WESTERN AUSTRALIA’S INTERNATIONAL RESOURCES DEVELOPMENT MAGAZINE December 2005–February 2006 $3 (inc GST)

PETROLEUM BONANZA WA gas becomes a premium fuel GAS TO LIQUIDS Major opportunities beckon STRAND LUMBER Major project status for Great Southern project NICKEL WA ready for the next leap forward Print post approved PP 665002/00062 approved Print post DEPARTMENT OF INDUSTRY AND RESOURCES Investment Services 1 Adelaide Terrace East Perth, Western Australia 6004 Jim Limerick Tel: +61 8 9222 3333 • Fax: +61 8 9222 3862 Email: [email protected] www.doir.wa.gov.au INTERNATIONAL OFFICES Europe European Offi ce • 5th fl oor, 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 Offi ce From the Director General 93 Jolly Maker Chambers No 2 9th fl oor, Nariman Point • Mumbai 400 021 INDIA Tel: +91 22 5630 3979/74/78 • Fax: +91 22 5630 3977 Email: [email protected] The recent announcement that Departments of Conservation and India — Chennai the State Government is making Land Management, Infrastructure and Western Australian Trade Offi ce - Advisory Offi ce 1 Doshi Regency • 876 Poonamallee High Road considerable changes to Western Planning and Industry and Resources Kilpauk • Chennai 600 084 • INDIA Australia’s system of approving major (DoIR). Tel: +91 44 2640 0407 • Fax: +91 44 2643 0064 resources projects spells good news Email: [email protected] The Premier also announced the Indonesia — Jakarta for project proponents. Western Australia Trade Offi ce winner of the annual Premier’s JI H R Rasuna Said Kav C15 - 16, Kuningan The State Government has allocated Awards for Excellence in Public Sector Jakarta 12940 • INDONESIA Tel: +62 21 2550 5331 • Fax: +62 21 522 7103 $25 million to a reform package to Management recently. LandCorp and Email: [email protected] accelerate the approvals process. The DoIR combined to win the top award. Indonesia — Surabaya process has been one of the biggest Western Australian Trade Offi ce The prestigious award acknowledged Graha Pena 17th fl oor • Jalan Ahmad Yani 88 areas of concern for the resources Surabaya 60234 INDONESIA sector. DoIR’s and LandCorp’s role in Tel: +62 31 829 9979 • Fax: +62 31 829 9975 developing common-user facilities at Email: [email protected] The changes are the culmination of the $200 million Australian Marine Japan — Tokyo Government of Western Australia, Tokyo Offi ce two years of solid negotiations by my Complex at Henderson, south of 13th fl oor, Fukoku Seimei Building staff with other government agencies Fremantle.The award adjudicators 2-2-2 Uchisaiwai-cho Chyoda • TOKYO 100-0011 JAPAN Tel: +81 3 5157 8281 • Fax: +81 3 5157 8286 and the Approvals Review Team were particularly impressed with Email: [email protected] to agree on timelines and process how the facilities had enhanced Japan — Kobe improvements. Western Australian Government Offi ce WA’s international manufacturing 6th fl oor, Golden Sun Building • 3-6 Nakayamate-dori reputation, boosting the State’s skills 4-Chome Chuo-Ku • Kobe 650-0004 JAPAN It is a timely move for project capability and economy along the way. Tel: +81 78 242 7705 • Fax: +81 78 242 7707 Email: [email protected] proponents who are anxious to bring Malaysia — Kuala Lumpar on new resource development projects Since opening in 2003, the common- Western Australian Trade Offi ce in these buoyant economic times. user facility has generated more than 4th fl oor, UBN Tower • 10 Jalan P Ramlee KUALA LUMPUR 50250 MALAYSIA Announcing the changes, Premier $40 million in business and 600 new Tel: +60 3 2031 8175/6 • Fax: +60 3 2031 8177 Geoff Gallop made the point that jobs from 80 different projects across Email: [email protected] Middle East — Dubai quicker approval times did not mean the marine, defence and resources Western Australian Trade Offi ce • Emarat Atrium Western Australia was lowering its sectors. PO Box 58007 • Dubai • UNITED ARAB EMIRATES Tel: +971 4 343 3226 • Fax: +971 4 343 3238 approvals standards. E-mail: [email protected] I offer my thanks and congratulations People’s Republic of China — Shanghai The Premier will head up a to everyone involved in the Western Australian Trade & Investment Promotion Coordinating Committee of Ministers development of the Australian Marine Shanghai Representative Offi ce • Room 2208, CITIC Square 1168 Nanjing Road West • Shanghai 200041 to ensure across-portfolio integration Complex. PEOPLE’S REPUBLIC OF CHINA of approvals for major developments. Tel: +86 21 5292 5899 • Fax: +86 21 5292 5889 He has appointed Mr Brendan Other stories in this edition of Email: [email protected] Prospect include several with an People’s Republic of China — Hangzhou Hammond, formerly Managing Western Australian Trade & Investment Promotion Director of Argyle Diamond Mines, international focus. The usual list Hangzhou Representative Offi ce to coordinate inter-action between of major projects in the last pages Room 910 • World Trade Offi ce Plaza Zhejiang World Trade Centre agencies to ensure that they meet of the publication again points to the 15 Shuguang Road • Hangzhou 310007 agreed timelines. The agencies large number and high value of major PEOPLES REPUBLIC OF CHINA Tel: +86 571 8795 0296 • Fax: +86 571 8795 0295 involved include the Environmental resource projects currently committed Email: [email protected] Protection Authority and the or planned in Western Australia. South Korea — Seoul Mr Young Chan Yu, Regional Director Western Australian Trade & Investment Offi ce 11th fl oor, Kyobo Building Prospect Cover photo: A section of the processing plant at one of 1 Jongro 1-Ga, Jongro-Gu Seoul, SOUTH KOREA Western Australian Prospect magazine is published quarterly Western Australia’s newest mines, the Magellan lead mine, Tel: +82 2 722 1217 • Fax: +82 2 722 1218 by the Western Australian Government’s Department of Industry near Wiluna. Photo by Martin Farquarson Photography. and Resources (DoIR) and Ray Burns Media. Email: [email protected] Editorial management: John Terrell, DoIR Communications Taiwan — Taipei and Marketing. Tel: (08) 9222 3804 • Fax: (08) 9222 3069 WA Business Development Manager Advertising management: Ray Burns Media, Australian Commerce & Industry Offi ce PO Box 1230, South Perth Western Australia 6951 Suite 2606, International Trade Building Tel: (08) 9227 6688 • Mobile: 0408 474 328 #333 Keelung Road Section 1 • Taipei 110 TAIWAN Email: [email protected] Tel: +886 2 8780 9118 ext 216 • Fax: +886 2 2757 6707 Email: [email protected] Disclaimer Prospect has been compiled in good faith by the Departmentof Industry Thailand — Bangkok and Resources. Opinions expressed in Prospect are those of the authors Department of WA Business Development Manager and do not necessarily represent the views, or have the endorsement of Australian Trade Commission • Australian Embassy the Department of Industry and Resources. The Department of Industry Industry and Resources and Resources has used all reasonable endeavours to ensure the material 37 South Sathorn Road • Bangkok 10120 • THAILAND contained in this publication is correct, but it is intended to be general in Tel: +662 287 2680 Ext 3307 • Fax: +662 287 2589 nature. No representation is made with regard to the completeness or Email: [email protected] accuracy of the information contained herein. The Department of Industry www.doir.wa.gov.au and Resources disclaims any or all liability for loss or damage whatsoever United States — Los Angeles suffered or incurred resulting from the use of or reliance on information Western Australian Trade and & Investment Offi ce contained herein. Readers of this publication should make and rely on their Howard Hughes Centre, 6080 Centre Drive, 6th Floor own enquiries, research and judgements in making decisions affecting Los Angeles, CA 90045 USA their own or any other person’s interest. Tel: +1 310 216 2827 • Fax: +1 310 216 5632 Email: [email protected] 2 Native title breakthrough for Ord Stage 2

3 Petroleum bonanza... as Western Australia becomes a major target for oil and gas opportunities

4 Fast track for Pluto gas development proposal

5 INTERNATIONAL FEATURE

14 Thumbs up for mining investment

16 Gas to liquid fuels opportunity in Western Australia

18 Major project status for strand lumber project

23 $90 million boost for Australian Marine Complex

26 Expansion of high-wide load corridors

28 WA’s nickel ready for the next big step

36 Major project listings

40 Resources map

Going global This edition of Prospect has a distinctive international fl avour, with articles featuring a diverse range of activities associated with global linkages to trade and investment opportunities in Western Australia. Turn to pages 5–17 for more details. Native Title Breakthrough for Ord Stage 2

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Looking sweet: Sugar cane and citrus fruits are among the many agricultural and horticultural options open to growers under the second stage of the Ord Irrigation Project.

The long-awaited second stage On completion of these studies, several Treasurer Eric Ripper, as Acting Premier, of the Ord River Irrigation Scheme project proposals were received and took part in the signing ceremony at Lake is now on the brink of becoming a considered for further development. Kununurra. reality — four decades after the There are seven development and fi ve He said the native title agreement project’s fi rst stage was established. conservation areas involved in the historic recognised the economic, social and cultural needs of the Miriuwung- This follows the signing in October 2005 native title agreement that was signed Gajerrong people. It would ensure that of a native title agreement between the on the shores of Lake Kununurra on 6 Western Australian Government and October 2005. the traditional land owners have an traditional landowners of the area, the opportunity to fully participate Miriuwung-Gajerrong people. The development areas are known as in projects within the native title area. Green Swamp, M2, Ord East Bank, Ord Under the agreement involving the The agreement paves the way for West Bank, Mantinea, Packsaddle, and Western Australian portion of the the development of about 65,000 ha Carlton Plains. around Kununurra and Lake Argyle native title area, the Western Australian for agricultural, industrial, residential, The conservation areas in question Government has committed $24 million commercial and tourism development. are Livistona, Zimmerman, Pincombe, over 10 years to assist in the operation of the Miriuwung-Gajerrong Corporation, Weaber Range and Ningbing which The development is expected to create $11 million for the Ord Enhancement amount to 154,000 hectares. widespread additional employment for Scheme to address recommendations locals and seasonal visitors. Green Swamp of the Aboriginal Social and Economic Green Swamp is expected to be the Impact Assessment of Ord Stage 1 The original Ord irrigation project in 1963, fi rst of the new areas to be developed. through improvement to government which involved the construction of the services to Aboriginal people, and The proponents are J.J. McDonald & Kununurra Diversion Dam plus irrigation $6 million to the Department of Sons Engineering Pty Ltd of Belmont and associated works and development Conservation and Land Management and the Ord River District Cooperative of the Kununurra township, cost about to fund joint management arrangements Ltd (Kununurra). Operating jointly as $20 million, of which the Commonwealth with the Miriuwung-Gajerrong people contributed $12 million. By 1966, 31 Green Swamp Agriculture Pty Ltd, for previously unmanaged conservation farms irrigated from the diversion dam the partnership aims to expand the areas. had been allocated and Ord Stage 1 was existing sugar industry by developing a born. land holding of 1380 ha, subject to the Other money will be spent on facilities Department of Environment’s approval. for 19 community living areas and water Construction of the Ord River dam management. All up, the total package is followed to provide a major storage The Department of Industry and valued at $57 million, including a nominal reservoir at Lake Argyle at a cost of $22 Resources, which is overseeing the value attached to the land granted to the million. This was offi cially opened in 1972. Ord Stage 2 project on behalf of the Aboriginal people. Ord Stage 2 has been a work-in- WA Government, is arranging economic progress since 1994. That year the State modelling studies for the other six Government approved the funding of development areas. Once this is done, studies to see how best the irrigation options will be submitted to the Minister scheme could be advanced. for State Development for consideration. 2 Prospect Petroleum Bonanza Western Australia now a major target for oil and gas opportunities BY JOHN TERRELL DEPARTMENT OF INDUSTRY AND RESOURCES

A decade ago, some petroleum “British Gas and Total are among new companies operating in Western players that are keen to get a foothold BONAPARTE Australia were fl aring what they in the region. And there are many more BASIN companies, both majors and juniors that BROWSE categorised as waste natural gas. BASIN And as little as three or four years are seeking farm-in and other exploration ago, the term “stranded gas” was opportunities.” commonly associated with many of Derby Several US companies are rushing to EXMOUTH the State’s offshore gasfi elds. the west coast of Africa, which is seen SUB BASIN Broome CANNING as a promising new petroleum frontier. Both these terms and practices are now BASIN But, many of them are also looking to virtually redundant, as world crude oil prices soar to record levels and countries park their investment dollars in Western Australia, especially in view of the State’s CARNARVON desperately try to restrict air pollution, BASIN political stability and its low sovereign OFFICER caused mainly from the burning of solid Western BASIN and liquid fuels. risk. Australia

Oil and gas prices are inextricably linked While Western Australia produced an impressive A$10.3 billion worth of PERTH because they tend to equate to energy BASIN Perth content, and when the price of oil rises, oil, condensate and gas in 2004, the so too do prices and the demand for State is still viewed internationally as natural gas and LNG. However, natural being immature and under-explored. gas is nowadays classed as a premium It certainly has plenty of potential for fuel because of its clean-burning substantial future discoveries to be made, Western Australia’s untapped petroleum potential capabilities, and, as a result, every both onshore and offshore. Target areas for major oil and gas discoveries resource in every gasfi eld around the Basins with commercial production Basins with no commercial production world is now under serious review. For example, during the entire 50-year history of onshore exploration in Western Western Australia is currently Australia, only 500 exploration wells have experiencing a petroleum bonanza with been put down. In contrast to this, more 40 some A$26.8 billion worth of upstream that 2000 wells are drilled in Texas every petroleum developments now in progress. month. That’s unprecedented in Australia’s history, with the level of commitment “Our vast onshore basins 30 more than double the A$12.4 billion slated for petroleum projects in Western are not only under-explored, Australia a year ago. they are untouched in many 20 MT/a In referring to the term stranded gas, the promising places,” Mr Tinapple Director of the Department of Industry said. “And the potential is there and Resources’ Petroleum and Royalties for some huge resources to be 10 Division, Bill Tinapple, said: “You now never hear that term used today, so found,” he added. important has natural gas become”. Mr Tinapple said another virtue of Western Australia’s oil and gas potential 0 “All of a sudden, everyone seems to be 2004 2006 2008 2010 fast-tracking upstream gas projects,” was its proximity to the fastest growing India South Korea Taiwan China Japan he said. economies in the world, in Asia. ProjectedAustralian growth Dollar inexchange Asian LNG rate demand against For details about new acreage releases, Source: DoIR Projections “Some of the big companies that have major currencies been partnering developments on the please contact Richard Bruce (DoIR North West Shelf and other parts of the Petroleum and Royalties Division) State for a long time are all of sudden +61 8 9222 3314 or by email: saying they want more gas.” [email protected]

“Because of high revenues and profi ts And for information about a host of generated by record oil prices, many downstream processing possibilities, petroleum companies are fl ush with please contact Steve Arnott (DoIR funds and keen to invest in places they Investment Attraction) +61 8 9222 3333 have never invested in before. or by email: [email protected] 3 Prospect Greyhound Pace for Pluto Development

The group said established customers This decline in unit production costs in Asia and potential customers in North Eajid should make the North West Shelf more America had shown strong interest in 9^hXdkZgn competitive, in the coming scramble for Pluto because of its potential size and new contracts in Asia. 6gZV commercial fl exibility. But there are other projects under way A fi nal investment decision is planned for to improve the group’s effi ciency, some mid 2007 and LNG shipments could begin of them refurbishing facilities that have from late 2010. been in use for 15 years, which will The development of the Pluto gas fi eld absorb costs of about $1.8 billion. will deliver huge economic benefi ts for Over the next fi ve years, partners in the Western Australia, among them 1500 North West Shelf intend to spend $360 construction and 150 permanent jobs million refurbishing LNG trains one, two once the fi eld is in production. and three, another $160 million on the In April 2005, Woodside said wireline logs venerable North Rankin platform, which indicated a 225m gas column at Pluto- launched the venture in the 1980s (at Woodside Petroleum Limited is fast- 1 with subsequent production testing fi rst delivering gas only for the domestic tracking the development of one of recording a fl ow of more than 46 million market). the most signifi cant projects in the cubic feet of gas a day. history of the Australian oil and gas The fi rst of the projects will be the industry — a $5 billion to $7 billion This led analysts to suggest the fi eld upgrading of the Wanaea-Cossack and liquefi ed natural gas (LNG) venture was signifi cantly bigger than the 2.5 Tcf Lambert-Hermes oilfi elds, but the major based on its wholly owned Pluto gas expected. In fact, the Pluto fi eld contains housekeeping task in gas production will at least 3.5 Tcf of relatively dry gas. fi eld. be development of a low-pressure train to improve the fl ow of gas from the Goodwyn Pluto lies between Chevron’s Wheatstone Engineering studies started in November and Urania fi elds to the north of the A platform, achieved by lowering the with the objective of commissioning it Greater Gorgon gas resource. operating pressure of one of its two in fi ve years — a speedy outcome for process trains. hydrocarbon projects of this complexity. Wheatstone-1 encountered a 53m While most of this work has been The fi eld, discovered by Woodside in April reservoir and fl ow tested 54 million cubic carried out, the demands of continuing 2005, is about 190 kilometres southwest feet a day. It is thought to contain around production mean that it will not be of Karratha and 90 kilometres west of the 2 Tcf of gas. Woodside-operated Goodwyn production completed until early next year. Urania, which was found in 2000 by platform on the North West Shelf. WAPET and is now owned by Chevron, The Perseus fi eld will be connected Chief executive offi cer Don Voelte said is also believed to contain around 2 Tcf. to Goodwyn A by 2007 to utilise spare Woodside had accelerated its studies production capacity that will become and appraisal program to commercialise Meanwhile Woodside is moving quickly available. Pluto due to a forecast strong LNG to improve or develop other resources demand window opening between 2010 off Western Australia’s northwest coast. The Angel gas and condensate fi eld and 2012 in the Asia-Pacifi c and North will be developed to connect to a new Site works started in August 2005 for the America markets. platform, and then to the existing development of the fi fth LNG processing trunkline serving the area. It is not train on the Burrup Peninsula which “Our 100 per cent ownership of the fi eld expected to be commissioned until late will enable fast yet rigorous decision emphasises the group’s determination in 2008. making,” Mr Voelte noted. to pursue “brownfi eld” as well as “greenfi eld” opportunities like Pluto. “We are confi dent that we have suffi cient The Woodside programs, only part of gas to justify an LNG plant with a capacity The company pointed out in a recent widespread development in offshore of fi ve to seven million tonnes a year to review that the fi fth train will increase fi elds on the WA coast, will confi rm the create enduring value for Woodside’s LNG production by 42 per cent, to nearly region’s role as Australia’s major source shareholders and for the citizens of 16 million tonnes a year, while operating of hydrocarbons, producing nearly two Australia.” costs will rise only 14 per cent. thirds of its gas and oil.

