Exploration - Department of State Development

Transcription

WESTERN AUSTRALIA’S INTERNATIONAL RESOURCES DEVELOPMENT MAGAZINE
December 2002–February 2003 $3 (inc GST)
Gas-to-liquids
New game-breaker
Strand lumber
Print post approved PP 665002/00062
Focus on Albany
Exploration
Need for action
WESTERN AUSTRALIAN OFFICES
Department of Mineral & Petroleum Resources
Mineral House • 100 Plain Street • EAST PERTH WA 6004
Tel: +618 9222 3333 • Fax: +618 9222 3430
www.mpr.wa.gov.au
Office of Major Projects
168–170 St Georges Terrace • PERTH Western Australia 6000
Postal address: Box 7606 • Cloisters Square
PERTH Western Australia 6850
Tel: +618 9327 5555 • Fax: +618 9327 5500
www.mpr.wa.gov.au
INTERNATIONAL OFFICES
Europe
Government of Western Australia
European Office • 5th floor, Australia Centre
Corner of Strand and Melbourne Place
LONDON WC2B 4LG • UNITED KINGDOM
Tel: +44 20 7240 2881 • Fax: +44 20 7240 6637
Email: [email protected]
India — Mumbai
Western Australian Trade Office
93 Jolly Maker Chambers No 2
9th floor, Nariman Point • MUMBAI 400 021 INDIA
Tel: +91 22 230 3973/74/75 • Fax: +91 22 230 3977
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E-mail: [email protected]
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Middle East
Western Australian Government Office • Emarat Atrium
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Tel: +971 4 343 3226 • Fax: +971 4 343 3238
People’s Republic of China — Shanghai
Western Australian Trade & Investment Promotion
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1168 Nanjing Road West • Shanghai 200041
THE PEOPLE'S REPUBLIC OF CHINA
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People’s Republic of China — Hangzhou
Western Australian Trade & Investment Promotion
Hangzhou Representative Office
Room 910 • World Trade Office Plaza
Zhejiang World Trade Centre
15 Shuguang Road • Hangzhou 310007
PEOPLES REPUBLIC OF CHINA
Tel: +86 571 8795 0296 • Fax: +86 571 8795 0295
Taiwan
WA Business Development Manager
Australian Commerce & Industry Office
Australian Business Centre
Suite 2605, International Trade Building
#333 Keelung Road Section 1 • TAIPEI 110 TAIWAN
Tel: +886 2 8725 4280 • Fax: +886 2 2757 6707
Thailand
WA Business Development Manager
Australian Trade Commission • Australian Embassy
37 South Sathorn Road • BANGKOK 10120 • THAILAND
Tel: +662 287 2680 Ext 3307 • Fax: +662 287 2589
FROM THE MINISTER
Anniversary edition
R
eaching 25 years in print is quite an achievement, and I’d
like to congratulate all those involved in making Prospect
one of the world’s leading publications on major resources
investment opportunities.
Clive Brown, MLA
Prospect continues to be an important source of information for
Minister for State
Development
its national and international audience. It is also a great avenue
through which we can promote the many successes the industry
and the Western Australian Government have achieved
over the past 25 years.
And what an impressive period of development it has
been over the last quarter of a century. During that time,
the value of mineral and petroleum output in Western
Australia has risen from A$1.6 billion to more than A$26
billion now.
In 1978, iron ore was the State’s number one
commodity, followed by alumina and nickel. Today,
petroleum heads the list, followed by iron ore, alumina and
gold.
What hasn’t changed is the critical role the resources
sector plays in the Western Australian economy. Today
more than ever, a healthy diversified minerals and
petroleum sector is the cornerstone of our prosperity —
and the nation’s prosperity as well.
In the past 25 years, Western Australia has grown to become the nation’s leading producer
of mineral and petroleum products. Now, we also lead the nation in minerals and petroleum
technology and expertise exports. And the future looks positive with several important
projects reaching significant milestones and others waiting in the wings. Some of those are
featured in this 25th anniversary edition.
I would also like to take this opportunity to wish all Prospect readers a happy and safe
Christmas and new year.
FROM THE DIRECTOR GENERAL
I
n 1978, Prospect started as a 12-page newsletter. Since then, it has
grown in stature as well as size.
Prospect has always sought to provide information about key
aspects of the Western Australian resources industry. And not just
minerals and petroleum products. Prospect also covers agriculture,
wood processing, engineering, new technologies, community
relations and environment as part of its brief.
In this milestone edition, you’ll also read a comprehensive
Jim Limerick
feature on exploration in Western Australia and the steps being
Director General
taken to reinvigorate the industry.
Department of Mineral and
Petroleum Resources
The core aim of Prospect has always been to encourage
investment in Western Australia — to create jobs and a better
standard of living for Western Australians, in line with the State’s
sustainable development policies.
Prospect now reaches about 10 000 subscribers each quarterly
edition, and with almost 8000 hits each quarter on the online
edition, it continues to strengthen and expand.
As we move into our 26th year, you can be assured that Prospect will continue to provide
you with up-to-date information on opportunities and projects in the Western Australian
resources industry.
May I also wish you a safe and enjoyable Christmas, and a prosperous new year.
in this issue EXPLORATION
In this edition, Prospect looks at
exploration, the all-important first
link in the resources development
chain. While things have been
relatively quiet lately on the
exploration front in Western
Australia, a turn-around in the
fortunes of the industry may not be
too far away. Turn to pages 7-21 for
more details.
2
GAS-TO-LIQUIDS
23
New technology from Texas could allow small and large
gas producers in Western Australia to turn uncommitted
gas reserves into worthwhile gas-to-liquids projects.
3
24
NICKEL JUNIORS
24
22
STRAND LUMBER
Front cover:
Photo courtesy
Consolidated Minerals Ltd.
26
FINANCIAL MODELLING
An insight into how the experts evaluate the worth of resource
projects.
Perth-based company, Lignor Pty Ltd, has its sights set on
Albany as a location for a A$150 million engineered strand
lumber plant.
Exploration drilling at
Consolidated Minerals
Ltd’s Woodie Woodie
manganese project in the
East Pilbara.
WATER STUDY
Results of an exhaustive study to find a long-term solution for
water needs for the Eastern Goldfields–Esperance region.
PLATINUM
The Panton Sill project in far north Western Australia is
shaping up to become Australia’s first commercial
platinum–palladium operation.
ALUMINA
Western Australia has plenty to boast about when it comes to
efficiency with alumina production. Four of its refineries are
among the top ten lowest-cost producers in the world.
Despite mergers by several resource majors in recent
times, junior nickel companies in Western Australia are
proving that many opportunities still exist at the lower end
of the food chain.
4
ANNIVERSARY
Prospect has come a long way since being launched
25 years ago.
Prospect
RESOURCES MAP— INSIDE BACK COVER
A subscription form appears on page 36
ISSN 1037-4590
Western Australian Prospect magazine is published quarterly by the Western Australian Government’s Department of Mineral and
Petroleum Resources (MPR) and Aspermont Ltd.
Editorial management: John Terrell, MPR Investment Attraction Division. Tel: (08) 9327 5555 • Fax: (08) 9327 5500.
Advertising management: Aspermont Ltd, PO Box 78, Leederville, Western Australia, 6902.
Tel: (08) 9489 9100 • Fax: (08) 9381 1848.
Prospect has been compiled in good faith by the Department of Mineral and Petroleum Resources from information and data gathered
in the course of the magazine’s production. Opinions expressed in Prospect are those of the authors and not necessarily those of the
Department of Mineral and Petroleum Resources. No person or organisation should act on
the basis of any matter contained in this publication without considering, and if necessary
Department of
taking, appropriate professional advice from other sources. The Department of Mineral and
Mineral and Petroleum Resources
Petroleum Resources, its employees and contracted personnel undertake no responsibility to
any person or organisation in respect of this publication.
www.mpr.wa.gov.au
ABN: 69 410 335 356
Prospect December 2002–February 2003 1
Gas-to-liquids
New technology a potential
game-breaker
Beyond the test phase: Both small and large gasfields and downstream processing industries in Western Australia could benefit from a new gasto-liquids technology that has been successfully tested in this plant in Texas.
W
estern Australia’s vast gas reserves
could be used to significantly
increase Australia’s supply of
synthetic transport fuels, as well as other
petrochemical products, employing a new
gas-to-liquids technology.
Described by its promoters as a “gamebreaker”, it has the potential to spearhead a
marked swing from oil to gas-based fuels,
delivering
significant
environmental
benefits to the global transport industry as
well.
Vast reserves of natural gas exist off
Western Australia’s northwest coast, some of
which is unlikely to be developed in the
foreseeable future using conventional
technology.
Texas-based Synfuels International will
soon present a business plan to interested
companies which it claims will make even
small gasfields attractive for the production
of petroleum.
Perth-based Clough Ltd, one of Australia’s
most experienced companies in the oil and
gas industry, has formed an alliance with the
Houston engineering firm S&B Engineering
and Constructors Ltd that could lead to the
technology being employed on Australian
fields.
Synfuels is successfully operating a pilot
plant in Texas and a number of companies
have indicated that they are interested in
building commercial operations.
Initially the company envisages building
plants that will process 10, 20 and 50 million
cubic feet of gas a day, scaling eventually up
to 500 million cubic feet a day (similar to the
volume piped from the North West Shelf to
Western Australian markets) to produce
around 100 000 barrels of hydrocarbon
liquids a day, equivalent to a significant
proportion of current Australian production.
Synfuels’
business
development
representative for Australia, John Read, says
a soon-to-be released business plan is
expected to confirm that a 10 million cubic
feet per day processing plant, capable of
producing 1200 barrels of light gasoline
product per day, will cost in the order of
US$30-35 million. The overall production
cost will be significantly less than US$20 per
barrel.
Mr Read points out that Australian oil
production is expected to decline rapidly in
the next decade, and the use of Australia’s
much more plentiful gas reserves could help
fill the gap.
For small fields, a flow rate of a few
million cubic feet a day would be sufficient
to justify its use.
The technology, developed by university
researchers in Texas (after stumbling on it
while working on an unrelated project),
involves passing gas very quickly through
extremely high temperatures, the separation
of hydrogen in the gas, a catalytic reactor
and product separation.
The only waste product is steam, which if
condensed and put through filters could be
used as potable water — a valuable
commodity if the plant was established in
arid areas.
A major advantage is that the transport
fuel that is produced has the same benign
characteristic as natural gas; it has much
lower levels of emissions than petroleum
refined directly from crude oil.
The plant is entirely self sufficient — the
raw material, natural gas, is burnt in its
turbines to produce electricity and steam.
John Read says that Australian companies
have shown a keen interest in the technology
and he hopes Western Australia will be one
of the first places in the world where it is
employed on a large scale.
For more details, contact John Read Management Services, Perth, on +618 9227 3221or [email protected]
2 Prospect December 2002–February 2003
Nickel juniors flourish
G
et big or get out.
That’s been the catchcry of some of the world’s
leading resource companies in recent years.
While it may suit the
likes of BHP Billiton, Rio
Tinto and WMC Resources
to deal only in world-scale
mining projects, it has
presented many exciting
opportunities for smaller
resource companies at the
bottom end of the food
chain.
Emerging opportunities: Junior nickel producers in the Kambalda
area, like Mincor at Miitel, are proving there are good rewards in
re-working ground previously owned by major mining companies.
China LNG contract officially signed
Important signing: In Canberra recently, representatives from China and Australia put their
signatures on paper, cementing a A$25 billion LNG sale and purchase agreement between the
two countries. From left to right (foreground) are Jiang Longsheng, the Vice President of China
National Offshore Oil Corporation; Rod Duke, Vice President Australia LNG; and John Akehurst,
Woodside Managing Director.
he contract binding China and Australia LNG to a A$25 billion liquefied natural gas
deal announced in August 2002 has now been formally signed.
Partners in the North West Shelf project and representatives from the Chinese buyers
executed a series of sale and purchase agreements in Canberra on 18 October 2002.
The nine buyers are participants in a Chinese joint venture company that will import LNG
into China’s first LNG receival facility to be constructed at Cheng Tou Jiao, near
Shenzhen, in Guangdong Province.
The buyers include China National Offshore Oil Company (CNOOC), BP Global Investment
Corporation and seven other companies that will use the gas in power stations and for
distribution through city gas networks to industrial and residential consumers.
Commencing in 2005–06, Western Australia’s North West Shelf project will supply more
than three million tonnes of LNG per year to China for 25 years.
In an associated development, an agreement was signed in Perth on 21 October 2002
that will see CNOOC acquire an interest in the North West Shelf petroleum titles. CNOOC
will also secure rights to use North West Shelf Venture infrastructure to process gas
owned by CNOOC for sale to the Guangdong LNG project.
To give effect to these arrangements, a new “China LNG” unincorporated joint venture
will be established and CNOOC Limited will participate at a level of 25%, with each of the
existing North West Shelf Venture participants holding a 12.5% stake.
The deal represents the first Chinese-equity investment in Western Australia’s A$9 billion
per year petroleum industry.
T
The China LNG contract is expected to result in the construction of a fifth LNG processing
train on the Burrup Peninsula.
This has been good for the
resources sector in Western
Australia where a new breed of
junior nickel sulphide producer
has emerged. They are enjoying
success by revitalising mature
mining operations with lower cost
structures, by applying selective
mining methods and through an
innovative
approach
to
exploration.
Juniors such as Mincor
Resources NL and Independence
Gold NL, which each acquired
near worked-out nickel mines
from WMC Resources, are two
excellent examples of small-scale
miners currently doing well.
A senior resources analyst for stockbroker
Hartleys, Kevin Tomlinson, told the 2002
Australian Nickel Conference that six junior
Western Australian companies were now
among the top 20 nickel sulphide producers
in the world. They are Black Swan operator
MPI, which is positioned 7th in world
rankings; Mincor (12th with its Miitel and
Wannaway operations; Jubilee Mines (13th
with its Cosmos operation); LionOre Nickel
(14th with its Emily Ann operation);
Independence Gold (17th with its
Long/Victor project) and Fox Resources (19th
with its Radio Hill operation).
Mr Tomlinson said various commodity
commentators had forecast a 7–10% growth
in world nickel consumption in 2003 and an
average 3–4% rise per annum for the decade.
He said a supply deficit was likely in
2003–04, mainly because no new nickel
operations were planned to come on stream
anywhere in the world before 2005.
Mr Tomlinson said most of the success of
junior nickel sulphide operators had come as
a result of lower cost structures compared
with majors. They also proved themselves to
be more flexible and able to adopt selective
mining techniques to narrower ore zones.
Also, many ready-made exploration drilling
targets were lurking in existing geological
files. This meant extensions to existing
orebodies were a distinct possibility.
Some junior explorers are using downhole and hand-held sensing equipment at the
mine face to detect new high-grade sulphide
deposits.
Importantly, they were proving themselves
to be internationally competitive. Majors like
WMC were more than willing to further
process the ore from junior miners and
market the upgraded (nickel, cobalt and
PGM) products overseas.
Panton Sill
Development of Australia’s first platinum mine looms
I
t is now almost certain that Panton Sill,
about 60 km north of Halls Creek in the
Kimberley region of Western Australia,
will host Australia’s first platinum–
palladium mine.
Just over a year ago, Platinum Australia
Limited with its Panton project and Helix
Resources NL with its Munni Munni
prospect, were vying to become the
nation’s inaugural platinum group metal
(PGM) producer.
At the time, Lonmin, the world’s third
biggest platinum producer, was funding
feasibility studies for both the Panton Sill
and Munni Munni projects.
However, follow-up exploration at
Munni Munni proved disappointing, to an
extent that drilling at the site was
suspended in August 2002. Helix then
ordered a complete review of exploration
data gathered in the vicinity of the once
highly promising Ferguson Reef. The
review is due to be completed by the end
of 2002.
At 30 September 2002 Helix Resources
reported that a high-grade thicker portion
of the Ferguson Reef contained 2.6 Mt at
3.5g/t of palladium, platinum and gold.
Unlike most PGM operations around the
world, the Munni Munni resource is
dominant in palladium, having a 6:1 ratio of
palladium to platinum, which is unfortunate
given recent soft prices for palladium.
On the other hand, since acquiring
ownership of the Panton Sill leases in 2000,
Platinum Australia has increased the
project’s identified resource from 387 000
ounces to 4.5 million ounces of PGM plus
gold credits.
