Resources Infrastructure Taskforce Update

EYRE PENINSULA MINERAL & ENERGY COMMUNITY DEVELOPMENT TASKFORCE

Port Lincoln – 10 March 2015

Mark Elford Executive Director

Economic Development Department of Planning, Transport & Infrastructure

South Australia – Economic Priorities

P1 – Unlocking the full potential of South

Australia’s resources, energy and

renewable assets

P4 – The Knowledge State – attracting a

diverse student body and commercialising

our research

P6 – Growth through innovation

P10 – South Australia’s small businesses

have access to capital and global

markets

Mineral and Petroleum Production

0

1

2

3

4

5

6

7

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$ B

illio

n

Copper Hematite Magnetite Gold Uranium Coal

Other Metallics Industrial Construction Gemstones Caroline 1 CO2 (well) Condensate

Crude Oil Ethane LPG Natural Gas

Production by commodity 2000 – 2013 In 2013 was $7 billion ($5.4b – Minerals and $1.6b – Petroleum)

South Australian Resources Industry Indicators

• $647.6 million EXPLORATION EXPENDITURE 2013-14

– Petroleum ($531.3m) and Minerals ($116.3m)

• $1.8 billion CAPITAL EXPENDITURE 2013-14

– ~$30 billion of potential capital for Minerals and Energy projects in the Major Developments Directory

• $7.5 billion RESOURCES PRODUCTION 2013-14

– Minerals ($5.6 b) and Petroleum ($1.9 b)

• $4.8 billion EXPORTS 2013-14

– Minerals ($4.6 b) and Petroleum ($0.2 b)

– 39% of South Australia’s total exports ($12.4 b)

• $291.3 million ROYALTIES 2013-14

– Minerals ($157.4 m) and Petroleum ($133.9 m)

• 13,509 people EMPLOYED August 2014

– more than double - 6,641 ten years ago

Trends in the Resource Sector

• Significant growth in mining and energy exploration in South Australia.

• New major potential opportunities identified.

• Set to generate significant economic value for our State.

• Delivery of this value to the State – Dependent on appropriately coordinated

infrastructure being in place

Regional Mining Infrastructure Plan

• Identified potential infrastructure

solutions to support mining

development

• Assessed on the basis of their

economic, social and environmental

implications

• Launched by the Minister for

Transport and Infrastructure June

2014.

• Three regions:

• Eyre Peninsula,

• Far North and Yorke and

• Mid North/Braemar,

RMIP

RMIP Outcomes

• The minerals and resources sector faces particular

challenges in resolving demand for infrastructure:

• The relatively dispersed nature of the State’s minerals deposits,

and

• The small scale of the majority of South Australian mining

companies.

• Economic modelling forecast on mining sector

development between 2013 and 2032 (medium growth

forecast) could:

• Add $22.5b to gross state product

• Generate ~ 5,750 full time equivalent jobs.

Forecast production volumes by cluster

RMIP Outcomes

• Medium growth forecast: mining sector production likely to rise:

• from average 15 million tonnes / yr (2013-2017)

• to average 95 million tonnes / yr (2023–2032).

• Forecast assumes infrastructure in place to facilitate such development.

• Existing infrastructure (ports, land transport links, electricity and water) - not adequate to accommodate the medium growth.

• Infrastructure challenges are likely to be particularly acute for high volume commodities such as iron ore.

Mining clusters with Highest Demand

Identified Infrastructure issues

• Power

• Inadequate electricity transmission links/capacity,

particularly Eyre Peninsula regions

Source: Department of Planning, Transport and Infrastructure

• Water

• Lack of identified sustainable water sources

with sufficient capacity particularly the Eyre &

Western region.

• Need for more information and data on water

sources

Identified Infrastructure issues

• Ports

• Lack of a high capacity port,

particularly to meet likely forecast

demand for Central Eyre & Braemar

resource sector clusters

• Freight

• Lack of mine to port supply chain links

and capacity to meet estimated export

tonnages

Source: Department of Planning, Transport and Infrastructure

Eyre Peninsula Rail Network Challenges

EP Electricity Capacity Reinforcement

• Project for new 275kV

line and substation

infrastructure to

upgrade capacity

• Dependent on load /

customer scenarios

from proposed projects

on Eyre Peninsula

• Significant Costs

Resources Infrastructure Taskforce (RIT)

• Established within the Olympic Dam Taskforce.

• Jointly chaired by the Department of State Development and Department of Planning Transport & Infrastructure.

• Guiding development of rail, road, port, water and electricity infrastructure supporting expansion of State’s resources and energy sectors.

• In 2015 report to government on the preferred commercial solutions to bulk mineral export infrastructure on Spencer Gulf supporting increased export from prospective mines in SA.

• Works closely with key private sector stakeholders.

RIT Program Activities

Industry Consultation

• Consult with key project stakeholders on infrastructure requirements.

Infrastructure

• Develop multi user access models for infrastructure.

• Confirm demands for water, power and transport for identified projects.

• Development of commercial solutions regional infrastructure for key resources projects.

• Facilitate investigations for improved information and data on water sources and capacity.

Develop intervention / assistance / support options

• Develop options for potential government support initiatives.

• Cross Agency collaboration.

Key EP Iron Ore Projects – Centrex

Key EP Iron Ore Project - Iron Road

Key EP Operator - Arrium / Whyalla Port

Key EP Port Proposal - Port Bonython

Key EP Port Proposal – Lucky Bay

RIT Progress to date

• Key mining / infrastructure / regional stakeholders identified hurdles and demand requirements.

• Extensive modelling of regional infrastructure models and projects.

• Development of multi user access framework principles.

• Project prioritization for targeted regional mapping of Groundwater resources.

• RIT will report to government on preferred commercial solutions to bulk mineral export infrastructure facilitation, third quarter 2015.

Disclaimer

The information contained in this presentation has been compiled by the Department of State Development and originates from a variety of sources. Although all reasonable care has been taken in the preparation and compilation of the information, it has been provided in good faith for general information only and does not purport to be a professional advice. No warranty, express or implied, is given as to the completeness, correctness, accuracy, reliability or currency of the materials. The Department of State Development and the Crown in the right of the State of South Australia does not accept responsibility for and will not be held liable to any recipient of the information for any loss or damage however caused (including negligence) which may be directly or indirectly suffered as a consequence of use of these materials. The Department of State Development reserves the right to update, amend or supplement the information from time to time at its discretion.

To keep in contact and for information, please contact:

Lachlan Kinnear – RIT Project Manager

Phone +61 8 8303 2192

lachlan.kinnear@sa.gov.au

Department of State Development

Adelaide SA 5000

Australia