Print post approved PP 665002/00062 Under guard Under June 2013–August$3 WESTERN AUSTRALIA’SINTERNATIONALRESOURCESDEVELOPMENTMAGAZINE WA’s protected assets northern (inc GST) DEPARTMENT OF STATE DEVELOPMENT International Trade and Investment 1 Adelaide Terrace East Perth, Western Australia 6004 • AUSTRALIA Tel: +61 8 9222 0566 • Fax: +61 8 9222 6151 Email: [email protected] www.dsd.wa.gov.au

INTERNATIONAL OFFICES Europe European Office • 5th floor, The Australia Centre Corner of Strand and Melbourne Place London WC2B 4LG • UNITED KINGDOM The Western Australian economy grew by 6.7 per cent in the 2011-12 financial Tel: +44 20 7240 2881 • Fax: +44 20 7240 6637 year, to $239 billion, primarily due to an intense investment phase in iron ore India — Mumbai and LNG production. Western Australian Trade Office Western Australia now produces 26 per cent of the world’s iron ore, up from 93 Jolly Maker Chambers No 2 19 per cent four years ago. Our share of world LNG production is expected to 9th floor, Nariman Point • Mumbai 400 021 • INDIA grow substantially over the next four years, from 15 million tonnes in 2011-12 Tel: +91 22 6630 3973 • Fax: +91 22 6630 3977 to almost 50 million tonnes in 2016-17. Indonesia — Jakarta After speaking with senior government and resources industry representatives Western Australia Trade Office in Beijing and Tokyo this month, the State Government is confident demand for Wisma Budi Building • floor 5 Suite 504 natural gas will continue. JI HR Rasuna Said Kav C-6 Kuningan, Jakarta 12940 • INDONESIA The desire for a cleaner environment in China in particular is expected to drive Tel: +62 21 5290 2860 • Fax: +62 21 5296 2722 an increase in its reliance on natural gas from five per cent of the country’s energy mix, to as much as 15 per cent by 2020. In Japan, the debate over reliance Japan — Tokyo on nuclear power remains difficult and is also likely to lead to sustained reliance Government of Western Australia, Tokyo Office on other sources of clean energy. This presents huge opportunities for WA. 14th floor, Imperial Tower 1-1-1 Uchisaiwai-cho Chiyoda-ku The record levels of business investment during the past few years means, Tokyo 100-0011 • JAPAN while there are signs the resources economic cycle has peaked, there is still a Tel: +81 3 5157 8281 • Fax: +81 3 5157 8286 significant amount of exploration, project construction and project expansions in the pipeline. In the first quarter of 2013 the Department of Mines and Petroleum Japan — Kobe received 676 exploration license applications. Western Australian Government Office The mining industry invested a record $39 billion in Western Australia during 6th floor, Golden Sun Building 4-3-6 Nakayamate-dori 2012. Figures show the commitment to projects across the State remains strong, Chuo-Ku • Kobe 650-0004 • JAPAN as evidenced by the list of major projects at the back of the magazine. Tel: +81 78 242 7705 • Fax: +81 78 242 7707 The long term dividends of the intense business investment phase are evident in the strong export growth projected to 2015-16 of between six per cent and seven Middle East — Dubai per cent each year. Western Australian Trade Office • 106, Emarat Atrium PO Box 58007 • Dubai • UNITED ARAB EMIRATES The substantial increase in the State’s iron ore and LNG production capacity Tel: +971 4 343 3226 • Fax: +971 4 343 3238 will drive economic growth for the next few years, with growth of more than four per cent a year forecast to 2015-16. People’s Republic of China — Shanghai Western Australian Trade Office Colin Barnett Room 2204 • CITIC Square PREMIER OF WESTERN AUSTRALIA & MINISTER FOR STATE DEVELOPMENT 1168 Nanjing Road West Shanghai 20004 • PEOPLE’S REPUBLIC OF CHINA Bill Marmion Tel: +86 21 5292 5899 • Fax: +86 21 5292 5889 MINISTER FOR MINES AND PETROLEUM People’s Republic of China — Hangzhou Western Australian Trade and Investment Promotion ISSN 1037-4590 Hangzhou Representative Office Room 1705 • World Trade Office Plaza Prospect Zhejiang World Trade Centre Western Australian Prospect magazine is published quarterly by the 122 Shuguang Road • Hangzhou 310007 Western Australian Government’s Department of Mines and Petroleum (DMP) PEOPLE’S REPUBLIC OF CHINA and Department of State Development (DSD). Tel: +86 571 8795 0296 • Fax: +86 571 8795 0295 DSD Editorial management: Greg Smith, DSD Communications and Marketing Division. Tel: +61 08 9222 0417 • Fax: +61 08 9222 0505 DMP Editorial management: Peter W. Lewis, DMP Communications and Marketing Division. Singapore Tel: +61 08 9222 3572 • Fax: +61 08 9222 3862 Western Australian Trade and Investment Office Subscriptions: Gerard O’Neill. Tel: +61 08 9222 3821 • Email: [email protected] Suntec Tower Four, #20-02 6 Temasek Boulevard • SINGAPORE 038986 Disclaimer Prospect has been compiled in good faith by the Department of Mines and Petroleum (DMP) and Department of State Development (DSD). Opinions Tel: +65 6836 5626 • Fax: +65 6836 5698 expressed in Prospect are those of the authors and do not necessarily represent the views, or have the endorsement of DMP and DSD. DMP and DSD has used all reasonable endeavours to ensure the material contained in this publication is correct, but it is intended to be general in nature. No representation is made with regard to the completeness or accuracy of the information contained herein. DMP and DSD disclaims any or all liability South Korea — Seoul for loss or damage whatsoever suffered or incurred resulting from the use of or reliance on information contained herein. Readers of this publication should make and rely on their own enquiries, research and judgements in making decisions affecting their own or any other persons interest. Western Australian Trade and Investment Office Unit 702 • 7th Floor • Kwanghwamoon Building 211 Sejongno, Jongno-gu Cover photo: HMAS Ballarat sails past the gas platform, John Brookes, 110km off the WA coast, as the ship transits through the North West Shelf of Australia. Seoul • South Korea 110-730 • KOREA Photo: Royal Australian Navy Tel: +82 2 722 1217 • Fax: +82 2 722 1218

Scan this QR code to view links to all the department’s publications In this issue

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02 Shale gas myths debunked 11 It’s a gas at Gingin The State Government’s leading expert on natural gas from The State’s newest gas production plant is now operating in shale and tight rock dispels the myths and mistruths about the relatively-untouched Perth Basin, just north of Perth. this vast natural resource. 12 Power project ‘strung up’ 06 Under guard Helicopters are being used to install 190km of power lines in Resources in Western Australia are coming under increasing the State’s biggest infrastructure project in 25 years. protection from the Royal Australian Navy. 17 Waste energy to plug Pilbara 08 New Minister sets priorities Recently-appointed Minister for Mines and Petroleum power gap Bill Marmion aims to improve the business operating The State Government’s has just given environmental approval environment for companies in WA. for WA’s (and Australia’s) first waste-to-energy plant.

Department of Mines and Petroleum Department of Mines and Petroleum Department of State Development Department of State Development www.dmp.wa.gov.au www.dsd.wa.gov.au WA petroleum regulator sets record straight Photo: Empire Oil and Gas NL

Western Australia’s leading petroleum “WA’s rigorous regulatory framework its early exploration and proof-of- expert used a recent Australian for petroleum activities, including concept phase for at least the next Petroleum Production and Exploration fraccing, has the strongest chemical few years. Association (APPEA) Conference and disclosure requirements of any “This early exploration and proof of Exhibition in Brisbane to address Australian jurisdiction, as well as concept phase means we have time to misinformation relating to the State’s rigorous environmental and safety learn from other jurisdictions, work emerging natural gas from shale and approval processes and international with communities, incorporate latest tight rock sector. standards for well design and integrity. information and technology and ensure Department of Mines and Petroleum “Despite what has been claimed, all the our regulations are robust and leading (DMP) Petroleum Executive Director chemicals used in fraccing in WA must practice,” Mr Tinapple said. Bill Tinapple said the department be disclosed.” “Looking to the future, we would expect would continue to provide correct Currently, there are no applications any shale or tight gas project to operate and up-to-date information regarding for fraccing projects submitted to in compliance with the law and with the sector, following the ongoing the department, which expects the respect for the interests of Western circulation of inaccurate information shale and tight sector to remain in Australian communities.” by lobby groups. “While we recognise the important contribution lobby groups make to public policy debates, it’s New information about shale and tight gas disappointing some organisations do DMP has developed a Gantt chart to assist companies wishing to undertake not always cite factual and reliable onshore oil and gas activities, including shale and tight gas exploration, and information in relation to this matter,” development activities in Western Australia. Mr Tinapple said. The information in the Gantt chart will assist in scoping project approvals, Some of the inaccurate claims include including timelines, required from government before an activity can describing the fluid used in hydraulic commence and is available at http://www.dmp.wa.gov.au/17769.aspx fracturing (fraccing) as a ‘toxic chemical For more information on shale and tight gas activity regulations, including cocktail’ kept hidden from the public, up-to-date fact sheets, please visit www.dmp.wa.gov.au/shaleandtightgas and that fraccing causes health issues and contaminates water aquifers. The fact sheets cover a range of topics including: “There have been 780 wells which have • Hydraulic fracture stimulation (fraccing): the basics safely undergone this gas extraction • Shale and tight gas exploration in WA process since 1958 with no adverse effects • Shale and tight gas & WA’s future energy security on the environment, water sources or • Shale and tight gas: DMP responses to misinformation peoples’ health,” Mr Tinapple said.