Hills afar: The hilly countryside at Panton Sill
in the far north of Western Australia that hosts
what appears to be a significant
platinum–palladium deposit.
continued overleaf
▼
The new resource includes the high-grade Top Reef, which contains
10.6 Mt at an average grade of 5.8 g/t PGM + gold, and the Middle Reef
resource of 5.7 Mt which averages 3.4 g/t PGM + gold.
The high-grade chromitite PGM system within the Top Reef has an
average overall width of more than one metre along a mainly
continuous strike length of about 4 km, including an average of 1.9
metres in the pre-eminent A Block.
This adds up to a significant resource, given that PGMs are among
the least abundant of the Earth’s elements, with fewer than 10
significant PGM mining companies in the world. Russia and South
Africa, two politically unstable countries, dominate PGM production
with Canada’s Sudbury Basin producing much of the balance of world
supply in the form of by-product material from nickel processing.
The emergence of a new platinum–palladium mine in Australia will
be strategically important for the nation, and further enhance Western
Australia’s reputation as one of the world’s premier mineral provinces.
As part of its bankable feasibility study into the development of a
mine at Panton Sill, Platinum Australia sunk a 300-metre long, 73metre deep decline so that a 650 tonne bulk ore sample could be taken
from the high-grade Top Reef. Other bulk ore samples have been
gathered from surface reefs around the Panton mining leases and sent
to South Africa for pilot plant testing.
The metallurgical testwork and other aspects of the bankable
feasibility study are due to be completed in the first quarter of 2003.
Geologist’s delight: Platinum Australia’s senior project geologist, Tony
Greenaway, alongside an outcrop of platinum–palladium ore at Panton Sill.
from page 5
This, according to Platinum Australia
executive director, John Lewins, should pave
the way for a construction start-up later in
the year, with production following about 12
months later.
Metallurgical testwork being undertaken
on the Panton Sill project has identified a
new process capable of producing a highgrade PGM + gold concentrate suitable for
direct feed into a refinery. This would bypass
the need for a smelter, and effectively save
Platinum Australia about A$10 million each
year in transportation costs.
Being
able
to
produce
highly
concentrated base metal and PGM products
on site will effectively eliminate the need for
smelting, and reduce export volumes from
about 50 000 tonnes per year to 5000 tonnes
per year. The base metals are likely to be
trucked to Wyndham and shipped to
markets overseas while the low-volume,
precious PGMs will be flown under tight
security to Perth and then to specialist
refineries overseas.
The process uses standard flotation to
produce
high-recovery,
low-grade
concentrate, which is then subjected to lowtemperature calcination, followed by
leaching to achieve more than 80% recovery
of PGM + gold. A precipitation recovery
route is currently being tested that would
produce a high-grade PGM + gold
concentrate and a base metal concentrate.
The process also uses off-the-shelf
equipment currently used in the Australian
gold industry. In fact, it is similar to that set
up at the Kanowna Belle gold mine, but
employs a subtle variation in temperature
during the calcination process to separate
the PGMs and gold from the base metals.
The Panton Sill operation is expected to
produce between 100 000 and 130 000
ounces of PGM and gold per year worth
A$80–100 million, plus 1000–1500 tonnes of
nickel, 500–800 tonnes of copper and 50–100
tonnes of cobalt worth another A$20–30
million. The mine is expected to operate for
at least 10 years and provide full-time
employment for about 200 people, most of
whom will be recruited from within the
Kimberley region.
Capital costs in
establishing the Panton operation will be in
the order of A$80–100 million.
One of the interesting aspects of the
project will be the provision of power.
Options include extending the hydroelectricity power grid south of Argyle, using
power from a proposed tidal power station
at Derby (some 400 km away), using
liquefied natural gas from the North West
Shelf or establishing stand-alone diesel
generation on site.
Peaks and troughs are synonymous with the
minerals industry.
Disappointingly for Western Australia, the
State’s highly valued mineral exploration
industry is currently in a trough.
A combination of factors, including native title
and low commodity prices, has caused mineral
exploration spending in Western Australia to
shrink 46% from A$704 million in 1996–97 to
just A$376 million in 2001–02.
There are concerns that, at this level of
exploration, the minerals industry may not be
sustainable in the longer term.
Exploration:
urgent rebound needed
The bare facts
Minerals
Mineral and petroleum output in Western
Australia account for 23% of gross State
products and employment (directly and
indirectly) for 20% of the State’s workforce.
■
Mineral exploration in Western Australia
has fallen every year since 1997.
Mineral exploration activity in 2001–02
was 14% lower than in the previous year
and 46% lower than the peak of around
A$700 million in 1996–97.
Exploration in greenfields areas (defined
as more than 5 km from existing mines)
has fallen 63% over the last five years.
Prices for most major commodities have
fallen in recent years.
Currently, A$460 million of potential
exploration activity is associated with
stalled tenement applications. Even if
only 25% of this is converted to actual
exploration expenditure, it would
generate about 1000 new jobs, 400 of
them in regional areas.
■
■
■
■
Mineral exploration expenditure (excluding
petroleum) in Western Australia
Trend series versus seasonally adjusted data
175
150
125
Seasonally adjusted
2002 Jun
2001 Jun
2001 Dec
2000 Jun
2000 Dec
1999 Jun
1999 Dec
1998 Jun
1998 Dec
1997 Jun
1997 Dec
1996 Jun
1996 Dec
1995 Jun
1995 Dec
75
Trend
Source: ABS
Petroleum
During 2001–02 spending for petroleum
exploration in Western Australia fell by 30%
(A$207 million) from A$687 million in
2000–01 to A$480 million.
The proportion of Australian petroleum
exploration expenditure in Western Australia
declined from 66% in 2000–01 to 54% in
2001–02.
800
70%
700
60%
600
50%
500
40%
400
30%
300
20%
200
10%
00–01
0%
01–02
99–00
98–99
97–98
96–97
95–96
94–95
93–94
92–93
91–92
100
WA % OF TOTAL AUSTRALIAN
EXPENDITURE
WA EXPENDITURE ($ M)
Petroleum exploration expenditure,
WA versus Australia
(Adjusted to June 2002 dollars)
0
Background
In
April
2002,
State
Development Minister Clive
Brown established the Bowler
inquiry to investigate reduced
levels of private investment in
greenfields
exploration
in
Western Australia.
During the following six
months, the Member for Eyre,
John Bowler MLA (pictured),
spoke to a lot of people and examined a
number of potential strategies to achieve a
sustainable future for the State’s allimportant minerals industry.
It was clear that the downturn in
greenfields exploration in Western Australia
was not peculiar to the State. It was a
worldwide trend.
While Western Australia had a welldeveloped tenement management system, a
glaring weakness lurked close by. It was in
the form of a legislative mismatch between
the Mining Act and the Native Title Act in
terms of the ability of mineral explorers to
access land.
Mr Bowler said the State Government
needed to move urgently to allow the land
access process to be like its much-vaunted
tenement management system — in the
realm of world’s best practice.
The way ahead
100
1994 Dec
Expenditure per quar ter ($ million)
200
The Bowler Inquiry
Source: ABS
Mr Bowler’s vision for mineral and
petroleum exploration in Western Australia
is to:
■ Restore exploration so that the minerals
industry is sustainable in the long term;
■ Establish a viable and significant
petroleum industry in onshore basins;
and
■ Improve Western Australia’s position in
the world market for exploration
investment.
There are currently around 12 000
unprocessed exploration, prospecting and
mining tenement applications in Western
Australia, and the No. 1 priority of the State
Government should be to remove the
backlog as quickly as possible.
Only then will explorers and drilling rigs
return to the field in numbers reminiscent of
buoyant times of the past, according to Mr
Bowler.
He said clearing the logjam of
unprocessed tenements, along with a minor
upturn
in
the
minerals
industry
internationally, could inject more than A$50
million per year into the search
for minerals in Western Australia.
“Every effort, both of an
administrative and legislative
kind, should be made to expedite
the
granting
of
pending
tenements that, collectively,
contain exploration expenditure
commitments totalling around
A$460 million,” he said.
Another priority, among 33 key
recommendations made by Mr Bowler, is to
introduce processes that guarantee that
heritage issues are dealt with in a timely
manner.
He also recommended the availability of
pre-competitive geoscientific data and
analysis in order to improve Western
Australia’s competitiveness and sustain
interest in the prospectivity of the State.
To achieve this, funding to the Geological
Survey of Western Australia (GSWA) should
be maintained at least A$17 million per year.
In addition, the capture of geophysical data,
especially in greenfields areas, should be
expanded with a special allocation of A$24
million over six years, as recommended by
the 2001 Fardon Review of Funding for
GSWA. Such funding would be counter
cyclical to the level of activity within the
exploration industry and, in effect, counter
the boom-and-bust nature of the
exploration industry and retain geological
skills within the State.
A significant fiscal incentive should also
be given, in consultation with the
Commonwealth and exploration industry,
for investment in the search for minerals in
greenfields areas. Mr Bowler believes that
special conditions should apply to recognise
the greater risk and difficulty of exploring in
less understood, remote parts of Western
Australia.
Mr Bowler endorsed the concept of a
flow-through share scheme, similar to that
operating in Canada, which provides tax
deductions above 100% for expenditure on
mineral exploration in greenfields areas.
Other recommendations made by Mr
Bowler include:
■ Providing information and guidance to
prospectors and small companies,
assisting them through the Native Title
and Aboriginal Heritage processes to
gain access to mineral-prospective
land, similar to the business support
provided by the Small Business
exploration ■
Ensuring that the Departments of
Mineral and Petroleum Resources and
Conservation and Land Management
are more pro-active in reviewing the
conservation estate in terms of
productivity
for
minerals
and
petroleum.
■ Lobbying for joint venture agreements
to be free of the Goods and Services Tax.
■ Exempting the transfer of exploration
tenements from WA stamp duty.
Mr Bowler’s recommendations were
delivered to State Development Minister
Clive Brown in November 2002. The State
Government will soon decide on
appropriate forms of action.
Quiet times: Diamond drilling at Western Area’s New Morning prospect at the Forrestania nickel
project — one of the few busy areas for exploration in the Goldfields area.
■
■
■
■
■
■
■
■
■
■
Development
Corporation
and
Business Enterprise Centres.
Pressing
the
Commonwealth
Government to ensure adequate
funding in the 2003–04 Federal Budget
for Native Title Review Boards and the
future role and operation of “prescribed
bodies corporate”.
Monitoring the effectiveness of
additional resources with Native Title
Review Boards to deal with the
mismatch between the Mining Act and
the Native Title Act.
Introducing legislation to extend the
term of an Exploration Licence beyond
five years, if substantial spending on
exploration in the fifth year warrants an
extension.
Avoiding multiple heritage surveys over
the same ground.
An audited expenditure statement for
annual Form-5 returns.
Introducing a bond system to avoid
frivolous plaints in the Wardens Court.
Expanding online tenement lodgement
procedures for mineral tenement
applications.
Increasing levels of State and Federal
funding for cooperative geoscientific
research in Western Australia.
Removing the right of veto to
exploration on private land.
Ensuring that land should not be
converted to a “conservation zone”
without the Minister for State
Development approving land-use
changes under Section 16 of the Mining
Act.
Minerals — why are they so important?
Minerals. Where would we be
without them?
Every day we rely on them to
make our lives easier, from
toothpaste that we use in the
morning, from the motor car we
drive to work, through to the
light globe that glows in our
bedroom at night.
The sustainable development
of Australia’s mineral
resources is in the national
interest, because:
■
■
■
Mineral and petroleum
production make up 35%
of Australia’s goods and
services exports;
Capital investment in the
resources sector accounts
for 12% of annual private
capital investment in
Australia;
Australia’s balance of
White knights: These are among a few day-to-day
payments is critically
items that are derived from minerals and
dependent on a
petroleum.
successful resources sector.
Western Australia’s resources sector is very significant in terms of the national
economy. It currently accounts for:
■
■
■
■
■
More than 48% of the nation’s mining and petroleum production.
More than 60% of the nation’s mineral exploration investment.
More than half of the nation’s petroleum exploration investment.
Nearly 80% of the nation’s oil and condensate production.
100% of the nation’s LNG production.
New officers to speed up native title processing
T
he State Government
is to invest more than
A$2.8 million to
speed up the processing of
mineral tenement applications on land under native
title claim.
Deputy Premier Eric
Ripper, who is the Minister
responsible for native title,
said the funding would be
used to recruit 11 specialist
Help on the way: Senior Case Manager Phil Mirabella and
officers who would dedicate
colleague Karen Pye will soon be welcoming another four officers
their time to resolving land
into the Mineral Titles Division of MPR to assist in the onerous
access issues.
task of clearing a backlog of some 12 000 unresolved mineral
Mr Ripper said the
tenement applications in Western Australia.
successful negotiation of
native title issues was vital to stimulate
mining, exploration and prospecting, and
it was in the State's best economic
interests to assist native title representative
ndorsement of a flow-through share
scheme by the Australia Government,
bodies.
similar to that adopted in Canada,
“Respect for native title rights and the
could be the trigger that Australia needs to
encouragement of economic development
reverse a worrying slump in mineral
are not conflicting aims,” he said.
exploration.
“Everyone recognises that these issues
Mining company chairman and former
can often be resolved through negotiation.
stockbroker, David Reed, told the 2002
“But, the success of negotiation
Australian Nickel Conference that a circuitdepends on how well the parties are
breaking initiative like this was needed to
resourced.”
produce a sustainable upsurge in
exploration expenditure, particularly in
Four of the officers will be employed by
Western Australia, the target of most
the Department of Mineral and Petroleum
mineral exploration in Australia.
Resources (MPR), while the balance will be
He said flow-through share incentives were
recruited by indigenous land councils:
instrumental in the discovery of diamonds
Goldfields Land and Sea Council (two),
in the Northwest Territories, the
Yamatji Land and Sea Council (two), South
Loouvicourt base metal mine in Quebec,
West Aboriginal Land and Sea Council
and two high-grade precious and base
(one), Kimberley Land Council (one), and
metal mines elsewhere in Canada — at
the Ngaanyatjarra Land Council (one).
Eskay Creek in British Columbia and
Lindsley in Ontario.
“Land councils have heavy statutory
Those discoveries have caused a major
responsibilities under the Native Title Act
upgrade of the perceived prospectivity of
and it is the Commonwealth GovernCanada.
ment's job to properly fund them,” Mr
The basic concept of flow-through is that a
Ripper said.
person subscribes for shares in a
What worried Mr Ripper most was that
corporation, and the corporation uses the
Federal funding to land councils had
subscription proceeds to incur certain
remained static since 1995–96. This meant
resource expenditures. These expenses
land councils were increasingly unable to
are then renounced back to the subscriber
keep up with the workload.
who claims the expense for taxation
purposes.
This initiative by the State Government
In October 2000, the Canadian Federal
was in line with recommendations of a
Government introduced a 15% nontechnical taskforce on mineral tenements,
refundable tax credit. This credit is in
chaired by National Native Title Tribunal
addition to the existing 100% deduction for
member Bardy McFarlane and including
eligible exploration expenditures from the
mining
industry,
indigenous
and
federal portion of one’s taxes. To
Government representatives.
distinguish it from the fully deductible
The chief executive officer of the
regular flow-through, investors are calling
Western Australian Chamber of Minerals
and Energy, Tim Shanahan, and the CEO of
the Association of Mining and Exploration
Companies, George Savell, both welcomed
the latest government initiative to address
the native title issue.
Mr Shanahan said the extra money would
go some of the way towards addressing the
issue, while Mr Savell described it as a
positive first step.
“I still have reservations about the level of
resources that will eventually be needed to
cope with the day-to-day inflow of mineral
title applications on top of the 12 000
unresolved titles currently in the backlog.”
Mr Savell suggested that many more
people would be needed to help process
these claims within a reasonable time.
Plea for flow-though tax incentives
E
this new creditenhanced
version “super
flow-through”.
In addition to
the super flowthrough benefit,
the Ontario
Provincial
Government has
given a 30%
bonus tax
deduction for
David Reed
mineral
exploration
investment, while the Quebec Provincial
Government has extended its maximum
deduction to 175% for exploration in certain
locations. In the Yukon, the refundable tax
credit to companies has been increased
from 22% to 25% for eligible mineral
exploration expenditures.
Mr Reed said Australia relied on mining
more than most countries, especially as a
means of generating export earnings.