4 Prospect OUR GLOBAL MARKETPLACE Is the world shrinking, or is it getting bigger? Both.

Shrinking when one considers the speed of modern communications and transport systems, and the ready access of many new overseas markets.

And defi nitely bigger when the increasing volume and diversity of products being traded with countries like China and India are considered.

Articles in this feature provide an insight into the global marketplace, as it affects Western Australia in a resources context.

5 Prospect Skills Search Takes Off Overseass BY SHAUN MORIARTY DEPARTMENT OF INDUSTRY AND RESOURCES

Western Australia’s dramatic “We were overwhelmed by resources boom is driving a huge the level of interest at each demand for skilled labour. event we attended,” Mr Hill said: “It was especially Not since the overlapping construction pleasing because we of the hot briquetted iron plant near Port had screened all visitors Hedland and three laterite nickel projects beforehand to ensure we in the Goldfi elds in 1998 has there been would be dealing with such a demand for skilled labour in quality candidates.” Western Australia — and it doesn’t look like abating for at least the next decade. About 4000 preliminary assessments were In June 2003 Prospect Magazine reported conducted at the four that the State had $27.9 billion worth of DIMIA expos alone, and it resources projects underway or planned. is anticipated that the rate The current edition lists the total value of conversion to actual of resources projects at $57.6 billion. visa sponsorship by the Government of Western Such is the imperative to attract skilled Australia will be very high. migrants that the Government of Western Australia has established a special Skills Among the candidates were a high number of Migration Unit within the Department of Skills search: WASAB Chairperson Chris Fitzhardinge (left) and Skills Migration Industry and Resources. engineers, tradespeople, Project Offi cer Claire English interview prospective skilled migrants at the Australia doctors, nurses and people Needs Skills Expo in London. Overseen by the Western Australian in other occupations that Skills Advisory Board (WASAB), the are in high demand in the and sponsor employees while the smaller Skills Migration Unit (SMU) has been State. players just don’t have the capacity,” Mr aggressively marketing the State’s Hill said. employment and lifestyle opportunities “We really can’t say how many of these to prospective migrants worldwide. will be sponsored, because the next Businesses in regional areas can contact step is to sort through the preliminary the relevant regional development In September, October and November assessments and deal with each commission who then relay skills needs 2005 the unit participated in nine overseas individual case. This process involves, information onto the Skills Migration Unit. migration events including four expos among other things, having their organised by the Federal Department of qualifi cations assessed by the relevant “There are a wide range of visa schemes Immigration, Multicultural and Indigenous Australian assessment authority,” Mr available and we can help businesses Affairs (DIMIA). Hill said. identify the most appropriate scheme to use to bring in the skills they need,” The DIMIA overseas expos — held in Back on Australian soil, a migration expo Mr Hill said. London, Amsterdam, Berlin and Chennai in Melbourne attracted about 8000 people in India between 27 September and on a single day, with some attendees To fi nd out more about the Skills 13 October — attracted huge crowds of travelling from Sydney to fi nd out about Migration Unit and how it can help potential migrants with a wide range of Western Australia. A similar expo in Perth businesses fi nd the skills it needs, skills. in early November attracted nearly 3000 contact Shaun Moriarty on people. (08) 9222 0427 (0421 583 822) or email Other overseas events included the [email protected] Working Downunder Expo in Dublin, The unit is also targeting small-to- Opportunities Australia expo in London, medium sized businesses to raise Information is also available on the and a series of smaller migration awareness about how the Western Government’s migration website at events held at the Western Australian Australian government can assist them in www.migration.wa.gov.au Government Offi ces in London. sourcing skilled labour and investigate the options for getting them into the country. Skills Migration Unit Manager Warren Hill said Western Australia was one of “The larger companies generally have the most popular exhibitors at each of the resources available to conduct their the DIMIA expos. own search and recruitment campaigns

6 Prospect The driving force for your energy business

p.o. box 9117, floor 20, al attar business tower, sheikh zayed road, dubai, uae In association with phone: +971 4 332 0007 fax: +971 4 332 0008 email: [email protected] Inco Joins a New Nickel Rush

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project in New Caledonia (52,000 t/a in 2008/09), taking its expected combined production capacity to about 450,000 t/a in 2009/10.

The Kalgoorlie Nickel Project farm-in and

The core issue: Heron Resources has proved up a large laterite nickel resource in the Goongarrie area north of Kalgoorlie, joint venture paves the way for ongoing and recently joined global nickel giant INCO with the aim of bringing the resource into production. feasibility studies, costing about $90 million in total. The operation, which has It was Inco* that indirectly sparked Inco’s prime involvement in Western similar parameters to the Ravensthorpe Western Australia’s famous nickel Australia to date has been through the Nickel Project, could be producing its boom in the 1960s. purchase of nickel sulphide concentrate fi rst nickel about seven or eight years from two mines (LionOre Australia’s from now, creating more than 1000 Now, the Canadian nickel giant has joined Emily Anne and Jubilee Mines’ Cosmos). construction and 300 full-time jobs. the “next generation” of laterite nickel Inco’s off-take sales agreements have projects in Western Australia. helped these relatively small companies *An industrial strike within Inco in the mid fi nance mine establishment costs 1960s caused a severe depletion of nickel Inco and Kalgoorlie-based mineral in the late 1990s to the early 2000s, stockpiles in the western world. So much exploration company Heron Resources and for these companies to benefi t so that it sparked a rush to fi nd alternative Limited have signed a defi nitive joint signifi cantly through the last two years nickel mines around the world. This led to venture agreement to progress the of unprecedented high nickel prices. Inco the 1966 discovery of nickel sulphides at proposed $1.4 billion Kalgoorlie Nickel has offi ces in Perth and Kalgoorlie in Kambalda, followed by others at Nepean, Project. Western Australia. Carr Boyd Rocks, Mt Windarra and other places in Western Australia in the late Both companies have undertaken more The JV is based on the proposed 1960s and early 70s. mining of 50,000 t/a nickel metal, plus nickel exploration activity, and in the case a hydrometallurgical processing plant of LionOre, expanded its local operations Assuming its planned acquisition of through the acquisition of other at Goongarrie, about 85 km north of Falconbridge goes ahead, Inco is expected companies or the purchase of the Bulong Kalgoorlie. to become one of the world’s leading mining nickel project. and metals companies, especially with The presence of Inco in the Western These and other off-set arrangements respect to nickel and copper. Estimated Australian nickel industry is an important have contributed about 35,000 tonnes or nickel production for the proposed Inco/ milestone. It will create signifi cant local 10 per cent of Inco’s expected production Falconbridge merger in 2005 is 334,000 competition, given the pre-eminent in 2005. tonnes, making Inco the world’s largest position BHP Billiton now holds following producer, compared with its global rivals its acquisition of WMC Resources, and the Inco’s plans through to 2009 are to bring Norlisk (240,000 tonnes) and BHP Billiton development of its Ravensthorpe Nickel on stream its Voisey’s Bay project in (152,000 tonnes). 2004 nickel production in Project. Canada (59,000 t/a in 2005) and Goro Western Australia was 177,000 tonnes.

8 Prospect US Views Western Australia as a Solid Investment Place

Western Australia is expected to be a major target of new investment and trade following the recent signing of the Free Trade Agreement between the United States and Australia (effective from 1 January 2005).

The US is already a major investor in Western Australia’s resources sector, and levels of bilateral trade are expected to broaden greatly in the post FTA era.

Over the years, companies like Alcoa (bauxite/alumina production), Newmont Mining (the Fimiston Super Pit, Jundee and Boddington), Apache and Chevron Texaco (oil and gas), and Kerr McGee and Lyondell (titanium pigment production) have committed tens of billions of dollars in resources development projects in WA.

Major winners of the future will also Sound investment place: US companies, like Newmont Mining at the Jundee gold mine, have invested billions of dollars in Western Australia’s resources sector. include knowledge-driven industries such as information and communications Seafoods and the MG Kailis Group, “Western Australia has it all — a technologies, biotechnology, marine and electrical and mechanical machinery perfect climate, it is rich in minerals defence, creative industries, food and exporter TGE Energy Services, and and agriculture, and it has limitless beverages and agribusiness. numerous ICT companies such as QR opportunities,” said the 80-year old Sciences, Brookstone, Palmteq and entrepreneur who arrived in Perth from US companies of this ilk — Motorola, IBM Empired. California in 1966, and successfully and defence systems provider Raytheon developed several shopping centres, Interestingly, an estimated 6000 people of — are securely established in Western television and radio networks and a American origin currently live in Western Australia, and are set to gain a stronger winery. foothold in WA in the years ahead. Australia. “Many of Australia’s big offi ces are Conversely, numerous Western One of them is millionaire businessman currently located in the Eastern States,” Australian companies are active in the Jack Bendat who says Western Australia Mr Bendat said. “I predict this will US. These include accredited livestock has grown from a branch offi ce economy exporter James Commodity Exports, to a major business centre over the past change over the next 20 years, with many seafood and pearl exporters Nor-West 40 years. companies heading west to Perth.” New LA Appointment A former Western Australian with nickel mine, as a research biochemist which promoted Australian ingredients a diverse professional life has at Murdoch University, and as a Uniting and cuisine in the US and brought US been appointed to head up the Church parish minister. While in America, Chefs to Australia. he has been an entrepreneur and small State Government’s new trade and Another strong aspect of Mr Doepel’s business owner in Boston and Miami. investment offi ce in Los Angeles. work was to support and organise visiting One of his business partnerships included Australian chefs to the United States with David Doepel (46), who has lived in the a fi rm which specialised in business dinners at the Australian Embassy in United States since 1987, took up the new engineering and re-engineering through LA, and similar functions which focused regional director’s position in October. the Internet for medically orientated on encouraging Australian trade and companies. Another of his companies supporting passage of the Free Trade In Australia, Mr Doepel worked in a launched the brand Taste Down Under, Agreement.

9 Prospect It’s a Gem of a Business BY SONIA GRINCERI DEPARTMENT OF INDUSTRY AND RESOURCES

India’s gem and jewellery industry is the country’s leading export earner at US $10 billion (16 per cent of total exports), with Western Australia’s Argyle diamonds being a major contributing force behind the industry’s phenomenal export growth and development.

Diamonds are no longer the domain of a wealthy elite or a special celebration purchase.

Indian diamond merchants and jewellery manufacturers have been quick off the mark to recognise the fact that diamonds are every girl’s best friend, and many of Argyle Diamonds’ less expensive diamonds are fi nding their way into gift boxes and ultimately on to the hands of At the cutting edge: Western Australian Premier Dr Geoff Gallop (centre) on a visit to a diamond processing factory in Mumbai, a growing number of Indian women. India. manages these seasoned negotiators The manufacturing process for mass Today, 95 per cent of Argyle diamonds with great élan. Along the way she has jewellery entails producing a silver fi nd their way to India via Antwerp, been the recipient of Indian business casting from a selected design, which a global diamond buying centre is then used to create a rubber mould. where stones are valued and sold awards, and recently has been recognised Liquid wax is next injected into the mould. predominantly to merchants from India’s by the global gem and jewellery industry. On hardening, diamonds are placed Jain community who dominate India’s The Premier of Western Australia, Dr in the wax which is also checked for diamond jewellery industry based in Geoff Gallop, on his recent visit to India, imperfections. Plaster of paris is poured Mumbai and Gujarat from where the met with the president and members of onto the wax jewellery to create another community originates. the Gem and Jewellery Council of India mould. On hardening, gold is poured Essentially family businesses, Indian and undertook a site visit to InterJewel, a into the plaster of paris mould and onto diamond merchants and manufacturers cutting, sorting and jewellery design and the wax piece of jewellery at a specifi c are a force to be reckoned with. Where manufacturing facility located in the Free temperature which enables the gold to Israel once led the world in the art of Trade Zone on the outskirts of Mumbai. replace the wax and hold the diamonds cutting and polishing the gemstones, in a fi xed setting. This is clearly, a very today most of the cutting, polishing and InterJewel’s Mumbai operations employ labour intensive process. manufacturing are undertaken in India. some 850 workers who produce diamond jewellery exclusively for international To provide the talented pool of Western The person responsible for marketing markets in the US, Europe and South Australian-based designers with an Argyle Diamonds to India is Rio East Asia. opportunity to showcase their work and Tinto’s, Nirupa Bhatt. Ms Bhatt is an skills to Indian manufacturers, Dr Gallop industry rarity. Not only is she a woman The hard and diffi cult to cut Argyle and the Chairman of the Indian Gem and succeeding in a man’s world, but she diamonds are worked on by skilled and Jewellery Export Promotional Council, is doing so with a community that experienced cutters who manage to cut Mr Bakul Mehta, have agreed to provide traditionally tends to prefer women delicate and multi facets into the most space for WA jewellery designers at the to keep a low profi le and immerse minute gemstones. International Jewellery exhibition to be themselves in a home-maker role and held in Mumbai in April 2006. function. To cater for the preferences of each market, InterJewel, like many other Participation in the event will be That’s not quite Ms Bhatt’s style. In manufacturing units, employs both local coordinated by the Western Australia her beautifully draped saris, Ms Bhatt Indian and international designers. Trade and Investment Offi ce in Mumbai.

10 Prospect

Sinosteel Matches Midwest

Iron Ore Commitment

In a strengthening of Sino- The President of Sinosteel, Huang Australian relations, one of China’s Tianwen, who visited Perth for the joint venture signing ceremony in October, largest and most infl uential State- said the feasibility process would be fast- owned enterprises has agreed to tracked, though he would not speculate if share the study costs to test the and when mining would commence. feasibility of developing the Midwest “It is with great pride that we join this Corporation’s Weld Range haematite project, and we want to be involved for the and Koolanooka magnetite iron ore long term because China is in great need deposits inland from Geraldton. of iron and steel products in support of its ongoing nation-building program,” The joint venture agreement between Mr Tianwen said. Pick of the outcrops: An example of some of the outcropping haematite iron ore, grading 55 per cent iron, within the Weld Sinosteel and Midwest created history Range resource. For example, 2005 steel consumption in that it was the fi rst time that a Chinese in China is expected to be around 270 Mt, Oakajee, about 20 km north of Geraldton, and an Australian company had agreed while next year it is expected to rise to is a possibility. Any support for a major to take the same level of risk — $16.3 about 340 Mt. new deep-water port there would million each — in the early stages of be predicated on the facilities and a major iron ore project in Western Sinosteel hopes to earn a 50 per cent infrastructure being common-user, and Australia. stake in both the Weld Range and not dedicated to a single company or Koolanooka projects, the highest equity consortium. The deal could eventually see $1.5 by a Chinese company in a Western According to previously published billion invested in the development Australian iron ore operation. material, Weld Range is thought to have a of two major mines, and substantial With the port of Geraldton experiencing measured indicated and inferred resource infrastructure such as railways, pipelines diffi culties with large volumes of exports of 132 Mt @ +55 per cent haematite, and port facilities, as well as generate (it is currently restricted to Cape size while the fi gure for Koolanooka is in the employment and service opportunities vessels), authorities are examining order of 430 Mt @ 35 per cent Fe (primary for many Western Australians. alternative sites for a new port. magnetite). Where Culture Meets Development

Developing mutual trust and respect At the end of the ballet, Major General for one’s culture are important Jeffery delivered a speech congratulating ingredients in building strong business the players, artistic director and relationships with Chinese people. choreographer for their fi ne artistic fl air, and expressed gratitude to Sinosteel for This was amply demonstrated in October their sponsorship and promotion of the when Sinosteel, partners of Midwest Sino-Australian cultural exchange. Corporation in a joint venture iron ore project in Western Australia, provided In May 2006, the North West Shelf $50,000 sponsorship for the visit to China Venture participants will be sponsoring of the West Australian Ballet. a fi ve city visit to China of the West Australian Symphony Orchestra. The visit included performances of the ballet La Boheme in Beijing, Nanjing, Hangzhou and Shanghai between 15 and 29 October to the rapturous acclaim of local audiences. The ballet, developed by the WA Ballet, is based on the opera story and adapts the opera to dance.

On the evening of 16 October, Australian Cultural exchange: A scene from the Sinosteel-sponsored Governor-General, Major General performance of La Boheme by the West Australian Ballet in Michael Jeffery, was among about 1000 Beijing in October. While in Beijing, WA ballet offi cials Louise Howden-Smith and Simon Dow spent time with a local ballet people who appreciated one of two company as part of West Australian Ballet’s Community performances in Beijing. Education Program. 12 Prospect Chinese Honour For DoIR Geologist

Globe-trotting Western Australia Dr Franco, who has been with the geologist Dr Franco Pirajno has left Department of Industry and Resources’ his mark in yet another domain. Geological Survey Division for 12 years, has a distinguished career as a geologist He was recently awarded the position of in Africa, Australia, New Zealand, Honorary Professor at China University of Southwest Pacifi c and China working with Geosciences – Beijing, in recognition of academia, industry and government. his role in assisting the development of several young Chinese geologists and the Over the past decade he has gained signifi cant expertise on aspects of supervision of PhD students. Chinese geology and been invited to Along the way he has published 12 papers speak at many geological meetings in on the geology of China and contributed China. to the editing of more than 100 papers New outback experience: Against the backdrop of the Altay Mountains (northern Xinjiang province, on the China- for the university journal, Earth Science Mongolia border), Western Australia’s Dr Franco Pirajno Frontier. shares a moment with Professor Yanjing Chen from Peking University.

Magellan Sets Sail with Lead Cargo

Magellan: Western Australia’s only stand-alone lead mine has already chalked up fi ve export consignments of lead to global markets since commencing operations in Q3 2005.

