Mining the Pilbara 2013

The Pilbara - Growth, Prosperity, Opportunity

Dr Ken King Chief Executive Officer

Pilbara Development Commission

Wednesday 17 July 2013

The catalyst for regional growth and development

Leader, Advocate, Broker and Innovator

The Pilbara Development Commission

The Pilbara, Australia’s Global Economic Hub

• In 2011/12 the Pilbara (on and off shore) was responsible for some $84 billion of minerals and petroleum production, 81 per cent of total WA production by value. This is shown in the chart below.

PILBARA ECONOMY

Source DMP 2012

• The Pilbara Gross Regional Product (GRP) using the production approach represents: • 38% of Western Australia’s GSP • 5.5% of Australia's GDP • 50% of New Zealand’s GDP.

• The Pilbara’s GRP is greater than the individual GDP

of 123 of the world’s 185 nation states. • The Pilbara currently supports some 45,000 jobs

with 40% of these part of the broader economy. Sources: Pilbara Development Commission - www.pdc.wa.gov.au 2010 International Monetary Funds list of GDP

PILBARA ECONOMY

Understanding our regional economy

• Mining and construction is fundamental to the

growth and development of the Pilbara

economy and provides ongoing prosperity.

• Mining (74.6%), Construction (8.1%) and

Manufacturing (5.2%) total some 90% of the

economy now and will continue to do so.

• Operations and maintenance in the resource

sector together with economic diversification

and normalisation provide opportunity for the

Pilbara going forward with an estimated 20%

increase in employment required by 2020.

Sources: www.pdc.com.au

CME / PWC Pilbara Population and Employment Study 2012

http://www.economicprofile.com.au/pilbara#

PILBARA ECONOMY

PILBARA GROWTH

Key areas of growth in the Pilbara:

• Population – currently 62,000

• Resource demand and investment

• Employment – doubled since 2006

• Construction – value add opportunities

• Service industries – community and industry support services

The Pilbara has low unemployment (2.6%) and an annual average population growth rate of 2.5% over the period 2006 to 2011. Source: ABS 2011

Karratha's population grew at over three times this rate and five times the national average!

PILBARA INDUSTRY INVESTMENTS

$100 billion plus estimated investment over 5-7 years going forward IRON ORE • Rio Tinto - $10 billion • BHP - $7 billion • Fortescue Metals - $7.5 billion • CITIC Pacific - $8 billion • Hancock Prospecting (Roy Hill) - $9 billion

LNG • Chevron - $52 billion (Gorgon) • Chevron - $29 billion (Wheatstone) • North West Shelf Joint Venture • Woodside - Pluto and Browse FLNG

MANUFACTURING • Yarra International - $600 million

OPERATIONS & MAINTENANCE – jobs for Pilbara residents

To build the population of Karratha and Port Hedland into cities of 50,000 residents each and for Newman to become a major town of 15,000 residents by 2035, with other Pilbara

towns also growing into more attractive, sustainable communities.

Pilbara Cities Vision

THE P ILBARA IN

2035

• Sustainable and diverse economy • Normalised market for land and accommodation • Family oriented communities with active arts and

culture, diverse retail and entertainment options • High quality health and education choices • Vibrant tourism industry • Engineering and support services for the resource

sector supported by a global transport hub • Sustainable integrated energy system • Sustainable water supply • Public and private funding of infrastructure • Aboriginal people are engaged and benefiting from

regional prosperity • A sustainable not-for-profit sector • A world leader in environmental and social

sustainability • Strong national and international investment • Strong security presence

PILBARA CIT IES FOCUS

Commenced July 2010 to realise the vision of building cities and improving regional towns:

• Infrastructure;

• Land availability and development;

• Community projects and engagement; and

• Economic Diversification.

$1.2 billion of initiatives to transform the Pilbara and cater for growth in the region.

Source: WA Department of Regional Development and Lands

PILBARA CIT IES PLANNING

Key planning frameworks have been developed to provide the strategy for future growth of the Pilbara:

• Pilbara Panning and Infrastructure Framework;

• Karratha City of the North – City Growth Plan;

• Pilbara's Port City Growth Plan – Port Hedland;

• Newman Revitalisation Plan; and

• Onslow Expansion Plan.

Source: WA Department of Regional Development and Lands

KEY DRIVERS OF CHANGE

• Continued Royalties for Regions funding • Growing awareness and focus on the Pilbara • Reducing cost of land and housing • Resource sector moving from construction to

operational phase - focus on production and productivity

• Growth of Asian markets • State Government focus on addressing

Aboriginal disadvantage • Growing capacity of Aboriginal corporations • Government interest in agriculture and food

security • Cost of doing business

PDC PRIORITY AREAS

DIVERSITY

• Economic Diversity • Liveable

Communities

PLANNING AND INFRASTRUCTURE

• Land Supply and

Accommodation • Core Infrastructure

STRATEGY

• Strategy, research

and policy • Knowledge Hub • Promoting the

Pilbara globally

STRATEGY

Areas of Focus • Regional Knowledge Hub • Promoting the region globally • Facilitating a shared vision and approach for the

Pilbara’s future • Collaborating with regional stakeholders

Projects • Regional Investment Blueprint • Regional Positioning Strategy • Regional Action Plan Partners • Government and Government Business Enterprises • Regional Development Australia • Non-Government Organisations • Aboriginal Corporations