“It is clear that exploration levels are at a
crisis point and, if neglected, the position
could become crippling both to the industry
and the nation,” he said.
“There is a need to reverse the current
trend with commercially driven, tax effective
incentives that are proven internationally in
Canada.
“Flow-though shares could be the answer in
Australia.”
Mr Reed understands that the Federal
Minister for Industry, Tourism and
Resources, Ian MacFarlane will be sending
a government officer to Canada to gather
background on its flow-through share
scheme.
exploration Brownfields vs Greenfields
R
Percentage of total estimated exploration
ecent Federal and State
Greenfields versus brownfields trends (1996–2001)
(Based on +/- 5 km from mine sites)
inquiries into shrinking mineral
80%
exploration in Australia raised a
<5 km (brownfield)
>5 km (greenfield)
70%
few interesting questions, not least of
60%
all the difference between brownfields
50%
and greenfields exploration.
Does greenfields exploration mean
40%
the search for minerals in a frontier
30%
area, as opposed to that in a mature
20%
mining area?
Does it mean
10%
exploration within an Exploration
0%
1996
1997
1998
1999
2001
2000
Licence as opposed to a Mining Lease?
And at what distance (from an
established mining location) should
the transition from brownfields to
greenfields occur?
These
issues
were
closely
scrutinised after staff at the
Department
of
Mineral
and
Petroleum Resources (MPR) noticed
glaring differences in figures
published by the Australian Bureau of
Statistics (ABS) with industry trends
and anecdotal evidence.
What exploration companies,
drillers, government departments,
politicians and people in regional
communities all know for certain is
that there has been a major slump in
Other points from the MPR analysis include:
exploration spending in Western Australia
■ The number of granted tenements greater
over the last five years.
than
40
km
from
mine
sites
The following graph shows that
(unquestionably greenfields tenements)
exploration spending more than 5 km from
has dropped from 1407 in 1997 to 802 in
mine sites (nominally greenfields) has
2001, a decline of 43% over four years. Such
declined from 40% of the total in 1997 to just
greenfields tenements represent only 7% of
28% of the total in 2001.
the granted tenements. This supports the
concept of the shrinking area of
greenfields
exploration
(see
illustration in centre column).
■ The exploration expenditure on
greenfields tenements has dropped
from A$76 million (1997) to $A45
million (2001), a decline of 41% over
four years.
■ That exploration expenditure in
undisputed greenfields areas ( more
than 40 km from mine sites) has
dropped from 2.0% (1997) to 1.2%
(2001) of reported expenditure on
granted
tenements
(including
mining and all other costs). This
highlights how little of industry’s
total costs are directed to high-risk
greenfields exploration.
In the final analysis, MPR resource
experts found that the real future lies in
greenfields exploration, if world-scale
mining projects in Western Australia are
to be sustained in the long term.
While brownfields developments
(those that generally involve exploiting
small, low-cost pockets of ore close to
existing mines and infrastructure) tend to
maximise shareholder returns in the
short term, the people of Western
Australia are less likely to reap benefits in
the longer term.
Consequently, every effort should be
made
to
encourage
exploration
expenditure in areas away from
established mining operations.
Prosser Inquiry
More recognition — and money — needed for mineral exploration
T
he Western Australian Government
has put forward a strong case to its
Federal counterpart for a more
coherent and realistic fiscal regime to help
stimulate greater investment in mineral
exploration across Australia.
The State’s submission to the House of
Representatives’ Prosser Inquiry into
impediments to exploration asserts that
Western Australia’s mineral and petroleum
resources endowment is of strategic
importance to the growth of the nation’s
economy.
The Western Australian
Government believes greater recognition
should be given to exploration as the
essential first phase in the development of
these resources.
Being the nation’s most prospective
mineral State — more than 60% of all
mineral exploration in Australia is carried
out in Western Australia — there is plenty at
stake for WA. Disappointingly, the amount
outlaid on mineral exploration in Australia
has fallen by almost half, from A$1166
million in 1997 to A$664 million in 2001. In
real terms, mineral exploration in Western
Australia is now at lower levels than during
the recession years of the early 1990s and the
lowest since at least the mid-1980s.
This has had a detrimental impact on
employment in the exploration and drilling
sectors of the resources industry, not to
mention the adverse economic impact on
key mining towns in Western Australia such
as Kalgoorlie–Boulder, Leonora, Laverton
and Norseman.
The State Government’s submission
recommends the development of a national
mineral and energy policy. Remarkably, no
such policy exists. That is despite the fact
that tens of billions of dollars worth of coal,
oil, gas, gold, nickel, diamonds and other
minerals in the ground are strategic assets
for Australia.
It believes the provision of state-of-theart geoscientific data is a key mechanism for
raising investor perceptions about the
mineral prospectivity of Australia. The
Department of Mineral and Petroleum
Resources in Western Australia is already
marketing the State’s mineral prospectivity
to the broader investment world. However,
for Australia to remain globally competitive,
a national approach is required to first
acknowledge the importance of exploration
for economic growth.
■
■
■
■
Stating our case: Federal politician Geoff
Prosser with Western Australia’s submission
that seeks greater recognition of the
importance of mineral exploration.
In total, the State Government
submission
contains
24
different
recommendations — all aimed at removing
perceived impediments that are slowing
down exploration spending.
In particular, the Western Australian
Government believes that special attention
should be given to increasing greenfields
exploration.
It asserts that the
Commonwealth should acknowledge that
declines in greenfields exploration are more
than just cyclical and related to commodity
price cycles. A worrying trend is that many
big companies are opting to acquire known
resources rather than pursue the challenge
of finding the “grand prize” via the higher
risk greenfields exploration route. It is time
to recognise that company growth through
acquisitions, rather than discoveries, may be
good for company share values in the short
term, but is not a sustainable policy for
Australia in the medium to long term.
The State Government submission also
calls for:
■ 150% tax write-offs on exploration to
companies with a taxable income, or
dollar-for-dollar subsidies for
companies that do not have a taxable
income.
■ The introduction of a “flow-through
share scheme” for greenfields
exploration in designated regions of
■
■
■
■
Australia. Basically, that means tax
benefits should be transferred back to
shareholders in situations where
companies do not make a profit from
exploration.
An increase in Commonwealth funding
to the National Native Title Tribunal to
speed up the back log of mineral and
petroleum titles required by Western
Australia to ensure sustainability of its
resources industry.
A cooperative effort between the State
and Commonwealth to streamline
environmental approvals for both
exploration and development projects.
Increased Commonwealth funding for
geoscientific research in universities
and cooperative research centres.
Increased Commonwealth funding for
modern airborne and ground-based
geophysical surveys and hightechnology laboratory-based studies in
greenfields and frontier areas in order
to kick-start new exploration
investment.
The building of seamless geoscience
and mineral deposit databases — to be
available free of charge to investors via
the internet.
Higher levels of State assistance
through revenue or expenditure
measures to sustain Western Australia’s
already substantial contribution to the
Federation.
A review of the zone allowance rebate
system so that it more effectively
compensates for the disadvantages of
living in areas remote from major cities.
An increase in funding under the
Regional Mineral Study Program.
Next steps
A series of hearings will take place around
Australia before the end of March 2003 to
gain wider input from industry and the
community.
Then, the House of Representatives
Standing
Committee
on
Resources
Exploration Impediments will report to
parliament
with
a
series
of
recommendations in a bid to reshape the
Federal Government’s resources policy —
and hopefully come up with strategic
measures that will stimulate greater
investment in exploration, especially
greenfields exploration.
exploration Western Australia is home base for
another big mineral explorer
Technology Park, Bentley,
“provided
an
excellent
environment of entrepreneurial, active multi-disciplinary businesses that fit
perfectly with our exploration style and focus.”
The decision to set up an
exploration hub in Perth also
recognised Western Australia
was still highly prospective
for minerals.
P
erth will be the base for exploration in
regions with half the world’s
population as Anglo American plc
intensifies its global search for minerals.
Anglo’s Perth hub will control the search
for a wide variety of resources in places as
diverse as the Philippines and India, with a
special emphasis on China.
The Perth office, covering what the
company defines as Asia/Australasia, will
report to Anglo’s world headquarters in
London. It will be separate from three other
companies in Australia in the corporate
family — Anglo Gold, Anglo Coal and De
Beers, which manages the diamond
business. The group as a whole is one of the
world’s biggest mining houses.
Ian Willis, vice president exploration
Asia/Australia, says the decision to run a
sprawling exploration program from Perth
indicates Anglo American’s recognition of
the great potential for exploration in Western
Australia, but more importantly, its
attributes as a service centre.
As a city that serves one of the biggest
resource industries in the world, Perth has
an almost unique combination of expertise,
infrastructure and stability.
The other three hubs are in Vancouver
(for North America), Santiago (South
America), and Johannesburg (Africa).
Mr Willis points out that the region
covered from Perth has half the world’s
population, significant industrial capacity,
and a striking range of cultures.
The local office is responsible for copper
exploration in India, the proving of a major
copper discovery in Mindanao in the
Philippines and a number of projects in
Australia.
These include base metals exploration
near Halls Creek (in a joint venture) another
in Queensland, and a third on the Gawler
Craton in South Australia.
The Perth office will be responsible for
new exploration the company hopes to carry
out in China, which is seen as having
immense significance both as a source and
consumer of metals.
The then chief executive officer of Anglo
American’s exploration division, Dr Bobby
Dachin, in Perth for the launching of the
hub, said the regional hub’s headquarters at
Major new player: The head of Anglo American's new exploration
base in Perth, Ian Willis.
Federal initiative
Action agenda to boost
exploration expenditure
A Federal action agenda aimed at
Total Australian Exports for 2001-02
stimulating mineral exploration
across Australia will have strong $A150.5 billion
Other
representation from Western
1.5%
Australia.
Service
The President of the Chamber of Resources
Minerals and Energy in Western
36.7%
Australia, Peter Lalor, will chair
the all-important Strategic
Leaders Group. He will be
supported by the Director General
of the Department of Mineral and
Petroleum Resources, Dr Jim
Limerick, and up to 10
government and industry leaders
from throughout Australia.
20.0%
Manufacturing 23.6%
Rural
18.2%
They and specific working groups
will address many of the tough issues facing the mineral exploration industry, among them
incentives for investment, native title, land access and environmental legislation. The aim
will be to come up with clearly defined strategies to lead a revival of interest and investment
in exploration in Australia.
Creation of the Mineral Exploration Action Agenda was an initiative of the Federal Minister
for Industry, Tourism and Resources, Ian Macfarlane, who says he is extremely concerned
that mineral exploration spending in Australia has slumped over the past five years.
Exploration is seen to be the cornerstone of the broader resources sector, which accounts
for more than a third of Australia’s total exports. The challenge is to ensure that mineral
exploration is encouraged and given every chance to flourish.
The various working groups are due to report their findings to Mr Macfarlane by mid-2003.
Meanwhile, people interested in this topic are urged to access the website of the Mineral
Exploration Action Agenda at www.industry.gov.au/minexpagenda or e-mail their
comments to the action agenda secretariat at [email protected].
...from your printer
On the web...
Design your own map online — free
T
he Government of Western Australia
takes seriously its commitment to
enhance the mineral prospectivity of
the State by disseminating geoscientific
information at minimal cost to the consumer.
That’s why the Department of Mineral and
Petroleum Resources (MPR) launched
GeoVIEW.WA, a web application that provides
customers with timely access to geoscientific
data online, and an ability to produce a
downloadable customised map. It’s online, it’s
free and it’s of the highest quality.
GeoVIEW.WA allows you to:
■ choose your own area of interest within
Western Australia,
■ decide which themes you wish to display
(geology, structure, mines and mineral
deposits, mineral and petroleum
tenements, geophysical data etc.),
■ choose a scale, and
■ print a published-quality map at your
chosen size (A4 to A0).
GeoVIEW.WA generates the map to your
specifications, and sends you an email
message with a link to your map in Adobe
PDF format. This allows the map to be
downloaded at an appropriate time to the
customer.
The service is available from MPR’s home
page at www.mpr.wa.gov.au, under the
“Interactive Computer Systems” tab. A quick
visit will convince you of its quality,
useability and usefulness.
GeoVIEW.WA is the latest offering from
the Geological Survey of WA (GSWA), MPR’s
geoscientific arm, which for more than one
hundred years, has provided high-quality
mapping and resource information services
at zero, or nominal cost.
“We believe that GSWA is today
recognised as a technological innovator in
the field of geoscience information delivery,”
said Stephen Bandy, GSWA’s Manager of
Geoscience Information Products.
“With GeoVIEW.WA we have taken
advantage of new technologies and
contemporary information-management
practices to provide management of, and
access to, geoscientific data. The system has
an easy-to-use web interface that provides
interactive querying and analysis in a
responsive manner.
The service is
generating a lot of interest and is available to
anyone who has an Internet connection.”
Customised maps from GeoVIEW.WA
exhibit full-colour, high-resolution images
and carry supplementary and reference
information provided on traditional, massproduced geological maps.
Traditionally, map users have been
frustrated by a lack of flexibility with
published maps. Areas that span map
boundaries require multiple maps. This
problem is often compounded when users
need to access multiple themes. On the
other hand, maps that address generalpurpose requirements can become very
exploration cluttered with data and legends that are not
relevant to particular users. GeoVIEW.WA
overcomes these difficulties by including
customisation that allows users to define
geographic areas and choose themes such as
topography, mineral occurrence, geology
etc. The intelligent software builds a
customised legend so the map is not
cluttered with irrelevant detail.
Mr Bandy said that GeoVIEW.WA had
been designed with the non-specialist user
in mind.
“While large exploration companies have
sophisticated geographic information
systems and expert personnel to operate
them, smaller companies, geological
consultants, prospectors and the general
community generally lack such facilities,” he
said.
“Users now have access to a growing
number of geoscience datasets, including
various scales, mineral resources, titles,
seismic data and geochronology, as well as
topographical and administrative data.
“GeoVIEW.WA utilises freely available
software such as PDF reader, ArcIMS map
reader, e-mail and ZIP etc. All you have to
pay for is the paper and ink.”
Low-risk Australia
A
n international risk survey has placed
Australia ahead of the rest of the world
in terms of investment in exploration and
mining projects.
Conducted by the Australian resources
publication Resourcestocks and the
American Investment Group (AIG), the
2002 survey rated Australia ahead of
Canada and the United States as the least
risky places to invest in the search and
development of mineral projects. Then
followed Chile, South Africa, Ghana,
Tanzania, Brazil, Mexico and Malaysia which
was listed as tenth as a low-risk investment
destination. At the bottom of the list in
places 18th, 19th and 20th positions were
Indonesia, Papua/New Guinea and
Zimbabwe.
Survey respondents gave Australia its best
low-risk marks in areas of sovereign risk,
social risk, natural disasters and
infrastructure.
Eight good reasons...
Here are eight good reasons why
explorers and resource developers
should choose Western Australia as an
investment
destination.
The State has:
•
World-class mineral
and petroleum
resources.
•
A wealth of
information for
explorers.
•
Unrivalled potential
for new discoveries.
•
A proven track
record in successful resource development projects.
•
Proximity to expanding markets in Asia.
•
Low sovereign risk and pro-development government
policies.
•
Government assistance for developers.
•
World-competitive environment for developers.
Rigs, rigs, rigs
Building on a 30% success rate for
exploration drilling
T
he number of drilling rigs operating
offshore in Western Australia
increased to the highest level for
many years with the movement of three new
mobile offshore drilling units (MODUs) into
the region in late 2002.
The MODUs include Glomar’s deepwater drillship Jack Ryan, (picture) which is
capable of drilling in water depths up to
2500 metres (8000 ft). It will operate in the
deeper waters of the State’s northwest.
Other MODUs heading for Western
Australia are the Atwood Falcon which will
be drilling for Woodside, and the Ensco 53
which will be drilling for ROC Oil near the
recent Cliff Head discovery site in the Perth
Basin.
These will join the Ensco 56, on longterm contract with prolific local explorer
Apache Energy, and the Sedco 703 rig, which
has been drilling for Santos.
This sudden increase in drilling activity
follows a downturn in exploration drilling
during the 2001–2002 financial year.
Most of the current drilling activity is
being focused on appraisal drilling of
numerous recent discoveries. This is an
inevitable flow-on effect from the high (30%)
success rate of exploration drilling in
Western Australia in recent years
Of the 67 wells drilled in Western
Australia during 2001–02, 37 were new field
wildcats, with an overall potential
commercial discovery rate of 27%. Two
significant gas and eight oil discoveries were
made.