With a name like Magellan, there had Christmas. The product is shipped from There is a strong and increasing global to be a ship involved somewhere in the State via the port of Esperance. demand for lead, fuelled by the rapid the company’s development plans. growth in China’s vehicle fl eet and the The Magellan lead mine, the only stand- subsequent demand for electrical- alone lead operation in Western Australia, storage batteries. Magellan Metals, which takes its name is geared to produce 150,000 tonnes of from the famous Portuguese sailor/ lead concentrates annually from 2006, With lead now in short supply and explorer Ferdinand Magellan (1480–1521), which is close to 3 per cent analysts’ forecasts predicting a continued is in the business of lead production and of global lead mining production. growth in demand, the Magellan project exports. And between the offi cial opening It will be one of the lowest cost lead will became a vital player in the world of the company’s $35 million mine near mines in the world, according to Trevor lead market. Wiluna in September and November Eyton, the Chairman of Ivernia Inc, a it had dispatched four cargoes of lead Toronto-based resources company The project will generate royalties for concentrates by ship to China, with a fi fth which has 100 per cent ownership of the Western Australia, as well as provide planned before Magellan mine. 110 full time jobs. 13 Prospect Thumbs Up for Australian Mining Investment

Australia is the least risky place Western Australia has an impressive for mining investment in the world. 1055 mine sites (from 520 different projects), and 169 operational mineral That was confi rmed by leading US processing plants. mineral industry consultant Behre Dolbear and Company Inc in its 2005 It also continues to be the most favoured global survey of the mining industry. part of Australia for mineral exploration, with about A$530 million being spent Of the 25 countries assessed, Australia annually, or 59 per cent of all exploration ranked either equal fi rst or equal second across the country, taking place in WA. in all measures, scoring 59 out of a possible 70. On the global stage, Western Australia commands a signifi cant share of world The fi ve highest ranking countries were: production for a number of commodities. 1. Australia (59/70) The State’s share of world production in 2004 was: 2. Canada (56) Tantalum 55% 3. Chile (51) Zircon 36% 3. United States (51) 5. Mexico (48) Diamonds (mainly industrial grade) 14% Rutile 27% The list — known colloquially as the “Where not to invest” for the lower Alumina 17% ranking countries — has been compiled Ilmenite 19% since 1999 and ranks countries which Nickel 15% are host to major exploration or mineral development efforts and/or mining Iron Ore (seaborne trade) 17% operations according to their economic, Gold 7% political and tax regimes; social issues affecting mining; delays and bureaucracy; LNG 7% corruption and political stability. Salt 5%

The Behre Dolbear rating is, in effect, There are plenty of new opportunities a huge feather in the cap of the Western for resources investment in Western Australian resources industry because Australia. For more details, link to: WA is by far Australia’s largest mining www.doir.wa.gov.au/investment/index.asp State, accounting for more than A$18 billion in production, plus tens of billions For more details about the Behre of dollars worth of investment in ongoing Dolbear global resources survey, link to: primary and downstream processing www.dolbear.com/Publications/ projects. CountryRankings05.pdf

Plenty of blue sky: Australia — in effect Western Australia because it is the nation’s No. 1 mining State — was rated ahead of Canada, Chile and the US as the best place in the world for mining investment.

Photo by Martin Farquarson Photography.

14 Prospect
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With its world-class gas resources and track-record as a reliable supplier of liquefi ed natural gas (LNG) to global markets, Western Australia (WA) is on the threshold of an exciting new gas processing opportunity.

It relates to the challenge of converting a large proportion of the State’s considerable natural gas resources into premium liquid fuels, better known as gas-to-liquid fuels or GTL.

The basic GTL fuels technology has been successfully employed for many years and the world now has to deal with crude oil shortages and substantially higher fuel and energy costs. GTL is seen as Gas processing: A gas-to-liquids plant like this one in Nigeria could easily be built in Western Australia. an ideal replacement for conventionally All the State of Western Australia is looking for is a prospective developer. produced diesel and distillate products derived from crude oil refi neries, potential GTL project development will be Findings from the three gas demand which are often major contributors to driven by the level of demand certainty in scenarios greenhouse emissions. the relevant gas markets. • The Base Case Gas Demand scenario indicates there are suffi cient known GTL is therefore becoming increasingly The key fi ndings of the Wood MacKenzie gas reserves in Western Australia to popular as the world strives to meet study are outlined in this article. meet WA’s Domestic Gas demand, higher environmental standards, provide gas supplies to the Eastern especially with respect to air quality. • Base Case 1, Gas Demand: This takes into account an average Western States and supply additional gas for Western Australia has large and Australian Domestic Gas market LNG and GTL export markets for the uncommitted gas resources which growth of 2.7 per cent per annum. next 60 years. could potentially be converted into It assumes that gas will be supplied • Despite signifi cantly higher levels of GTL for supply to the Australian and/ to Eastern Australia from 2015, that gas demand for the High Case Gas or international transport fuels and two 80,000 bbl/day GTL plants will be Demand scenario, there are suffi cient petrochemicals markets. commissioned and that there will be 10 mmt/a of additional LNG demand known WA gas reserves to meet any This major opportunity was confi rmed by 2020. additional domestic demand, plus in the recently completed “Study of the growth in demand relating to potential Western Australian Natural Gas Resource • Base Case 2 Gas Demand: This LNG and GTL export projects and the Utilisation Options – 2004/2020”, is identical to the fi rst case, but expected Eastern States Domestic which was undertaken by consultants assumes no WA gas is supplied to Gas market, until 2048. Wood Mackenzie on behalf of the WA eastern Australia. • In the High Case Demand scenario, Department of Industry and Resources. • High Case Gas Demand: This takes 99,379 PJ of 2P* gas reserves and into account an average WA domestic The Wood Mackenzie study provides a 24,732 PJ of YTF gas reserves will be gas market growth of 3.8 per cent commercial perspective for industry to available in Western Australia at 2020. per annum. It assumes that gas will These reserves will be suffi cient to justify LNG and GTL project investment be supplied to eastern Australia from meet gas demand to 2048. decisions. 2012, that three 80,000 bbl/day GTL • In the High Case Gas Demand The study maps-out three possible future plants will be commissioned and that scenario, it is estimated that Western gas demand scenarios for Western there will be 20 mmt/a of additional Australia will have 62,717 PJ of Australia, recognising that timing of a LNG demand by 2020.

16 Prospect Opportunities Beckon For A World-class GTL Industry In Western Australia

uncontracted 2P* gas reserves in gas demand. However, 2020. This is suffi cient to supply 57 the GTL fuels and mmt/a of LNG over 20 years, (13.6 products markets BONAPARTE x 4.2 mmt/a LNG trains) or 868,000 are likely to provide BASIN bbl/day of GTL fuels over 20 years (6.2 very strong gas sales BROWSE x 140,000 bbl/day GTL plants). opportunities in the near BASIN 21.6 Tcf future. CARNARVON Western Australia’s gas resources BASIN Large gas fi elds exist in the Carnarvon The main challenge 26.5 Tcf and Browse Basins located off the for WA-based GTL northwest coast of Western Australia. fuels producers is to Only 8 per cent of an estimated 164,466 identify viable GTL 83.9 Tcf PJ of remaining discovered reserves are fuels projects based on Broome currently contracted and committed for gas supply contracts development. which provide gas producers with equal or Western Australia’s world better rates of return Karratha competitiveness in LNG markets than those achievable Western Australia has been in the LNG from producing and Western Australia export business since 1989, during which subsequently marketing time it has proved itself as a reliable and LNG into world LNG internationally competitive supplier of markets. LNG to markets in Japan, Korea, Europe and the United States. The Wood Mackenzie study shows that for the 0.05 Tcf The study shows that the North West NWSGP and the other Shelf Gas Project (NWSGP) competes WA gas resources, the PERTH Perth favourably in international LNG markets estimated GTL profi t BASIN with all its main competitors, with the margins for sales to the exception of Indonesia, in Japan, China, Singapore market are the West Coast of the USA/Mexico and greater than the LNG WA natural gas reserves (2004) by basin in Singapore. The NWSGP is competitive project margins for LNG against all other LNG suppliers in the sales to China and the Korean market. West Coast of the USA/ Mexico. The challenge for prospective GTL producer profi t margins) for commercially producers Western Australia’s world viable GTL fuels production in WA. Western Australia’s largest gas producers competitiveness in GTL markets have a choice of major gas markets The Wood Mackenzie study demonstrates More details that, over the next decade, Western when considering the commercialisation For more information about the GTL Australia could be internationally of their natural gas reserves. The four potential in Western Australia please competitive as a major GTL fuels supplier. major markets are: the WA and Eastern contact Mr David Ryan, Department of As a result, potential GTL producers can States Domestic Gas markets, the LNG Industry and Resources on +61 8 9222 0477, and GTL fuel and GTL products markets. be expected to soon seek gas supply or by email: [email protected] The economic and commercial drivers contracts with the Joint Venture Partners for developing the gas resources are of both the NWSGP and the Greater numerous, but timing and scope of Gorgon gas project, in the Carnarvon development will be driven by the level Basin, as well as gas resources owners in of demand certainty in the relevant gas the Browse Basin. markets. Gas supplied from these large gas LNG is currently dominating the resource areas could provide suffi cient global gas market, providing large gas gas reserves, at competitive break-even producers with certainty of high levels of gas production costs (with attractive gas

17 Prospect Major Status for Great Southernher Strand Lumber Project

Good progress continues to be made The Great Southern region of Western with Lignor Pty Ltd’s proposed $200 Australia has large hardwood plantations million engineered strand lumber under development with an annual project in the Great Southern, near harvest of 2.5 million tonnes of wood being forecast by 2008. The project offers Albany. the opportunity of adding signifi cant value The company recently raised $5 million to plantation timber which is currently which is being used to complete exported in the form of unprocessed woodchips. engineering design and feasibility studies. It anticipates being in a position The project will produce up to 260,000 to have fi nancial closure by mid-2006 and m3/a of lumber in full production, worth commence construction in the second in the region of $270 million per half of the year. year, and will create 140 direct jobs. Most of the timber will The Commonwealth be used to supply the domestic Government has market, although the company is awarded Lignor Major keen to develop export markets. Project Facilitation The timber product can be used for Status for the project. structural purposes in the construction industry and in a variety of fl ooring Renewable hardwood timber: Above, the source (bluegums) and (inset) one of the many end products The project will process applications. plantation hardwood (fl oor timber) that can be made from strand lumber. timber to produce the lumber using The project will be located at the planned It will be near the existing Albany innovative German technology. The Mirambeena Timber Processing Precinct Plantation Export Company (APEC). process takes logs, strips the wood into located about 12 km north of Albany, Other projects being planned for the area strands and then reforms it into a lumber which is being rezoned from agricultural are the Beacons bio-energy project and a product using heat, glue and pressure. to industrial. second woodchip mill.

Smoothing out the Burrup Some of the rough edges of an channel for the extremely rugged Burrup Peninsula, Dampier Port near Karratha, have been ironed Authority; out with the construction of a major • $48 million for a service corridor through the area. new bulk liquids berth; and The multi-user corridor extends from • $19 million on the the gas processing precinct near Hearson east-west multi-user Supply lines: Integral for the export of liquid ammonia at minus 33 degrees C Cove through to the port of Dampier service corridor. from Burrup Fertilisers’ world-class production plant on the Burrup Peninsula are several kilometres to the west. these two pipelines. The fi rst is a 20-inch special carbon steel pipeline that is clad in polyurethane foam and aluminium, while the second is a four-inch recirculation The remaining funds An early benefi ciary of $183 million worth line for returning ammonia vapour back to the plant. will be used to extend the of government-funded infrastructure is Burrup Fertilisers, a company of Indian seawater cooling system and bulk liquids origin, which is commissioning a $630 berth at the Port of Dampier’s public jetty. Virtually all construction work on the million liquid ammonia plant in the area. new ammonia plant has been completed, Another $20 million is being spent with commissioning now well advanced, on construction of a state-of-the-art Expenditure on infrastructure so far and the fi rst exports due before the desalination plant to provide fresh water includes: end of the fi rst quarter in 2006. Liquid for Burrup Fertilisers’ ammonia plant. • $65 million for a seawater cooling ammonia from the plant will be shipped This unit will also provide water for yet- system; to India and used for the manufacture of to-be developed downstream processing • $24 million for dredging of a new fertilisers. projects in the Hearson Cove area. 18 Prospect To the WA economy, it’s one very big gift box.

It’s called the Common The CUF was expected to reach capacity in fi ve years. It’s now already approaching User Facility, but its that milestone and expansion plans are well underway. This includes a $90 million performance at this year’s commitment from the State Government for Stage 1 of this expansion to assist in Premier’s Awards was It includes load out wharves, fabrication accommodating the growing demand and laydown facilities and offi ce space. In from a number of naval projects and the anything but common. the space of two years, it’s become the resource industry. nation’s pre-eminent facility for marine- LandCorp and the Department of Industry related industries, generating some This huge, and hugely successful, feature and Resources would like to congratulate $40 million for the State’s economy, along of the Australian Marine Complex on all stakeholders involved in the project. with 600 new jobs. Cockburn Sound not only took off the This includes all the dedicated people who Economy category, it took off the top prize And this economic surprise package makes created and now manage this world-class as well. It’s a prime example of Public a difference far beyond Cockburn Sound. facility. And we thank the many clients Sector leadership for 2005. Studies have shown that for every new who’ve made it such a glittering success. job at the CUF, almost three extra jobs are The CUF, as it’s called, was created by For more information visit generated in the wider WA community. LandCorp and the Department of Industry www.australianmarinecomplex.com.au and Resources, to attract big fabrication That means around 1,500 new jobs will be or contact AMC Business Development projects that would otherwise have created outside the Complex over the next Manager Richard Clark on +61 8 9437 0500 or gone overseas. year, because of projects at the CUF. email [email protected]. Marketforce LCI 0036PROSPECT Marketforce Multi-million Dollar Blueprint Aids BY ALLAN FRANCIS

Leading-edge chemistry: An artist’s impression of the new Minerals and Chemistry Precinct at Waterford.

Australia’s status as a leading-edge Research work carried out by these “The seven-year funding period for CRCs international hydrometallurgical and organisations together with industry is the longest commitment of Federal mineral processing research location participants will make a substantial funding for research in Australia,” he has been boosted by two Perth-based contribution to improving the effi ciency said. initiatives involving federal and state and competitiveness of the Australian “The re-funding, together with the governments, universities, peak minerals sector. The research will also continued fi nancial support from the WA assist in opening up new opportunities for research organisations and industry. State Government and industry for the Australia in a wide range of areas related centre, is recognition of the important One initiative, with funding of more to the chemical sciences. than $100 million, is to establish a research work undertaken by the centre.” “Minerals and Chemistry Research The second initiative is the recent The Parker Centre has widespread and Education Precinct”. This includes awarding of $20 million from the Federal international recognition for its work a $12 million expansion of the CSIRO Government’s Cooperative Research addressing the needs of Australia’s Minerals site at Waterford and the $75 Centres (CRC) Programme to support the key hydrometallurgical industries that million construction on adjacent land activities of the Parker CRC for Integrated of new facilities to accommodate Curtin produce alumina, copper, gold, nickel Hydrometallurgy Solutions from 2005 to University’s Department of Applied and zinc valued at more than $15 billion 2012. Chemistry and the Chemistry Centre a year. The outcomes of this work have been applied widely throughout Australia (WA). Parker Centre Chief Executive Offi cer and overseas. The precinct will also house the Mark Woffenden said the funding headquarters of the Centre for awarded last December for a third time The Parker Centre has an established Sustainable Resource Processing, the under the Australian Government’s CRC track-record of working collaboratively Parker Centre and the WA offi ce of AMIRA Programme of $20 million over seven with research organisations in North International. years was magnifi cent. America, South Africa, Europe and Asia

202 Prospect Resources Sector

with growing interest developing in the Council of Australia, WorleyParsons, Chemistry Research and Education Middle East and South America. Norsk Hydro, Central TAFE and the Precinct at Waterford to capitalise on the Department of Industry and Resources collaborative opportunities offered by the The centre, established in 1992, involves (WA). precinct. research groups from CSIRO Minerals, Curtin University of Technology, Mr Woffenden said the new centre’s CSIRO Minerals Waterford site manager Murdoch University and the University four main activity themes would be Dr John Farrow said the precinct would of Queensland, and nearly 20 end-users breakthrough technologies, process create an internationally recognised from the minerals and related industries. fundamentals, technology transfer and centre of research excellence across a developing staff. number of key technologies. The vision The “core” end-user participants in the for the precinct also involved having Centre are Alcan International, Alcoa The new centre would build on the space available for industry to establish World Alumina, AngloGold Ashanti strengths it had already achieved, and their own independent research facilities Australia, Aughinish Alumina, BHP would focus on ongoing research for the while at the same time having close and Billiton, Billiton Aluminium Australia, alumina, gold and base metals sectors, ready access to leading-edge research Hatch Associates, Queensland Alumina effective delivery of research outcomes infrastructure and intellectual expertise. and Rio Tinto. to industry and developing innovative technologies to exploit low-grade ores or Dr Farrow believes the new precinct The “supporting” end-user participants currently uneconomic, untapped mineral will also allow for cost effi ciencies are Barrick Gold Australia, Minara deposits. by bringing different (research) skills Resources, Straits Resources, Zinifex, together through collaboration and the Outokumpu Technology, Ciba Speciality The Parker Centre will move its joint utilisation of state-of-art high-tech Chemicals, Nalco Australia, Minerals headquarters to the new Minerals and research equipment.

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21 Prospect Taking the Prospectors and Miners Show on the Road

The Australian Prospectors The plan is to make the roadshow and Miners Hall of Fame has accessible to every primary and been a roaring success since its secondary student in Australia on a establishment in Kalgoorlie just over continuous rotational basis. four years ago. Affi liate mining organisations such as the Minerals Council of Australia, State Now a plan is in place to take the Chambers of Minerals and Energy, Hannans North-based tourist and and various mining and prospectors mining educational attraction on the associations will have an opportunity road to spread the word about the to decide on themes and content for many milestones and social dividends roadshows in their respective States. associated with one of Australia’s key industries. Educating the Australian public about the signifi cance of mining — it generates The Board of Directors of the Hall of Roadshow proposal: Organisers of the Australian about $55 billion worth of exports Prospectors and Miners Hall of Fame are keen to Fame has set a goal of raising $15 million annually and creates about 321,000 direct spread messages about the importance of mining over the next four years to establish and indirect jobs throughout Australia — beyond Kalgoorlie, and are planning an Australia-wide roadshow. a Foundation administered by an is seen to be essential for the industry’s independent Board of Governors, that will long-term future. Australian Governments and mining pay for the renewal of various exhibitions, companies — as well as contributions maintenance of the various buildings There are currently two full-time from individuals. and equipment, and establish a mobile education offi cers working at the educational mining facility. Australian Prospectors and Miners Hall It features many galleries — including of Fame in Kalgoorlie who host a steady exploration, minerals, discovery and Chairman of the Hall of Fame’s Western stream of visits by students and teachers fi nance — plus extensive outdoor displays Australian Gifts Committee Neil from different parts of Australia. Their and an underground mine tour. Warburton says he has been heartened role is to reinforce the positive aspects by the good early response to the call for of a sustainable resources sector, things In the year to 30 June 2005 more than assistance, with about $1.2 million being like protection of the environment, care 50,000 people, including 8500 children, pledged so far since the campaign started for worker and community health, fair visited the Hall of Fame, making it one in June. returns for companies and the fourth of the most popular regional tourist element of the quadruple bottom line attractions in Australia. September 2005 “Apart from honouring people and events — leaving something behind for future was the busiest month ever with 7000 of the past, we are especially keen to generations to share and enjoy. visitors. underline the importance of mining from an economic, environmental and The Hall of Fame was established on the Companies and individuals wishing community development perspective site of old Hannans North gold mining to make donations to the APMHOF across Australia,” Mr Warburton said. lease in Kalgoorlie in November 2001, Foundation can contact either as a Centenary of Australia project, with Neil Warburton 0408 935 014 or The roadshow will start as soon as funding coming from three major sources [email protected], or Brian suffi cient funds are raised. — the Commonwealth and Western Holmes on (08) 9387 7800.