ECONOMIC DIVERSIF ICATION

To secure the sustainability of communities in the Pilbara, the region needs to diversify its economy. Key Opportunities include: • Tourism and short stay accommodation • Local fabrication and industry support for both

onshore and offshore - e.g. PFSCUF at Port Hedland • Food Security and Fibre Production • Defence operations and services • Alternative energy generation – e.g. renewables • SME development:

• Tourism and Hospitality • Business Incubation for new and existing SMEs • Increasing commercial retail premises • Digital technology uptake • Increased market opportunities

L IVEABLE COMMUNITIES

To achieve the vision vibrant and thriving towns and cities are developing in the Pilbara with a focus on: • Social infrastructure and amenity • Education and Health • Communications and connectivity Current Place Activation Projects • Karratha City Centre /Health Campus -$500m • Pilbara Health Partnership - $38.2 million • Pilbara Education Partnership - $30 million • Recreational Facilities (e.g. Wanangkura

Stadium, Karratha Leisureplex, Onlsow Multi-purpose Centre, Tom Price Sporting Pavilion)

• Dampier, Wickham and Paraburdoo Community Hubs

LAND SUPPLY AND ACCOMMODATION

• The Pilbara Development Commission closely monitors the housing supply pipeline from early stage development, subdivision approval, clearance and subsequent builds.

• Current data and projections to 2017 indicate

that supply is meeting demand with the following developments planned:

• The Town of Port Hedland - 14,200 dwellings • Karratha - 6,900 dwellings • Newman - 1,684 dwellings

• Onslow - 1,496 dwellings

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2007 2008 2009 2010 2011 2012 2013

Rental Cost

Year

Advertised Residential Rental Cost (Average), Pilbara

Port Hedland Average Rental

CostSouth Hedland Average Rental

CostsKarratha Average Rental Costs

Newman Average Rental Costs

Source: Realestate.com.au

HOUSING AND LAND PRICE TRENDS

COMMERCIAL PROPERTY

0

10

20

30

40

50

60

70

80

$-

$100

$200

$300

$400

$500

$600

$700

$800

Sept to Dec 2012 Jan to Mar 2013 Mar to Jun 2013

Retail volume

Office Volume

Retail average price sqm2

Office average price sqm2

INFRASTRUCTURE

Power projects • Pilbara Underground Power Project - $100 million spent to date • Pilbara Power Board – Investment in a new Pilbara Power

Station in Port Hedland – 110 MW, $140 million • Renewables and alternative energy - waste/solar/bio fuels Water • Investigating new sources (West Canning Basin) • New sources (Chevron in Onslow) Waste Treatment • Port Hedland Waste Water Treatment and plant relocation • Karratha Water Recycling Project • Newman Onslow waste water treatment upgrades Transport • Regional airports – Karratha, Hedland, Newman and Onslow • Road / rail upgrades and PortLink Road ($3.4515 billion) • Pilbara Ports – import opportunities for Hedland and Dampier Communications • NBN, Nextgen Networks, Fujitsu, Google, Trident • Smarter Cities initiatives and Pilbara Digital Flagship

RfR Projects in the Pipeline / in Progress:

• Pilbara Underground Power - $75 million

• Pilbara Fabrication and Services Common Use Facility , Port Hedland - $6-800 million ($5 million RfR)

• Port Hedland Marina - $152 million ($72 million RfR)

• Water for Pilbara Cities - $28.5 million ($3.862 million RfR)

• Port Hedland Wastewater Treatment Plant - $42 million

• Karratha Health Campus - $207 million

• Pilbara Education Fund - $50 million

• Pilbara Indigenous program - $30 million

• Pilbara Health Partnership - $38.2 million

• Pilbara Cities Community projects - $30 million

• Local Government Support project - $3 million

TARGETED PROJECTS

COMMERCIAL PROJECTS

An artists impression of the $65 million Karratha Hilton Hotel – 8 stories, 144 rooms, 22 serviced apartments

SUSTAINABILTY

Community challenges and pressure points: • Housing and accommodation – short and long stay

• Land supply and release

• Demand for utilities – power, water, telecommunications etc.

• Infrastructure capabilities – roads, airports etc.

• Community services demand and supply – health, education, police, child care etc.

• Attraction and retention of workforces

• Fly-In-Fly-Out workforces vs long term residents

• SME growth and development

• Institutional establishment

Relieve the pressure, normalise the economy and develop sustainable communities

T: 1800 THE PILBARA (1800 843 745) E: pdc@pdc.wa.gov.au W: www.pdc.gov.au

PORT HEDLAND OFFICE Shop 2, 6 Wedge Street

PO Box 544 Port Hedland, Western Australia 6721

As publishers of this presentation the Pilbara Development Commission makes every reasonable effort to ensure the accuracy of all information. Nevertheless, the Commission is unable to guarantee the accuracy of all of the information contained. The Commission takes no responsibility and will not be liable either in contract for negligence or in any other way for any errors, acts or omissions, which may occur in relation to it.

KARRATHA OFFICE Suite 49, 5 Sharpe Avenue

PO Box 294 Karratha, Western Australia 6714

PERTH OFFICE Level 2, 16 Parliament Place

PO Box 51 West Perth, Western Australia 6872

Thank You!