Apache’s very active drilling program
includes approximately 25 exploration,
appraisal and development wells in this
financial year. From late 2000, Apache has
been developing its “String of Pearls”
discoveries with the Simpson miniplatforms in 2001, the Gibson/South Plato
development in 2002, and the Victoria
Platform currently under construction.
BHP Billiton is actively exploring for
significant oil resources in the frontier deep
waters of the Browse Basin.
Kerr-McGee, with Agip Australia in a JV
partnership for WA-295-P, undertook an
extensive 2-D program in the deepwater
outer Canning Basin in preparation for two
wells to be drilled by August 2003.
ExxonMobil
recently
commenced
appraisal
drilling on the recently
discovered Jansz gasfield
using the Jack Ryan deepwater drill ship. The appraisal
of the potentially huge
reserves in the Jansz–Io and
other fields west of the
Gorgon field is of great
interest.
Following the success of its
Norfolk and Exeter oil
discoveries in the Mutineer
area, Santos has commenced
development studies for the
project and intends to drill a
further four exploration and
appraisal wells in the
Carnarvon Basin in 2002, plus
four exploration wells in
2003.
Woodside participated in
the drilling of 11 offshore
exploration wells in Western
Australian
waters
last
financial year. The company
is planning a similar activity
level for 2002–03, and is
expected to drill additional
appraisal wells in the
Vincent–Enfield area.
While most of the offshore Hello Jack: Glomar’s deep-water drillship Jack Ryan (foreground)
drilling activity has been in is one of several exploration vessels to arrive in Western
the Carnarvon and Browse Australian waters recently to probe a number of exciting targets
Basins, the Perth Basin has below the seabed off the State’s northwest coast.
also become a centre of
these as operator. Further appraisal of
attention, with a significant oil discovery
discoveries at Hovea 1 is expected as well as
with the Cliff Head wells drilled by ROC Oil,
exploration for gas in the Hovea-2, Beharra
only 8 km offshore. Of particular note has
Springs and/or Hibbertia 3D areas.
been the success of onshore exploration
Untapped potential
wells in the Perth Basin, especially Beharra
Despite some onshore success in the
Springs North 1 and Hovea 1. The Hovea
Perth Basin, there continues to be little new
field is currently undergoing extended
exploration activity in other onshore basins.
production testing, prior to development by
This is thought to be largely due to the size
Origin Energy and its partners. The recent
and
remoteness
of
these
basins.
discovery of a 30-metre oil column by Origin
Unfortunately,
this
is
a
Catch-22
situation
Energy at the Jindamia-1 exploration well
where unless there is initial exploration
has further fanned the interest in the
activity and success (as recently observed in
onshore Perth Basin.
the Perth Basin) there will not be great
In 2002–03, Origin plans to participate in
interest. Although these basins are frontier
up to eight exploration, appraisal and
exploration areas, there is the real potential
development wells in the Perth Basin, half of
exploration Drill core mapping made easy
Quick scan: This new device developed by CSIRO can automatically scan and map drill cores at a
rate of 500–600 metres per day, improving geologists’ understanding of ore forming processes.
ustralian scientists have developed what is believed to be the world's first automatic
system for mapping minerals in drill cores, with potential to save the mining industry
millions of dollars.
A
The new rapid core logging system developed by CSIRO in collaboration with the mining
industry through AMIRA International, applies satellite-based mineral-mapping knowhow to
significantly increase the geological knowledge gained from drill cores, chips and powders.
Dr Jon Huntington's team at CSIRO has demonstrated automatic and continuous mapping
of the minerals in drill cores at a rate of 500–600 metres per day and a resolution of 1 cm
or less, with further scope for improvement.
The technology can also extract new knowledge from the millions of kilometres of core
stored in core yards around the world.
for major rewards. The onshore Canning
Basin is substantially underexplored with
few wells. The potential oil and gas
structures of the Officer Basin have been
compared to those of Oman, Russia, and
the Amadeus Basin. The few exploration
wells to date have encountered minor
hydrocarbons. A major player with the
courage, commitment and resources to
adequately appraise the true potential of
these areas is, however, urgently needed.
Western Australia continues to be one
of the most successful places to conduct
oil and gas exploration, and has the
advantage of significantly reduced
political risk compared with other
greenfields areas in the world. It is
therefore expected that the current
increase in drilling activity will continue
into the future.
“The most exciting thing is the geological information revealed,” says Dr Huntington.
“Detailed knowledge of the mineralogy can contribute to grade control, assessment of mine
stability, optimisation of ore processing and improved understanding of ore forming
processes.”
The new system has been successfully tested at the Sunrise Gold Mine in Western
Australia and will be trialled at Mount Isa and sites in South Australia in the near future
“We've brought our airborne and satellite-based mineral mapping expertise into the core
shed,” says Dr Huntington.
He envisions complete 3-D models of ore system mineralogy being easily assembled from
all drill holes, mine faces and benches, and incorporated into existing 3-D mine
visualisation and modelling systems.
While current work is focusing on mine-scale applications, it is easy to see the value of the
technology for improving returns from exploration drilling. Operationally this information
could be available within just a few hours of completing a drill hole.
At the heart of the system is a sophisticated infrared reflectance spectrometer that rapidly
measures molecular level absorption characteristics of a suite of important alteration and
rock-forming minerals.
For more information:
Dr Jon Huntington, CSIRO Exploration and Mining, 0408-221-934
Joe Cucuzza, AMIRA, [email protected]
Eyes on Albany for high-tech
lumber plant
T
Discussions have also been
he Albany region has firmed as a
held with potential overseas
likely site for a A$150 million
end-users with the idea of
“engineered strand lumber”
using ELS as a high-quality,
plant, using bluegum plantation timber
price-effective
building
as a feedstock.
material and possibly as a
Perth-based Lignor Pty Ltd originally
flooring alternative in sea
had its eye on four potential sites in the
containers and semi-trailers.
South West–Great Southern region of
Target markets for all of the
Western Australia. However, most
products are Australia, and
recent evaluations suggest that Albany
overseas (especially New
is the best location for the proposed
Zealand, Japan, and other
new plant.
parts of Asia, and the United
Using bluegum plantation timber as
States).
a feedstock, the operation will be
The proposed engineered
unique to Australia and the Southern
strand lumber plant for
Hemisphere. Currently there are two
Western Australia will require
such plants operating in North America
approximately 1500 hectares
(with a third under construction) and
of wood per annum, which is
one due to commence construction in
well within the capability of
Europe.
the
South
West–Great
Critical factors identified for the
Southern region, given that
proposed Great Southern strand
more than 200 000 hectares of
lumber plant include a suitably sized
bluegums are currently under
wood resource, the availability of water
cultivation in these areas,
and power at a reasonable cost, suitable
much of which is uncomhaulage road linkages, a railway line,
Strand-by-strand: Lignor’s project coordinator, James Anderson, is
mitted at this stage.
and access to a port that can preferably
confident that his company’s A$150 million strand lumber project can
Project coordinator, James
handle containers.
be up and running by early 2005.
Anderson, said the proposed
Lignor has obtained a licence from a
engineered strand lumber plant would be an
German manufacturer to use its unique
environmentally friendly project that would
construction
strand
lumber
(CSL)
The world’s first construction strand
provide about 130 direct jobs and potentially
technology in Australia and New Zealand to
lumber plant commenced production in the
another 300 indirectly.
produce a product that will be known as
United States about a decade ago, utilising
While the key to the project is the ability
engineered strand lumber (ESL™). Lignor
aspen and poplar wood resources. It
to sell the end-product, Lignor is working
will be the first company in the world to use
produces a product called “Timberstrand”,
with Austrade, Invest Australia and Jaakko
CSL technology on eucalyptus hardwood
which is marketed as a replacement for solid
Poyry, leading advisors to the global forest
resources.
lumber, as well as competing with other
based industry, to identify strategic partners
Bluegum plantation trees, currently used
structural engineered wood products such
and further develop markets for the
for pulp and paper production, are generally
as laminated veneer lumber (LVL).
engineered strand lumber product.
considered unsuitable for use as structural
The latter uses pine saw logs, which have
Lignor has also completed initial tests, in
timber.
However, advanced German
a 20–25 year planting–harvest rotation,
conjunction
with the State Government and
technology has opened up significant
compared with just 8–10 years for bluegums.
the Forest Products Commission, on nonmarket opportunities for hardwood
Features of ELS include a consistent
plantation marri and karri re-growth
plantation resources.
quality, high-structural reliability (including
thinnings from South West forests. The
A major component in the ELS
higher strength ratings than comparable
results indicate the commercial potential of
manufacturing process is the use of
existing products), the use of a non-toxic
marri and karri resources, now used by the
isocyanate binder resin. Another critical
petroleum-based binding resin, inherently
State Government as low-value woodchips.
aspect of the manufacturing process is the
high water resistance and an ability to drill,
Following 18 months of product testing,
steam press used to compress the waferscrew and nail in all areas of the wood.
examining
marketing options and feasibility
thin, 200 mm-long strands of bluegum into
Water, rot, fire and termite resistant
work regarding eucalypt resource materials,
blocks of structural timber (or billets).
products can also be added to the
Lignor is currently looking for a strategic
The proposed plant will produce billets
manufacturing process.
partner to advance the project.
up to 200 mm thick x 1860 mm wide and 12
This makes it very suitable for weightMr Anderson said if all goes according to
metres in length. These will be suitable for
bearing beams, columns, headers, lintels,
plan
the engineered strand lumber plant
cutting into a various lumber sizes,
joists and rafters in residential construction,
could
be up and running by early 2005.
depending on clients’ needs.
including outdoor applications.
Prospect — 25 years on
T
his edition of Prospect represents a
significant milestone in the magazine’s
history.
It was 25 years ago ( January 1978) that
the first issue of the magazine rolled off the
printing presses.
Prepared originally by the Department of
Industrial Development, the publication
aimed to keep senior people in industry and
government postings overseas up-to-date
with business opportunities in Western
Australia.
The Minister for Industrial Development,
Mines, Fuel and Energy, Andrew Mensaros,
commented in the magazine’s initial frontpage foreword that: “We have some of the
world’s biggest deposits of key minerals, a
Making history: The first issue of Prospect
appeared in January 1978.
Local content
Big gear underlines our skill capability
estern Australia’s reputation as a supplier of world-class services for the resources
sector was reinforced recently when Bassendean-based Hofmann Engineering
successfully completed building Australia’s largest mechanical gear.
W
Measuring 12.5 metres in diameter and weighing 74 tonnes, the specially hardened metal
girth gear will be used in a semi-autogenous grinding (SAG) mill in a Papua New Guinea gold
mine. The supply contract which also included two mating pinions, a girth gear guard, two
lubrication systems and two condition monitoring systems was valued at more than A$1
million.
Built to United States company Metso Minerals standards, Hofmann Engineering beat stiff
international competition to win the supply contract.
Hofmanns employ about 220 Western Australians and has been supplying sophisticated
engineering components to the resources sector for some 30 years, but nothing as big as
the monster girth gear it manufactured recently.
Metal in the girth gear and pinion are forged, rather than cast, making the components
extremely durable. The unit will be driven by two 3500 kilowatt electric motors.
The girth gear was dismantled and packed into five sections prior to being road hauled to
Cairns on its way to PNG.
major natural gas field and a
burgeoning oil search. We are entering
a new period of economic expansion
and we need and welcome your
investment capital and development
and marketing skills.”
In fact, the North West Shelf was
undeveloped 25 years ago, with output
from the State’s petroleum industry
being worth just A$95 million in 1978,
compared with A$9.5 billion in
2001–02.
The table below indicates the
massive growth in mineral and
petroleum production in Western
Australia over the last quarter of a
century.
Commodity
Iron ore products
Alumina
Gold
Nickel
Petroleum
Mineral sands
Coal
Salt
Tin
Total
1978
2001–02
Value A$ millions
Value A$ millions
959
277
74
186
95
57
28
27
5
1647
5099
3584
3280
2007
9532
859
258
251
6
26 271
The inaugural 12-page edition of Prospect
covered a range of topics including:
■ A revival of petroleum exploration and
the granting of an exploration permit to
Esso–Western Mining Corporation
covering a highly promising area taking
in the Abrolhos Islands, 100 km west of
Geraldton;
■ Possible difficulties associated with the
overlapping of construction of the North
West Shelf project and two new alumina
refineries in the South West of the State;
■ A Western Australian Government
investment mission to the United
Kingdom, Europe and South East Asia;
■ A breakthrough with the Federal Loan
Council to allow larger semi-government
authorities to access independent
borrowings (overseas if necessary) to
support projects of major economic
significance; and
■ A visit to Perth by the Industries
Assistance Commission in December
1977 to investigate potential support for
additional land and services for
shipbuilding facilities at Cockburn
Sound.
The first issue of Prospect featured a State
resources map, a spread on economic
indicators and a page of newspaper
clippings.
Desert water may be
cheap but not
necessarily best option
he Nullarbor Plain, best known as one of the
driest and most remote parts of Australia,
has been flagged as a strategic oasis capable of
meeting the long-term water needs of
Kalgoorlie–Boulder and the surrounding mining
region.
T
A detailed investigation by the Department of
Mineral and Petroleum Resources (MPR)
indicated that the supply of brackish
groundwater from the Eucla Basin could be the
cheapest option for delivering future bulk water
supplies to Kalgoorlie–Boulder and its environs.
Highly competitive: Alcoa’s Wagerup alumina refinery in southwest Western Australia
(pictured) is ranked with the Worsley refinery, near Collie, as equal second lowest-cost
alumina plant in the world.
Alumina costs
Western Australia still a trend-setter
Western Australia continues to host some of the world’s lowest-cost alumina plants.
London-based James F. King, a renowned economic adviser to the industrial and raw
materials industries, says Western Australia’s four alumina refineries — Wagerup, Worsley,
Pinjarra and Kwinana — are ranked two, three, four and six respectively in terms of operating
costs per tonne of alumina produced.
Only the Damanjoli plant in India has a lower base operating cost.
However, when total costs (operating and capital costs) are taken into consideration,
Alcoa’s Pinjarra alumina refinery is the cheapest operating plant in the world.
The following table shows the world’s 10 lowest cost alumina producers.
METALURGICAL ALUMINA PRODUCTION COSTS
SECOND QUARTER — 2002
Country
Company
India
National
Australia
Alcoa
Australia
Worsley
Australia
Alcoa
Venezuela
Interalumina
Australia
Alcoa
Australia
QAL
Brazil
Alumar
China
Pingguo
Suriname
Suraloco
World total/weighted average cost
Location
Damanjoli
Wagerup
Worsley
Pinjarra
Matanzas
Kwinana
Gladstone
Sao Luis
Pingguo
Pananam
Capacity
1.65 Mt/a
2.32 Mt/a
3.25 Mt/a
3.215 Mt/a
1.85 Mt/a
1.485 Mt/a
3.72 Mt/a
1.3 Mt/a
0.525 Mt/a
1.85 Mt/a
Production costs
+Operating US$/t
103
112
112
114
131
144
148
152
155
157
175
*Total US$/t
149
153
153
124
185
155
163
198
209
168
201
+Operating costs mean cash costs for raw materials, energy, labour and overheads
*Total costs are operating costs plus capital charges (interest and depreciation)
Source: James F. King
Aluminium
Using a 10-year time horizon, Mr King forecasts world consumption of primary
aluminium will increase from 24.2 Mt in 2001 to 34.1 Mt in 2012. By that date 2.6 Mt of
primary smelting capacity will be needed beyond that currently planned. Total Australian
production was 1.8 Mt in 2001.
For alumina, Mr King’s current forecasts show that world consumption will increase from
52.5 Mt in 2001 to 72.7 Mt in 2012 and that by that date 6.6 Mt of alumina capacity will be
needed beyond that currently planned. Total Australian production was 16.3 Mt in 2001.
In both cases “currently planned” includes all committed expansion and greenfields
projects and capacity creep at existing plants.
However, because of a question mark over the
sustainability of this resource and public
feedback, it seems that sourcing seawater from
Esperance is the simplest option and probably
in the best interest of people in the
Goldfields–Esperance region.
In the lead-up to a public consultation process
in October 2002, consultants looked at five
options aimed at meeting the long-term water
needs of the Goldfields–Esperance region.