2 Community consultation key for emerging industry

The Department of Mines and Petroleum in providing open and transparent “Community members are also (DMP) has increased its community information,” Mr Haworth said. interested in the potential benefits a engagement efforts around the State’s “Through meeting with communities shale and tight gas industry could bring emerging natural gas from shale and in the past year, DMP has identified a to WA, including regional jobs, cheaper tight rock (shale and tight gas) industry. number of common concerns which the energy and other flow-on benefits.” It comes as the department anticipates public would like more information on. Following community meetings in petroleum companies seeking government “These include groundwater protection, the Mid West last year, DMP will be approvals to develop such gas. the physical footprint of shale and tight delivering further community forums In the past year, DMP has met with local gas activities, and land access rights. in the Kimberley this year. shires, politicians, community members, land owners, environmental groups, traditional owners and industry to ensure interested parties are consulted about the regulation of natural gas from shale and tight rock in Western Australia (WA). Most of the consultation with these groups has occurred in the Mid West and North West of WA, where the State’s known shale and tight gas resources are located. DMP Petroleum Director Jeff Haworth said being proactive with community consultation in these areas was an important step both the State Government and industry should be taking. “Shale and tight gas is an emerging industry for WA which, if exploration proves successful, could see more proposals for onshore development in the coming decade,” Mr Haworth said. “The industry operators need to ensure community engagement is at the forefront of any planned onshore activities, particularly in light of the level of community interest in fraccing and its impacts on the environment.” After a DMP visit to Queensland last DMP environment officers meeting with regional community groups to discuss year to meet with coal seam gas petroleum activities. regulators, Mr Haworth believes community engagement is the key to ensuring the emerging shale and tight gas industry has a social licence to To register your interest in future community engagement initiatives or operate in WA. for more information about shale and tight gas, please visit www.dmp.wa.gov.au/shaleandtightgas or contact Jason Medd on “What the experiences in Queensland ph: 9222 0442 or [email protected]. have taught me is that DMP as the State regulator needs to be more proactive

3 Separating fact from fiction

In line with the myths and misinformation surrounding the extraction of shale and tight gas, the Department of Mines and Petroleum has produced an information guide.

The table on this page directly addresses recent claims made by some lobby groups and the media:

CLAIM DMP RESPONSE

The fluid used during fraccing is a ‘toxic chemical In WA, companies are required to publically disclose all chemicals cocktail’ kept hidden from the public. used in the fraccing process. Fluid placed down a well during fraccing is typically made up of 90 per cent water, 9.5 per cent sand and 0.5 per cent chemical additives. Most additives can be found in common household items such as ice cream, cosmetics, detergent and table salt. WA’s environmental petroleum regulations have the strongest chemical disclosure requirements of any Australian jurisdiction.

A report in the United States revealed 6-7 per cent Official US Ground Water Protection Council reports into the failure of wells fracced in the US leak in the first year. rates of onshore wells drilled in Ohio and Texas over a 20 year period found the true rate of failure to be 0.03 and 0.01 per cent respectively. Most of these leaks were not significant and occurred at the surface. Under Petroleum Resource Management regulations, all petroleum wells in WA must adhere to strict international well design and integrity standards as well as strict monitoring regimes, which significantly reduce the risk of well leakage occurring.

Fraccing causes health issues. DMP is not aware of any publically confirmed cases of a medical illness being directly attributed to fraccing in Australia or the US (according to the US Environmental Protection Authority).

Fraccing contaminates water aquifers. There is no evidence of water aquifers having been contaminated as a result of fraccing in WA. WA petroleum operators must adhere to strict international well design and integrity standards including the requirement for several layers of protective cement and steel casing in areas which pass through aquifers. Additionally, WA’s shale and tight gas resources and aquifers are often separated by thousands of metres of dense rock formations, acting as a natural barrier.

Shale gas industry in WA intends to develop WA’s shale and tight gas industry is currently in its early exploration 130,000 onshore wells. phase with three wells having undergone fraccing in 2012 and seven since 2005. If shale and tight gas exploration does prove successful, any increase in activity would be subject to government approvals and is expected to be gradual.

The documentary Gasland shows US residents Gasland has been discredited by many recognised scientific and lighting their taps on fire, claiming gas environmental expert bodies as inaccurate and unnecessarily alarmist. development is to blame. Due to unique geology in some areas of the US, naturally occurring methane has been present in aquifers long before gas development occurred. For members of the public who are interested in finding out more about this documentary, a recent public crowd-funded documentary, Fracknation, investigates the facts presented in Gasland.

4 Canning reserves a priority T i m o r S e a WYNDHAM

Western Australia has taken another important step in ensuring the development of the Canning BROOME Basin’s vast gas resources.

Premier and State Development Minister PORT HEDLAND Colin Barnett said the vast onshore CANNING gas resources of the Canning Basin BASIN would be developed under the provisions EXMOUTH of new legislation. Mr Barnett said the Natural Gas (Canning Basin Joint Venture) Agreement Bill WESTERN 2013 ratified the agreement signed by the State Government with joint venture CARNARVON partners, Buru Energy Limited and AUSTRALIA Mitsubishi Corporation. “This legislation will bring about the continued exploration for natural gas in the remote Canning Basin and the development of a gas pipeline to ensure Western Australian consumers have first use of any gas discovered,” he said. I n d i a n KALGOORLIE The Premier said the US Energy O c e a n Information Administration estimated the Canning Basin natural gas from PERTH shale rock resources at about BUNBURY 235 trillion cubic feet — about one Southern Ocean and a half times WA’s currently identified offshore resources. The Canning Basin covers 530,000 km2, stretching from the coast between Port Hedland and Broome, to the State’s eastern border. Natural gas provides about 50 per covered by five exploration permits The gas resources in this arid area are cent of the State’s domestic electricity held by the joint venture. These permits located between two and five kilometres generation, and contributes to the anchor the joint venture’s Canning below the ground’s surface. production of key resource exports Basin Domestic Gas Project, with the “Tapping this vast resource will including iron ore, alumina, base metals agreement facilitating further targeted guarantee Western Australia’s and gold. gas exploration in these permits and the domestic gas supplies well into the “This will also ensure future energy- development of a pipeline to transport future,” Mr Barnett said. intensive mining opportunities and gas south to existing industrial areas. “Because this gas is located onshore, other manufacturing industries will If commercially-viable gas resources are it is also entirely owned by the State benefit considerably from an expansion discovered, by mid-2016 the partners Government. of WA’s domestic gas supply sources,” will be required to submit a plan for the Premier said. “This agreement ensures gas construction of the domestic gas project, discoveries are rapidly brought into “Natural gas is also an ideal partner including a pipeline connecting to the production, and that gas is delivered for the State’s growing renewable existing State gas network. to the State’s domestic gas network, energy production as a back-up in Under the agreement, the partners before any is exported.” times of adverse weather conditions are still required to obtain relevant and peak demand.” Once the domestic gas project is State and Commonwealth environmental, under development, the agreement The Premier said the agreement safety, Aboriginal heritage and Native provides for potential future gas supply provided additional security of tenure Title approvals for their exploration, for gas export. for 17,000 km2 (1.7 million hectares) development and infrastructure proposals.

5 Photo: Royal Australian Navy

HMAS Ballarat establishes communications with an offshore platform to inquire about any suspicious activity in the area.

North West rigs under close watch

Oil and gas platforms in Western of security surveillance “on an almost transiting through the region, usually Australia are coming under daily basis, by either Navy, Air Force en route to or from HMAS Stirling increased surveillance from the or land-based Army capabilities, as base, south of Perth, to transit close to, well as Customs air surveillance and patrol and make routine contact where Royal Australian Navy (RAN). maritime patrols”. appropriate, with oil and gas platforms in the northwest. The RAN has increased the tempo of The RAN has increased its frigate and patrols near platforms off the northwest patrol boat patrols in recognition that Defence said the extra patrols played coast as part of a plan to strengthen the platforms have become a central “a key role in the navy’s effort to protection of $350 billion worth of pillar of the nation’s economic security maintain security in the North West resources assets in the region. and require greater protection. Shelf, which is of vital strategic and Chief of Navy Vice-Admiral Ray Griggs Collins-class submarines have also economic importance to Australia”. undertaken extra patrols of oil and gas ordered all navy ships transiting the As well as enforcing exclusion zones platforms, although figures for these region to conduct close patrols of the around the oil and gas facilities, are classified. platforms, in addition to regular patrols the patrols test communications, by Border Protection Command. This build-up has occurred steadily procedures and protocols between The RAN said oil and gas facilities in the since Admiral Griggs issued a directive Coast Watch and Defence, as well as northwest were now under some form in July 2011, ordering all navy ships with oil and gas platforms.