22 Prospect $90 Million Boost for the Australian Marine Complex

Growing reputation: The versatility of the Australian Marine Complex at Henderson was demonstrated recently with the The status of the Australian Marine at the same time, which will alleviate load-out of a platform for Apache Northwest Pty Ltd’s John Complex Common User Facility some of the pressure at the facility Brookes gas and condensate development near Varanus (AMC-CUF) at Henderson, south of with the demand for more naval and Island offshore from Onslow. resources work increasing all the time. Perth, continues to grow following AMC, making it possible for companies In particular, the AMC-CUF is keen to a $90 million funding boost by the to tackle large-scale fabrication and assist local fabricators with the effi cient Western Australian Government to servicing contracts, using dockside handling of modules for the booming facilities on a project-by-project walk-in, upgrade the site’s shipbuilding and resources sector. servicing facilities. walk-out lease basis. The new fl oating dock when completed The AMC is now home to about 100 The work will see the installation of will have a lifting capacity of up to 28,000 additional common-user infrastructure, businesses. Its common user facilities tonne and will be capable of lifting all generate more than $40 million in including a fl oating dock and rail transfer of the Royal Australian Navy’s current system to launch and retrieve large ships, business annually, and have been and planned future vessels. It will also responsible for creating 600 new jobs and the extension and upgrade of existing have the capacity to lift the majority of wharves. from 80 projects since its opening two- Panamax class ships that travel up and and-a-half years ago. The $180 million AMC-CUF has exceeded down the Western Australian coast. all expectations since becoming While it took more than a decade to It is planned to have the AMC-CUF’s operational in July 2003, providing a plan, build and implement, the AMC has fl oating dock in operation by late 2007. range of world-class services for the certainly been worth the wait. Growth prospects are enormous, and so too are petroleum, mining, and commercial and The world-class Australian Marine naval ship repair industries. the opportunities for local fabricators Complex (AMC) comprises four precincts who are perpetually challenged by stiff The upgrade of the existing eastern wharf — shipbuilding, technology, support international competition. will allow the accommodation of two industry and fabrication. Common-user Anzac-class frigates and a submarine facilities are a special feature of the

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XXXXPPETJEFDPNBV 23 Prospect Resource Companies Scoop 2005 Industry and Export Awards

“Rio Tinto Iron Ore is to be congratulated for achieving this award, which recognises the efforts the company has made to develop an internal structure that ensures the Pilbara operations are managed in the most effi cient and fl exible manner, with a capability for further expansion,” he said.

“The company holds a strategic advantage through long-term relationships and a range of joint ventures with steel and trading industry partners.

“Future growth will ensure Rio Tinto continues to deliver an outstanding economic and community benefi t to WA.” Cheers for Rio: Resources industry stalwart, Rio Tinto Iron Ore, has been rewarded for its contribution to the WA economy and community by winning the coveted Premier’s Award for Excellence and the Minerals Other resource-based companies to take and Energy Export Award. home an award were Gold Corporation Six companies with a strong link awards in the State, with the Premier’s (Marketing and Design Excellence Award to the resources sector have taken Award for Excellence being awarded for and Large Advanced Manufacturer Export Award), Neptune Marine Services out nine of the 15 categories at outstanding performance and overall (Innovation Excellence Award), Tyco Water this year’s prestigious Western excellence. Australian Industry and Export (Emerging Exporter Award), MetroCount (Information and Communications Export Awards. Premier Geoff Gallop said Rio Tinto Iron Award) and Risktec Australasia (Services Ore, which represented one-quarter of One of Australia’s leading exporters, Rio Export Award and Education Export the world’s seaborne-traded iron ore Award). Tinto Iron Ore (RTIO), won the coveted supply, had developed the capability Premier’s Award for Excellence and the Stop Press: As Prospect magazine was to bring on additional resources in the Minerals and Energy Export Award. going to print, news was received from fastest and most cost-effective manner Sydney that Rio Tinto Iron Ore had just The Western Australian Industry and to meet the demands of a booming global won the Minerals and Energy category of Export Awards are the leading business industry. the 2005 Australian Export Awards.

INVITATION FOR PUBLIC SUBMISSIONS Resources Safety Feasibility Study

State Development Minister Alan The review is being conducted in three stages: Stage 2 will propose a draft safety model framework for the WA resources industry. Carpenter announced on 9 November Stage 1 will be a review of the existing operating 2005 a feasibility study into establishing safety models in Australia and overseas to Stage 3 will analyse the benefi ts and costs a new body to oversee health and identify the key characteristics, risks and of a new Safety Authority, including its advice safety in Western Australia’s resources fundamental aspects of various operating on funding and the best mode of delivery. industry. The study is designed to improve models. Part of this will include identifying Consultation with industry and community occupational health and safety in the the key competencies required and resources stakeholders is an important part of the needed to operate within the various models. feasibility study. mining, onshore petroleum and dangerous goods industries. The study invites written public submissions, Submissions will be The study will examine the systems, and these should be sent by email to accepted up to 31 January procedures, funding requirements and [email protected] or by post to: 2006 and will be published Dr Richard Langford on the Resources Safety reporting processes required to operate a Department of Industry Resources Feasibility Study website: leading resources Safety Authority in WA. 100 Plain Street www.doir.wa.gov.au/ EAST PERTH WA 6004 resources_safety

24 Prospect MID WEST DEVELOPMENT COMMISSION Working in the region for the region... to make the Mid West a preferred place to live, work and invest

Building the Mid West by: Q Facilitating Investment Q Promoting Infrastructure Development Q Facilitating Opportunities for Live Local Business Q Developing Export Opportunities Q Improving the level of Government Services Q Providing Information and Advice Work Invest Ph: 9921 0702 • Fax: 9921 0707 [email protected] • www.mwdc.wa.gov.au SGIO Building, 45 Cathedral Ave • PO Box 238, Geraldton WA 6531 ExtensionExtension of High-wide Load Corridors

Sound infrastructure is one of the important prerequisites for attracting major resource projects.

Western Australia can boast the largest tonnage port in Australia (at Dampier), it has some of the longest and highest tonnage rail networks in the world (serving the Pilbara iron ore industry), and it has multiple massive industrial estates in key coastal and inland parts of the State.

Added to that are Western Australia’s heavy haulage (road transport) routes which are continually being upgraded. An example of this was a recent State Government pledge to spend $22 million on the extension of the High Wide Load Corridor (HWLC) network. This will involve $12.5 million on Corridor 2 between Kewdale and Kwinana and $9.5 million on Corridor 1 between Better haulage routes: Incidents like this near Kwinana will be a thing of the past once the proposed high-wide load corridor Henderson and the South West. The linking Kwinana with the South West is established. latter will be subject to the go-ahead for a major project in the South-West being confi rmed.

We are currently offering an unused high pressure water injection pipeline in excellent condition with the following features.

4ID 8” Flowline 41100m length 4Manufactured by NKT Flexible 4Located at Dampier Port 4Spooled on NKT Unreeling Device 4Manufactured Dec 2004 4Delivered April 2005 4Price: negotiable

Expressions of interest please call 26 Reece Power at Burrup Fertilisers Prospect High wide loads are defi ned as loads of up to eight metres high, eight metres wide, 24 m long and 200 tonnes in weight, which require a clearance envelope of 10 m high and 10 m wide — something that a fl ourishing resources State like Western Australia needs.

In recent years there have been numerous requests from the Chamber of Commerce and Industry Western Australia (CCIWA) and members of the heavy fabrication and mining-related industries for the provision of road routes that facilitate the effi cient movement of high-wide loads around the State. These requests refl ect the growing trend in the heavy fabrication industry to achieve signifi cant time and cost savings, and improved quality in major projects by using large, prefabricated modules which are transported to construction sites for fi nal assembly.

It was feared that delays in the provision of HWLCs could compromise the ability of Western Australian fabricators to compete for major project work, especially against overseas module fabricators.

The urgency to extend Corridor 1 and Corridor 2 was underlined by the need to address requirements for likely major resource projects in the South West, fabrication tenders for projects in the north of the State and defence contracts based at the Australian Marine Complex (AMC) at Henderson.

Such projects include Alcoa’s proposed $1.5 billion upgrade of its Wagerup alumina refi nery, and work associated with the giant Gorgon gas project and the North West Shelf joint venturers’ LNG Train-5 project.

The recent award of the Air Warfare Destroyer Contract to South Australia also means that linking the AMC to all the major metropolitan fabrication centres will enhance the capacity of Western Australia to participate competitively in work arising from this contract. Similarly, fabrication opportunities for the Gorgon gas project and Woodside’s LNG Train 5 project will be enhanced by the linking of the AMC to Kewdale/Welshpool.

27 Prospect Strength Test Western Australia’s BY JOHN TERRELL DEPARTMENT OF INDUSTRY AND RESOURCES

In 1999 it was forecast that the Rich fi elds of hope Exploration development of low-cost laterite Western Australia has about 140 During 2004–05, about 170 companies nickel mines would elevate Western nickel sulphide deposits and over 120 explored for nickel in Western Australia to the top of world prospects and exploration sites scattered Australia. Exploration expenditure for rankings for nickel production within throughout the Yilgarn Craton, Pilbara nickel–cobalt has risen sharply over the four years. Craton, Halls Creek Orogen and the past three years and is now at record Musgrave Complex. levels, exceeding A$140 million a year. While that hasn’t happened — Western Expenditure in 2004–05 was slightly more Australia is still ranked third behind Added to these are another 140 nickel than double that during 2003–04. Russia and Canada in terms of global laterite deposits scattered throughout the State, but mainly within the Yilgarn nickel production — the State is poised &+% for solid growth in both nickel and cobalt Craton. 8j·EW·Oc·6\·C^·8d C^X`Za·XdaWVai production over the next few years. The only producing laterite mines in In 2004 Western Australia recorded 2005 are at Murrin Murrin (60 km east &'% an output of 177,000 tonnes of nickel of Leonora) and at Cawse (about 55 km (contained within nickel concentrates, northwest of Kalgoorlie). matt and refi ned metal) valued at -% about A$3230 million. This was a slight Work is progressing rapidly at BHP decrease on the previous year, but nickel Billiton’s Ravensthorpe laterite nickel production is set to rise with two laterite project. The project involves openpit mining from three adjacent nickel laterite )%

nickel projects at Ravensthorpe and :medagVi^dcZmeZcY^ijgZb^aa^dc near Kalgoorlie, at advanced stages, and deposits — Halleys, Hale-Bopp, and several smaller nickel operations like Shoemaker-Levy — which are estimated Cosmos and those around Kambalda to contain a total proved and probable % showing plenty of upside. BHP Billiton reserve of 263.3 Mt at 0.65 per cent Ni and 0.029 per cent Co. Mining is due to plans to produce about 50,000 tonnes &.,.·-% &.-%·-& &.-&·-' &.-'·-( &.-(·-) &.-)·-* &.-*·-+ &.-+·-, &.-,·-- &.--·-. &.-.·.% &..%·.& &..&·.' &..'·.( &..(·.) &..)·.* &..*·.+ &..+·., &..,·.- &..-·.. &...·'%%% '%%%·%& '%%&·%' '%%'·%( '%%(·%) '%%)·%* commence at the Halleys deposit and per year of contained nickel from the L6WVhZbZiVaZmeadgVi^dcZmeZcY^ijgZ Ravensthorpe project, commencing is expected to continue for the fi rst 11 production by the third quarter of 2007. years of operation. The development is In the longer term, Heron Resources expected to produce a total of around In terms of greenfi elds exploration focus, plans to produce about 50,000 tonnes 50,000 tonnes of contained nickel per the areas of greatest interest were the per year of contained nickel from the year, but with the grade declining after northern areas of the Yilgarn Craton Kalgoorlie nickel project, with the the fi rst seven years and hence the (particularly the Gerry Well greenstone bankable feasibility study for the project output will be 30,000–35,000 tonnes per belt), Kimberley region, Musgrave expected to be completed by 2011. year of contained nickel from year eight Complex, and west Bangemall region. to year 28 of the project. The project The additional production from these at Ravensthorpe is on-track for initial The most notable greenfi elds exploration two projects is likely to push Western delivery of its mixed hydroxide product success was at Collurabbie in the Gerry Australia ahead of Canada on the global to an expanded Yabulu refi nery in Well greenstone belt of the Yilgarn production table. Queensland during the fi rst half of 2007. Craton, where WMC Resources Ltd (now part of BHP Billiton) announced the In the wings, Heron Resources Ltd has discovery of a new nickel province in signed a joint venture agreement with November 2004. The discovery is a zone World’s leading nickel producers for 2004 Inco Ltd to develop its Kalgoorlie Nickel of combined nickel, copper, and platinum (production in tonnes) Project, which has the largest resource group elements (PGE) mineralisation Russia 315,000 inventory of any Australian nickel laterite extending over 7 km along strike. Canada 180,000 project, with a total measured, indicated, A number of companies had brownfi elds Western Australia 177,000 and inferred resource of 903 Mt grading 0.74 per cent Ni and 0.05 per cent Co exploration success near existing Indonesia 144,000 (for 6.7 Mt of contained nickel metal). operations, including WMC Resources, New Caledonia 122,000 The company has plans to produce about which successfully used an innovative Sources: DoIR for Western Australia and USGS for other countries 50,000 tonnes per year of contained deep-penetrating electromagnetic nickel. surveying technique (“Geoferret”

28 Prospect nickel industry ready for the nextt bigb g ststepepe

Taking shape: The early stages of construction work at BHP Billiton’s $1.4 billion Ravensthorpe Nickel Operation in the State’s south.

technology) around Mount Keith. This Mineral resources and ore reserves (*%%% technology helps to better explore depths From zero resources and zero production AViZg^iZegdkZY egdWVWaZ bZVhjgZY ^cY^XViZY ^c[ZggZY of 150–500 m below surface. (%%%% 40 years ago, Western Australia has an Other areas of success included the amazingly rich endowment of nickel and '*%%% discovery of high-grade mineralisation cobalt. Total nickel resources in Western at Prospero near Cosmos mine (35 km Australia have increased throughout the '%%%% northwest of Leinster), extending the last decade, with this attributed to the &*%%% considerable success around Cosmos — successful delineation of resources of regarded by many as the most profi table 8dciV^cZYC^@i lateritic nickel. Resources of lateritic &%%%% nickel mine in the world (on a pound for nickel have increased about fourfold over pound basis). In the Forrestania belt, Hja[^YZegdkZY egdWVWaZ bZVhjgZY ^cY^XViZY ^c[ZggZY the past 10 years, whereas resources of *%%% Western Areas reported considerable sulphide nickel have remained almost exploration success at Forrestania, with unchanged. % the discovery of the rich Flying Fox T5 &..+ &.., &..- &... '%%% '%%& '%%' '%%( '%%) deposit. The Western Australian deposits account L6c^X`ZaaViZg^iZVcYhjae]^YZgZhdjgXZh 2004 and 2005 also saw signifi cant for about 8 per cent (10 Mt) of global exploration around Copernicus and nickel resources (130 Mt) in deposits Salk North deposits in the Halls Creek averaging 1 per cent Ni or greater. For region, an area that is proving to be highly cobalt, Western Australian deposits prospective for Voisey Bay-type nickel contain about 11 per cent (1.6 Mt) of the mineralisation. global cobalt resource of 15 Mt.