Options included:
■
■
■
■
■
Upgrading the Mundaring pipeline to meet
potable water needs for the Eastern
Goldfields, with mining interests using
palaeochannel groundwater to meet mining
and processing requirements;
Desalinating seawater at Esperance and
pumping it to Kalgoorlie–Boulder;
Pumping seawater from Esperance to
Kalgoorlie–Boulder and desalinating it as
required.
Sourcing water from the Officer Basin and
delivering it to Kalgoorlie–Boulder; and
Developing a scheme based on the piping
of brackish groundwater from the Eucla
Basin, 450 km east of Kalgoorlie–Boulder
and desalinating it at the nation’s gold
mining capital.
During the study, the possibility of delivering
water from the Wheatbelt, Kimberley and mine
voids had been considered, but each of these
ideas was eliminated for various reasons.
The Minister for Goldfields–Esperance, Nick
Griffiths, said a single supply option was
preferred.
So why is an alternative water supply for the
Goldfields necessary? Basically, it gets down to
the current cost of supplying water via the
Mundaring pipeline, fears about the long-term
sustainability of this supply given that the
demand for water in the Goldfields has been on
the rise for many years and is likely to continue,
and the cheaper unit cost of sourcing water from
Esperance or via the Eucla or Officer Basins.
The study found there is sufficient regional
groundwater available in the Goldfields to
sustain current mining demands, plus an
additional 100 gigalitres per year, for at least 40
years.
Mundaring-Kalgoorlie pipeline
Optional new water pipelines
Officer
Basin
Laverton
Leonora
Kalgoorlie-Boulder Eucla Basin
Esperance
Quest for cheaper
electricity
The State’s
resources
industry is set to
benefit from
proposed energy
reforms
announced
recently by the
Western Australia
Government.
An independent study commissioned by
the State Government shows that an
average cut of 8.5% in the retail price of
electricity would help create new jobs
and boost the Gross State Product by
A$300 million a year by 2010.
Deputy Premier and Energy Minister, Eric
Ripper, described high electricity prices
as a handbrake on the State economy
that disadvantaged consumers.
President of the Western Australian
Chamber of Minerals and Energy, Peter
Lalor, said the mineral and energy
industries, the largest single user of
electricity in the State, have been urging
energy reform for several years.
“Lower electricity prices means more
investment in major projects and more
jobs for West Australians,” Mr Lalor
said.
“The lower the energy input costs, the
more competitive our minerals and
energy exports are to the rest of the
world.”
In late November, State Cabinet
endorsed the breaking up of Western
Power into four separate entities —
generation, transmission and
distribution networks, retail and regional
power — in a bid to further reduce
electricity prices in Western Australia.
Environmental excellence
Silica miner rewarded for saving
rare wildflower
The
Environmental
Protection
Authority
responded by agreeing to
use
the “Change
to
Environmental Conditions”
process
to
fast-track
approval for Simcoa to
mine an area known as the
Western Ridge near Moora.
The
company
also
demonstrated
environmental sensitivity at
its
Kemerton
smelter
operations by successfully
managing
potentially
harmful waste streams.
Waste products are now
marketed as silicon fume
and silicon dross and used
Controlled quarrying: One of Simcoa’s quartz mining sites near
for the manufacture of
Moora. Inset photo shows the rare plant species Regalia
concrete.
megacephala.
Simcoa
is
also
decreasing its use of CALM-supplied jarrah
Western Australian resource company
in favour of mill ends, waste and fallen
that opted to forego development of a
timber. By standing in the market for mill
high-grade silica deposit near Moora,
ends and other waste timber, the company
just to protect a rare plant species, has been
provides security and economic benefit to a
rewarded for its sensitivity.
number of small timber mills in the South
Simcoa Operations Pty Ltd, together with
West of Western Australia.
its environmental consultant, Sally
In summary, Simcoa is to be
Robinson, were joint winners of a Certificate
congratulated for its environmental
of Merit at the 2002 Golden Gecko Awards
responsibility and its flexibility to achieve a
for their package of environmental
win-win outcome for itself and the State.
measures in and around the company’s
Moora mining leases.
Parts of the Moora mining tenements,
Other Golden Gecko award recipients
which provide vital feedstock for Simcoa’s
for 2002 were:
silicon smelter at Kemerton, were of high
Golden Gecko statuettes
ecological significance in the eyes of the
Alcoa World Alumina Australia — for
Environmental Protection Authority, with
restoring the botanical diversity of the
the Cairn Hill area in particular being
jarrah forest after bauxite mining in the
South West.
regarded as “the jewel in the crown”.
A
rare
plant
species,
Regalia
LionOre Nickel — for its “get it right
from the start” approach to the
megacephala, that thrives on unbroken
development of its Emily Ann mining
quartz along the so-called Noondine Chert
project.
horizon, lay in the path of a planned quarry
A
development. However, Simcoa chose to
leave the Cairn Hill area untouched and
source its quartz from less sensitive areas
within its overall tenement holdings in the
Moora region.
Not only did Simcoa choose not to mine
the fragile area in question, it succeeded in
re-generating the rare plant on broken
sections of rock in rehabilitated quarries in
others parts of the region.
The Esperance Port Authority — for its
innovative environmental controls at the
port.
Certificate of Merit
Woodside’s Cossack Pioneer team —
for reducing flare gas emissions on its
FPSO.
Encouragement Certificate
Newmont Golden Grove Operations —
for its ongoing commitment to achieving
environmental excellence.
Economic and financial modelling
Sizing up the value of resource projects
W
hat is the value of a mine? How
much is an oil and gas project
worth? The answer depends on
who is making the assessment.
A mine accountant may access the
company’s assets register to find an answer.
The banker who financed the mining
operation may dig into a risk file and come
up with another figure, while the jumbo
operator at the mine face and the local
shopkeeper who sells provisions to the
miner may view the mine’s value completely
differently.
Likewise, costs can be viewed from many
different perspectives, far beyond simple
accounting procedures. For example, who
pays for the wear and tear on the roads to the
mine? What about the extra school teachers
needed in the town for the miners’ children?
More profoundly, what value is put on a
construction workforce for a potential
resource project, if workers are committed
to a project somewhere else.
To tackle this seemingly mind-boggling
array of valuation issues, economic and
financial models are necessary.
Akin to running a pilot-scale plant to
assess the viability of a new mineral
processing technique, economic models are
a key step in the process of evaluating
benefits, threats and opportunities
associated with a potential new investment.
Proponents of large-scale resource
projects often request Government support
in building or extending infrastructure such
as ports and roads. Many of these projects
are in remote locations. In response, the
Government needs to be able to measure
broader community benefits that will flow
from an individual project and compare
these with the costs incurred in facilitating
the project.
One model that the Department of
Mineral and Petroleum Resources (MPR)
uses when assessing projects is the Project
Analysis System (PAS). This model was
developed to undertake cost-benefit
assessments of single, relatively large-scale
projects with significant exports. MPR has
used different versions of PAS since the mid
1990s to analyse more than 40 individual
projects covering a broad range of resource
industries including, nickel, iron and steel,
natural gas, methanol, ammonia, urea,
wood fibre and gas-to-liquids.
The PAS model has two facets,
comprising a financial analysis system (FAS)
that derives a discounted cash flow financial
By Richard Borozdin
Manager, Resource Economics
Department of Mineral and Petroleum Resources
Key concepts: Senior Economist Qiang Ye and Manager Resource Economics Richard Borozdin
working together on a resource-related modelling project.
analysis of projects and a project-analysis
system that uses the data and analysis of FAS
to provide a broad economic impact
assessment of projects.
Impacts assessed include royalties and
payroll taxes paid to the State Government
from a project plus associated employment.
PAS also assesses a project’s impact on
Commonwealth revenue flows by way of
corporate taxes, incomes taxes and fringe
benefits tax. The PAS model can also broadly
show the impact of a project on the State
economy in general terms of output and
employment.
However, for a more sophisticated
analysis of how projects impact on the State
economy, MPR has acquired Monash
University’s
Computable
General
Equilibrium, Multi-Regional Forecasting
model (MMRF-Green).
General equilibrium modelling is a wellestablished field of applied economics, with
widespread application and strong
influence in the Australian policy
community. To capture the entire economywide effects of various mineral investment
activities, a computable general equilibrium
model is the ideal tool. It can be applied to a
wide range of economic issues such as major
project analysis, industry assistance,
environmental regulation, competition
policy, structural change and trade policy.
The genesis of the MMRF-Green model
can be traced back to Monash University’s
IMPACT Project initiated in 1975. The most
important and well-known product of this
project was a model of the Australian
economy named “ORANI”.
For MPR, a general equilibrium model is
essential in analysing the economy-wide
implications of a variety of shocks
pertaining to the State’s mineral and
petroleum sector such as mineral
investment booms, changes to oil prices,
productivity growth and greenhouse gas
emission control.
The fruits of MPR’s first General
Equilibrium efforts using MMRF-Green
were borne recently by modelling the broad
effects of changes in exploration on the
Western Australian economy. It showed, for
example, that a A$100 million annual
increase in exploration expenditure for five
years, would see 0.8% higher State
employment (or about 11 700 jobs) in
2020–21. It was also projected to add an
additional A$10.4 billion in investment,
A$45.8 billion in export revenue, A$32 billion
in GSP and $1.7 billion in the State
Government revenue over the entire
simulation period to 2020–21.
Results such as these serve as a reminder
that as we may take for granted the
enormous economic benefits of resource
projects, it is often necessary to back up the
sector’s proud assertions with hard numbers
that economic and financial modelling can
produce.
the big picture
The Global Scene
mild recovery, though consumption and investment are likely to be softer than
previously expected.
Mild recovery should continue but risks remain
One of the key risks to this benign outlook is that the equities market
continues to sag, causing further erosion in consumption and investment
plans to be further delayed. High levels of consumer and business debt have
the potential to exacerbate this factor in two ways. If investors and
consumers decide that declines in wealth and ongoing uncertainty about
employment and economic growth require balance-sheet rebuilding,
households will lift savings and reduce consumption and firms will cutback on
investment. Second, if further falls in equities add to the uncertainties in the
economy, financial institutions, in a climate of rising bad debts, may decide to
restrict access to finance, thus reducing the ability of households and
investors to borrow.
The world economy has been recovering gradually during 2002, driven by
growth in the United States. However, early expectations for a robust
recovery, founded on rapid US growth in the first quarter of 2002, have
been revised down in the wake of sharp declines on global sharemarkets,
uncertainties related to the Middle East and concerns over oil prices.
A modest recovery should continue given generally supportive
macroeconomic policies and low inflation. However, significant downside
risks remain, reflecting the potential for further financial market weakness
and higher oil prices due to instability in the Middle East.
The outlook for the global economy as outlined in the International
Monetary Fund’s (IMF) September 2002 World Economic Outlook is for
slower than expected, but still improving, growth into 2003 (Table 1).
Another risk is that further instability in the Middle East causes oil prices to
rise sharply. Sharp rises in fuel prices would reduce real consumer spending
and raise business costs, thus reducing profitability and the incentive to
invest.
TABLE 1 — INTERNATIONAL GROWTH OVER THE NEAR-TERM (%)
The Federal Reserve has signalled its recognition of these risks and its
willingness to further reduce interest rates should the US economy weaken
further.
Actual
Forecasts
2003
2000
2001
2002
World
4.7
2.2
2.8
3.7
United States
Japan
European Union
Germany
Non-Japan Asia
Newly Industrialised Asia
Developing Asia
China
3.8
2.4
3.5
2.9
0.3
-0.3
1.6
0.6
2.2
-0.5
1.1
0.5
2.6
1.1
2.3
2.0
8.5
6.7
8.0
0.8
5.6
7.3
4.7
6.1
7.5
4.9
6.3
7.2
Annual percentage changes
Source: International Monetary Fund. World Economic Outlook 2002.
United States growth has slowed
Inventory building and strong consumer spending drove a robust recovery
in the US in early 2002. Since then, however, growth in the US economy
has slowed significantly, driven by sharply higher imports (and thus lower
net exports) and softer consumption amid rising uncertainty (Chart 1).
This uncertainty has been partly driven by continued sharp declines on US
sharemarkets reflecting, among other things, lower earnings expectations
(Chart 2).
The sharemarkets’ falls and concerns about the pace of the recovery have
led to a sharp weakening of consumer and investor confidence from early
2002 highs. Adding to rising uncertainty have been growing international
political tensions relating to Iraq and the Middle East.
US business investment, the key driver of economic growth, has remained
weak, in part because the strong investment of recent years, particularly
in manufacturing and IT, led to over-capacity. While some economists
have pointed out that long-term interest rates have fallen to very low
levels, and thus should support US investment, to a significant degree the
decline in rates has reflected market concerns about the weakness in
recovery and associated flows of capital out of equities into safer longterm bonds. The outlook for investment therefore depends partly on the
extent to which low interest rates counterbalance the gloom about the
economy and the reductions in equity-based wealth that has caused them.
As Japan’s case indicates, low interest rates do not necessarily offset a
poor economic outlook.
The outlook for the US economy depends on the extent to which lower
equity prices and rising global tensions lead to lower consumption growth
and/or a further delay in recovery in investment spending.
On a positive note, there have also been signs that investment is
beginning to improve, notably in terms of software and capital equipment
spending. On balance, therefore, the US economy should continue its
Japan’s outlook remains weak
Following the third, and most severe, contraction in the Japanese economy in
the past ten years, economic activity seems to have troughed. The current
outlook is for a modest recovery in 2003.
Activity accelerated mildly in the first half of 2002 driven by net exports.
Industrial production has picked up in response. Domestic demand, however,
particularly household consumption, has remained very weak raising
questions about the sustainability of any recovery. Prices have continued to
fall, exacerbating consumers’ tendency to “wait and see” before spending.
Lack of domestic demand has provided a disincentive for businesses to
invest and consequently unemployment has resumed its drift upwards to
5.4% in July 2002.
Signs of an incipient stabilisation are there, however. Shipments of capital
goods, which had fallen since early 2001, have stopped declining and
software investment has started a reasonable recovery. More recently,
business surveys including the Bank of Japan’s tankan (Short-Term Economic
Survey of Enterprises) suggest that business investment is on the verge of
picking up, though given weak retail sales and rising unemployment, any lift is
likely to be very modest.
Significant excess capacity remains and price deflation continues to increase
the real debt burden on firms and the financial sector. The balance sheets of
the latter are further weakened by falling equity and land prices, restricting
the ability of the sector to lend to willing investors.
The outlook is for a modest improvement in domestic demand with household
consumption rising and, as noted, business investment slowly recovering.
Stronger import demand as consumption and investment rise, combined with
the rise of the yen against the $US, will weaken net exports’ contribution to
growth. Tax cuts will offset some of the negative impact of fiscal
consolidation on spending.
The key risks to the economy are on the downside and to a large degree
external. A deterioration in global, particularly US, growth or a further
appreciation of the yen, would reduce net exports. Internally, further falls in
equity prices would erode fragile confidence and the precarious state of the
banks.
Europe
Recovery in European economic growth has lagged behind that of the US,
Canada and much of the Asian region.
Growth in Europe has been driven by net exports rather than domestic growth
with exports rising and imports actually falling.
Household consumption is weak and investment has yet to recover from its
2001 slump. Recent indicators of retail sales, GDP and business confidence,
particularly in Germany and Italy, have been softer than expected.
Economic trends
C o m p i l e d b y M P R ’s R e s o u r c e S t r a t e g i e s B r a n c h
Chart 1: Recent Major Economy Output Growth
per cent
2.0
per cent
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
-0.5
-1.0
-1.0
-1.5
-1.5
-2.0
-2.0
-2.5
Jun-99
Dec-99
Jun-00
Dec-00
US
Euro area
Quarterly Economic Growth. Source RBA Bulletin
Jun-01
Dec-01
-2.5
Jun-02
Japan
Positive factors supporting the European growth outlook are the likely end of the
stock cycle, so that production rises to lift inventories, underpinned by stronger
consumption spending. The latter reflects higher wages and employment
growth, and modest inflation. Investment should be boosted by improved
corporate earnings and falling levels of capacity utilisation.
There are a number of risks to the outlook. Weaker world growth and/or further
appreciation of the Euro would reduce the stimulus from net exports. While
Europeans are not as exposed to equities as in the US case, European markets
have fallen further in recent quarters than their US counterparts. Further falls
have the potential to dampen consumer demand and put pressure on financial
sector balance sheets, reducing the latter’s capacity to lend.