6 DMP ramps up safety policing at WA mines

The State’s resources safety watchdog has embarked on a major crackdown targeting injuries and ‘near misses’ in the Western Australian mining sector, following numerous serious incidents during the past couple of months. Department of Mines and Petroleum (DMP) Resources Safety Executive Director Simon Ridge said while the State achieved a fatality-free year in 2012 – the first time in more than a century – he was concerned by recent incidents. In June, two workers were injured at the same Goldfields operation – St Ives Gold Mine near Kambalda – during a four-day period. A mining worker was injured in a road train accident, while a maintenance worker suffered broken bones and internal injuries. In addition, a worker was seriously injured at Karara mine in the Midwest region in May. The worker, who was one of three other workers performing the commissioning maintenance work, was allegedly struck in the face by a tool — causing mouth A Resolute operation fractures, lip lacerations and a broken tooth. There was also a serious ‘near-miss’ HMAS Ballarat used a transit from Commander Mark Massie, incident at Karara on 24 April, where an Fleet Base West south of Perth Operations Officer at Headquarters 80 tonne crane suffered a major structural to Christmas Island to conduct Northern Command, said Ballarat’s collapse during load testing, dropping the an Augmented Security Patrol presence in the region offered load in the vicinity of four workers. (ASP) of Australia’s North West some reassurance to the oil and Shelf Venture. gas installations. Mr Ridge said it was unsettling and disappointing that these incidents had Ballarat’s visit to the North West “Armidale Class Patrol Boats visit occurred across WA. Shelf Oil and Gas Infrastructure was the area frequently, but having an part of the navy’s vital contribution ANZAC Class frigate drop in would “DMP safety inspectors are managing the to Operation RESOLUTE, the military have given the patrol a whole new incidents — for which full investigations component of Australia’s maritime meaning,” he said. have been launched,” he said. border security effort. “As a regulator, the department believes “It’s important work and it sends Lieutenant Richard Farrelly, every worker should return home to their a message that we’re serious Assistant Officer of the Watch in family and friends at the end of their swings about protecting investment in Ballarat said the ASP added a bit of or shifts. the region.” excitement to the journey north. “I strongly urge all managers to ensure “We were kept busy plotting a According to the North West Shelf mining workers aren’t placed in harm’s way, course to get in close to the oil Gas Venture, the infrastructure and I urge mining workers to remain careful and gas platforms and sharing constitutes Australia’s largest oil and vigilant at all times.” and gas resource development information on potential irregular Mr Ridge said he wanted to point out that activities in the area,” Lieutenant area, which in turn represents an investment of $27 billion. most companies and workers were doing Farrelly said. the right thing. “It was a good feeling to contribute, The venture currently accounts for “Attitudes to mines safety are improving even in a small way, to protecting more than 40 per cent of Australia’s across WA and this is represented by Australia’s borders.” oil and gas production. statistics that show WA’s lost time injury frequency rate has decreased by 50 per cent in the past decade,” he said.

7 New minister to focus on approvals process

Continuing to reduce overlap and While he was Environment and Water approval processes, and facilitating new duplication in the approvals process is a Minister, Mr Marmion made a resource development opportunities. key priority over this term of government, number of key reforms aimed at “The State Government will expand according to newly-appointed Mines and streamlining approvals and improving the successful Department of Mines Petroleum Minister Bill Marmion. the business operating environment and Petroleum’s online lodgement and in Western Australia. As a former Environment Minister, Mr approvals tracking system to other Marmion said there were some obvious He said since coming into office the key approval agencies, including the links between the two portfolios. Liberal National Government has Environmental Protection Authority, determined more than 900 appeals the Department of Water and the “While I have valuable experience on the more than 309 proposals. new Department of Environmental environmental issues that are of interest Regulation,” he said. to the resources industry, I know there This included the $30 billion Wheatstone is much to learn, and my first imperative project in Onslow and the multi-billion “Proponents will be able to track their is to engage with industry,” he said. Port Hedland outer harbour project. progress across government, and the new system will build on the ‘in-house’ “Environment-based approvals are a “In addition, amendments to the reforms already implemented by the tangled web that needs untangling, and Environmental Protection Act 1986 saw agencies.” I believe my experience in the practical a number of duplicative appeal points difficulties of achieving this gives me a removed, and amendments to the Another reform will be the development head start in this crucial area. Environmental Protection Regulations of a publically-available online 1987 have also seen reductions in costs environmental database and library. “In particular, it will be important to for small business,” he said. revive the negotiations with the Federal “Mining and petroleum companies Government regarding accrediting Mr Marmion said he was committed to have invested hundreds of millions State Approvals under the Environment continuing the reform program initiated of dollars over the years collecting Protection and Biodiversity Conservation by his predecessor Norman Moore, with data and undertaking surveys, and this Act 1999.” two critical areas of focus: reforming the information, along with data held

8 a calculatedearlycommitmentto The fastturn-aroundreflectsnotonly after theFinucaneSouthdiscovery. after beingsanctionedand24months It beganproductioninMay,16months north ofDampier. northern CarnarvonBasin,about150km to theMutineerExeteroilprojectin development isathree-welltie-back The Santos-operatedFletcherFinucane sanction andthenfirstoil. which theprojectwentfromdiscoveryto Of mostsignificanceisthepaceat petroleum liquidstradedeficit. that itsoutputwillhelptrimAustralia’s noteworthy forotherreasons,notleast Fletcher Finucaneoildevelopmentis radar buttherecently-commissioned project onWesternAustralia’sresources At $490million,itmightnotbethebiggest Basin project helpstrimoildeficit Government regardingtheEnvironment future negotiationswiththeFederal will beanimportantconsiderationin “I amalsoconfidentthedatabase environment assets. governments protectourunique processes andhelpresearchers It willalsostrengthenourapproval reduce costsandtimelinesforindustry. “Easy accesstothisinformationwill Mr Marmionsaid. regulators andthecommunity,” in thefuturetocompanies,researchers, profit organisations,willbeavailable by governmentagenciesandnotfor The NanHaiVIwasusedtodrill thethreewellsforFletcherFinucaneoilproject. ramp-up, itwasflowingatacombined, May and,aftercompletingthethree-well Fletcher Finucanecameonline20 target forlaterthisyear,earlynext. identified theVanuatuprospectasadrill other near-fielddiscoveriesandhas Santos hassignalleditplanstotie-in new lifetoanexistingasset. together threejointventuresandgave new projectmoreattractive,itbrought rein incapitalexpenditureandmakethe Mutineer Exeterfacilitynotonlyhelped The FletcherFinucanetie-intothe that outputhasdeclined. production in2005but,morerecently, sanctioned adecadeagoandbegan The MutineerExeteroilprojectwas existing infrastructure. but alsothebenefitsoflinkingwith long leaditemsandgoodexecution, into internationalmarkets,”hesaid growing miningservicesectorexporting there arealsogreatprospectsforour on attractingoverseasinvestment, petroleum sectorisheavilydependent “While WesternAustralia’sminingand Western Australia. new developmentopportunitiesfor focusing onfacilitatingandencouraging Mr Marmionsaidhewouldalsobe as MinesandPetroleumMinister, While stillintheearlydaysofhistenure Approval processes.” Act andthewayitinteractswithState Protection andBiodiversityConservation attractive placetoinvestinexploration.” Western Australiainparticular,an environment thatmakesAustraliaand “It isessentialthatwecreatearegulatory me withinthreemonths,”MrMarmionsaid. industry stakeholdersandreportbackto “I wantmydepartmenttoconsultwith business inWA. they arenotaddingtothecostofdoing of allpoliciesandguidelinestoensure DMP willundertakeanimmediatereview State tonewinternationalaudiences.” international strategythatwilltakeour Mines andPetroleumtodevelopan “I haveaskedtheDepartmentof with thedevelopmentdrilling. various logisticalsupportassociated underwater vehicleservicesand supply boats,remote-operated as helicopterservices,workand drilling andconstruction,aswell surveys, pipelinedesign,offshore the front-endengineering,pipeline during developmentincluded Work awardedtolocalcompanies managers andengineeringcontractors. vessel workersthroughtoproject the project,fromrigandconstruction Around 1000localjobswereengagedin for thefirstyear. an averagerateof15,000barrelsaday output, theprojectisexpectedtohave Notwithstanding thehigherinitial barrels ofoiladay. better thanexpectedrateof45,000 9 Photo: Santos Offshore projects Rankin the platform help seabed scientists for research chalk up record year centre

Understanding the seabed is crucial to the success of offshore oil and gas COFS’s, and WA’s, expertise in projects, especially those being developed in much deeper waters off the offshore foundations grew from studies needed to remediate continental shelf, such as the Gorgon Project, Australia’s largest single the foundations of two giant gas resources project. platforms – North Rankin A and Goodwin – in the 1980s and 1990s. Proposed oil and gas developments “We look into quite a few aspects of earmarked for Western Australia resulted what we call the mechanical behaviour According to Professor David in a bumper 2012 for seabed scientists of soils, such as its strength, stiffness White, from COFS, in those days working at the Centre for Offshore and permeability, plus the capability of all the original geotechnical Foundation Systems (COFS) at the the material to consolidate or liquefy. design work for such University of Western Australia (UWA). These are two processes by which the developments was done overseas. strength can rise or fall as soil is loaded, The team of researchers at COFS’s soils and which need to be understood for “With the recently-commissioned lab analysed soil samples submitted to it by efficient and safe design.” North Rankin B platform, the many resources projects either underway geotechnical work was done here or proposed. Last year, the lab undertook COFS is now involved in all of the major and completed a third more technical projects under development in WA, in Perth, using COFS’s soils lab, reports than in 2011. having performed studies to support and by many COFS graduates the Pluto, Gorgon, Wheatstone, Browse, working in local industry,” he said. The lab’s findings virtually underpin the Ichthys, Sunrise, Julimar, Macedon, project’s success. “The geotechnical input to Equus and Scarborough projects. Australian projects is almost “Engineering design and analyses for Apart from its work in Australia, COFS wholly performed in Perth, most of those projects are based on the researchers also assist the oil and gas thanks partly to UWA’s renowned information we generate in the soils lab industry in the US, Europe, Brazil, India, facilities such as the soils lab, here at UWA,” said Professor Antonio the Middle East and Southern Africa. COFS’s two centrifuges, and the Carraro, the laboratory’s supervisor. award-winning O-tube facility, Not only is COFS attracting work from The seabed under much of WA’s coastal which simulates the effects of around world, it is also attracting waters consists of chalky, calcareous cyclones on underwater pipelines. researchers. sediments – in effect, brittle shell fragments – that are vastly different to the seabeds in Professor Carraro is originally from Brazil, “All this local expertise means most other oil and gas regions around the and more recently led a research lab at companies avoid the need to world and present particular hazards. Colorado State University in the US, until go to other oil and gas centres he was attracted to Western Australia. such as Norway or Houston to “As engineers, we need to understand not find geotechnical support for only the materials used to build offshore “COFS’s research team is phenomenal and their projects. structures, such as concrete and steel, COFS is definitely one of the top centres in but we also need to understand the the world to do this type of research, which “It also means COFS’s underground materials that support these were the main reasons that made me want geotechnical graduates populate structures,” Professor Carraro said. to come here,” he said. the local consultancies, providing the expertise needed to perform the geotechnical design work in our local seabed materials.”