29 Prospect THE BIG PICTURE Economic trends

The Global Economy spending growth. In the absence of 6 additional household income growth, higher Strong growth in the global economy petrol prices, high levels of household 4 continues... risks persist debt and limited savings will constrain households’ ability to further lift spending. Global economic expansion continues apace, 2 with the two major drivers of recent growth, • Employment growth has strengthened the United States and China, both showing moderately with non-farm payrolls stronger than expected growth in recent expanding by 1.8 per cent in the year to Percent 0 quarters. Japan’s recovery continues to August, leading to an unemployment show a broadening of activity with stronger rate of 4.9 per cent in the same month. domestic demand complementing solid -2 exports. European growth remains weak. Despite some signs of softness in terms Latin America and the Asian region continue of industrial production, retail sales and to grow supported by US and Chinese consumer confi dence, current expectations -4 demand, strong commodities demand and are that economic growth will continue at a recovery in the global ITC trade. Sept-95 Sept-97 Sept-99 Sept-01 Sept-03 Sept-05 a solid pace, with growth expected to be US Euro area Japan 3.3 per cent in 2006. Hurricane Katrina is Current forecasts for global GDP growth are GrowthAustralian in the Dollar major exchange economies rate Source: against RBA Bulletin for continued, above-trend, growth, with the expected to have little sustained economic IMF forecasting 4.3 per cent growth in 2006, impact on the US economy as a whole. 160 following on from a similar rate in 2005. A rapid rise in housing prices in a number Index: June 2000=100 Around this benign outlook, however, there 140 are a number of risks. These risks relate of US regions has been a key factor driving largely to asset price bubbles in the US and household consumption over the past year China and low levels of saving and high or so. In California, for example, house 120 levels of debt in US households. In addition, prices have risen at an annual rate of over 20 per cent. This rise in home owner there are now concerns and some modest 100 signs that strong economic growth and wealth has driven spending, underpinned by the effect of high oil prices are beginning home equity-related borrowings. There is to put upwards pressure on infl ation and now some risk that signifi cant numbers of 80 infl ationary expectations and thus global homes are overvalued and, in the event interest rates. of house price falls, household spending 60 may slow signifi cantly. The US economy continues to grow 40 solidly... Japan’s recovery broadens Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 US GDP grew by 0.9 per cent in the Until recently Japan’s modest growth US Japan Euro-zone Aust September quarter for a solid annual growth has been driven by exports. However, Major stockmarket indices Source: RBA Bulletin rate of 3.6 per cent. Growth was broad- in a climate of improving consumer and based, though still driven by consumption. business sentiment and healthier corporate 90 0.85 balance sheets, domestic demand has • Continuing its pre-eminent role in the 85 begun to strengthen. GDP expanded by, an 0.80 US expansion, household consumption upwardly revised, 0.8 per cent in the June grew robustly by 1.0 per cent in the 80 quarter 2005 for an annual growth rate of 0.75 75 June quarter for an annual rise of 3.8 2.2 per cent. per cent. This refl ected durable goods 0.70 70 spending and was driven by moderate • Importantly, domestic demand made a TWI, Yen growth in employment and housing price strong contribution to growth in the June 65 0.65 US$, Euro related increases in household wealth. quarter, 0.6 percentage points of the 60 0.60 0.8 per cent growth rate. This refl ected • Business investment continued its 55 growth in private consumption and upswing as equipment and software 0.55 50 spending rose, driven by high levels non-residential investment. A modest 0.50 of retained profi ts and still low interest detraction from growth as inventories 45 moderated suggest further production rates. Investment rose by 0.6 per cent 40 0.45 in the quarter to be up 3.4 per cent over gains in future quarters. Net exports

the year. made their fi rst positive contribution to Oct-99 JOct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 economic activity in four quarters. This TWI Yen US$ Euro A pick-up in employment growth remains trade performance should improve as Australian Dollar exchange rate against the key to sustained US consumption demand for ITC continues to recover. 30 major currencies Source: RBA Bulletin Prospect Underpinning the improvement in Japan’s investment towards consumption to avoid Europe showing only modest signs of life economy is stronger employment growth, unsustainable levels of excess capacity, The pace of European economic growth which has boosted disposable incomes and investment growth continues unabated. has remained broadly stable over the past consumer confi dence. Employment grew China’s aggregate fi xed capital investment four quarters and remained modest in the by 0.5 per cent over the year to September growth was over 27 per cent in the year to June quarter of 2005. GDP rose by 0.3 per and unemployment has fallen to just over September, well above the offi cial target 4 per cent, its lowest level in seven years. cent, compared with 0.4 per cent in the fi rst of growth of around 16 per cent a year. Hiring expectations remain solid suggesting quarter. further gains in the job market. Non-Japan East Asia... improving after • Growth was driven primarily by changes Japan’s purchasing managers index, a 2004’s moderation in inventories, which contributed 0.2 leading indicator of manufacturing activity, Growth in the region has picked up percentage point to quarter-on-quarter stood at a seasonally adjusted 54.7 in moderately to 4.3 per cent in the year real GDP growth. October, the highest reading since August to June 2005 following the softening 2004, up from 54.5 in September. A reading • The contribution of the other above 50 suggests a business expansion experienced in 2004. components of domestic demand to while a reading below the 50 point threshold real growth was weak, or even absent. The region’s growth has recovered most indicates a contraction. In particular, the contribution of private strongly recently in Hong Kong and consumption to growth was zero, which Following June quarter growth of 3.6 per Singapore which have benefi ted from may partly refl ect the negative impact cent for an annual rise of 7.6 per cent, integration with China’s robust growth of rising oil prices on real income. investment intentions remain solid and, as and strength in the biomedical industry Investment growth increased from a reported in the September quarter Tankan respectively. Thailand’s growth rate has fall of 0.2 per cent in the fi rst quarter survey, were revised upwards, supported by benefi ted from a recovery in tourism improving corporate balance sheets, cost of 2005 to 0.2 per cent in the second following the tsunami-affected March quarter. However, this partly refl ected a cutting and rising profi tability. The ability quarter. of the banking sector to support rising rebound of the weather-related decline in construction in the previous quarter. growth through lending is also improving Following an improvement in global ITC as fi nance sector balance sheets continue product demand, key regional indicators to be repaired. • Gross capital formation made a have begun to show some signs of life. contribution of 0.1 percentage point Industrial production recovered to 7.2 per China... growth continues unabated... to GDP growth in the second quarter. with better balance cent in the year to August and merchandise Meanwhile, the contribution of net exports lifted to over 15 per cent in the exports declined to almost zero in the China’s economy continued to expand same period. second quarter. rapidly in the September quarter 2005 growing at an annual rate of 9.4 per cent Importantly for the sustainability of the • On the positive side, there have been as domestic consumption and fi xed capital recovery in the region, domestic demand signs of improving business sector data investment rose strongly. across the region has generally been fi rm. in more recent months with industrial High levels of capacity utilisation has been • In a welcome development, consumer production rising by 2.5 per cent over a stimulus to stronger investment and demand, as refl ected in retail sales, the year to August. Exports rose by over accelerated to 12.7 per cent over the retail sales have lifted, driven by rising 4 per cent in the year to August. In a year from 12 per cent over the year to employment, low interest rates and rising turnaround from recent performance it August. asset prices. appears that Germany is beginning to lead the way, though growth remains • Industrial production rose by 16.5 per High oil prices have put upwards pressure modest. cent over the year to September 2005. on regional infl ation rates, and this has been aggravated to some degree by • The UK economy has slowed rapidly as Recent strength in the domestic lower fuel subsidies in some economies. cooling housing price growth and higher components of demand is a positive sign in As a consequence there has been some interest rates constrain consumption. that it appears that some of the reliance on moderate tightening of monetary policy Softer domestic demand growth exports for China’s growth is lessening. This across the region. has been compounded by weaker rebalancing process needs to continue for merchandise exports. The labour China’s growth rate to be sustained. India, which, in purchasing price parity market has softened in consequence, While a rise in the importance of domestic terms, is now the world’s fourth largest with unemployment rising from a low demand is welcome there remain concerns economy, continues to grow solidly, 2.6 per cent in January to 2.8 per cent about the ongoing strength of investment recording GDP growth of 8.2 per cent in in September. On the positive side, growth. Despite the Chinese government’s the year to the June quarter, driven by the business and consumer sentiment aim of switching growth away from manufacturing and services sectors. remain solid. 31 Prospect THE BIG PICTURE Commodity trends

Currently, markets are characterised by Iron ore 1600 strong demand for some commodities Rising ocean freight rates place additional and unexpected weakness in others. Over cost burden for buyers in a market that 1400 the past year zinc and copper prices have has already realised substantial increases increased by close to 40 per cent and in iron ore prices. One factor contributing 35 per cent, respectively, on the year to to the inexorable rise in iron ore prices 1200 October. At the other extreme, nickel has is stronger than expected Chinese crude fallen 13 per cent and tin by 29 per cent. steel production. Despite the most recent 1000

In explaining such divergent movements, projections indicating China’s iron ore US$/t commodity analysts point to several output could be has high as 390 Mt for underlying dynamics. Price-induced year end 2005 growth in China’s iron ore 800 substitution away from copper and nickel imports is expected to continue. According is seen as particularly relevant in recent to the AME (Australian Mineral Economics), 600 times along with the increased use of scrap the strength in demand for iron ore is material in place of primary material. A manifesting in over-supply in domestic number of metals are also experiencing commodity-grade product markets. 400 substantial inventory reductions, based Baosteel, China’s largest steelmaker 01-Jul-03 01-Jul-05 01-Jul-04 01-Jan-03 01-Jan-04 01-Sep-03 01-Jan-05 01-Sep-05 01-Sep-04 01-Nov-05 01-Nov-04 01-Mar-03 01-Nov-03 01-Mar-05 01-May-05 01-Mar-04 01-May-04 partly on uncertainty about the direction of announced plans to expand production 01-May-03 specifi c markets in the immediate future capacity with current production, based on and also on cost pressures, particularly annualised fi gures to July, indicating total Zinc prices Source: LME Cash Official for downstream refi ners. Recent reports production in excess of 23 Mt this year. suggest some consolidation is likely as Expansion plans will increase capacity to 4250 some relatively less effi cient intermediate 30 Mt/a by end of 2008. producers may exit the market. 3750 US and Canadian crude steel production Capacity constraints and uncertainty about declined for the year to August, with both suppliers’ responsiveness to increasing inventories and capacity utilisation down. 3250 capacity are also beginning to show. Damage to port infrastructure in New Uncertainty, in particular, tends to feedback Orleans and rising Atlantic freight charges in the form of price volatility, obscuring is compounding this downward trend, 2750 underlying market signals for buyers and disrupting raw material fl ows. US$/t sellers alike. 2250 Moderating infl uences for aluminium? Oil prices still strong Aluminium daily prices have exhibited The West Texas Intermediate oil price substantial volatility for much of this year 1750 continued an upward trend in recent months peaking in March at US$2026/t followed reaching a peak of US$69.82/bbl, before by a trend decline to US$1691/t in July 1250 easing back somewhat to US$63.21/bbl only to rise again to US$1993/t in October. 01-Jul-05 01-Jul-04 01-Jul-03 01-Jan-03 01-Jan-05 01-Jan-04 01-Nov-05 01-Sep-04 01-Sep-03 01-Nov-04 01-Nov-03 01-Sep-05 01-Mar-03 01-Mar-05 01-Mar-04 01-May-03 01-May-05 by mid-October. Recent softening follows Unwrought aluminium inventory statistics 01-May-04 reassessment of the supply-side impacts published by the International Aluminium including that of hurricanes Katrina and Institute show a 7 per cent increase in Copper prices Source: LME Cash Official Rita. However, prices are still well above inventories at the end of September 2005 longer-term averages with future price compared with September 2004, but follows 75.00 trends uncertain. Supply-side disruptions in a 138 thousand tonne inventory reduction oil production coincide with unusually low from a peak of 1,912 thousand tonnes at 65.00 levels of spare capacity. Recent falls in Iraqi the end of August. The increase in inventory production further reduced spare capacity over the previous 12 months coincides with output down 0.4 million barrels per with a 5 per cent production increase in 55.00 day from 2.5 million barrels per day in late primary aluminium for 12 months to the 2004. Prices remain sensitive to unexpected end of September and a 3 per cent increase events, particularly geopolitical instability. in production capacity between December 45.00 2004 and June 2005. Ironically, the diffi culties caused by capacity US$/bbl (WTI) 35.00 constraints are not refl ected in world oil According to Macquarie Research, reserves. According to the Statistical Review the September inventory drawdown of World Energy, the world’s proven oil is substantially larger than normally 25.00 reserves are currently estimated at 1.19 experienced following the Northern trillion barrels. The IEA (International Hemisphere summer shut down. Energy Agency) estimates that remaining With reduction in total reported stock 15.00 oil resources could last 70 years from 2003. (equivalent to 6-7 weeks of Western world 01-Jul-02 01-Jul-03 01-Jul-04 01-Jul-05 01-Jan-02 01-Jan-03 01-Jan-04 01-Jan-05 01-Sep-02 01-Sep-03 01-Sep-04 01-Sep-05 01-Mar-05 01-Nov-02 01-Nov-03 01-Nov-04 01-Nov-05 01-Mar-04 01-Mar-02 01-Mar-03 01-May-02 01-May-03 01-May-04 However, with much of this located in the consumption) the price of alumina and 01-May-05 Middle East, higher petroleum prices are rising energy cost will be key determinants High oil prices pressure stimulating exploration elsewhere. of near term aluminium price movements. Source: EIA (Official Energy Statistics from the US Government) 32 Prospect 2,200 Increasing electricity cost is leading to for the 12 months to October, the copper closure of smelters – particularly in Europe market reached an all time high before – although in the longer term increased 2,000 sustaining a substantial correction in late smelter capacity is expected in the Middle October and in the process, wiping out gains East, Russian Federation and India. Lower made during the month. As reported by 1,800 exports of aluminium from China are ABARE (Australian Bureau of Agricultural also expected to tighten supplies in world and Resource Economics) world copper markets placing upward pressure on prices. 1,600 prices averaged US$3430/t on average, US$/t which is 20 per cent higher than the average In the case of alumina, there have been 2004 price. In response to high prices, the reductions in forecasts for global refi nery 1,400 International Copper Group reported world capacity growth with supply projections refi ned copper consumption declined for the by analysts showing that new projects January to July 2005 period. Indeed, Asia 1,200 are not coming into production as quickly as envisaged. This leaves the required was the only region recording aggregate utilisation rate at alumina refi neries globally consumption increases with China and India 1,000 well above normal levels in 2006 which increasing by 15 per cent and 10.5 per cent, implies continuing strength in prices and respectively, while Japanese consumption 02-Jul-02 02-Jul-03 02-Oct-02 02-Jan-03 01-Apr-03 02-Apr-02 02-Oct-03 02-Jan-02 02-Apr-04 02-Jul-04 02-Apr-05 02-Jul-05 02-Oct-05 02-Jan-04 02-Oct-04 02-Jan-05 places Chinese aluminium producers, who decreased by 7 per cent, South Korean Aluminium daily prices Source: Metal Prices are the most exposed to the spot market, consumption by 10 per cent and Taiwanese under pressure. Another year of strong spot consumption 11 per cent. ABARE reports 19,000 prices will give sellers of alumina under consumer destocking in the US and Europe contract another opportunity to push for in response to high copper prices. 18,000 a higher linkage to LME (London Metal Sustained construction activity in the US 17,000 Exchange) prices in any contracts which are coming up for renewal. is helping to underpin strong demand as 16,000 construction spending increased by 10 Zinc per cent. Reconstruction activity following 15,000 Hurricane Katrina’s infl uence extended hurricane Katrina may add to demand for

US$/t to the zinc market in September with copper. China is also adding substantial 14,000 248 kt of zinc stocks trapped in New Orleans demand for copper derived from rapid 13,000 warehouses suspended from trading growth in production of power generating on the LME. The temporary shortage equipment. AME reports a 90 per cent 12,000 added upward impetus to already rapidly increase in power generating capacity, rising zinc prices, which have risen by accounting for 46 per cent of copper 11,000 approximately 40 per cent for the 12 months consumed while manufacture of copper- 10,000 to October. consuming household goods grows at 14 per cent per annum.

31-Jul-04 On the demand side, over half of global zinc 31-Jul-05 31-Oct-04 01-Oct-05 30-Apr-04 31-Apr-05 31-Jan-04 28-Feb-05 31-Jan-05 30-Jun-04 30-Sep-04 29-Feb-04 30-Jun-05 30-Nov-04 31-Dec-04 31-Mar-05 31-Aug-04 31-Dec-03 31-Aug-05 30-Sep-05 31-Mar-04 31-May-04 31-May-05 supplies are consumed by the galvanising Nickel Nickel prices Source: Metalprices industry. The proportion of zinc use in In contrast to copper, nickel prices have galvanising to other uses is highest in Japan exhibited mixed fortunes in 2005, rising 85 and South Korea, which according to AME, accounts for 65 per cent of zinc consumed by some 40 per cent from the end of May 2004 to the end of May 2005, peaking 75 in those countries. China uses relatively less for galvanising, accounting for only at US$17,650/t. Prices then dropped 43 per cent of total Chinese consumption. sharply to US$14,520/t by the end of June, 65 However, China’s galvanising capacity has thereafter following a rather volatile path grown at a compound average growth rate to US$12,120/t by mid-October. Much of 55 of 24 per cent since 1995. With Wuhan Iron the early price reduction (in the June-July and Steel and Tangshan adding additional period) coincides with declining stainless 45 hot dip galvanising capacity, strong growth steel production in the US and Europe while in Chinese demand for zinc is expected China reduced stockpiles in preference to $US cents/dltu to continue into the foreseeable future. increasing imports. 35 The rapid expansion of the automotive manufacturing industry in Central and Moving forward, ABARE expects nickel 25 Eastern Europe adds additional demand and production to exceed supply in 2006 and at least partially offsets declines in the US for further supply increases in 2007 to 15 and EU. place downward pressure on nickel prices. 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 However, despite the downward trend Lump Fines Yandi Fines Robe Fines An all-time high for copper forecast, ABARE warn that signifi cant Iron ore prices get a boost After 16 months of upward trending prices disruptions to production could cause nickel Source: TEX Report, AME and after having gained some 35 per cent prices to escalate. 33 Prospect

Signifi cant resource projects underway Visit us online or planned in Western Australia

Western Australia continues to lead the way as Australia’s No.1 Prospect can be downloaded free of resources investment destination, with more than $57 billion worth charge from the Internet by visiting the of projects either underway or planned for the State over the next few website of the Department of Industry years. This will bring tremendous benefi ts to the State including more and Resources at: www.doir.wa.gov.au than 31,000 additional construction and 8000 full-time jobs.