The German economy is of some concern, given its relatively dominant role in
the Euro economy, with an uncertain outlook for industrial production and
domestic demand. Weak growth in Germany would be a significant drag on
Europe as a whole.
Non-Japan Asian growth expected to be sustained
In contrast with other regions the Asian region (excluding Japan) has seen a
stronger than expected recovery in growth from the recession of 2001.
Stronger growth in global trade, and in particular the electronics trade, has
provided the key boost to growth prospects. However, domestic demand growth
in some instances, notably China, India and Korea, has played an important
role. Macroeconomic policy, notably fiscal policy in Korea, has contributed to
kick-starting sustained growth.
Chart 2: Global Sharemarkets to end September 2002
Index Jun-99 = 100
150
The IMF’s current forecast for the region is for a mild acceleration in growth: in
the newly industrialised Asian economies from 4.7% in 2002 to 4.9% in 2003
and the developing Asian economies from 6.1% in 2002 to 6.3% in 2003.
China is expected to slow mildly from growth of 7.5% in 2002 to 7.2% in 2003.
140
130
The key risk to the outlook is that global growth disappoints, removing one of
the underpinnings present in the strong performance to date.
120
110
100
Western Australia’s economy continues its growth
90
The Western Australian economy showed growth patterns similar to the national
economy through the past year. Western Australian domestic demand grew by
7.2% over the year to the June quarter 2002 period, underpinned by ongoing
dwelling investment, higher business investment and strong household
consumption.
80
70
60
This strength is notwithstanding the negative impact of the slowdown in the US,
Europe and Japan, and consequent continued decline in exports.
50
Jun-99
Dec-99
Jun-00
US
Dec-00
Japan
Jun-01
Germany
Dec-01
Jun-02
Aust
The outlook remains positive, though, should the international economy take a
turn for the worse, this would place downward pressure on the State’s growth,
particularly if investment in the globally exposed resources sector were to be
delayed.
Source: Reserve Bank Bulletin
The A$ remains subject to volatile international forces
Chart 3: Australian dollar exchange rate against
major currencies
$US,Euro
0.7
Yen,TWI
75
70
0.7
65
0.6
60
0.6
55
0.5
The Australian dollar (A$) has fallen against the major currencies since May
2002 following a period of appreciation beginning in the second half of 2001
(Chart 3).
This early appreciation was driven by a number of basic factors. These included:
rising global growth and expectations of strengthening growth; rising commodity
prices, falling risk aversion to peripheral and growth-driven currencies like the A$
and the expectation that Australian interest rates would likely rise more quickly
than those in other economies owing to Australia’s relatively strong growth rate.
Since then these factors have turned around and the A$ has fallen by 2.9%
against the Yen, 3.5% against the US$, 7.8% against the Euro and 3.4% against
the trade weighted index (TWI).
50
0.5
45
40
0.4
Oct-99
Apr-00
Oct-00
Apr-01
Oct-01
Yen (lhs)
TWI (lhs)
$US (rhs)
Source: Reserve Bank Bulletin
Apr-02
Euro (rhs)
mid Oct-02
Driving these falls have been: the deterioration in actual and expected global
growth reflecting the slowdown in the US economy; the ongoing falls in equity
markets; rising risk aversion to peripheral currencies owing to developments
relating to Iraq and the war on terror; and reduced expectations of further RBA
monetary policy tightening. Providing some support to the currency has been
the strong domestic growth that Australia continues to experience.
the big picture
Tale of two markets
Expectations and concern about a sustained and robust global economic recovery
continue to influence most commodity prices. While US equity markets recovered in
October, they provided no crutch for the commodities sector. Major industrial
commodities have turned their backs on Wall Street to focus on real actual economic
performance. Commodity prices have therefore mainly floundered on the back of a
lacklustre US manufacturing sector and weak business investment.
However, oil and gold markets paint a different picture. Oil has been on a high,
dancing to its own rhythm beaten out by geopolitical tensions surrounding the Middle
East. Gold is also in another world, in limbo between its diminishing ‘safe haven’
status, equity market gyrations and hard-nosed supply and demand price
exploitation.
Oil price
US$/barrel*
31.00
29.00
27.00
25.00
23.00
21.00
19.00
17.00
With oil prices recently running at high levels and possibilities of US attacks on Iraq,
many market observers hoped OPEC might lean towards increasing its export
quotas. However, at the 121st meeting of the OPEC conference in Osaka on 19
September 2002, it was decided that agreed production levels would be maintained.
This decision was based on an expectation of very moderate global economic growth
rates for the remainder of 2002 and normal seasonal growth in demand being
expected for the fourth quarter. It is also likely that an increase in OPEC quotas
would tend to have legitimised current cheating. In response to high prices, OPEC
members are estimated to be producing 1.5 million to 2 million barrels per day
above the current quota level of 21.7 million barrels per day. If OPEC were to raise
quotas now, further cheating may be encouraged. The danger from OPEC’s
viewpoint, is that if the disruption of an Iraqi war is avoided and world economic
growth and demand for oil are slack, prices can fall sharply.
Oct-02
Sep-02
Jul-02
Aug-02
Jun-02
Apr-02
May-02
Jan-02
Feb-02
Dec-01
Oct-01
Sep-01
Mar-02
Since June 2002 the West Texas Intermediate (WTI) oil price has crept higher to be
consistently above US$30/bbl by late September and early October. By late October
the crude oil market fell sharply to around US$28/bbl on the news of a diluted,
softened stance on war with Iraq.
Aug-01
Jul-01
Oil — marching to its own beat
Nov-01
15.00
Source Bloomberg via WA Treasury Corporation
*average of Tapis, West Texas and Brent prices
World Crude Oil Reserves and Production at
the end of 2001
Reserves
billion barrels
300
250
200
150
100
50
Iraq
Saudi
Arabia
Production 8.8
per day
IAE
2.4
2.4
Kuwait
Iran
2.1
3.7
3.4
10-Jul-02
0
13-Jun-02
The conference closed with OPEC reiterating its commitment to continued monitoring
of the market and to taking any further measures, including the convening of
extraordinary meetings if necessary, to maintain prices within the range US$2228/bbl. With this in mind, the conference agreed to meet again in Vienna on 12
December 2002 to review the situation.
Venezuela Russia
7.1
United
States
Libya
Mexico
7.7
1.4
3.6
Source: BP Statistics Review of World Energy
… beating to the tune of Iraq
Energy analysts have estimated Iraq’s average daily exports for the year thus far, to
be around 1.19 million barrels per day. Strategically though, and most significantly,
Iraqi oil reserves stand at 112.5 billion barrels — the second largest in the world,
surpassed only by Saudi Arabia.
1,700
1,600
1,500
Source: LME Cash Official
21-Oct-02
29-Sep-02
2-Sep-02
6-Aug-02
17-May-02
20-Apr-02
24-Mar-02
1,400
29-Jan-02
Iraq’s OPEC quota is in suspension but its total current output capacity is judged by
the EIA to be about 3 million barrels per day, a level that could be surpassed only by
two other OPEC members, Iran, at 3.85 million barrels per day and Saudi Arabia,
which is capable of producing 10 million barrels per day, but whose quota is 7.05
million barrels per day.
US$/t
1,800
25-Feb-02
Under UN sanctions, Iraq is only allowed to export oil under an oil-for-food program,
aiming to ensure that Iraq’s oil export earnings can only be used for food and
medicines — not to purchase weapons. But, Iraq has had some success in
circumventing these restrictions by selling its oil under the UN program to energy
traders and levying a separate surcharge (around 25 cents per barrel). The UN’s
announcement that it will crack down on this practice means that Iraqi oil flowing
onto the world market could increase as Iraq’s desperation for revenue grows. This
would be in addition to the estimated 400 000 barrels of oil per day that Iraq
manages to transport via pipelines and road tankers to Jordan, Syria and Turkey.
Copper Price
2-Jan-02
The softening of the US stance towards Iraq and Saddam Hussein’s apparent
willingness to admit weapons inspectors helped to ease oil prices in October.
Another potential downward move in oil prices could be influenced by a less noticed,
but important announcement by Iraq that it would cease to levy a surcharge on its
oil.
Commodity trends
C o m p i l e d b y M P R ’s R e s o u r c e E c o n o m i c s B r a n c h
Base metals — rough southern ride
World base metal market fundamentals continue to remain less than encouraging.
Following annual lows in August 2002, the base metals market appeared to stabilise
and then rise again by early September. However, this was a false dawn. Hammered
by fitful equity news and distrustful global economic outlooks, prices came crashing
down again in early October. New annual lows were touched before staging another
feeble upward assault.
Lead and Zinc
US$/t (zinc)
860
US$/t (lead)
550
840
820
500
Zinc, for example, is facing tentative indications of improved demand. However, as
pointed out by ABARE’s September issue of Australian Commodities, so far,
production in 2002 has exceeded consumption. Official stocks at the end of 2002
were forecast to be at historically high levels. Price rises, therefore, critically depend
on producers’ response to expectations of strengthening demand and prices. If
decisions to permanently close high-cost operations and delay potential restarts
materialise, a foundation for higher prices will have been laid. Increased consumption
depends of course on augured economic pick up taking place in major consumer
countries. ABARE points out that rebuilding activity following severe flooding in China
and central Europe is hoped to be a major fillip in rising global zinc consumption.
800
780
450
760
740
400
7-Oct-02
21-Oct-02
13-Sep-02
30-Jul-02
Lead
21-Aug-02
8-Jul-02
14-Jun-02
26-Apr-02
21-May-02
4-Apr-02
11-Mar-02
15-Feb-02
2-Jan-02
24-Jan-02
720
Zinc
Likewise, copper depends on the timing and magnitude of global economic recovery.
China is particularly crucial, where it is expected that copper demand will continue to
grow on the back of major infrastructure development. The prognosis is similar for
lead, though weak demand by the battery industry and high production levels are still
major factors hindering a solid recovery in lead prices in the short term.
Nickel prices
US$/t
8,000
Nickel — weaker but still hopeful
7,500
Nickel prices have held up relatively well compared with other base metals through
most of 2002. Prices have been driven largely by uncertainty surrounding production
and relatively robust stainless steel demand. Nevertheless, the metal has suffered
from the generally weaker tone set by the same maladies as those of the base metal
markets.
7,000
6,500
6,000
5,500
5,000
2-Jan-02 1-Feb-02 3-Mar-02 2-Apr-02 2-May-02 1-Jun-02 1-Jul-02
31-Jul-02 30-Aug-02 29-Sep-02 22-Oct-02
Evidence is now materialising that global stainless steel production has slowed
comparef to the first half of 2002. While global growth in the 5–6% range is still
predicted by ABARE, the main driver behind this is expected to be only China, with the
Japanese sector down, US flat and Europe showing only fickle growth.
Gold — price el Dorado postponed?
The opening six months of 2002 started optimistically enough for gold with prices
rising from lows of less than US$280/oz to well above US$320/oz in June 2002.
However, following this buoyant first six months of 2002, prices took a decidedly
southern turn, flirting with the US$300/oz mark in July before getting on a generally
upward roller coaster ride to beyond US$325/oz. This ride was short lived.
Gold Price
Stock market manoeuvrings appear to be the primary driving influences on gold’s
mixed fortunes. Resurgence of large-scale terrorism in early October unsettled
investors and prompted a flight to gold as a safe-haven asset, reaching highs of
US$319.50/oz. However, firmer US stock markets on the back of some stronger
corporate results illustrated the strong negative correlation between gold and the Dow
Jones Index. Gold prices subsequently plummeted to US$310/oz in the latter half of
October.
US$/oz
340
330
320
310
300
290
280
270
260
Source: NY Comex
21-Oct-02
29-Sep-02
02-Sep-02
06-Aug-02
10-Jul-02
13-Jun-02
17-May-02
20-Apr-02
24-Mar-02
25-Feb-02
29-Jan-02
02-Jan-02
250
Gold is rallying on each dip in the stock market and falling on each rally. In this
respect, the gold market is truly caught in a vicious trap, as on each rally, physical
demand plummets. Demand for gold in India (the largest buyer globally) is extremely
price sensitive and demand dissolves when prices move higher. North American and
European commercial interests have now been trained, in the Indian fashion, to be
buyers on dips, instead of chasing rallies, especially those rallies that are due to safehaven buying.
Commissioned Projects
Committed Projects
for the financial year 2002–2003
as at 3 December 2002
H E AV Y M I N E R A L S A N D S
IRON ORE
NICKEL
Dardanup — Mineral Sands Mine
Mining Area C — Iron Ore Mine
Cosmos — Nickel Mine (sulphide ore)
DORAL MINERAL SANDS PTY LTD
Doral has spent more than A$30 million on asset
acquisition and construction costs to bring a new
130 000 t/a open pit mine into operation during Q3
2002. The company plans to mine 120 000 t/a of
titanium-based minerals and 10 000 t/a of zircon
over a nine-year period. The ore is being processed
at a refurbished plant at Picton (purchased by Doral
from the Japanese company ISK Minerals Ltd). The
project was officially opened on 8 October 2002.
Expenditure: A$30 million
Employment: Construction: 60; Operation: 60
BHP BILLITON IRON ORE PTY LTD
BHPBilliton and the State approved the
development of Mining Area C on 3 April 2002.
Mining operations at deposit C are planned to
commence in Q3 2003. The product and capacity
expansion (PACE) project at Finucane Island was
approved on 19 July 2002.
Expenditure: A$1 billion
JUBILEE MINES NL
A feasibility study based on the Cosmos Deeps ore
reserve of 520 000 t at 7.2% nickel grade was completed
in April 2001. Development of the decline to the
underground orebody commenced in Q4 2001, with
access to the ore anticipated to occur in Q2 2003. This
timing will ensure a smooth transition from the opencut development, and with current ore reserves, will see
operations extended into mid-2007. Exploration drilling
is continuing in and around the Cosmos Deeps
orebody.
IRON ORE
West Angelas — Iron Ore Mine
ROBE RIVER MINING CO PTY LTD
A new iron ore mine at West Angelas in the Central
Pilbara region of Western Australia was officially
opened on 24 August 2002. Based on a resource of
around one billion tonnes of Marra Mamba ore, the
mine commenced production earlier this year and
is building up to a production rate of 20 Mt/a. A new
joint rail arrangement with Hamersley Iron has been
finalised to allow ore from West Angelas to be
delivered to Cape Lambert for export to Japan. West
Angelas iron ore will be transported, in part, via
Hamersley’s railway. These arrangements have
involved the establishment of a new entity, the
Pilbara Rail Company (PRC), which is equally
owned by Robe and Rio Tinto. PRC operates the rail
network on behalf of Robe and Rio Tinto.
IRON ORE PROCESSING
Kwinana — HIsmelt Commercial Iron
Making Plant
HISMELT CORPORATION LIMITED
HIsmelt Corporation, in a joint venture with
Nucor (25%), Mitsubishi (10%) and Shougang
(5%), announced on 24 April 2002 that it will build
a commercial scale HIsmelt process plant at
Kwinana, near Perth. The first stage plant will
initially produce around 800 000 t/a of pig iron
from iron ore fines, coal and fluxes. Construction
is proposed to commence on receipt of statutory
approvals in Q4 2002 with the plant being
commissioned in 2004.
Expenditure: A$1.2 billion
Significant resource projects underway or planned
in Western Australia
IRON AND STEEL
PROJECT VALUE (ESTIMATED)
Hope Downs iron ore mine and railway
$1050m
Fortescue (Cape Preston) mine and HBI plant
$3000m
Kwinana HIsmelt pig iron and steel plant
$1200m
Mt Gibson iron ore mine, pig iron and pellet plant
$500m
Koolyanobbing iron ore mine expansion
$100m
Sub total
$5850m
NICKEL/COBALT
Ravensthorpe mine
$950m
Cosmos Deeps
$33m
Sally Malay
$50m
Sub total
$1033m
PETROCHEMICALS
Dampier Nitrogen ammonia–urea plant
$900m
Burrup Fertilisers ammonia plant
$630m
Japan DME — di methyl ether plant
$1000m
GTL Resources methanol plant
$770m
Methanex methanol plant
$2000m
Sasol Chevron gas-to-liquids plant (Phase 1)
$2040m
Sub total
$7340m
GAS
Gorgon project
$4000m
LNG Train-4 and trunkline
$2400m
Train-5 LNG project
$1600m
Sub total
$8000m
OTHER
Alcoa Wagerup Train-3 expansion
$995m
Boddington Wandoo gold mine expansion
$500m
Kemerton titanium dioxide pigment plant expansion
$470m
Telfer gold mine expansion
$1000m
Port Hedland manganese dioxide project
$136m
Sundry projects — at least another
$5000m
Sub total
TOTAL
$8101m
A$30 324 million
OIL & GAS DEVELOPMENTS
North West Shelf — Project Expansion —
4th LNG Train, Second Trunkline
WOODSIDE ENERGY LTD
Proposals by the NWS partners for additional LNG
trains 4 & 5, and a second trunkline and expansion of
the Domgas plant, received environmental approval in
1998 and 1999. The LNG expansion is based on growing
Asian energy markets. In April 2001 the partners
committed to development of the A$1.6 billion LNG
Train 4. Construction of Train 4 commenced in Q3 2001.