There’s a final, important consideration.

“At a time when the local content of these big oil and gas projects is under scrutiny, COFS’s facilities are an important enabler behind one of the biggest elements of

Photo: UWA local content in the design of Australian oil and gas projects,” Senior soil technician Usha Mani checks seabed soils as part of the R&D for local says Professor White. oil and gas projects.

10 Gingin plant to boost State’s gas supply Photo: Empire Oil and Gas

The newly-commissioned gas processing plant at Gingin, just north of Perth.

WA oil and gas company Empire has Project manager Matt Biddle said the The RPS report covers only those just realised a 16-year dream with its gas would be extracted from the two wells, permits with sufficient seismic coverage. newly-commissioned gas processing processed at the plant and piped “We believe the potential of the Perth plant north of Perth. 3.2km to the DBNGP tie-in point located Basin is immense,” Mr Marshall said. near the Brand Highway for sale to Alcoa The plant, 18km north of the rural town of Australia. “There could be anything up to 92 trillion of Gingin, should enhance the State’s gas cubic feet of gas, and 14 billion barrels supplies for more than 20 years. The condensate will be processed and of oil in five of our 11 permits. temporarily stored onsite in two 150,000 Empire Oil and Gas NL’s Red Gully gas litre tanks, before being trucked to the BP “If the reserves are there, the Perth and condensate processing plant is the refinery at Kwinana. Basin has a tremendous advantage first dedicated gas and condensate-rich due to the proximity to the market and processing facility in the onshore Perth He said there would be ongoing drilling existing pipeline infrastructure.” Basin — an area long regarded as ‘tight’. operations for more wells. Shire of Gingin President Michael The $34 million plant will produce gas The company is also the first in WA to use Aspinall said the facility would give and condensate from the Red Gully-1 and 3D heliseismic investigations over the locals an opportunity to be trained in Gingin West-1 wells and be separated into Wannamal and Gingin Gas Field Areas the oil and gas industry as the project dry gas, condensate (light crude oil) and to help identify future drilling prospects. expands in the coming decades. produced water. Wannamal and Wannamal Deeps are estimated to hold 66bcf of gas and Empire managing director Craig Marshall 2.3MMbbl of condensate. said the facility would help address the high demand for domestic gas in WA. “The application of 3D seismic has been the key to understanding the reservoirs “The plant will make the gas suitable for and how they work,” Mr Marshall said. sale into the Dampier to Bunbury Natural Gas Pipeline,” said Mr Marshall, who has “We have unlocked the secret of success been with the project for all 16 years and in this part of the Perth Basin, for sure. faced many hurdles along the way. We know it’s pretty ‘faulted-up’, because it’s a break-up basin, formed when India “It is designed specifically for the and Australia split.” condensate-rich gas and to meet the specification for entry into the pipeline, Helicopters are used to drop seismic for which Empire has established a drilling equipment in to ground crew to 20-year agreement,” he said. minimise the environmental ‘footprint’ on the land, in particular within the Mr Marshall said the secret to maintaining Boonanarring Nature Reserve. his focus since the company listed in 1997 was that he loved what he did. Long term, the potential seems positive. The company has obtained independent “If you didn’t love this business, you studies by RPS Energy from which Empire Photo: Empire Oil and Gas wouldn’t be in it,” he said. estimates five of its Perth Basin permits “When the second well flowed at 12 million contain an estimated 14 billion barrels Flowline from the wellheads which of oil and more than 92 trillion cubic feet travel into the facility delivering gas cubic feet a day it was very satisfying, after and condensate for processing. such a long time exploring.” (Tcf) of gas in unconventional reservoirs.

11 High-flying power project takes shape

Helicopters are being used to string the “The Mid West Energy Project is one “This State Government is working towards first power lines for Western Australia’s of the most important infrastructure a clean energy future and are building the biggest electricity infrastructure project projects in WA. The transmission lines infrastructure that will be able to support in 25 years. will have the capacity to feed new renewable generation feeding into the grid resources projects and help tap the for decades to come,” Dr Nahan said. The Mid West Energy Project (MWEP) is economic opportunities in this region. building a 190km transmission line from The transmission line will ultimately Neerabup, north of Perth, to Eneabba at “This project itself is creating jobs for terminate at the recently-constructed Three a cost of $443million. West Australians, employing just over Springs Terminal, which was energised last 300 people, but it will create more in year, with power now flowing to Gindalbie Helicopters are threading power lines and Ansteel’s Karara iron ore mine. through the 388 transmission towers, the long run by powering growth in the which are more than 60m tall. Mid-West. “Karara contributed significant funding towards the construction of this “This mineral-rich region contributes Inspecting the aerial work, Energy transmission line, Dr Nahan said. Minister Dr Mike Nahan said the project about $2.5 billion to the total value of “This project is symbolic as an example was a vital investment in opening the WA’s exports and demand for electricity of the mining sector contributing to resources-rich Mid-West region. for more new mining sites is expected to the building of critical infrastructure for grow in the coming years.” the State.” “The transmission line will supply industry and help drive economic growth The Minister said the MWEP would The southern section of the project is in the region,” Dr Nahan said. “It will use more steel than the Eiffel Tower. being built by Downer EDI Engineering facilitate the bulk transfer of electricity It will also support renewable energy Power. The MWEP project is scheduled to and from the Mid-West. generators in the Mid-West corridor. for completion by mid-2014. Photos: Western Power

A Western Power technician guides the insulator string to its installation location on the transmission tower, while (inset) Minister Mike Nahan watches a helicopter assist in threading a power line.

12 Latest WA gold mine boosts investor confidence Photo: Norton Gold Fields Limited

Enterprise panorama with Cullum Winn (GM Paddington Operations), Jinghe Chen (Chairman) and Dianmin Chen (CEO).

Mines and Petroleum Minister Bill the Goldfields and the broader Western the 10-year average, something that is Marmion commended the opening of a Australian economy,” Mr Marmion said. certainly driving development like this from Norton Gold Fields.” new gold mine near Kalgoorlie-Boulder The fact the company was majority by a Chinese-controlled miner, saying it controlled by China’s largest gold The Enterprise Mine will supply the bulk of demonstrated continued confidence in producer, Zijin Mining, showed continued the sector. the ore to the company’s 3.3 million tonne confidence in the sector, he added. per annum Paddington Mill. One of Australia’s largest domestic gold “This move solidifies Western Australia’s producers, Norton Gold Fields, opened reputation as a global mining investment Gold remained WA’s second most valuable its $110 million Enterprise Mine in Ora destination, and I welcome Norton Gold mineral sector in 2012, reaching $9.4 billion Banda in May. Field’s position as a long-term WA gold in sales — a six per cent increase from 2011. miner,” Mr Marmion said. “From November, the mine will begin Last year, Norton Gold Fields, which is producing approximately 110,000 ounces “While the price of gold has taken a modest 89 per cent owned by Zijin Mining Group, of gold a year and employ 80 staff for drop during the past year, the current produced more than 150,000 ounces of the next five years, which is great for price is still around 60 per cent higher than gold in WA. Gas projects lift local content spending Australian businesses supporting the Project has committed close to development of the Chevron-operated $10 billion. Gorgon and Wheatstone Projects have “Chevron works closely with local now received commitments of a massive industry to maximise opportunities for $30 billion in local-content spending. work on these projects and has awarded The two natural gas projects have also more than 600 contracts with local created 14,000 direct and indirect jobs companies to date.” across Australia – 10,000 on the Gorgon Mr Krzywosinski said Gorgon and Project and 4,000 on Wheatstone. Wheatstone were well placed to take “Chevron and its partners are advantage of a rapidly increasing investing billions of dollars in demand for cleaner-burning natural gas. Australian goods and services as well “Global LNG demand is expected to as creating thousands of local jobs,” increase significantly by 2025, at which said Chevron Australia managing point there is a potential supply shortfall director Roy Krzywosinski. estimated at almost 150 million tonnes,” “The Chevron-operated Gorgon Project Mr Krzywosinski said. “This equates has now committed $20 billion to local to 10 Gorgon projects and about half a companies, while the Wheatstone trillion dollars in investment.”