Project Employment value Prospect (estimated A$m) Construction Permanent Iron and steel Subscription/Change of address ABN: 69 410 35 356 BHP Billiton’s future growth strategy 4200 900 150 Fortescue Metals Group’s mine, rail and port proposal 2400 1500 300 Gindalbie Metals’ mine and pellet plant 720 200 175 Grange Resources’ Southdown magnetite mine 560 n/a n/a Name: Hamersley Iron’s port, rail and power upgrades 920 835 200 Hamersley Iron’s Yandicoogina expansion 700 650 330 Hancock Prospecting’s Hope Downs iron ore mine 1000 1000 300 HIsmelt’s pig iron and steel plant 800 320 65 Midwest Corp’s Koolanooka mine and pellet plant 1000 1200 270 Position: Midwest Corp’s Weld Range mine 800 900 220 Mineralogy’s Cape Preston mine and pellet plant 1400 2000 400 Mt Gibson/Asia Iron’s Extension Hill magnetite project 620 400 210 Organisation: Robe River’s mine, rail and port upgrades 719 750 380 Robe River’s West Angelas mine expansion 217 200 300 Sub total 16056 10855 3300 Address: Nickel/cobalt BHP Billiton’s Ravensthorpe mine 1800 1400 325 Heron Resources’ Goongarrie mine 1400 1000 300 Sub total 3200 2400 625 Petrochemicals Type of business: Agrium’s ammonia urea plant 900 100 300 Burrup Fertilisers’ ammonia plant 630 1100 60 Dampier Nitrogen’s ammonia-urea plant 900 1000 130 Phone number: Deepak Fertilisers’ ammonia nitrate plan 399 200 150 Sub total 2829 2400 640 Email Oil, gas and condensate BHP Billiton’s Onslow LNG plant 4000 2500 150 Please tick the appropriate box Chevron’s Gorgon gas/condensate development 11000 3000 600 Please add me to your mailing list to receive Prospect magazine. I would like a subscription for North West Shelf JV’s LNG Train-5 2000 1500 20 one year @ $12 (incl. GST) Roc Oil’s Cliff Head oil development 240 300 15 two years @ $22 (incl. GST) Santos’ Tern–Petrel gasfi eld development 1000 n/a n/a three years @ $32 (incl. GST) Woodside’s Angel gas/condensate development 1600 n/a n/a Woodside’s Enfi eld oil development 1480 100 80 Woodside’s Pluto LNG plant 5000 1500 150 My cheque made out to the Department of Industry and Sub total 26320 8900 1015 Resources, is enclosed OR please debit the amount to my credit card using the following details: Other Type of card: Visa Bankcard Mastercard Alcoa’s Pinjarra alumina refi nery optimisation 440 1000 n/a Alcoa’s Wagerup refi nery Train-3 expansion 1500 1000 150

Alinta’s Pinjarra power station 320 280 n/a Expiry date Argyle Diamonds’ underground mine 850 250 500 This form will become a tax invoice for GST purposes when payment is made. BGM’s Boddington Wandoo gold mine expansion 1500 750 400 Change of address Griffi n Energy’s coal-fi red power station 400 250 40 (please make changes required on one of your old labels). Lyondell’s titanium dioxide pigment plant expansion 470 500 200 Ord irrigation (Stage 2) project 600 650 550 Please photocopy or cut coupon and mail to: Transfi eld’s gas turbine power plant 260 n/a 400 Prospect subscriptions Information Centre Worsley’s refi nery expansion 900 500 150 Department of Industry and Resources Sundry projects — at least another 2000 2000 300 Mineral House, 100 Plain Street Sub total 9240 7180 2690 East Perth, Western Australia 6004 TOTAL 57645 31735 8272 Committed Projects (as at 15/11/2005)

AMMONIA/UREA the fi rst quarter of 2006. At the expanded rate of 8 Mt/a, at new pit at Junction South East, new crushing and Koolyanobbing is expected to have a mine life of 11.5 screening plant and a new overland conveyor. Burrup Peninsula - Ammonia Plant years. This is based on a reserve estimate of 91.8 million Expenditure: $700m. BURRUP FERTILISERS PTY LTD tonnes. Employment: Construction: 330; Operation: 650 Burrup Fertilisers is building an ammonia plant at the Expenditure: $75m. King Bay/Hearson Cove industrial area on the Burrup Peninsula, near Karratha. Around 760,000 t/a of liquid Pilbara - Dampier Parker Point Port Expansion IRON ORE PROCESSING ammonia will be produced and exported to India and HAMERSLEY IRON PTY LIMITED Kwinana - HIsmelt Commercial Iron Making Plant other world markets for the manufacture of fertilisers. Hamersley Iron is currently expanding the capacity of its HISMELT CORPORATION LIMITED Norsk Hydro is the shipping and marketing agent for port facilities at Parker Point (near Dampier) from 74 Mt/a HIsmelt Corporation, in a joint venture with Nucor (25%), the ammonia produced. SNC-Lavalin Australia Pty Ltd, to 95 Mt/a. This work includes a new car dumper, new rail Mitsubishi (10%) and Shougang (5%), is developing a is the EPC contractor and Sinclair Knight Merz the loop and construction of two new berths with a new ship commercial-scale HIsmelt process plant at Kwinana, environmental management consultant for the project. loader, as well as expansion of the stockpile facilities. near Perth. The fi rst stage of the plant will produce The Harriet Joint Venture has an agreement to supply Completion is expected by the end of 2005. 800,000 t/a of pig iron from iron ore fi nes, coal and fl uxes. 82 TJ/d of natural gas to the project. Construction Hamersley has committed to a further capacity expansion Construction commenced in January 2003, with fi rst commenced on 30 April 2003 and production is planned to 116 Mt/a and is conducting feasibility studies to further to start in Q3 2005. In April 2005, Yarra International, hot metal production in mid-2005. Commissioning is expand to a capacity of 140 Mt/a with the addition of a continuing. a Norwegian fertiliser company bought a 30 percent second new car dumper. shareholding in this ammonia plant. Expenditure: $800m. Expenditure: $920m. Expenditure: $630m. Employment: Construction: 320; Operation: 65 Employment: Construction: 800; Operation: 200 Employment: Construction: 1100; Operation: 60 Pilbara - Power Infrastructure Enhancement NICKEL BAUXITE/ALUMINA HAMERSLEY IRON PTY LIMITED Ravensthorpe - Lateritic Nickel Mine and Hydro- Pinjarra/Huntly - Alumina Refi nery Effi ciency Hamersley Iron intends to install up to two additional metallurgical Processing Plant Upgrade to 4.2Mtpa 35 MW gas turbine generators at Paraburdoo to increase BHP BILLITON - RAVENSTHORPE NICKEL OPERATIONS ALCOA WORLD ALUMINA AUSTRALIA generating capacity in the Pilbara. The company also PTY LTD Alcoa commenced construction in April 2004 on an intends to convert an existing diesel-fi red gas turbine On 23 March 2004, BHP Billiton approved the effi ciency upgrade of its Pinjarra alumina refi nery to generator to duel fuel capability. Gas to these turbines development of the Ravensthorpe Nickel Project that will increase capacity by 0.6 Mt/a to a total 4.2 Mt/a. The will be supplied by an 18 km pipeline spur from the produce up to 220 000 t/a of mixed nickel/cobalt hydroxide expansion construction is about 90% complete, with the Goldfi elds Gas Transmission pipeline to the Paraburdoo to be processed at QNI’s Yabulu refi nery in Queensland. mine site. Hamersley is also undertaking several high- additional alumina capacity planned to come on stream Plant construction is expected to take 30 months and the voltage transmission projects to cater for increase power early in 2006. fi rst shipment of product from Esperance to Yabulu is to demand, including installing a 220 kV transformer at Expenditure: $440m. commence in early 2007. the Yandicoogina substation to meet the power needs Employment: Construction: 1000 of the current 36 Mt/a mine expansion. Another project Expenditure: $1.8b. Worsley - Worsley Refi nery Expansion to 3.5 and involves construction of a substation to interconnect Employment: Construction: 1400; Operation: 325 then 3.7 Mt/a the company’s Dampier-Tom Price 220 kV transmission WORSLEY ALUMINA PTY LTD line and the Robe River Cape Lambert-Pannawonica OIL & GAS DEVELOPMENTS 132 kV transmission line, at a point where they cross, BHP Billiton’s Worsley alumina refi nery has environmental Cliff Head (Perth Offshore Basin) - Oil Field approximately 75 km south of Karratha. approval to expand capacity to 3.5 Mt/a through its ROC OIL (WA) PTY LTD Employment: Construction: 35 Development Capital Program. This additional capacity The development of the Cliff Head oil fi eld, located should be commissioned by Q1 2006. Worsley also has Pilbara - Rail Duplication from Tunkawanna to 20km southwest of Dongara, was formally approved in environmental approval to expand production to 3.7 Mt/a. Rosella Siding March 2005. The fi eld will be developed using a small, and this will achieved over time by production creep. ROBE RIVER MINING COMPANY PTY LIMITED normally unmanned, offshore platform with a 15,000 Expenditure: $257m. Robe River Mining is currently expanding the capacity of bbl/d design capacity. A processing plant will be located Employment: Construction: 100 its rail facilities by duplication of Hamersley Iron’s railway onshore at Arrowsmith. Proven and probable oil reserves between Tunkawanna Creek and Rosella Siding, which is are estimated to be about 14 million barrels. First oil COPPER operated by Pilbara Iron Pty Ltd on behalf of Robe River production is scheduled to fl ow in the fi rst quarter of East Pilbara – Nifty Underground Expansion and Hamersley Iron. Expected completion is mid-2006. 2006, at an initial rate in excess of 10,000 bbl/d. Cliff Head Birla is currently expanding the Nifty Copper Operation Expenditure: $200m. will be the fi rst oil fi eld to be developed in the offshore in the East Pilbara to include an underground mining Perth Basin. operation from the base of the existing open cut. The Pilbara - Rapid Growth Project 2 Expenditure: $240m. expansion will include an on-site processing facility to BHP BILLITON IRON ORE PTY LTD Enfi eld (Carnarvon Offshore Basin) - Oil Field produce copper concentrate. The copper concentrate will In October 2004, BHP Billiton announced Board approval be trucked to Port Hedland and shipped from an 18,000 for the US$575 million Rapid Growth Project 2 (“RGP2”) WOODSIDE ENERGY LTD tonne fully enclosed storage facility to be built by Birla on which will increase production capacity of its Pilbara iron Development of the Enfi eld project was approved in March land leased from the Port Hedland Port Authority. The ore operations to 118 Mt/a in the second half of 2006. 2004. The oil fi eld will be developed via subsea wellheads underground mine will have an annual throughput of 2.5 Expenditure: $745m. with fl owlines tied back to a fl oating production, storage million tonnes with an extension to the life of mine of and offl oading (“FPSO”) vessel with disconnectable 10-12 years. Pilbara - Rapid Growth Project 3 mooring. After stabilisation, export crude oil will be Expenditure: $200m. BHP BILLITON IRON ORE PTY LTD produced on board the FPSO and periodically exported Employment: Construction 160; Operation: 90 In October 2005, BHP Billiton announced its Board through an offl oading hose to tandem moored offtake approval of the US$1.3 billion Rapid Growth Project 3 tankers. The facilities are designed for 20 years operation, ELECTRICITY (“RGP3”) expansion which will increase capacity of its with production expected to start up in Q4 2006. Kemerton Industrial Park - Kemerton Gas Turbine Pilbara iron ore operations to 129 Mt/a. The key elements Expenditure: $1.48b. of RGP3 comprise the expansion of Area C, additional Power Plant Employment: Construction: 100; Operation: 80 sidings on the Newman railroad, and port works at TRANSFIELD SERVICES Nelson Point and Finucane Island. Initial production is North West Shelf - Project Expansion - 5th LNG The Kemerton Power Station is the result of a competitive forecast to begin in Q4 2007, with actual production of Train bidding process to supply Western Power with 260 MW 129 Mt/a anticipated to be achieved by 2008/2009. WOODSIDE ENERGY LTD of peak generating capacity over the next 25 years. The Expenditure: $1.7b. plant, to be owned and operated by Transfi eld Services, A fi nal investment decision for the 4.2 Mt/a Train 5, will be an open cycle gas turbine and be capable of Employment: Construction: 900; Operation: 150 with an associated second LNG loading jetty and extra using diesel fuel as a back up. Construction of the Pilbara - West Angelas Mine Expansion to 25 Mt/a processing facility support, was announced in June 2005. Site work started in Q3 2005. The project is expected plant begun in Q2 of 2004 and was offi cially opened in ROBE RIVER MINING CO PTY LTD November 2005 before the start of the 2005/06 summer to take approximately three years to complete, with peak electricity demand period. In addition to the A$260 Robe River is currently expanding operations at its commissioning due to start around mid-2008 and fi rst West Angelas mine to increase production from 20 million capital expenditure on the plant itself up to LNG cargoes planned from Q4 2008. Mt/a to 25 Mt/a. The increase in production will be A$40 million will be spent on connecting the plant to Expenditure: $2b. the South West Interconnected System, upgrading the achieved through an increased mining rate at Deposit A, Employment: Construction: 1500; Operation: 20 Kemerton substation and building a terminal substation minor plant modifi cations, an expansion to the product at Hazelmere in the eastern suburbs of Perth. stockyard, minor increases in supporting infrastructure and purchase of additional mobile equipment. Further POWER STATIONS Expenditure: $260m. capacity expansion is under consideration Pinjarra - Gas Fired Cogeneration Power Project Employment: Operation: 400 Expenditure: $217m. ALINTA IRON ORE Employment: Construction: 200; Operation: 300 Alinta is constructing two 140 MW gas-fi red cogeneration Koolyanobbing - Iron Ore Project Yandicoogina - Mine Expansion units at Alcoa’s Pinjarra refi nery site. The units will provide Alcoa with process heat for current and future PORTMAN LIMITED HAMERSLEY IRON PTY LIMITED capacity increases as well as electricity for sale into the Hamersley Iron has committed to expand operations at its In October 2004, the Portman Board approved an local market. Unit 1 commenced construction in February expansion of its Koolyanobbing operations to increase Yandicoogina mine to increase production from 36 Mt/a 2004 and is expected to be completed in late 2005, with iron ore production from 5 Mt/a to 8 Mt/a. This expansion to 52 Mt/a. Hamersley has recently expanded the current Unit 2 scheduled for completion in September 2006. is primarily driven by the “Northern Tenements” operation by establishing a new wet processing plant (to resources at Windarling and Mt Jackson. The upgrade process low grade ore), an overland conveyor and tertiary Expenditure: $320m. in expansion capacity is expected to be completed by crushing/screening facilities. The new expansion involves Employment: Construction: 280 36 Prospect Projects Under Consideration (as at 15/11/2005)

AGRICULTURE Worsley/Boddington - Alumina Refi nery Expansion facilities and waste rock dumps. KCGM is in the process to 4.4Mt/a of identifying all relevant issues in a Project Defi nition Mantinea Flats - Ord River Irrigation Scheme (Stage Document for submission to the EPA. 2 Development) WORSLEY ALUMINA PTY LTD Employment: Operation: 1043 The conceptual project consists of developing and BHP Billiton is considering an expansion of its Worsley servicing approximately 80 farms (about 4200 ha total) at alumina refi nery from 3.7 Mt/a to 4.4 Mt/a. Final Sunrise Dam - Gold Mine - Underground Mantinea Flats for irrigated intensive horticulture which environmental approval is expected be in place by the end Development will then be offered for sale. of Q1 2006. A fi nal investment decision is dependent on market conditions. ANGLOGOLD AUSTRALIA LTD Ord River - Ord River Irrigation Scheme Expenditure: $900m. AngloGold Ashanti commenced underground development in October 2003 at the Sunrise Dam gold ORD STAGE 2 M2 AREA Employment: Construction: 500; Operation: 150 The potential exists for a 30 000 ha irrigated agricultural mine to test the feasibility of expanding to underground development immediately to the northeast of the existing COAL operations. The study involves the development of two Ord Stage 1 development. Environmental approval has been declines totalling 9 km in the vicinity of previously defi ned given for an irrigated agricultural project in the M2 area. Collie - Coal Mine (Ewington I) reserves. The fi rst underground gold was produced in A signifi cant milestone was passed on 6 October 2005 THE GRIFFIN COAL MINING COMPANY PTY LIMITED Q4 2004. The company expects to make a decision on when a historic native title agreement between the Griffi n Coal plans to develop its Ewington I deposit whether to proceed to full-scale underground mining in State Government, Miriuwung Gajerrong traditional approximately 2 km east of Collie, which has estimated early 2007. A positive decision is expected to increase the owners and private developer interests was reached. The recoverable reserves of 75 Mt. Environmental approval life of the project to at least 2012. agreement has resolved native title over approximately has been given, subject to acceptance of a fi nal Expenditure: $87m. 65,000 hectares of land that is earmarked for future environmental management plan. The mine will produce agricultural, industrial and residential development about 2 Mt/a coal for private sector customers, including HEAVY MINERAL SANDS while providing sustainable education, training, job and the Griffi n Group’s proposed nearby Bluewaters power Jangardup South - Mineral Sands Mine business opportunities for the Aboriginal people. Further, station. CABLE SANDS (WA) PTY LTD Aboriginal heritage studies have been completed over Expenditure: $20m. the Ord Stage 2 M2 and Green Swamp areas. Finally, the Cable Sands has outlined a major titanium minerals State has received and is considering an Ord Business DIAMONDS orebody adjacent to the D’Entrecasteaux National Park. Case report that, among other things, investigated and Feasibility and environmental studies are well advanced. reported on current engineering costs for Ord Stage 2 Argyle - Underground Diamond Mine An environmental impact statement for the project is M2, crop options, benchmarking these crop options on ARGYLE DIAMOND MINES PTY LIMITED being prepared. a world scale and compared the cost of a staged versus Argyle Diamonds is undertaking a $100 million feasibility Expenditure: $40m. a single full development of the Ord Stage 2 M2 area. study to investigate the potential for an underground mine Employment: Construction: 100; Operation: 50 Possible crops include sugar, cotton, leucaena and at Argyle. The feasibility study will be completed by late horticultural crops. 2005. Full production for Stage 1 (7-8 Mt/a ore extraction) Kemerton - Titanium Dioxide Pigment Plant Expenditure: $600m. would be reached in 2011 with an average of around 17 Expansion Employment: Construction: 650; Operation: 550 Mcts per annum diamond production until 2018. The LYONDELL CHEMICAL COMPANY second stage project will extend mine life to 2024. Lyondell has approval for a major expansion of its AMMONIA/UREA Expenditure: $850m. Kemerton titanium dioxide pigment plant near Bunbury to Burrup Peninsula - Ammonia Urea Plant Employment: Construction: 250; Operation: 500 190,000 t/a. Environmental approval for the proposal was DAMPIER NITROGEN given in April 1999. A decision to proceed to this capacity A Joint Venture has been formed between Dampier ELECTRICITY is dependent on market factors. Nitrogen and Dyno Nobel to develop an ammonia/urea Collie - Bluewaters Coal-Fired Power Station Expenditure: $470m. project on the Burrup Peninsula. Under the JV Dyno Employment: Construction: 500; Operation: 200 Nobel and Dampier Nitrogen will co-own the ammonia GRIFFIN ENERGY plant while Dampier Nitrogen will own the urea plant. Griffi n Energy is proposing to construct two 200MW Kwinana - Titanium Dioxide Pigment Plant Dyno Nobel is also conducting a feasibility study into coal-fi red power stations at the proposed Coolangatta Expansion developing an ammonium nitrate production facility, to industrial estate, 10 km north-east of Collie. The TIWEST JOINT VENTURE proposals have been through a Public Environmental be owned by Dyno Nobel, adjacent to the ammonia/urea Environmental approval for the staged expansion of a plant. The development agreement could result in a Review level of assessment and an investment decision is pigment plant capacity to 180,000 t/a has been given. combined complex producing 2300 t/day of ammonia, not expected till the fi rst half of 2006. A decision to proceed with further stages within this 1750 t/day of urea and 235,000 t/a of ammonium nitrate. Expenditure: $400m. approved expansion is dependent on market conditions. Expenditure: $900m. Employment: Construction: 250; Operation: 45 Employment: Construction: 108; Operation: 98 Employment: Construction: 1000; Operation: 130 Peel - Heavy Mineral Sands Mine Burrup West - Ammonia Urea Plant GALLIUM OLYMPIA RESOURCES LTD AGRIUM AUSTRALIA Pinjarra - Gallium Extraction Plant Olympia has identifi ed a reserve of 1.17 million tonnes Agrium Australia Ltd (Agrium) is proposing to develop a GEO SPECIALTY CHEMICALS INC. of heavy mineral sands near Keysbrook, about 70 km A$900 million world-scale ammonia and urea plant on In March 2001, GEO Speciality Chemicals Inc of the USA south of Perth. The regulatory approval process has a 69 ha site on the Burrup West Industrial Estate. The announced plans to construct a major new gallium metal been initiated and land access and product off-take plant is expected to require approximately 100 TJ/d of extraction facility at Pinjarra, south of Perth, on the site agreements are under negotiation. natural gas to produce around 1.2 Mt/a of granular urea of the former Rhodia gallium chloride plant. The facility and 100,000 t/a of ammonia. In December 2004, Agrium is planned to have an ultimate capacity of 100 t/a of Final detailed mine planning and project capital costing commenced its project environmental approval process. ‘4N’ gallium metal. The gallium will be extracted from are near completion and Olympia plans to start mining in Plant construction is planned to start in Q1, 2007. the Bayer liquor stream generated in Alcoa’s adjacent late 2006. Expenditure: $900m. alumina refi nery. Timing is dependent on favourable Shark Bay - Coburn - Heavy Mineral Sands Mine market conditions and statutory approvals. Employment: Construction: 1000; Operation: 130 GUNSON RESOURCES LIMITED Expenditure: $75m. AMMONIUM NITRATE Gunson Resources completed a bankable feasibility study Employment: Construction: 150; Operation: 50 on the Coburn Project, located south of Shark Bay, about Burrup Peninsula, former Syntroleum site - 600 km north of Perth, in December 2004. The project Ammonium Nitrate GOLD consists of the Amy deposit which has a total indicated DEEPAK FERTILISERS Boddington - Gold Mine (Wandoo Expansion) and inferred resource estimated to be 710 million Deepak is investigating the feasibility of an ammonium BGM MANAGEMENT COMPANY PTY LTD tonnes, averaging 1.4% heavy minerals. Development of nitrate complex on the Burrup Industrial Estate for the project is subject to Gunson gaining environmental a plant capacity of 200,000t/a of ammonium nitrate, Boddington Gold Mine is managed by BGM Management Company Pty Ltd on behalf of Newmont, AngloGold approvals, offtake and funding arrangements. Gunson 170,000t/a of nitric acid with the option to either produce anticipates that mining will commence in late 2006. or import 100,000t/a ammonia. and Newcrest. BGM has environmental approval for the expanded Wandoo project, based on mining the extensive Expenditure: $75m. Expenditure: $399m. bedrock resource that underlies the mined-out oxide Employment: Construction: 200; Operation: 20 Employment: Construction: 700; Operation: 150 resource to produce up to 800,000 ounces of gold and BAUXITE/ALUMINA about 20,000 tonnes of copper concentrates per annum IRON ORE over a 17 year mine life. The project may include a Cape Lambert - Cape Lambert Capacity Expansion Wagerup/Willowdale - Alumina Refi nery Train 3 dedicated 120 MW gas-fi red power station. Project go- and Stockyard Rationalisation Expansion ahead is subject to commercial factors. ROBE RIVER MINING COMPANY PTY LIMITED ALCOA WORLD ALUMINA AUSTRALIA Expenditure: $1.5b. Robe River Mining is considering expansion of the Alcoa is investigating the feasibility of a third train Employment: Construction: 750; Operation: 400 expansion at its Wagerup alumina refi nery for a plant capacity of its port facilities at Cape Lambert, east of capacity of up to 4.7 Mt/a of alumina. The environmental Kalgoorlie - Kalgoorlie - Super Pit - Golden Pike Karratha. The expansion and rationalisation works will assessment process is in progress with an Environmental Cutback lift the design iron ore export capacity of the facilities to Review and Management Program released in May 2005. KALGOORLIE CONSOLIDATED GOLD MINES PTY LTD 69 Mt/a. This work includes expansion of the stockpile Final environmental approvals are expected by the end KCGM is planning to extend the life of its open-cut mine stacker and reclaimer facilities and a Tug Pen at the port of Q1 2006. from 2012 to 2017 with the Golden Pike Cutback. This to provide haven for up to four tugs. Expenditure: $1.5b. involves the mine moving closer to the Kalgoorlie town Expenditure: $302m. Employment: Construction: 1000; Operation: 150 centre and the need to develop additional tailings storage Employment: Construction: 70; Operation: 450 37 Prospect Projects Under Consideration (as at 15/11/2005)