In December 2001 the joint venturers approved
expenditure for the A$800 million second subsea
trunkline linking the offshore production facilities to
the onshore gas plant on the Burrup Peninsula.
Construction of the trunkline is scheduled to finish in
April 2004 to coincide with the completion of Train 4.
Minerals and
petroleum
Department of
Mineral and Petroleum Resources
Projects under consideration
A G R I C U LT U R E
Mantinea Flats — Ord River Irrigation
Scheme (Stage 2 Development) —
Mantinea Flats
HENRY WALKER ELTIN LTD.
The project consists of developing and servicing
approximately 80 farms (about 4200 ha total) at
Mantinea Flats for irrigated intensive horticulture
which will then be offered for sale. Following an
Expression of Interest process in late 1998, a
consortium headed by Henry Walker Eltin Limited
was mandated to carry out the development,
subject to a successful feasibility study and
associated approvals. The studies have been
deferred pending resolution of land access issues.
Employment: Operation: 240
Ord River — Ord River Irrigation Scheme
ORD STAGE 2 M2 AREA
The potential exists for a 30 500 ha irrigated
agricultural development immediately to the north
east of the existing Ord Stage 1 development. The
WA and NT Governments are committed to
investigating the project feasibility. Both WA and NT
Governments propose to consult with the local
community before progressing re-tendering Ord
Stage 2 M2 area. Environmental approval has been
given for an irrigated agricultural project in the M2
area, but it is possible that a future proponent or
proponents may wish to develop this area for other
purposes such as cotton, leucaena or horticultural
crops.
West Kimberley — Water & Land
Resources Development Project
WESTERN AGRICULTURAL INDUSTRIES PTY LTD
Western Agricultural Industries Pty Limited (WAI)
was appointed in August 1997 to carry out feasibility
studies into establishing an irrigated agricultural
industry based on the ground and surface water
resources of the Canning Basin and Fitzroy River
system. Results to date indicate that there is
sufficient potential to establish a 20 000 ha
groundwater-based irrigated cotton industry in an
area situated about 200 km south of Broome.
Feasibility studies have been deferred pending
resolution of land access issues.
BAUXITE/ALUMINA
Wagerup/Willowdale — Alumina
Refinery/Bauxite Mine Expansion Train 3
ALCOA WORLD ALUMINA AUSTRALIA
Environmental approval was granted in August 1995
to increase the mining rate and expand the Wagerup
refinery to 3.3 Mt/a by construction of a third
production train and round-out of total facilities. A
round-out to increase capacity by 25% was
completed in 1999. Commitment to build the third
train is dependent on market and community
factors.
COPPER
Maroochydore — Copper Mine
STRAITS RESOURCES LIMITED
Straits Resources is continuing efforts to define the
scope of work and synergies associated with the
proposed integration of Maroochydore with the
sulphide development at the Nifty mine. The
feasibility scope and project schedule is expected to
be completed in Q1 2003.
GALLIUM
Pinjarra — Gallium Extraction Plant
GEO SPECIALTY CHEMICALS INC.
In March 2001, GEO Speciality Chemicals Inc of the
USA announced plans to construct a major new
gallium metal extraction facility at Pinjarra, south of
Perth, on the site of the former Rhodia gallium
chloride plant. The facility is planned to have a
capacity of 100 t/a of ‘4N’ gallium metal. The gallium
will be extracted from the Bayer liquor stream
generated in Alcoa’s adjacent alumina refinery. Timing
is dependent on favourable market conditions and
statutory approvals.
GOLD
Boddington — Gold Mine (Wandoo
Expansion)
BGM MANAGEMENT COMPANY PTY LTD
Boddington Gold Mine (BGM) is now managed by
BGM Management Company Pty Ltd on behalf of
Newmont, AngloGold and Newcrest. BGM has
environmental approval to expand the Wandoo
project, based on mining the extensive bedrock that
underlies the mined-out oxide resource. The project
includes a dedicated 100 MW gas-fired power station.
Project go-ahead will be subject to commercial
factors.
Telfer — Gold Mine (Expansion)
NEWCREST MINING LIMITED
Conceptual studies for the Telfer expansion have
identified a large low-grade resource (up to 200 Mt of
sulphide and 50 Mt of oxide ore) adjacent to
Newcrest’s suspended (October 2000) mine pit.
Newcrest intends to commence construction of the
mine extension in late 2002. The expected life of the
expansion should go beyond 2017. Newcrest is
investigating the potential for exporting copper as a
metal instead of concentrate. A final decision will be
made by the end of 2002.
H E AV Y M I N E R A L S A N D S
Jangardup South — Mineral Sands Mine
CABLE SANDS (WA) PTY LTD
Cable Sands has outlined a titanium minerals orebody
adjacent to D’Entrecasteaux National Park. Feasibility
and environmental studies are underway. A formal
proposal to mine has been put to Government. The
proposal is subject to an environmental impact
assessment which has been set at the ERMP level. The
environmental impact statement is expected to be
released in the first half of 2003.
Kemerton — Titanium Dioxide Pigment
Plant Expansion
MILLENNIUM INORGANIC CHEMICALS LTD
Millennium proposes a major expansion of its
Kemerton titanium dioxide pigment plant to 190 000
t/a. The EPA approved the proposal in April 1999. A
decision to proceed is dependent on market factors.
Kwinana — Titanium Dioxide Pigment Plant
Expansion
TIWEST JOINT VENTURE
Environmental approval for the staged expansion of
the pigment plant capacity to
180 000 t/a has been given. A decision to proceed with
further stages within this expansion is dependent on
improved market conditions.
INFRASTRUCTURE
Oakajee — Oakajee Deepwater Port &
Industrial Estate
STATE GOVERNMENT INFRASTRUCTURE
The WA Government has established the economic,
environmental and technical feasibility of
developing an industrial estate and associated
deepwater port at Oakajee, about 20 km north of
Geraldton. Land has been acquired for the core area
and acquisition of land for the buffer zone is
continuing. The initial users of the industrial estate
and port will be major Mid West resource projects. A
commitment to proceed with the port development
will be dependent on an agreement, with a major
customer, on the terms and conditions of use.
IRON ORE
Hope Downs — Iron Ore Mine
HOPE DOWNS LIMITED
Hancock and Kumba have completed a feasibility
study of the Hope Downs project. The alliance is
now progressing project finance, joint venture and
market agreements.
Koolyanobbing — Expansion — Iron Ore
Mine
PORTMAN LIMITED
Portman is proposing to increase iron ore
production at its Koolyanobbing operations to 6
Mt/a in the next few years through the development
of deposits located at Mt Jackson and Windarling, 50
to 100 km north of Koolyanobbing. Mining of these
areas may commence in early 2003. A new railway
connecting the northern deposits to Koolyanobbing
is being considered. The company is seeking
environmental approval to proceed with the
expansion.
Nammuldi — Iron Ore Mine
HAMERSLEY IRON PTY LIMITED
Hamersley Iron intends developing iron ore
deposits near its current Brockman No 2 iron ore
mine, 55 km northwest of Tom Price. Environmental
approval was granted in November 2000. The
Nammuldi deposits will produce Marra Mamba
lump and fine ores either as stand-alone products,
or for incorporation into the Hamersley blend,
depending upon market conditions. The existing
Brockman No 2 loadout facilities and rail spur will
be used to transport the ore from the mine.
Production is likely to commence at 2 to 3 Mt/a with
potential expansion of up to around 20 Mt/a as
demand dictates. Development timing is dependent
on customer acceptance of Nammuldi trial
shipments and prevailing market conditions. Prefeasibility studies were completed in late 2002.
IRON ORE PROCESSING
Fortescue (Cape Preston) — Mine and
HBI Plant
AUSTEEL PTY LTD
The Austeel consortium is promoting a 3.85 Mt/a
EAF steelmaking project, utilising the Fortescue
magnetite deposits. The Austeel plan is to produce
slab, hot-rolled and cold-rolled coil and galvanised
steel at a new plant in Newcastle, NSW, that will
receive its feed from a new iron ore mine and HBI
production facility at Fortescue. Processing in WA
includes magnetic concentration, pelletising and
DRI processes. HBI will be shipped to Newcastle
through new port facilities at Cape Preston.
Environmental impact assessment for the mine to
HBI stage commenced in late 2000. Other projects
based on the Fortescue deposits (being promoted
by parent company Mineralogy) involve an export
DRI/slab project and an export pellet project.
Mt Gibson — Iron Pellet Plant
MT GIBSON IRON LTD
Mount Gibson Iron Ltd is proposing a small export
iron ore development of 1.5 to 2 Mt/a. The initial
operation will be based on the company’s Tallering
Peak deposits, although its Mt Gibson deposits
could also be mined later. Mount Gibson also plans
to conduct feasibility studies into value-adding
products such as pig iron. The total investment with
value-adding products being developed could be as
much as A$500 million.
KAOLIN
Thangoo (100km SSE of Broome) —
Kaolin Mine
MANSFIELD MINING NL
A major kaolin deposit, to be mined by Mansfield
Mining NL as the Eaglehawk Kaolin Project, is
situated on Thangoo pastoral station about 100 km
south-southeast of Broome in the West Kimberley. It
is one of Western Australia’s few high-grade
deposits, with proven reserves of around 410 Mt.
The quality of the resource has been verified by
independent bodies (CSIRO, universities in Qld and
SA). Once operating, the A$90 million project could
produce and export 700 000 t/a of kaolin and byproduct minerals such as silica sand, ilmenite and
leucoxene.
LEAD
Wiluna (Magellan) — Lead Mine
MAGELLAN METALS PTY LTD
The project is based on a lead carbonate (cerussite)
deposit 30 km west of Wiluna. The company expects
to mine 950 000 t/a of ore to yield 100 000 t/a of
concentrate. Magellan is developing this project in
association with Ivernia West Plc, an Irish resource
company. Construction is projected to commence
in Q3 2003. The plan is to export more than 50% of
production as a concentrate.
MANGANESE
Port Hedland (Boodarie) — Manganese
Dioxide Project — Stage 1
HITEC ENERGY LIMITED
HiTec Energy Limited proposes to produce
manganese sulphate and electrolytic manganese
dioxide (EMD) at Boodarie, near Port Hedland. It
will be a staged development, with first production
levels being 25 000 t/a, with an expected rise to 50
000 t/a. It will use ore from Consolidated Minerals’
Woodie Woodie manganese mine in the East
Pilbara, about 400 km east-southeast of Port
Hedland.
Employment: Operation: 115
METHANOL
Burrup Peninsula — Methanex Methanol
Plant
METHANEX
Methanex is considering the establishment of a 5
Mt/a methanol plant on the Burrup Peninsula.
Feasibility and approvals work have commenced for
a decision on the project by Q1 2003.
Burrup Peninsula — Methanol Plant
GTL RESOURCES PLC
GTL Resources proposes to build a plant to produce 1
Mt/a of methanol from mid-2005. The plant will be
situated at Withnell East on the Burrup Peninsula. On
17 October 2001, GTL Resources signed a
Memorandum of Understanding with Apache
Corporation, Globex Energy Inc and Santos Ltd for
the purchase of 108 TJ/d of natural gas to supply the
plant. Products will be sold to Swiss company Vitol for
trading on international markets.
NICKEL
Mt Keith — Nickel Mine
WMC RESOURCES LTD
WMC Resources is reviewing options to expand its Mt
Keith operations from 11 Mt/a to 14.3 Mt/a by the
second half of 2004, and then possibly to a mill
throughput of 16 Mt/a later in the project
development. A feasibility study into the preferred
expansion options is expected to be completed by the
end of 2002. Options for expanding its output at its
Kwinana refinery are also being evaluated.
Ravensthorpe — Nickel Mine
BHP BILLITON — RAVENSTHORPE NICKEL
OPERATIONS PTY LTD
BHP Billiton is currently evaluating the production of
approximately 180 000 t/a of mixed nickel/cobalt
hydroxide that contains at least 45 000 t/a of nickel
and 1800 t/a of cobalt to be processed at QNI’s Yabulu
refinery in Queensland. The definition phase has
been extended to December 2002 to undertake
further pilot scale testing and plant optimisation
modelling. The project is then expected to move,
subject to the results of the definition phase, into the
engineering stage which is due to be completed by
mid 2003.
Sally Malay — Nickel Project
SALLY MALAY MINING LIMITED
Sally Malay Mining recently secured US$5 million
project financing and signed a life-of-mine
concentrate offtake agreement with the Chinese
resource giants Jinchuan Group and Sino Mining
International. In Q3 2002 the company awarded the
stage 1 (optimisation) EPCM contract to Roche
Mining/JR Pty Ltd. The company is aiming to
commission the mine and process plant in Q4 2003.
The project proponents plan to employ both opencut and underground mining methods to extract the
ore, which will be processed via a 535 000 t/a mill. A
bulk nickel/copper/cobalt concentrate will be
shipped by road and exported through the upgraded
Port of Wyndham. The project is expected to have a
mine life of 5.5 years on current resource estimates.
OIL & GAS DEVELOPMENTS
Gorgon (Carnarvon Offshore Basin) — Gas
and Condensate Field
CHEVRON AUSTRALIA PTY. LTD.
A range of alternative development scenarios is
currently being examined. The restricted use of
Barrow Island will be considered after a public review
of environmental, social, economic and strategic
aspects as part of an evaluation by Government.
Potential markets include domestic gas consumers in
Western Australia and value-adding gas processing
consumers such as LNG or GTL. Gas reserves have
been enhanced by positive results from an
exploration program in the West Gorgon area.
Development decisions by the Gorgon joint venturers
will be subject to market commitments.
Macedon/Pyrenees (Carnarvon Offshore
Basin) — Oil/Gas Fields
BHP BILLITON PETROLEUM PTY LTD
These are two adjacent, but separate offshore
hydrocarbon fields within the West Muiron
structure, about 50 km north of Exmouth. The
Macedon gas field was discovered in 1992 by the
West Muiron-3 well with a follow-up appraisal
campaign in 1994. The Pyrenees oil and gas field
was discovered in 1993. There are no immediate
plans to develop the Pyrenees oilfield. Pyrenees and
Macedon are under consideration for domestic
market opportunities.
North West Shelf — Project Expansion —
5th LNG Train
WOODSIDE ENERGY LTD
Proposals by the NWS partners, for LNG train 5 and
a second trunkline, and expansion of the Domgas
plant, received environmental approval in 1998 and
1999. The LNG expansion is based on growing Asian
energy markets. In April 2001 the partners
committed to development of the A$1.6 billion LNG
Train 4. Train 5 development is contingent on future
market conditions.
Scarborough (Carnarvon Offshore Basin)
— Gas Field
ESSO AUSTRALIA LTD
The field is located in 900 metres of water, 300 km
offshore in the Carnarvon Basin. Development will
depend on reserves proving up to 7 to 11 Tcf of gas.
Further evaluation work is being undertaken, but
currently there are no near to mid-term
development plans.
Scott Reef/Brecknock (Browse Basin) —
Gas Fields
WOODSIDE ENERGY LTD
The latest exploration is focussed on Brecknock
South-1 in WA-33-P where a 167 metre hydrocarbon
column over a single interval in the primary
reservoir objective has been found, a result that was
at the high end of expectations. The water depth is
420 metres. In February 2001, the recoverable
reserves for the Scott Reef/Brecknock project were
upgraded to 20.49 Tcf of gas and 311 million barrels
of condensate after multi-disciplinary studies
incorporating the results of drilling at Brecknock
South. The fields are considered commercially
viable in the future, but await firm development
plans dependent on significant growth in domestic
gas and LNG markets.