13 Photo: Rio Tinto

The launch of the Hammersley Agricultural Project, as featured in Prospect, December 2012. Used mine water agricultural project boosts production

Rio Tinto’s innovative use of surplus hectares. One small seven hectare pivot solutions, such as the agricultural water from the recent commencement is reserved for growing native seeds for project, to put that water to good use. of large scale mining operations below future minesite rehabilitation. “This expertise will prove increasingly the water table has resulted in an The trial cut of the Rhodes grass crop was important as more of our sites produce inaugural bumper hay crop from its in January 2013, and the first quarter’s surplus water due to increased mining pastoral leases in the Pilbara. operations resulted in approximately below the water table.” As reported in the December 2012 issue 3,000 bales — equating to more than Rio Tinto holds six pastoral stations in of Prospect, the Hamersley Agricultural 2,000 tonnes of hay, with a revised annual the Pilbara and manages five covering Project (HAP) covers 835 hectares of estimate of about 25,000 tonnes. land and takes advantage of surplus 1.5 million hectares of land in total. Rio Tinto general manager for Climate water supply generated from nearby The five managed stations of Change, Water and Environment, Allan Marandoo mining operations to grow Karratha, Hamersley, Rocklea, Juna Jackson, said the launch had been a great pasture for cattle stations operated by and Yarraloola can jointly run up to success and remained on track to produce Rio Tinto across the Pilbara. approximately 25,000 head of cattle. hay to project expectations. The remainder is used to support mine Pastoral lease and rangeland “We have already started supplying our operations, provide water supply for the management brings a number of pastoral operations in the Pilbara and are Tom Price township, or is re-injected in obligations including; the maintenance presently refining the process by which we to the Southern Fortescue Borefield. of a commercial cattle herd, could sell any surplus externally,” he said. The HAP is the first project of its kind management of environmental aspects in the Pilbara, relying on 35km of mild “This project will produce hay all year including rangeland pasture cover, steel pipe, 22 pumps and large-scale round at a consistent quality, and we water and fence facilities and fire risk, associated pumping infrastructure. The expect to cut the crops up to eight times and interaction with Traditional Owners. completed project uses large centre per year. Property management strategies for pivots, each able to irrigate 40 to 50 “Rio Tinto is committed to responsible each station encompass all company hectares of pasture land. water management across its operations. policies with emphasis on safety, Most pivots are now operating, with 15 of That means not only limiting use wherever local heritage values, and natural the total 17 pivots irrigating around 750 possible, but also enabling innovative resource conservation.

14 WA resources industry remains a ‘revolving door’

Western Australia’s resources industry applications and finalised 98 per cent Continued expansion of the iron ore continues to ensure the long-term within the 65 business day target. industry is also supporting high levels of growth of the State’s economy. major infrastructure construction. While some projects have been shelved When one project ceases operations, or postponed during the past year due to This includes Rio Tinto’s $9.5 billion another begins. falls in global commodity prices, there expansion of Pilbara mines, ports and railways to 290 million tonnes per The cornerstone of growth in the is still an estimated $177 billion worth annum (Mtpa), with further expansion to WA mining industry is private sector of resource projects under construction 360 Mtpa by 2015. investment, and according to the in WA, with a further $120 billion Australian Bureau of Statistics (ABS) earmarked for major future projects. Additional major infrastructure developments include BHP Billiton’s the mining industry invested a record For the petroleum sector, the $52 $39 billion in WA during 2012. $1.6 billion Port Blending and Rail Yard billion Gorgon LNG project is a major facilities, and Fortescue Metals Group’s development well advanced, while the This represents a 12 per cent increase resumption of its Pilbara mines and from the previous year and highlights $29 billion Wheatstone LNG project infrastructure expansion plans. the level of resource construction and $5 billion North Rankin natural gas activity in WA, which continues to be a redevelopment are also in full swing. With 975 operating mine sites, major driver of the economy — fuelled 523 commercial mineral projects, by strong demand from Asia. Major iron ore mines under 32 petroleum fields, and a wealth construction include Hancock of untested mineral occurrences Department of Mines and Petroleum Prospecting’s $9.5 billion Roy Hill mine, throughout the State, Western (DMP) Deputy Director General BHP Billiton’s $3.3 billion Jimblebar Australia’s resources sector will remain Tim Griffin said the figures showed mine expansion and CITIC Pacific’s strong for a long time to come,” investment in committed projects $7.7 billion Sino Iron project. Dr Griffin concluded. across WA remained strong. “However, early indications are that the previous high levels of high-risk exploration expenditure – sitting at around $2 billion each for petroleum and minerals – is softening,” he said. “This is reflected in the difficulty junior explorers are having in attracting investment to support their projects. “Expenditure on exploration is critical in ensuring new mines are coming on stream as the current mines run out of ore. “Demands on government remain high and this is demonstrated through the number of applications for both exploration and production activities the department processes each year, usually around 7000.” Each application is subject to a rigorous approvals process, which may often include other government agencies such as the Environmental Protection Agency, Department of Water, Department of Aboriginal Affairs and the Department of Environment and Conservation. In the first quarter of 2013, DMP Deputy Director General Approvals, Dr Tim Griffin. received 676 exploration licence

15 New shiploader boosts Cape Lambert Photos: Rio Tinto

Aerial view of the port at Cape Lambert.

Rio Tinto has taken a major step forward in 290 million tonne annual capacity for the two-sided berth that will provide its expansion of its Pilbara operations, with Pilbara operations.” facilities and loading for two large ore the installation of the new shiploader with carriers with the capacity to deliver up to The shiploader joins two new stackers, a nominal 55 million tonne annual capacity 250,000 tonnes of iron ore to each. two reclaimers and a new car dumper in on the new wharf at Cape Lambert. the newly-constructed stockyard for the Work on the second stage (phase B), The shiploader was swung from the Cape Lambert expansion. will add a 400-metre wharf extension ‘BigLift’ vessel and placed directly on to with another two berths, this second The company says all major coastal its rails on the wharf, which will eventually stage is already well advanced, with all infrastructure for the 290 Mt/a project is extend 1.4 kilometres from shore. dredging requirements and majority of now safely on site and in place. piling now completed. Once all works The shiploader was manufactured offshore The new Cape Lambert wharf is being have been completed the Cape Lambert and transported to the Pilbara in modular constructed in two stages, with the port will have the largest export capacity form by the specialist heavy-lift ship. The first stage to be completed in the of the three iron ore port assets owned modular design meant a narrow timeframe third quarter of 2013, consisting of a by Rio Tinto. was necessary to transfer the 1000-tonne shiploader from the vessel to its position, minimising the safety hazard in the works and improving the construction time. Unloading and erection was completed within a few days. Rio Tinto Pilbara Projects chief operating officer Michael Gollschewski said the shiploader was a major component of infrastructure in the expansion programme and it was exciting to see it secured in place. “The last time we received a new shiploader was in 2007, also at Cape Lambert, on the existing wharf as part of the capacity expansion to 220 million

tonnes a year,” he said. Photo: Rio Tinto “This is a powerful visible reminder that we are progressing rapidly towards the A systems officer monitors movements at Cape Lambert Port Control. reaching our interim target of achieving

16 Energy from waste to plug power gap

Plans to use household rubbish to The group would use a process called low- on a large scale, that landfill diversion produce electricity could be a reality temperature gasification, which extracts rates will be among the highest in within two years, with Western Australia’s gas from decomposing waste before using Western Australia, and clean renewable environmental watchdog approving the it to generate heat and electricity. It would power generation is established.” State’s first waste-to-energy plant. then be fed into the electricity grid. New Energy Chief Executive David The recommendation by the The approval comes at a time plans for Sneddon said Port Hedland was Environmental Protection Authority (EPA) other similar projects are taking shape. selected due to the pressure on the will allow Perth company New Energy waste management and power New Energy wants to build another plant, to plug a looming shortage in Pilbara generation infrastructure in the region, at Kwinana, while a Melbourne-based electricity supplies, with its proposal to and to play a key role in assisting to company backed by Janet Holmes a Court build a $180 million power station at Port deliver the State Government’s has plans for a $400 million, 60MW station Hedland fuelled by gas from waste. ‘Pilbara Cities’ vision. in the same precinct. Under the plan, the company would take “In order to achieve the State Enzo Gullotti, New Energy’s chairman, about 100,000 tonnes of municipal waste Government’s objective of building the welcomed the EPA’s endorsement. a year from across the Pilbara and turn population of Karratha and Port Hedland it into enough electricity to power up to “We are passionate about delivering this into cities of 50,000 people, sustainable 21,000 homes and businesses. solution and providing a world-class waste and power generation infrastructure environmental outcome for the Pilbara,” is critical,” Mr Sneddon said. The project is an Australian first, and Mr Gullotti said. will convert waste, which would “New Energy’s solution is well placed to otherwise have gone to landfill, into a “The project has many benefits. It will assist the Pilbara in keeping pace with its clean energy source. ensure recycling initiatives can be realised unprecedented growth.” Images supplied by New Energy

Top: A simplified diagram of the waste-to-energy conversion process. Bottom: An artist’s impression of the proposed waste-to-energy plant at Port Hedland.

17 Fund to enhance mine rehabilitation

The new Mining Rehabilitation Fund (MRF) increasing bonds to cover full rehabilitation “They cannot be used to address the started accepting contributions on a costs would be financially unsustainable problem of existing abandoned mines, voluntary basis from 1 July. for most mining companies.” otherwise known as legacy sites.”