Great Southern Region - Southdown Magnetite - Iron Mt/a magnetite concentrate and/or pellets. The project be serviced by a multi-user railway and new port facilities Ore Mine is expected to include gas and water pipelines and a at Port Hedland. Stage A of the project which consists of GRANGE RESOURCES LIMITED dedicated 120 MW gas-fi red power plant. A scoping the north-south railway and port facilities has received Grange Resources Limited is undertaking a bankable study is currently underway and is due to be completed environmental approval. Stage B - the east-west railway feasibility study on the Southdown magnetite iron in December 2005. The company anticipates production and the mine developments - and a separate mining ore project, located approximately 90 km north-east will commence in 2010/2012, following the completion of proposal at Cloudbreak are currently being assessed of Albany. The study is expected to be completed by successful pre-feasibility and bankable feasibility studies. by the EPA. A detailed feasibility study of the mining early 2006, and the company anticipates that, subject Expenditure: $1b. operations is in preparation for completion in late 2005. to government approval, construction will commence Employment: Construction: 1200; Operation: 270 Construction on the rail and port facilities is planned to in the second half of 2006. In September 2005 Grange start in mid 2006 to supply the Chinese market from early Mid West Region - Koolanooka/Blue Hills Hematite announced an interim indicated and inferred (JORC) 2008. Iron Ore Mine resource estimate of 426.2 million tonnes of magnetite. Expenditure: $2.4b. The company proposes to produce 6.6 Mt/a of magnetite MIDWEST CORPORATION LIMITED Employment: Construction: 1500; Operation: 300 concentrate, which will be transported via a slurry Midwest Corporation proposes to re-open the Koolanooka pipeline to the Port of Albany for export and pelletising and Blue Hills hematite iron ore mines about 160 km Pilbara - Rapid Growth Project 4 overseas. The EPA has set a level of assessment at Public south-east of Geraldton, near Morawa, at an initial rate BHP BILLITON IRON ORE PTY LTD Environmental Review, with the Environmental Scoping of 1 Mt/a. The company plans to initially ship the fi nes Further to Rapid Growth Projects (“RGP”) 1, 2 and 3, Document lodged in November 2005. stockpiles, commencing in December 2005, before BHP Billiton proposes to expand the production capacity Expenditure: $560m. starting hard rock mining at Koolanooka in mid-2007 and of its Pilbara iron ore operations to nominally 152 Mt/a, Employment: Operation: 200 at Blue Hills in 2008. Midwest Corporation will transport subject to Board and Government approvals. RGP4, which the ore by road from the Koolanooka minesite to the is focussed on expanding the Newman operations, is Hope Downs - Iron Ore Mine Port of Geraldton. The NOI for the shipping of the fi nes currently in the feasibility stage. HOPE DOWNS LIMITED stockpile has been submitted. Expenditure: $1.8b. Hancock Prospecting has entered into a 50:50 joint Expenditure: $26.4m. venture with Hamersley Iron (Rio Tinto) to develop the Employment: Construction: 40; Operation: 60 IRON ORE PROCESSING project. Up to 30 Mt/a of iron ore will be transported Fortescue (Cape Preston) - Mine and Pellet Plant along a spur line to be constructed to connect to the Mid West Region - Weld Range Iron Ore Mine West Angelas mine of Rio Tinto, for transport of product MIDWEST CORPORATION LIMITED MINERALOGY PTY LTD to either Dampier or Cape Lambert for export. Final Midwest Corporation proposes to develop a 15-20 The fi rst project based on the Fortescue magnetite approvals for the amended project are expected by the Mt/a iron ore mine at Weld Range 65 km south-west of deposit is expected to be a 7 Mt/a pellet plant. The end of 2005. Meekatharra, producing a mix of hematite lump, fi nes and project involves mining, concentrating through magnetic Expenditure: $1b. possibly concentrate. The project is expected to include separation, pelletising and export through new port facilities at Cape Preston. Mineralogy has entered into Employment: Construction: 1000; Operation: 300 a new standard gauge 350 km rail line and a new deep water port facility near Geraldton. A go-ahead for the a number of Memorandums of Understanding with Jack Hills - Iron Ore Mine project is dependent on commercial and market factors. Chinese companies which could see a number of projects MURCHISON METALS LIMITED The company is to conduct an extensive drilling program producing concentrate, pellets and DRI developed. Murchison Metals proposes to develop an initial 1.5 Mt/a late 2005/early 2006 with a pre-feasibility study to be Environmental approval has been granted. (Stage 1) direct shipping iron ore mine at Jack Hills, 380 completed mid 2006 and project start-up aimed for 2010. Expenditure: $1.4b. km north-east of Geraldton. The company intends to Expenditure: $800m. Employment: Construction: 2000; Operation: 400 crush and screen the ore on site and truck it to Geraldton Employment: Construction: 900; Operation: 220 Port for export. All necessary approvals are expected to MANGANESE Midwest Region - Blue Hills Iron Ore Project be in place to commence Stage 1 production in Q1 2006. Goldfi elds - Manganese Dioxide Project Murchison Metals is progressing a pre-feasibility study GINDALBIE METALS LIMITED HITEC ENERGY LIMITED on Stage 2 which would increase production to 10-25 Gindalbie Metals proposes to develop a direct shipping Mt/a hematite. A new rail line and deep water port near hematite ore project of 1.5 Mt/a at Blue Hills, 220 km HiTec Energy proposes to produce electrolytic manganese Geraldton would be required and construction on Stage 2 south-east of Geraldton. The company is currently drilling dioxide (“EMD) is predicted to commence mid-2008. to defi ne a JORC-compliant resource and expects that for alkaline batteries. The hydrometallurgical plant will Expenditure: $26m. drilling will be completed by March 2006 and that mining be a brownfi elds development at Cawse, 55 km north- Employment: Construction: 30; Operation: 90 will commence in early 2007. Gindalbie is currently west of Kalgoorlie, built around an investigating the option of transporting the ore by train or existing electro-winning cell house and SX plant, Kimberley - Koolan Island Iron Ore Mine truck to the Port of Geraldton for export. acquired by HiTec in October 2003. The initial production AZTEC RESOURCES LIMITED Expenditure: $20m. stage of up to 23,000 t/a is expected to take 12 months Aztec Resources completed a bankable feasibility study in Employment: Construction: 60; Operation: 50 to construct. Manganese ore will be sourced from August 2005 to develop a mining operation based on the Consolidated Minerals’ Woodie Woodie mine in the ex-BHP Koolan Island iron ore deposits in Yampi Sound, Midwest Region, Blue Hills North - Mt Karara Pilbara, as well as manganese waste from OMG’s Cawse 130 km north of Derby. Aztec aims to produce premium Magnetite Mine and Pellet Project nickel plant. grade iron ore at a production rate of approximately 4 GINDALBIE METALS LIMITED Expenditure: $136m. Mt/a over 9-10 years. The current (JORC) resource is 53.3 Gindalbie Metals is progressing a pre-feasibility study Employment: Operation: 30 million tonnes at 64% Fe, with the potential for further for the development of a magnetite mine at its Mt resources. The project is undergoing EPA assessment Karara deposit in the Blue Hills North Project, 220 km MOLYBDENUM at the Assessment on Referred Information level. Aztec east-south-east of Geraldton. The company believes Pilbara - Spinifex Ridge Mo/Cu mine anticipates that construction will commence early 2006 to the deposit has the potential for a resource in excess enable fi rst ore shipment in late 2006. of 400 million tonnes, to support a 4 Mt/a pellet project MOLY MINES LIMITED Expenditure: $108m. for at least 20 years. A scoping study was completed The Spinifex Ridge Mo/Cu deposit is located 50 km Employment: Operation: 220 in February 2005, which proposed that the magnetite north-east of Marble Bar in the Pilbara region of Western concentrate will be transported to Narngulu, near Australia. Moly Mines has commenced a Defi nitive Mid West Region - Extension Hill Magnetite Project Geraldton, via slurry pipeline and pelletised prior to Feasibility Study (“DFS”) at Spinifex Ridge and is targeting MT GIBSON IRON/ASIA IRON shipping. Gindalbie are undertaking extensive fl ora and a decision on project development by mid 2006. A pre- Asia Iron Holdings Limited is proposing to develop the fauna studies in conjunction with CALM and is continuing feasibility study is expected to be completed by the end of Extension Hill iron deposit near Mt Gibson, 330 km south- negotiations with traditional owners. Gindalbie anticipates 2005. A positive DFS outcome would result in Australia’s east of Geraldton. The project will produce up to 5 Mt/a of that commissioning and shipping would occur in 2009. fi rst major entry into the 200,000 tonne per year global magnetite concentrate. A further 1.5 Mt/a hematite will Expenditure: $720m. molybdenum market. be mined and exported by Mt Gibson Mining, which has Employment: Construction: 200; Operation: 175 rights to all hematite mineralisation within the tenement. NICKEL The magnetite concentrate will be shipped from the Port Pilbara - Iron Ore Mine Goongarrie - Kalgoorlie Nickel Project - Mine of Geraldton direct to a new 2.5 Mt/a pellet plant at the IRON ORE HOLDINGS (laterite ore) and Hydrometallurgical Processing port of Longtan, Nanjing, Jiangsu Province, China. The Iron Ore Holdings completed a scoping study in July Plant - project is currently being assessed through a Bankable 2005 on its three projects (Yandicoogina Creek, Lamb HERON RESOURCES LTD Feasibility Study, due for completion in December 2005. Creek and North Marillana) located in the Pilbara, 275 A detailed pre-feasibility study is continuing for the Environmental assessment of the project is underway and km south of Port Hedland. The study was based on the development of a 50,000 t/a mine and hydrometallurgical site construction is scheduled to commence early-mid road transport of 2 Mt/a pisolitic ore, which is expected processing plant at Goongarrie some 85 km north of 2006, and commissioning of the magnetite concentrator to be shipped from Port Hedland. Stage 1 geological Kalgoorlie-Boulder. The project will be based on the mid 2007. investigations of the projects were completed in company’s laterite nickel resources of 903 Mt grading Expenditure: $620m. September 2005 and identifi ed an additional 16 exposed 0.74% Ni and 0.05% Co. The dominantly siliceous Employment: Construction: 400; Operation: 210 channel iron deposit targets on the tenements. Iron Ore component of the resource, being some 460 Mt grading at Holdings expects to commence resource drilling of the Mid West Region - Koolanooka Iron Concentrate/ 0.70% Ni and 0.05% Co, is considered to be amenable to projects in Q4 2005. Pellet Project benefi ciation by low cost screening to a leach feed grade MIDWEST CORPORATION LIMITED Pilbara - Iron Ore Mine Rail and Port Development target of 1.5% Ni. Heron and Inco have signed a formal Midwest Corporation proposes to develop an iron ore FORTESCUE METALS GROUP (FMG) agreement under which they will develop the project. mining operation at the Koolanooka magnetite iron ore FMG is proposing to develop new iron ore mines in the Expenditure: $1.4b. deposit, 160 km south-east of Geraldton, to produce 4.5 Chichester Ranges of the eastern Pilbara. The mines will Employment: Construction: 1000; Operation: 300 38 Prospect Projects Under Consideration (as at 15/11/2005)

