified
resources
5
Rare earths
Minerals
Sands
Silver
Coal
Zinc
Lead
Graphite
4 mines
in 2003
21
mines in
2013
Nickel
Tin

6. South Australia’s Decade of Growth
South Australian Minerals Industry Indicators 2001–2012
Mineral exploration
$400.0
Mineral production value
$6,000
$350.0
$5,000
$300.0
$4,000
$200.0
$3,000
$150.0
$100.0
$2,000
$50.0
$1,000
$m
$-
$-
Capital expenditure
$900
Net minerals industry value
$7,000
$800
$6,000
$700
$5,000
$500
$4,000
$million
$600
$400
$300
$3,000
$2,000
$200
$1,000
$100
$-
$m
$-
Mineral royalties
$140.0
Mineral exports
$4,500
$120.0
$4,000
$3,500
$100.0
$2,500
$2,000
$1,500
$1,000
$500
$million
$3,000
$ million
Lead indicators – influenced by
fluctuating economic conditions
$ millions
$250.0
$80.0
$60.0
$40.0
$20.0
$$-

7. Mines and Developing Mineral Projects
•
•
21 Major Mines
~30 Developing Mineral Projects
•
5 World Class discoveries in last
decade
•
•
•
•
•
Prominent Hill
Jacinth-Ambrosia,
Carrapateena
Four Mile
Hillside
2004
2013
December 2013

8. Mineral Exploration Activity
2013
2004

9. Mineral Exploration in Australia by Commodity 2012/13
South Australia – increasing share of Iron Ore (largest outside WA)
maintaining 33% of Copper & significantly decrease in share of Uranium
COPPER
IRON ORE
URANIUM
Other
$30.30
3%
NSW
$7.3
2%
Other
$10.2
15%
Other
$28.4
9%
WA
$76.6
24%
NT
$9.6
3%
$319.3
million
QLD
$91.1
29%
Source: ABS Cat. 8412.0
SA
$106.3
33%
SA
$10.3
15%
$69.5
million
WA
$35.1
50%
Source: ABS Cat. 8412.0
SA
$47.9
5%
QLD
$3.9
6%
NT
$10.0
14%
$1,011.3
million
WA
$921.8
91%
Source: ABS Cat. 8412.0
NT
$11.3
1%

10. Copper
3 operational copper mines
4 development projects
40 prospects
67% of Australia’s economically
demonstrated copper resources
Many of the deposits in South Australia’s copper
provinces are covered by a sequence of
younger rocks that have effectively hidden
many large copper deposits from the early
explorers.
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11. Precious Metals
4 operational mines
8 development projects
37 prospects
30% of Australia’s economically
demonstrated gold resources
Gold mineralisation is widespread in South
Australia and occurs in most geological
provinces.
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12. Uranium
3 operational mines and 1 approved mine
78% of Australia’s identified resources
25% of the world’s uranium resources
Olympic Dam – the world’s largest uranium
deposit
South Australia has an unusually high incidence
of ‘felsic magmatic rocks’, these provide an
excellent naturally elevated source for uranium.
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13. Iron Ore
3 operational iron ore mines
20 development projects
14 billion tonnes in identified resources
Forecast production of 105Mtpa by 2025
Forecast Iron Ore Production (Mtpa)
120
North Gawler Craton
South Gawler Craton
Braemar Province
100
80
60
40
20
0
2013
13
2018
2023
2028
2032
Source: Deloitte Regional Mining & Infrastructure Plan

14. Oil and Gas
Cooper Basin
Exploration & development for 50+ years
Otway Basin
Mature & immature conventional/unconventional plays
Arkaringa Basin
Unconventional plays with significant shale oil potential
Bight Basin
BP & Statoil leading offshore exploration
An emerging unconventional oil & gas boom.
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15. Resources Infrastructure
$10+ billion in announced infrastructure
Path to Market Projects
6 port projects, multiple slurry pipelines, rail upgrades
Mine Infrastructure Projects
3 desalination plants, magnetite beneficiation plants
Electricity transmission upgrades
Eyre Peninsula, North Gawler Craton, Braemar
Province
Source: Deloitte Regional Mining & Infrastructure Plan
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16. Disclaimer
The information contained in this presentation has been compiled by the
Department for Manufacturing, Innovation, Trade, Resources and Energy
(DMITRE) and originates from a variety of sources. Although all reasonable
care has been taken in the preparation and compilation of the information, it
has been provided in good faith for general information only and does
not purport to be professional advice. No warranty, express or implied, is
given as to the completeness, correctness, accuracy, reliability or currency
of the materials.
DMITRE and the Crown in the right of the State of South Australia does not
accept responsibility for and will not be held liable to any recipient of the
information for any loss or damage however caused (including negligence)
which may be directly or indirectly suffered as a consequence of use of
these materials. DMITRE reserves the right to update, amend or
supplement the information from time to time at its discretion.
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