Department of Mines and Petroleum (DMP) Dr Gorey said bonds also discouraged Under the MRF, one of the uses for the investment by tying up significant funds Environment Division Executive Director Dr interest generated by the fund will be that could be used for developing a Phil Gorey said the fund was established rehabilitating legacy sites. following extensive consultation with mining project. industry, government, conservation and “The MRF will overcome these issues “So not only does the MRF address community stakeholders. by providing a pooled fund, levied on the issue of having insufficient “Under the current bonds system, all mine site operators according to bonds to cover the State’s liability, Mining Act 1978 tenement holders are the environmental disturbance on a it also enhances the State’s required to provide bonds as security to tenement,” he said. ongoing capacity to manage and rehabilitate abandoned mines,” ensure that they fulfill their environmental The fund addresses another important issue. obligations,” Dr Gorey said. Dr Gorey said. “Under the current system bonds can “The bonds do not cover the true cost only be used for specific mine sites,” “This will lead to better environmental of rehabilitating abandoned mines and Dr Gorey said. and community safety outcomes.”

Senior staff start environmental reforms The Department of Mines and Petroleum (DMP) has wasted no regulations with the traditional approaches that both industry time in implementing the Reforming Environmental Regulation and DMP have to date,” Dr Leybourne said. (RER) program, hiring two new senior staff members. Mr Tantala moved to Perth from his home city of Canberra in Dr Marnie Leybourne and Steve Tantala joined DMP earlier this January, just before taking up his new position at the department. year in the Environmental Division. He previously worked for the Commonwealth in the regulation Dr Leybourne, who has worked for the State Government division of the resources, energy and tourism department. for 17 years and was previously an Executive Director at the Department of Water, has been appointed General Manager The RER program will help deliver greater certainty, confidence Administration and Reform, while Mr Tantala comes to and clarity surrounding the department’s environmental the department with 12 years’ experience working for the regulatory system for all stakeholders. Commonwealth Government, and has been appointed Director Importantly, the reforms will strengthen the enforcement of Operations. capacity of the department. “I’m looking forward to successfully combining the new For more information on the RER initiative, visit: risk-based and outcomes focused approach to environmental www.dmp.wa.gov.au/RER

18 Royalty incentive for magnetite producers

Fact File • Under the Magnetite Royalty Rebate up to 50 per cent of the 5 per cent royalty on magnetite will be returned to the producer. • There are 29 potential magnetite mines at different stages of planning and development in WA. • In 2011, Deloitte Access Economics estimated that a magnetite industry could add $4.5 billion and 4,000 jobs to Australia’s economy — mostly in Western Australia. • The five per cent royalty rate for magnetite, compares with a 7.5 per cent rate for hematite, the ore currently exported from Special day … (from left) George Jones, Premier Colin Barnett and Tim Netscher, Western Australia. Managing Director of Gindalbie. • The Karara Iron Ore Project minesite A magnetite royalty rebate, to be He congratulated Karara Mining Limited is 320km north-east of Perth, and 200km east of Geraldton. considered on a project-by-project basis, partners, Gindalbie Metals and the will provide a major boost for a developing Anshan Iron and Steel Group Corporation • In addition to the mine and Western Australian iron ore industry sector, (AnSteel), on their success. processing facilities, project says the Premier and Minister for State infrastructure includes 85km of “The State Government has worked Development Colin Barnett. new railway, plus upgrades to the closely with the proponents to get this existing network; 180km of 330 kV Mr Barnett was speaking at the opening of project up and running and I congratulate power line from Eneabba to the State’s first producing magnetite iron them on getting to the production stage,” Karara; 140km water pipeline from ore mine, the Karara Iron Ore Project. Mr Barnett said. Mingenew to Karara; and train “Western Australia has vast magnetite “Karara is an outstanding example of the unloader, storage and handling resources and this ore is preferred by many positive impact Chinese investment is facilities and berth at Geraldton port. Chinese steel mills,” the Premier said. having in WA.

“This industry has the potential to stimulate “It is a significant achievement in terms of He said the mine would initially produce new investment and construction activity Chinese investment and a major example of eight million tonnes per annum (mtpa) of throughout the State. Chinese confidence in Western Australia.” magnetite, with the potential to expand to 16mtpa or more. “However, bringing magnetite ore to grades Mines and Petroleum Minister Bill suitable for export is capital and energy Marmion said the $2.5 7 billion Karara AnSteel’s integrated steelworks at intensive, so this royalty rebate will assist in project would produce many benefits for Bayuquan, China will take all the project’s recovering the massive investment required local communities, the region and the iron products. to achieve production. State over its expected 35-year life. Mr Barnett said the Western Australian “This means a rebate of up to 50 per cent “In addition to creating important new Government had worked closely with the of royalties paid will apply for the first 12 employment and business opportunities, Karara partners to secure the project, months of magnetite production, before Karara has made a significant investment including upgrading the Pinjar to Eneabba returning to the full royalty rate of 5 per cent.” in community projects, in Morawa and the electricity transmission line from 132kV to The policy will apply for a three-year period Mid-West,” Mr Marmion said. 330kV, and facilitating regulatory approvals. from now. The Minister said the project employed The Premier said as the Mid-West’s Mr Barnett said the Karara project was a more than 2,400 people at peak largest iron ore exporter, Karara would major step forward for the State and for the construction and had generated 500 also have a role in securing a deep water Mid-West region. direct permanent jobs. port for the region at Oakajee. 19 Resources contractors get financial boost

Continued growth in Western Australia’s resource sector projects has created many opportunities for small and medium enterprises (SMEs) Photo: Innotech in WA that supply goods and/or services. However, gaining access to finance to take on these opportunities can sometimes be a Bonding assistance of $1 million to challenge. Prospect takes a look at one government agency that pipeline specialist Innotech enabled the company to progress de-watering is providing solutions. services in the Pilbara and at the same time bid for export contracts.

The Export Finance and Insurance “EFIC’s support was crucial in helping EFIC provided Innotech with a $1 million Corporation (EFIC) is a Federal us protect our obligations as a supplier bonding facility to be utilised for export- Government-backed (AAA-rated) provider of to this landmark LNG project and also related contracts approved by EFIC. financial solutions for contractors working helps us secure future LNG deals, thereby It is anticipated the $1 million in bonds in the supply chain for resource projects. supporting our future revenue and profit issued by EFIC, by way of guarantees growth,” said Binder managing director to St George, will be primarily used in These are contracts where the ultimate Paul Bennett. goods produced, such as oil, gas, iron ore connection with Innotech’s provision and gold, are exported from Australia, Leela Hanson, EFIC’s Director, SME & of dewatering services at Rio Tinto’s but the contractors themselves may not Mid Market, WA, said Binder’s case was Yandicoogina iron ore mine in WA’s be exporters. a prime example of how EFIC can help Pilbara region. contractors and subcontractors involved in Any bonds issued by EFIC should EFIC works directly with eligible export-related deals win more business. contractors and their banks to provide also enable Innotech to free up its tailored financial solutions, including “We can assist eligible Western Australian cashflow and allow it to bid for more working capital and bank guarantees. companies working on major export- export-related projects. related resource projects with financing “The issuing of performance and EFIC recently assisted WA pipe suspension solutions to supplement what their banks warranty bonds through EFIC and designer and manufacturer Binder Group offer,” Ms Hanson said. Pty Ltd. Binder is one of WA’s largest St George Bank has been instrumental designers and manufacturers of proprietary An EFIC bond facility also enabled WA in ensuring Innotech’s current and and custom-built pipe suspension solutions dewatering infrastructure supply and future cash flow levels remains stable for the oil and gas, power generation, pipeline installation SME, Innotech Site and consistent, thus allowing Innotech to petrochemical, mining and mineral Services Pty Ltd, to fulfil its contractual confidently tender for further processing industries. It also supplies obligations and free up cashflow. export-related projects,” Matt Reese, director of Innotech Site Services said. Woodside Petroleum’s Pluto LNG project Based in Kewdale, WA, Innotech provides and the Worsley Alumina refinery, both specialised services in the installation in WA, as well as other Australian and of pipeline components and the provision international projects. of dewatering infrastructure for mine Fact File site operations. The company needed to provide a warranty To be eligible for assistance your bond for the supply of pipe supports for Dewatering is the process of removing company should: the Gorgon liquefied natural gas (LNG) water from mines which constitutes an • Be financially stable, with annual project, Australia’s largest single resource essential part of extracting resources, turnover of circa $5 million project and one of the world’s largest helping to optimise mine production and or more. natural gas projects. reduce operational costs. • Have at least three years’ trading EFIC provided a warranty bond for $547,000 The company needed to supply experience. to cover Binder’s warranty obligations performance and warranty bonds for its for the Gorgon project. Warranty bonds contracting services to export projects of • Require finance for the growth are a common contractual obligation for mostly blue-chip mining clients. of your export supply chain construction projects involving the supply contract and your bank is not However, Innotech’s bank, St George (a of goods and/or services for export and able to provide all of the financial export-related purposes. division of Westpac Group), recognised its support required cash collateral requirements would have The bond also enabled this SME to use constrained the company’s cashflow and Contact Leela Hanson, EFIC Director, its existing bank guarantee lines to fund hence its ability to tender for new contracts SME & Mid Market, WA, on: 0408 974 215 [email protected] additional LNG export projects. and approached EFIC for support. , or

20 LNG projects in the spotlight

During March WA’s petroleum petroleum exploration history, “With crude oil and condensate supply regulation boss put the State’s to reinforce potential and current expected to decrease significantly petroleum sector on the national stage investors’ confidence. during the next few years, shale oil and at a key industry event. “I also spoke about how WA’s off-shore liquids rich in shale gas could offer DMP Petroleum Executive Director Bill LNG industry is expected to increase an alternative solution for domestic Tinapple (pictured) highlighted WA’s oil significantly in the next five years, with the demand,” he said. and gas exploration and development construction of five new projects valued “Additionally, Western Australia also opportunities during a keynote address around $120 billion,” Mr Tinapple said. has an estimated 280 trillion cubic feet at the Excellence in Oil and Gas “This increase will provide an excellent of untouched natural gas from shale and Conference in Sydney. opportunity for companies to invest, tight rock resources in the Canning and The conference, which attracted 600 particularly for farm-in and equipment northern Perth basins. delegates, provided an invaluable insight companies.” “While these resources are currently into where investors are looking to Western Australian shale oil and in the exploration stage, they could commence new projects. gas resources were also touted as potentially form part of WA’s long-term Mr Tinapple said he used the opportunity potential investment opportunities, resources development and provide to promote Western Australia’s rich Mr Tinapple added. secure energy supplies.”