North Eastern Goldfi elds - Yakabindie Nickel Mine and June 2004 gave more information on the potential t/a rare earths oxides. During the March 2005 quarter BHP BILLITON NICKEL volume of the fi eld. The preferred development concept is Lynas completed a feasibility study, with capital costs for a FPSO vessel connected to subsea wells and fl owlines. development put at $49.2 million for an open pit mine and The Yakabindie project is based on a large nickel deposit The FPSO will have a design capacity of 80,000 bbl/d of two processing plants in China. A development decision situated near BHP Billiton’s existing Mt Keith nickel liquids. The fi eld life is estimated to be 20 years. on the project is expected by early 2006, with production project and is estimated to contain a resource of 289 Mt expected to begin within 12 months from the decision. grading 0.58% nickel. BHPB is considering developing Scarborough (Carnarvon Offshore Basin) - Gas Field Expenditure: $49m. Yakabindie as an integrated part of the Mt Keith project, EXXON MOBIL and is conducting a pre-feasibility study, including infi ll Employment: Construction: 100; Operation: 35 The fi eld is located in 900 metres of water, 300 km drilling of the ore body and metallurgical testing. offshore in the Carnarvon Basin with probable reserves SALT Expenditure: $20m. of approximately 8 Tcf of gas. BHP Billiton Petroleum Pilbara - Nickel Mine (BHPB) completed 3D seismic survey work in May Exmouth Gulf - Yannarie Solar Salt Project 2004 and drilling of Scarborough-3, 4 and 5 wells were SHERLOCK BAY NICKEL COMPANY STRAITS SALT PTY LTD completed in the period December 2004 to February Straits Salt Pty Ltd is currently investigating the Sherlock Bay Nickel Corporation (“SBNC”) is currently 2005. Evaluation of the data is in progress. BHPB is also investigating the feasibility of the Sherlock Bay nickel feasibility of producing up to 10 Mt/a of salt in the conducting a pre-feasibility study to assess the viability eastern Exmouth Gulf area, 1100 km north of Perth. It project, 100 km east of Karratha. SBNC intends to of providing Scarborough gas to its proposed Pilbara LNG has exploration licences over the area of interest while it develop an approximately 9000 t/a nickel project based on plant near Onslow. the Bioheap ore treatment process, licensed from Pacifi c undertakes its feasibility studies. Straits has submitted Ore Technologies. The company is undertaking a major Scott Reef/Brecknock (Browse Basin) - Gas Fields its Environmental Review and Management Program to review of the project to take into account more recent WOODSIDE ENERGY LTD the EPA and is in discussions with government regarding resource estimates and to confi rm the results of prior The current estimated contingent resources for the appropriate tenure and associated matters. metallurgical testing. Browse gas fi elds exceed 20 Tcf of gas and 300 million Expenditure: $120m. Expenditure: $30m. barrels of condensate. Further drilling is currently taking Employment: Operation: 70 place with three wells, Brecknock-2 (completed early OIL & GAS DEVELOPMENTS October 2005. Brecknock-2 intersected a 151m gross gas TIMBER Angel (Carnarvon Offshore Basin) - Gas Field column), Calliance-1 (spudded mid-October, 2005) and Mirambeena - Engineered Strand Lumber Brecknock-3 (scheduled for early 2006). Over the next WOODSIDE ENERGY LTD LIGNOR PTY LTD two years, Woodside (Operator and ~ 50% stakeholder) The Angel gas and condensate fi eld, operated by is planning further appraisal of the gas resources Lignor Pty Ltd is proposing the development of an Woodside as part of the North West Shelf Venture and fi nalising concept feasibility studies for an LNG engineered strand lumber plant located at Mirambeena, (“NWSV”), will be developed to meet NWSV gas customer production facility capable of supporting 7-14 million near Albany. The plant will source most of its timber from demand. The development includes the NWSV’s third tonnes of LNG annually. The current target for a possible the extensive eucalypt plantations growing in the Albany fi xed platform, which will be remotely operated, three start up is 2011 to 2014, depending on the outcome of region and will use technology developed by the German subsea wells and a 49 km pipeline to join an existing the development studies, the gaining of approvals and engineering company, Siempelkamp. The company has offshore trunkline to shore. A fi nal investment decision on securing customers. raised $5 million to complete its feasibility study. The the project is expected in December 2005, with production study should be completed by the middle of 2006 and planned for Q4 2008. The platform will be capable of Stybarrow (Carnarvon Offshore Basin) - Oil Field construction commenced by late 2006 with the plant processing 800 million standard cubic feet of gas a day. BHP BILLITON PETROLEUM PTY LTD being fully operational by late 2008. Expenditure: $1.6b. The Stybarrow fi eld is located in a water depth of Expenditure: $200m. Gorgon (Carnarvon Offshore Basin) - Gas and approximately 800 metres and is approximately 65 km Employment: Construction: 400; Operation: 140 north-west of Exmouth. The Stybarrow oil discovery Condensate Field was made in February 2003 when the Stybarrow-1 well VANADIUM CHEVRONTEXACO AUSTRALIA PTY LTD encountered a gross oil column of 23 metres with 18.6 Pilbara - Balla Balla Vanadium/Ferroalloys Project The Gorgon Joint Venture is considering an LNG (up metres of net pay in the Macedon member sandstone RENEWABLE ENERGY CORPORATION LIMITED to 10 Mt/a) and domestic gas development at Barrow reservoir. The preferred development concept is a FPSO Island, based on gas from the Gorgon and Jansz fi elds. vessel connected to subsea wells and fl owlines. The Aurox has commenced late stage development work The restricted industrial use of Barrow Island has been FPSO will be able to process approximately 80,000 bbl/d on the Balla Balla ferroalloy project located mid-way approved, in principle, by the Western Australian Cabinet of liquids. The Stybarrow oil fi eld and adjacent small oil between the regional centres of Karratha and Port Hedland. Granted mining leases enclose a resource after evaluation of environmental, social, economic and rim of the Eskdale oil and gas fi eld have recoverable oil estimated to be 110 Mt grading 0.76% V2O5, with the strategic aspects. Development decisions by the Gorgon reserves estimated in a range from 63-95 million barrels project being within close proximity to key infrastructure Joint Venturers will be subject to market commitments. of oil (“MMbbl”), comprising of 60-90 MMbbl at Stybarrow including a natural gas pipeline and grid power. The The joint venture has applied for environmental approvals and 3-5 MMbbl at Eskdale. The estimated economic fi eld layered intrusion at Balla Balla also contains signifi cant so it is in a position to start construction in late 2006. life is 10 years. concentrations of apatite, a source of phosphate for the Expenditure: $11b. Tern/Petrel (Bonaparte Offshore Basin) - Gas Fields production of phosphoric acid and fertilizer. As well, Employment: Construction: 3000; Operation: 600 SANTOS LIMITED the 16 kilometre titanomagnetite horizon has potential as a superior value-in-use iron making product. The Macedon (Carnarvon Offshore Basin) - Gas Field The offshore Petrel gas fi eld, discovered in 1969, is completion of a Bankable Feasibility Study into the BHP BILLITON PETROLEUM PTY LTD located about 250 km west of Darwin on the WA/NT production of ferrovanadium is scheduled early in 2006 seabed border in the Bonaparte Basin. The offshore Tern The Macedon gas fi eld, located about 50 km north of with operations to commence at the end of 2007. Exmouth, was discovered in 1992 by the West Muiron-3 gas fi eld, discovered in 1971, is located about 300 km west well, with a follow-up appraisal campaign in 1994. BHP of Darwin in WA waters in the Bonaparte Basin. Field Windimurra - Vanadium Pentoxide mine and Billiton is continuing to investigate domestic market development options include installation of unmanned processing plant opportunities for Macedon, which is estimated to contain offshore production platforms with a pipeline to a gas PRECIOUS METALS AUSTRALIA LIMITED a gas resource of up to 1.2 Tcf. Gas recovered to date is treatment plant south of Darwin. The development Windimurra is located approximately 80 km from Mount dry, containing no condensate or LPG. possibilities for these fi elds have been enhanced by Magnet. It is one of the largest proven vanadium bodies recent signifi cant discoveries by other parties nearby, in the world, with JORC measured resource at 77 million Onslow - LNG Plant which may provide tie-in potential for Petrel and Tern tonnes grading 0.5% vanadium pentoxide and a further BHP BILLITON PETROLEUM to service domestic gas customers. A conceptual plan indicated resource of 32 million tonnes grading 0.47% BHP Billiton Petroleum (BHPB) is conducting a pre- involves initial development of Petrel with a pipeline vanadium pentoxide. PMA is conducting a feasibility study feasibility study into the development of the Scarborough to an onshore gas plant and a subsequent phase that to assess re-developing the project and also producing gas resource located 280 km northwest of Onslow, and completes Petrel and develops Tern. 5000 t/a ferrovanadium. It is expected that the study will an associated 6 Mt/a LNG plant at a site approximately Expenditure: $1b. be completed in early 2006 when a decision on the future 4.5 km southwest of Onslow. BHPB will be the owner and of the project will be made. operator of the LNG plant. It is intended that the bulk PLATINUM GROUP METALS Expenditure: $120m. of the LNG produced will supply the United States west Pilbara - Platinum Deposit Employment: Construction: 400; Operation: 120 coast and Asian energy markets. The Pilbara LNG Project sanction is expected by Q1 2007 and construction is HELIX RESOURCES NL ZINC/COPPER scheduled to commence during Q2 2007. LNG production Helix Resources NL has established an indicated resource is anticipated by early 2011. of 9.2 Mt at 2.9 g/t combined platinum, palladium, North Eastern Goldfi elds - Jaguar - Base Metals Mine Expenditure: $4b. rhodium, and gold, 0.2% nickel, and 0.3% copper at its project site near Karratha. Preliminary mining studies JABIRU METALS LTD Employment: Construction: 2500; Operation: 150 suggested a mining rate of combined open cut and A recently updated and optimised Bankable Feasible Pyrenees Development (Carnarvon Offshore Basin) underground production of 1.5 Mt/a. Further activity was Study for Jabiru Metals’ Jaguar base metals prospect, 54 - Oil Fields postponed in early 2003, as a result of poor exploration km north of Leonora, has been completed. The project is BHP BILLITON PETROLEUM PTY LTD results and a decreased palladium price. The project is forecast to produce 20-25,000 t/a of zinc in concentrate, under review. 8-10,000 t/a copper in concentrate and 800,000 oz/a of The proposed Pyrenees Development is located 45 km silver in concentrate over a 5 year mine life, based on a north-west of Exmouth in approximately 200 metres of milling rate of 365,000 t/a. It is planned to develop an water. The project is in the feasibility stage. The Pyrenees RARE EARTHS underground mine, with a possible start-up date of early development area was discovered in July 2003 when the Mt Weld - Rare Earths Operations 2007. Ravensworth-1 well encountered a 29.4 metre net column LYNAS CORPORATION LTD of oil, while the Crosby-1 well encountered a 43.5 metre Lynas is planning to mine up to 200,000 t/a ore, producing Expenditure: $56m. net column of oil. Additional appraisal wells drilled in May 45,000 t/a of concentrate which is equivalent to 15,000 Employment: Operation: 100 39 Prospect As at Dec 2005 Major Resource Development Projects: Western Australia

INSET B MutineerO INSET C Sunrise N Exeter O Campbell u Troubador N Eaglehawk Egret !Hermes Wonnich Endymionu Searipple ! Lambert /Sinbad N Kelp Deep Capella uu O O u Angel ? NDoric/Ulidia ! Cossack Bambra N NLinda Perseus u u ! OJahal Gaea/ North ! B N Laminaria East ChudditchN Wanaea Harriet/Gudrun C Lee Dockrell Ishmael u Rankin ! Legendre North ORose uuMonty O Buffalo Keast uu Goodwyn Varanus Island! A u !Legendre South North Alkimos Echo/Yodel u ?? !uJosephine Io/Janszu Goodwyn South/Pueblo Tidepole Agincourt ! ! Gipsy ! UraniaN N Rankin/u Burrup Peninsula O S.Plato Bayu-Undan JanszN Wheatstone ?Dixon/West Dixon Monet/Simpson u Sculptor @ Ammonia /Tanami O !Little Sandy/Pedirka/North Pedirka/ Eurytion NNGeryon N Iago/N Tryal Rocks N Hoover Victoria Pluto Reindeer N @ O @ Double island u Wilcox Caribouu Ammonia-urea Gorgon CorvusN @ Ammonium Nitrate Barrow O Jabiru N Island Maenad N Orthrus Wandoo ! 6 Desalination Barrow Island O Challis/Cassini uChrysaor/Dionysus PuffinO uWest Tryal Rocks @ LNG O O Stag Skua

SEE INSET C N Petrel John Brookes N Cape Lambert N Crux Gorgon u Parker Point q q Spar N Dampier N Dampier salt s Tern East Spar N Karratha N Brewster N Scott Reef Blacktip N Woollybutt O uIchthys n Radio Hill N Brecknock I Fortescue Z Whundo Cu Zn K Munni Munni N Brecknock South Turtle O b Chinook/Scindian Mitchell Plateau ConistonO ! Griffin O ONovara ! Eskdale O Taunton ! South Chervil Ord Stage 2-M2 Enfield Wyndhamq 6 Skiddaw e Crest in O Vincent Yammaderry ! l Ord Stage 2-Mantinea Flats 6 OO ! e 6 Stybarrow O Ravensworth/Crosby Saladin ip N ! P Koolan Island ! ! s Laverda O!Pyrenees Cowle a I Ord Stage 1 N Skate G ! l Cockatoo Island I I N q a ! r I Middle Robe Mesas Scafell Roller u Robe Lake Argyle Hydro 6 Macedon Coaster O @ s t I Robe Mesa J Onslow Na r e Mesa A Stickle Pilbara LNG pi N m a D I Bungaroo Creek Tubridgi - th KIMBERLEY r d e Argyle P N Point Torment Derbyq Lloyd s Boundary Exmouth Gulf West Terrace OO Sally Malayn Homestead I O d Ellendale Silvergrass I Sundown nCopernicus q Blina Panton Sill K Nammuldi I Broome Manyingee Brockman 2 I O Rough Range , Brockman 4 I Z Pillara Zn Pb 0 100 j Paulsens 200 km Z Kapok Zn Pb RESOURCE SYMBOLS Bauxite-Alumina a Alumina refineries b SEE INSET B Mines and deposits Chemicals / Petrochemicals / Petroleum Coyote j @ Processing plants / refineries Port Hedland N Natural gas field Scarborough N q s Port Hedland Salt O Oil field Salt Creek V Balla Balla ! Natural gas / oil field Zn Pb Z Yarrie I u Natural gas / condensate field n Sherlock Bay ? Natural gas / oil / condensate field Z Whim Creek Cu Chromite jIndee c Wodgina t Mines and deposits Z Sulphur Springs Zn Cu Clays Brick / tile procesing plants Woodie Woodie r Coal Z j Telfer Au Cu Nifty Cu h Coal/coal bed methane (CBM) mines and deposits Golden Eagle j ? Lignite mines and deposits PILBARA r Ant Hill Z Copper-Lead-Zinc Cloud Break I Maroochydore Cu Co Z Mines and deposits IChristmas Creek , Kintyre Diamonds Marandoo Western 4 I IYandi/BHPB I Mt Nicholas d Mines and deposits Tom Price I I Yandicoogina/HI Beasley River I I I Mindy Mindy Gold Mining Area C I I j Hope Downs I Rhodes Ridge Mines and deposits Paraburdoo IWest Angelas I IEast Angelas Gypsum Eastern Range I I IOrebody 23, 25 & 18 x Channar I Giles Mini I I Mines and deposits Mt Whaleback Jimblebar c Heavy mineral sands Coobina m Mines and deposits — titanium-bearing sands G Mines and deposits — garnet-bearing sands J Ti02 pigment and synthetic rutile plants Iron ore q x Lake MacLeod I Mines and deposits s Lake MacLeod Y Downstream processing plants Limestone-Limesand 4 Mines and Deposits Carnarvon C Cement plants Plutonic j Magnesite Fortnum j r p Mines and Deposits Horseshoe South Manganese ore r Mines and deposits y Downstream processing plants Wingellina Jack Hills I Nickel n n Mines and deposits Shark Bayqs jJundee/Nimary n Magellan PbZ v Smelters and refineries West Musgrave Bluebird–Meekatharra mCoburn Gabinthia Wilunaj Phosphate j V Wiluna WestI jWilliamson Weld Range I , P Mines and deposits n Honeymoon Well n Lake Way j,Nowthanna ,Yeelirrie ,Lake Maitland Platinoids Burnakura j nMt Keith K Mines and deposits Gidgee Bronzewing/Mt McClure Yakabindie n j Rare earth elements R Cosmos n Mines and deposits Waterloo Salt Leinster n jDarlot s Sandstone Plant Agnew j n Production facilities / pans INSET A Port Gregory Hill 50 j ,Thatcher Kwinana/Rockingham j Lawlers j jThunderbox Soak Silica - Silica Sand G I Tallering Peak j p w Mines and deposits q 0 50km nMarshall Pool AIS Jetty V Lords Henry & Nelson p Sickle X Silicon smelters a Windimurra Jaguar Zn Cu Z Whisper j Alumina Refinery m Gullewa Au Cu j Kirkalocka j Brightstar Talc @ Gingin Oakajee q j Tarmoola j j BP Oil Refinery Narngulu Synthetic Z Golden Grove Zn Cu pn T Mines and deposits q j P C Cement and Lime Chandala Geraldton J Rutile Minjarj Gossan Hill Ag Au Sons of Gwalia jMurrin j R Mt Weld Tantalum Alinta Wind farm8 Mount Horner IjMt Mulgine Murrin jSunrise Dam t Mines and deposits @ Chlor Alkali J Synthetic Yardarino Nu Blue Hills Granny Smith –Wallaby Rutile Hovea–EremiaIKoolanooka j Uranium @ Chemicals Neerabup Dongara OOO Xyris IKoolanooka South Red October O mu , Mines and deposits 6 Desalination 1 Cliff Head O DoApiumT Malaga Brick Jingemia NOu nga Three Springs I Mt Gibson Vanadium-Titanium @ Fertilizers ra H Mulga Rock Middle Swan Brick Beharra Springs/ M j Davyhurst j jSand George , V Mines and deposits @ Midland Brick u m Eneabba Fused Alumina North Beharra Woodada Mt Gibson Windarling Range I n Goongarrie • PERTH Springs h j Carosue Dam NON-MINERAL PROJECTS @ Fused Zirconia Tarantula Central West Paddington 6 Caversham Tile Mt Jackson I Cawsen Irrigation/water schemes Y HIsmelt y n Black Swan q q 8 EMD/HiTec Major port handling facilities @ Fremantle Emu Downs Wind Farm jj j Kanowna Belle – Red Hill 8 LPG Mt Pleasant j v nBulong Major power stations Armadale Brick Cooljarloo m Koolyanobbing I Kundana j Avalon Plant 1 v Nickel Refinery mCataby j jSuper Pit Downstream timber processsing plant Cardup Brick Frogs Leg v Kalgoorlie Ni Smelter Gas pipeline Proposed gas pipeline 8 Power Station Coolgardie-Redemption j j nBlair-Area57 @ Sodium Cyanide SEE INSET A Westonia j Mt Marion n Carnilya OPERATING PROJECTS ARE SHOWN IN BLUE Long–Victor n n Kambalda Concentrator J Titanium Pigment m Keysbrook Marvel Loch j Nepean n n n Beta-Hunt POTENTIAL PROJECTS ARE SHOWN IN RED j Spargoville jSt Ives PROJECTS ON CARE AND MAINTENANCE ARE @ Zirconia Yilgarn Star n t Pinjarra Armstrong n n Bald Hill SHOWN IN PURPLE Miitel–Redross a8 PERTH• Lanfranchi abHuntly Pinjarra Gallium j Boddington Au Cu Emily Ann – Maggie Hays n j Central Norseman mWaroona n Forrestania aWagerup b Kemerton Saddleback O'Sullivans ? @ Chlor Alkali Kemerton X w Silicon Smelter 8 ? Scaddan aWorsley J Titanium JAustralind 8Bluewaters Western Pigment q Bunbury h 8 Collie Phillips River h nRavensthorpe Australia m hPremier 8 Ewington q Dardanup 1 Dardanup Muja 8 Esperance Capel Synthetic Rutile J mGwindinup 1Manjiump m Yoganup West m Ludlow mm Jangardup South I Southdown Tutunup m h Yoganup Leeuwin - Naturaliste CBM Mirambeena 1 NWhicher Range tGreenbushes q Albany

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A Bright Future Planned for Investors in Victoria Petroleum N.L. Victoria Petroleum N.L. plan to increase oil & gas production net revenue by 215% in 2006 after 275% increase in 2005. Participant in onshore North Perth Basin Jingemia Oil Field production tested at 4,800 barrels of oil per day in 2005, Mirage and Ventura Oil Field 2004 discoveries and Flour Bluff Gas Field Development Project, Texas, USA 4Drilling major Californian Eagle Oil Pool well in December 2005 targeting 34 million barrels of oil and 58 BCFG 4Planned drilling in early 2006 of 16 million barrel oil potential Tomcat Prospect as fi rst well in six well exploration drilling program in Cooper Basin South Australia 4Initial successful 2005 development drilling of 200 BCF gas potential Flour Bluff Gas Field, Texas producing 5 million cubic feet per day gas equivalent 4Successful development well at Jingemia-10 resulted in increase of Jingemia Oil Field production to 5,200 barrels of oil per day in November 2005 4Mirage and Ventura oil discoveries in South Australian Cooper Basin on stream at gross 400 barrels of oil per day in November 2005 4Largest exploration acreage holder in South Australia and Queensland Cooper/Eromanga Basin with average 40% interest 4Targeting Australia and USA 2006 est. net oil production of 600 barrels of oil per day and $12 million net revenue with 12 wells planned in next six months

DHA-VP-662