Tern/Petrel (Bonaparte Offshore Basin)
— Gas Field
SANTOS LIMITED
The offshore Petrel gas field, discovered in 1969, is
located about 250 km west of Darwin on the WA/NT
seabed border in the Bonaparte Basin. The offshore
Tern gas field, discovered in 1971, is located about
300 km west of Darwin in WA waters in the
Bonaparte Basin. Field development options
include installation of unmanned offshore
production platforms with a pipeline to a gas
treatment plant south of Darwin. The development
possibilities for these fields have been enhanced by
recent significant discoveries by other parties
nearby which may provide tie-in potential for Petrel
and Tern to service domestic gas customers.
Whicher Range (Perth Onshore Basin) —
Gas Field
AMITY OIL NL
The Whicher Range gas field, located 21 km south of
Busselton, was discovered in 1968. The four wells
drilled to date have confirmed a significant-sized
gas field, but gas flow rates have been subcommercial. Recent work by Amity Oil to increase
gas flow rates from the extremely tight sands,
including high pressure injection of carbon dioxide,
Projects under consideration
has increased the possibility of commercial
development. Amity is presently holding
discussions with interested parties to take a farm-in
position to assist in funding expenditure of up to
A$9 million on a new well (Whicher Range-5). If a
commercial gas flow is obtained, the well would be
completed for production.
Woollybutt (Carnarvon Offshore Basin) —
Oil Field Development
AGIP AUSTRALIA LIMITED
The Woollybutt development plan comprises the reentry and sidetracking of two of the existing three
wells to drill two horizontal production sections,
each 500 metres in length. Produced oil will be
exported via a shuttle tanker arrangement. The joint
venture partners have signed an agreement for the
provision of a leased FPSO vessel. First oil is
planned for Q1 2003 at an estimated (gross)
production rate of 35 000 barrels per day.
PETROCHEMICALS/CHEMICALS
Barrow Island — Gas to Liquids Fuels
SASOL CHEVRON GLOBAL JOINT VENTURE
Sasol Chevron is considering Australia as a location
for a plant to produce environmentally clean diesel
fuel from natural gas. This gas-to-liquids (GTL) fuels
plant would initially produce about 30 000 barrels a
day, of which 22 700 barrels would be diesel and the
rest naphtha and LPG. Future expansions would
provide up to 200 000 barrels a day to supply both
Australian and South East Asian markets with total
investments of $10 billion and utilising around 20
Tcf of gas over the 25-year design life. Likely
locations for the plant are the North West of Western
Australia or the Northern Territory.
Burrup Peninsula — Ammonia Plant
BURRUP FERTILISERS PTY LTD
Burrup Fertilisers plans to develop an ammonia
plant at King Bay/Hearson Cove industrial area on
the Burrup Peninsula, near Karratha. Around 760
000 t/a of liquid ammonia will be produced and
exported to India for the manufacture of
ammonium phosphate fertilisers. The company has
concluded a bankable feasibility study and is well
advanced in negotiations with government agencies
on land tenure, water and port infrastructure.
Environmental and Aboriginal Heritage approvals
and Native Title agreements have been obtained.
SNC-Lavalin Australia Pty Ltd, was appointed the
EPC management contractor for the project. The
Harriet Joint Venture has entered into an agreement
to supply 82 TJ/d of natural gas to the project.
Construction is scheduled to start up in Q1 2003.
Burrup Peninsula near Karratha. DME is used as an
aerosol propellant and is a likely future
environmentally clean fuel for the power generation
and transportation industries. The proposed plant
will produce methanol for conversion into 1.7 Mt/a
of DME from around 220 TJ/d natural gas. Detailed
feasibility studies are underway. Environmental
consultant, PPK Environmental and Infrastructure
Pty Ltd, has commenced work on obtaining
environmental approval for the project. A
commitment to proceed is expected in the latter
half of 2003. When a project go-ahead is given, the
plant could be operating in late 2006.
P L AT I N U M G R O U P M E TA L S
Halls Creek — Panton Sill-Platinum
Project
PLATINUM AUSTRALIA LIMITED
The Panton platinum-palladium project is located
60 km north of Halls Creek in the Kimberley. It will
be an open cut and underground mine operation,
and it is expected to have a mine life of 11 years. The
proposed high-grade plant will consist of crushing,
milling and flotation to produce a final flotation
concentrate. It is proposed that 650 000 tonnes per
annum will be processed through the plant.
Platinum Australia anticipates construction to
commence in 2003.
Munni Munni — Platinum Deposit
HELIX RESOURCES NL
Helix Resources NL and UK-based Lonmin PLC, the
third largest PGM producer in the world,
announced a joint venture covering the Munni
Munni PGM deposit with Lonmin to provide A$8
million in funding to October 2002 in return for 50%
equity in the project. At the end of September 2001
the indicated resource was 9.2 Mt at 2.9 g/t
combined platinum, palladium, rhodium, and gold,
0.2% nickel, and 0.3% copper. Preliminary mining
studies suggested a mining rate of combined open
cut and underground production of 1.5 Mt/a.
Extensive drilling was undertaken to add to the
resource with work in early 2002 revealing the
deposit was not a typical layered PGM intrusion,
with the western and eastern margins bounded by
steeply dipping faults. In the September quarter of
2002 a A$2 million diamond drilling program was
begun to test for feeder zones and downplunge
extensions of the Ferguson Reef. The company will
then decide whether to proceed with a feasibility
study.
RARE EARTHS
Mt Weld — Rare Earths Operations
LYNAS CORPORATION LTD
Environmental approval has been granted to mine
100 to 150 000 t/a of ore at Mt Weld leading to up to
40 000 t/a of 40% concentrates to produce up to 13
000 t/a REO. Lynas intends to sell 30-40% of product
as mixed REO carbonate, produced in Australia,
with the balance of the material shipped to China
for separation and on-sale. Lynas will own and
market the output through its Rare Earths Direct
brand.
TIMBER
Flynn Drive — Laminated Veneer Lumber
Plant
WESBEAM PTY LTD
WESBEAM Pty Ltd has reached an agreement with
the State, which has been ratified by Parliament, for
the development of an A$80 million laminated
veneer lumber (LVL) plant at Flynn Drive, Neerabup.
LVL is prepared by peeling pine logs into sheets,
then re-aligning and gluing them to produce very
strong engineered wood products. Timber
feedstocks will be pine trees harvested from State
Government- owned plantations in Gnangara and
other areas. The project will sell LVL and veneers to
Australian and overseas markets.
Name
Position
Organisation
Address
Burrup Peninsula — Ammonia Urea Plant
DAMPIER NITROGEN
Agrium Inc of Canada, Plenty River Corporation Ltd,
Thiess Pty Ltd and Krupp Uhde GmbH of Germany
have signed a Project Development Agreement to
complete a bankable feasibility study for the
construction of a A$900 million ammonia and urea
plant on the Burrup Peninsula near Karratha. The
world-scale plant will produce around 1.2 Mt/a of
granular urea and 100 000 t/a of ammonia. Urea is
widely used as a fertiliser, while ammonia is used in
fertilisers, explosives and as a chemical feedstock.
Burrup Peninsula — Dimethyl Ether
Project
JAPAN DME LTD.
Japan DME Ltd, a joint venture of Japanese
companies comprising Mitsubishi Gas Chemical
Company, Itochu Corporation, Mitsubishi Heavy
Industries and JGC Corporation, plans to develop a
world-scale dimethyl-ether (DME) plant on the
Type of business
Phone number
Email
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Major Resource Development Projects: Western Australia
As at December 2002
Loxton Shoals N
Troubador N
Bard N N
Sunrise
N Kelp Deep
Jahal
Chudditch
O Kuda Tasi
O
Laminaria East !
N
Buffalo OO Krill O Elang-Kakatua
ExeterO Norfolk
Mutineer
OO
Hermes
Montague Egret ! OPitcairn
Eaglehawk
! Lambert
O
O
Capella u
uAngel
u ! Cossack
Perseus u u
North !Wanaea
Gaea
! Legendre North
Dockrell u u Rankin
u Goodwyn
!
Echo/Yodel u u
Legendre South Burrup
Keast ; Tidepole
N Io
Urania
@ Ammonia
N
;Dixon/West Dixon
N Jansz
N Saffron
@ Ammonia-urea
N Iago/N Tryal Rocks
N Geryon
Reindeer
N
@ Dimethyl Ether
u Wilcox
u Caribou
@ Synthetic Fuels
Corvus N
Maenad
Orthrus
and Lubricants
Wandoo !
NN
Chrysaor/Dionysus
Tusk
u
O
@LNG
u West Tryal Rocks
Oryx O
O Stag
@Methanol
N Chamois
Campbell u
John Brookes N
Sinbad
Cape Lambert
Wonnich ; Linda u
Ulidia
N
Gorgon u
N NN Lee Baker/Josephine/
q
Maitland N Bambra
q
Harriet
Dampier
O
u
Monty/Rose
!
Spar N Agincourt
!
!uO! O
s Dampier salt
O Gipsy/North Gipsy
Simpson Rosette/Tanami
Karratha
East Spar N
N Narvik
Barrow
Island
O
Woollybutt O
n Radio Hill
! Pasco
I Fortescue
K Munni Munni
I
!
Flinders Shoal
Austeel DRI/HBI
Chinook/Scindian
Chervil
Griffin O !
South Chervil O ! Nasutus
Coniston O
!
Nimrod N Australind
O Novara
! u Cadell
Yammaderry !! Crest
Enfield O Vincent
O Pyrenees OOuttrimCowle! Saladin
Laverda! N !
! Skate
N
; Blencathra ! Roller
ScafellMacedon
CoasterO
I Robe River
O
s Onslow
Leatherback
N Tubridgi
INSET B
N Hingkip
! Bayu-Undan
OliverN
Tenacious
N Audacious
!
O Jabiru
Maple N
Challis
O
Puffin O N
Swan
OTalbot
Padthaway
Tahbilk NO Montara
N
N Crux
Petrel
N
u
Prometheus/Rubicon
N Tern
Dinichthys
Gorgonichthys N
N Scott Reef
O Cornea
N Titanichthys
NN
Brewster
N Brecknock
N Brecknock South
Blacktip N
! Gwydion
Turtle O
b Mitchell Plateau
Ord Stage 2-M2
Wyndham q
e
lin
sP
ipe
am
pie
rN
atu
ral
Ga
I Cockatoo Island
Pe
rt
h-D
KIMBERLEY
Argyle d
N Point Torment
Derbyq Lloyd
Nammuldi/Silvergrass I
Brockman No. 2 I
O Rough Range
0
100
O Boundary
West Terrace OO
Sundown O d Ellendale
Blina
Broome q
Sally Malay n
Panton Sill K
Z Pillara Zn Pb
200 km
6 West Kimberley
Kapok Zn Pb Z
RESOURCE SYMBOLS
SEE INSET B
Port Hedland
qs Port Hedland Salt
Scarborough N
Boodarie HBI Y
y Hitec EMD
I Yarrie
Z Whim Creek Cu
Wodgina t
Z Panorama Zn Cu
Nifty Cu
Woodie Woodier Z
j Telfer Au Cu
PILBARA
rAnt Hill
Z Maroochydore Cu Co
Marillana Creek Yandi/BHPB
Marandoo I
I Yandicoogina/HI
Tom Price I
I
Mining Area C II Hope Downs
Ridge
West
IRhodes
Orebody 23 & 25
Paraburdoo I
Angelas I
Eastern Range I
Giles Mini I I III Orebody 18
ChannarI
Jimblebar
Mt Whaleback
j
c Coobina
Mt Olympus
Lake MacLeod qx Lake MacLeod
s
Carnarvon
Plutonic j
Shark Bay qs
Jundee/Nimary
Magellan Pb Z
Wiluna j
Honeymoon Well n
Bluebird
Weld Range I
j
j
n Mt Keith
Gidgee j
Yakabindie n j Bronzewing/Mt McClure
Cosmos n
Leinster
Hill 50
Bulchina Agnew n
j Darlot
j
Port Gregory
j
j
Lawlers j
j Thunderbox
I Tallering Peak
G
V Windimurra
Murrin
Oakajee
Tarmoola j Murrin Granny Smith
q
Z Golden Grove Zn Cu
n j P Mt Weld
GeraldtonqJ Narngulu Synthetic Rutile
Sons of Gwalia j
R
Mount Horner
j Sunrise Dam
Yardarino Nu
Koolanooka
I
Hovea OODongara
Three Springs
Cliff Head O m
T
Dongara
Davyhurst
I
Beharra SpringsN
Mt Gibson Windarling Range
j
Eneabba
Woodada u m
I
Goongarrie n
Carosue Dam
Cawse Paddington j
Mt Jackson I
Lady Ida j n
n Black Swan
Kanowna
Belle
j
Mt Pleasant j j
Koolyanobbing I
n Bulong
Kundana jjj Super
Cooljarloo m
Pit
Frogs Leg j
Binduli v Kalgoorlie Ni Smelter
SEE INSET A
New Celebrationj j Jubilee
Marvel Loch/
n Kambalda
St Ives
Southern Cross j j Yilgarn Star
j
Miitel n t Bald Hill
Big Bell j
j Dalgaranga
Kwinana/Rockingham
q AIS Jetty
a Alumina Refinery
@ BP Oil Refinery
C Cement and Lime
@ Chlor Alkali
@ Chemicals
@ Chemicals/
@
@
Y
@
v
8
@
J
@
Fertilizers
Fused Alumina
Fused Zirconia
HIsmelt
LPG
Nickel Refinery
Power Station
Sodium Cyanide
Titanium Pigment
Zirconia
INSET A
Chandala
J Synthetic
Rutile
1 Neerabup
• PERTH
qFremantle
0
50km
a Pinjarra
ab Huntly
j
PERTH•
Kemerton
@ Chlor Alkali
X Silicon Smelter
J Titanium
Pigment
Emily Ann n
Boddington Au Cu
m Waroona
aWagerup b
Saddleback
Kemerton
NON-MINERAL PROJECTS
6 Irrigation schemes
q Major port handling facilities
8 Major power stations
1 Downstream timber processsing plant
GAS PIPELINE
OPERATING PROJECTS ARE SHOWN IN BLUE
POTENTIAL PROJECTS ARE SHOWN IN RED
j Central Norseman
? O'Sullivans
w
Western
Australia
? Scaddan
aWorsley
h 8 Collie
qBunbury
m Ewington h Premier
Dardanup 1 Dardanup
h Muja
Capel m Collie Pig Iron Y 8
Capel Synthetic J m Gwindinup
1 Donnybrook
Rutilem
Yoganup
Whicher Range
t Greenbushes
N
Bauxite−Alumina
a Alumina refineries
b Mines and deposits
Chemicals / Petrochemicals / Petroleum
@ Processing plants / refineries
N Natural gas field
O Oil field
! Natural gas / oil field
u Natural gas / condensate field
; Natural gas / oil / condensate field
Chromite
c Mines and deposits
Coal
h Coal mines and deposits
? Lignite mines and deposits
Copper−Lead−Zinc
Z Mines and deposits
Diamonds
d Mines and deposits
Gold
j Mines and deposits
Gypsum
x Mines and deposits
Heavy mineral sands
m Mines and deposits — titanium-bearing sands
G Mines and deposits — garnet-bearing sands
J Ti02 pigment and synthetic rutile plants
Iron ore
I Mines and deposits
Y Downstream processing plants
Limestone−Limesand
4 Mines and Deposits
C Cement plants
Manganese ore
r Mines and deposits
y Downstream processing plants
Nickel
n Mines and deposits
v Smelters and refineries
Phosphate
P Mines and deposits
Platinoids
K Mines and deposits
Rare earth elements
R Mines and deposits
Salt
s Production facilities / pans
Silica − Silica Sand
w Mines and deposits
X Silicon smelters
Talc
T Mines and deposits
Tantalum
t Mines and deposits
Vanadium−Titanium
V Mines and deposits
Bounty j
Pinjarra Gallium
Rav 8 n
Ravensthorpe/BHPBn
q Esperance
Jangardup
m 1 Manjiump
m Jangardup South
Mirambeena 1
I Southdown
Albany
0
100
200
300
400
km
6
Ord Stage 2-Mantinea Flats 6
6
Ord Stage 1
Lake Argyle Hydro 6

Exploration - Department of State Development

Transcription

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