US gas industry a learning opportunity for Western Australia

As Western Australia’s emerging natural department hasn’t received any “The events allowed me to promote gas from shale and tight rock sector applications for future activities — so this Western Australia’s shale gas resources gains momentum, a leading petroleum tour was really about getting up close and and gain an understanding of the expert from DMP recently toured key personal with the activity,” he said. experienced operators that are interested shale gas sites in the United States. in investing in our petroleum industry,” “After all, with WA’s domestic gas he said. DMP Petroleum Director Jeff Haworth supply anticipated to fall below demand visited a number of West Texas by as early as 2016, it is important “I was also able to have some discussions sites including BHP Billiton and we explore alternative energy solutions with U.S manufacturers and service ConocoPhillips — where advanced to ensure WA’s energy security for providers, to encourage investment.” drilling technologies and hydraulic future generations. The US is ranked second in the world for fracturing was being used to safely and “If exploration for shale gas proves shale gas, with an estimated resource of effectively extract shale gas. successful, DMP is committed to ensuring 862 trillion cubic feet. Mr Haworth said the visit was an the responsible and safe development of Australia is ranked sixth in the world, invaluable opportunity to learn from an this emerging industry.” with the majority of shale gas resources, advanced jurisdiction like the US, as Mr Haworth also presented to the totalling 268 trillion cubic feet, found in WA’s shale and tight gas industry was 18,000-strong crowd at the 2013 Winter Western Australia. currently in the early exploration phase. North American Petroleum Expo in “At the moment there isn’t any shale Houston Texas and attended the Fifth gas exploration in WA and the Energy Conference in the same State.

21 Global technology developed in Western Australia

As the oldest refinery in Australia, the WA-based operation of leading global bauxite miner and aluminium producer Alcoa is the centre for the company’s cutting-edge development of technology. With the company celebrating 50 years in Australia in 2013, it’s timely to take a look at the technology driving the industry.

Alcoa Australia represents the largest its operational supply chain, and assisting rolled out to Alcoa’s other two WA vertically integrated bauxite mining, them to access the global market place. refineries and its USA refinery. alumina refining, aluminium smelting and However, a critical factor which sets Alcoa • FTIR Bauxite Analyser: New method for aluminium rolling system in the world. Australia apart from its national and measuring main constituents in bauxite Alcoa’s WA operations are impressive: global mining peers is the extent to which using a five minute test to replace days its mine sites produce more than technology and innovation is nurtured, for laboratory analyses. The breakthrough 75 million tonnes (Mt) of bauxite and its developed and adopted across the global enables Alcoa to maximise its bauxite three refineries a combined output of organisation. And it all stems from its resource through advanced mine 9.1 Mt of alumina, or more than 50 per cent R&D division, the Technical Delivery Group planning, thereby reducing environmental of all alumina exported from Australia. (TDG), located at the Kwinana refinery, footprints for given production levels. Employing more than 4000 workers in WA, just south of Fremantle. Alcoa estimates the innovation has increased mine life of WA operations from a total Australian workforce of 6000, Alcoa has invested in technology and by more than a decade. It is a fully the company contributes significantly to research and development (R&D) since the automated robotic system, delivered by a the national economy, with $5 billion in industry began more than 120 years ago. exports per annum. small local robotics company in WA. In 1996 the TDG team was given global The technology has since been exported It is also engaging many and varied SMEs responsibility for all of Alcoa’s refining to three refineries outside Australia. and engineering groups which are part of systems, including the transference • ‘Bright Hydrate’ process: Creation of of R&D carried out in Pittsburgh to a new export product for the Kwinana Western Australia. refinery which produces in volume a Examples of technologies developed by very white aluminium hydroxide product, TDG in Australia include: resulting in a high margin product. • Mud Level Gauge: The world’s first • Ready Grit: At an advanced stage of process for accurately measuring research and market development, solids’ levels in Alcoa’s major this will be the world’s first large scale processing vessels. The instrument product made from bauxite residue. is manufactured in WA and exported It is targeted at large scale industrial fill to all Alcoa refineries globally, with usage as well as niche applications to more than 150 installed. Parts are still

Photo: Alcoa reduce phosphate fertiliser usage and provided by the WA manufacturer. reduce algae growth (eutrophication). Construction coordinator Steve • On-Line Liquor Analyser: World’s • Residue Dry Stacking Technology: Saunders and WA Residue Operations only on-line Bayer liquor analyser, State of the art safe bauxite residue Manager Jamie Muir inspect the carbon manufactured by a local WA company area construction and operation capture plant at Alcoa Kwinana refinery. and exported to Alcoa’s global system. developed using world class rheological • Carbon Capture in Residue: Primarily research carried out by the University designed to reduce causticity of of Melbourne. It is openly shared with bauxite residue, the process captures industry because of its environmental benefits, is manufactured in WA and CO2 and sequesters it in inert mineral form. In full scale operation at the exported globally.

Kwinana refinery (waste CO2 from a The importance of the TDG is manyfold. It neighbouring industry). hosts 80 scientific, engineering and support • Continuous Biological Oxalate staff representing WA’s largest employer Destruction: World first technology to of PhDs outside the CSIRO and academia, destroy waste from alumina refining and has an annual budget of $20-$35 million (by utilising naturally occurring (50 per cent of which comes from outside microorganisms to consume oxalate, of Australia). Photo: Alcoa an impurity in the refining process). It has also won prestigious innovation Replaces combustion, reduces CO awards and is one of the few truly global Alcoa research chemist Amanda Tilbury 2 at the pilot bioreactor in Kwinana emissions, is less costly and allows industrial research centres based in refinery’s oxalate removal facility. recovery of sodium hydroxide. Australia, with a long history of delivery of Implemented at Kwinana, now being new and improved technologies. 22 State’s first uranium mine given environmental approval Photos: Toro Energy

Aircore drilling at Wiluna. Toro’s Wiluna uranium pilot test plant.

Mines and Petroleum Minister Bill environmental approval in WA and paves “All WA uranium mines are required Marmion has welcomed the Federal the way for a new industry in this State.” through strict legislation and regulation, Government’s environmental approval of to ensure the safety of employees and the Before construction works can begin, a Toro Energy’s Wiluna uranium project. broader community. range of further approvals are required, “As former Environment Minister, I gave including assessment of a detailed “Uranium mines in WA would also meet State environmental approval to the Mining Proposal and Closure Plan by the all the relevant international safeguards project five months ago, so I certainly Department of Mines and Petroleum (DMP). in relation to the safe and peaceful use of welcome the Federal Government’s uranium resources, and obtain environmental The Minister said he wanted to reassure endorsement,” Mr Marmion said. approvals for mining and transport.” Western Australians that the State “Opening up uranium mining in Western Government was committed to ensuring Fact File Australia was a central plank of the that the uranium mining industry was safe • WA currently has known uranium oxide State Government’s 2008 election and environmentally responsible. reserves of 211,000 tonnes across commitments. “Western Australia has been mining, around 26 deposits “This announcement is hugely processing, transporting and exporting • WA radiation safety legislation has been significant, as it’s the first uranium radioactive minerals, including mineral in place since 1970s, to protect the project to receive State and Federal sands, for more than 40 years,” he said. public, workers and the environment Wiluna Uranium Project Toro’s flagship and wholly-owned Wiluna Uranium Project The project assessment to date includes the successful which has a regional resource base of 54 million lbs, is situated completion of a pilot processing plant and trail mining. 30 kilometres south of Wiluna in Central Western Australia. The Theseus Uranium Project in Western Australia The project is the most advanced of the new generation of (100% Toro) is a significant greenfield discovery made uranium mines in Australia with State and Federal Government in 2009. Toro has identified an exploration target range approvals well advanced. of 22 to 44 million lbs U3O8 at 400 to 500 ppm. Based on this timetable, it is anticipated the project will produce Early studies indicate that the sandstone hosted deposit 1.8 million lbs of U O per year with first uranium sales in early 3 8 is amenable to In Situ Recovery (“ISR”) extraction 2014. Project life is expected to be in excess of 14 years. methods. There remains significant ‘blue sky’ with the Wiluna consists of a series of shallow calcrete deposits, with the mineralisation open to the south, east and west and largest of these deposits, Lake Way and Centipede, being subject other positive regional drill results yet to be followed up. to approvals and a definitive feasibility study.

23 Japanese garden symbol of enduring friendship

Just before leaving for China and Japan, speciality tiles from Awaji Island in Premier Barnett said the garden Premier Colin Barnett was presented with Hyogo. Awaji Island is home to the symbolised the ties between the two the Hyogo Friendship Garden by the Vice koalas which were a 30th anniversary regions, and acknowledged Japan as Governor of Hyogo Prefecture in Japan, gift from Western Australia. one of Western Australia’s most Tomoyuki Yoshimoto. Japanese gardens are abstract and important trading and investment The garden, which is located on the stylised representations of nature which partners. Japan’s role in the State’s grounds of Dumas House, is a gift to the serve to aid meditation. These gardens pioneering iron ore and natural gas people of Western Australia from Hyogo to are considered works of art in Japan. projects have brought great benefits to mark the 30th anniversary of the State’s Western Australia. Other living works of art were featured oldest Sister State relationship in 2011. at the presentation ceremony. Models, “Japan was my first overseas visit when The Hyogo Friendship Garden was who braved a bitter cold morning, I was elected in 2008, so it is pleasing my designed by Professor Yue Shen from showcased the 2013 Banshu Fashion first overseas visit on being re-elected is the University of Hyogo and features Textile Program designs. also to Japan and China,” he said.

The Hyogo Friendship Garden, Walking with the Vice Governor of Hyogo accepted by Premier Colin Barnett. Prefecture, Tomoyuki Yoshimoto.

Risk training improved

Continuing its efforts to improve safety procedures, 14 staff DMP Resources Safety Executive Director Simon Ridge members from the Department of Mines and Petroleum said people need to understand the hazards in their (DMP) have undergone training to test and further develop work place and how to handle them. their risk management skills and processes. The training gave the department a good look at its own It’s the same training that will be rolled out to 60 industry safety risk and crisis management. professionals and 64 mining safety inspectors throughout the “Changes will come out of it,” DMP Senior Education and year, in an intense four-and-a-half-day course. Training Officer Barry Healy said. The risk management training puts staff in real-life “Most importantly it brought to the surface a lot of issues mining-related situations, testing their knowledge of in the industry. It focused our minds on how to bring about processes and procedures. changing the culture of the Western Australian mining industry and on safety management. “Last year we recorded our first fatality-free year since records began in 1896. That’s a heck of an achievement and we want to build on that.” Future sessions will run in Kalgoorlie from 12 to 16 August and in Bunbury from 14 to 18 October. Inquiries regarding attendance should be directed to JKtech on (07) 3365 5842.

24 (Left to right) WA Government representative Hon Phil Edman MLC, Ms Kellie-Jane Pritchard A/Regional Director Indonesia DSD, Mr Brian Wood, A/Executive Director Strategic Projects DSD and Dr Tim Griffin DDG DMP. Indonesian conference strengthens Asian ties

In the mid-2000s, the Australian Government’s Austrade identified a need to provide Australian mining and Mining Engineering Technology Services (METS) companies with extra exposure in the fast-growing Indonesian mining sector. The first Ozmine conference and exhibition was held in 2007. Since then, Ozmine has become the premier Australian mining event in Southeast Asia. Western Australia is one of two State governments to back the conference.

With a theme of Australia and ASEAN: The event is backed by the WA and some discussions around shortages of Partnering for Performance, Omine Victorian State governments, Austmine, oil and gas as the Indonesia economy 2013, held in Jakarta, brought together and other Australian Government expands, and the failure of recent key Indonesian, Australian and ASEAN departments such as Foreign Affairs and exploration efforts,” DMP’s Tim Griffin said. industry and government players, Trade, and Resources and Energy. “It also enabled us to discuss challenging including Thailand, Malaysia, The This was the fifth Ozmine conference for Phillipines and Vietnam, to discuss issues and impart some of our experience the Department of State Development, major trends, opportunities and in WA with the Indonesian authorities. which was represented by Brian Wood, challenges of the mining industry. We covered many topics, including A/Executive Director Strategic Projects, security of title and avoiding changing With a focus on how ASEAN businesses and Ms Kellie-Jane Pritchard, A/Regional conditions effecting rights, through to are linking with Australian expertise Director Indonesia. The Department of understanding and meeting approval to improve efficiency and boost Mines and Petroleum was represented requirements for the different levels productivity, this year’s exhibition by Dr Tim Griffin, Deputy Director of government, to community and and conference provided an opportunity General, who also presented on the role environmental management issues.” for the more than 2600 visitors of government in delivering a successful (460 registered delegates) to promote mining sector. The significance of the location is the mining services sector and expand something Jakarta-based Ms Pritchard “Our main focus was to support WA- activities in Indonesia and ASEAN recognises. based METS companies in promoting more generally. their expertise to the Indonesian and “Indonesia remains the most significant An important part of Ozmine 2013 was ASEAN markets,” said Mr Wood. player in ASEAN’s mining sector, the ASEAN-Australia Mining Workshop boasting significant production levels of “The message we had was that WA for government officials, which aimed coal, copper, gold, tin and nickel, so our mining is the most efficient in the to encourage greater co-operation and focus was to promote the WA Trade and world and that WA companies have the assistance between mining industries Investment Office in Jakarta,” she said. knowledge and the experience that Asian across the region. companies can benefit from.” “It’s vital to develop and further The exhibition also featured networking strengthen relationships with leading For DMP, oil and gas was a hot topic. events, with the final session hosted business and government stakeholders by the Indonesian-Australian Business “Although our visit was not focussed on in Indonesia, while promoting investment Council and Austrade. attracting direct investment, there were opportunities in WA.”

25 Browse gas precinct acquisition to proceed

The State Government will press ahead “The Aboriginal people of this region approach to developing the area for the with the acquisition of the land for a entered into an agreement with the State future processing and export of natural gas precinct near James Price Point to to ensure tht the benefits of development gas,” he said. encourage the development of nearby in the Kimberley would, first and The agreement covering the site also gas fields. foremost, flow to them,” the Premier said. ensures its use is limited to supporting Premier and State Development Minister “The decision by Woodside and its joint the development and processing of gas, Colin Barnett said the acquisition of venture partners not to proceed with their and not for other industrial purposes. the land was necessary to establish the original proposal for the development of “If the Government doesn’t act now to precinct as a project-ready site to foster Browse was disappointing, but this move the efficient development of the offshore secure the area, it could face substantial will ensure the benefits from the State costs when re-negotiating approvals Browse Basin and onshore Canning Government will still flow to the people of Basin gas fields. and create a disincentive for any new the Kimberley.” entrant,” the Premier said. “This region contains world-class gas The land acquisition will trigger a “The gas is there and it is just a matter resources, and there is interest in a $10 million economic development suitable site to support the development of time before it is used. We are being fund and $20 million for an indigenous prudent about its development and of LNG or domestic gas projects in the housing fund. Kimberley,” Mr Barnett said. aiming to ensure the maximum benefit Mr Barnett said the traditional owners will flow through to the people of Under native title agreements reached would have an ongoing role in managing Broome, the Kimberley and right across with the Goolarabooloo Jabirr Jabirr the environmental, social and heritage Western Australia. native title claimant group in June 2011, outcomes of the precinct, which would be the traditional owners of the site will “The development of these projects central to the future development of the receive payments of more than $30 will provide a major boost to the Browse Basin. million from the State Government to regional economy through jobs, training benefit indigenous people across the “The precinct does not rely upon any single and business opportunities across the Kimberley region. proponent. We are taking a long-term wider community.” New local officer for the Kimberley “Through my new role I hope to assist DMP Mineral Titles Executive Director, with some of those challenges by Ivor Roberts said Mr Lloyd will be an providing local advice and departmental invaluable contact for the Kimberley region. services to a wide variety of resource “As the regulator, it is important the industry stakeholders including land department has a presence in the users, the community, industry and other Kimberley to ensure current and future government agencies. resource development proposals Mr Lloyd’s key responsibilities will include are undertaken responsibly and in facilitating communication and dispute consultation with the community,” resolution, providing advice on legislation, Dr Roberts said. assisting with Native Title enquires and The Department of Mines and Petroleum “We are confident Brian can fulfill this coordinating heritage surveys. (DMP) will once again have a regional role successfully given his vast liaison presence in the Kimberley with the “Being based in Broome, I will also experience and commitment to servicing announcement of a new Broome office and represent the department at regional regional areas.” new liaison officer, Brian Lloyd. working groups and committees,” Mr Lloyd commenced his new role on Mr Lloyd said. 2 April and is based at the newly Mr Lloyd, who has spent many years co-located Department of Planning / working for government agencies in regional Before joining DMP, Mr Lloyd worked Department of Mines and Petroleum areas, said he was looking forward to being out of Broome as a liaison officer for the Broome office off Shiba Lane. the local point of contact for resource Department of Regional Development and exploration and development enquiries. Lands assisting the pastoral industry in the Kimberley and Pilbara. If you have any queries regarding “Having lived in Broome for a number of land access in relation to resources years now, I have a genuine empathy for Mr Lloyd has also previously worked in the Kimberley region, please the challenges regional communities face,” for the Department of Agriculture in contact Brian on 0428 714 402 Mr Lloyd said. Katanning. 26 Major LNG conference to attract 5000 to WA

Newly appointed Mines and Petroleum to the petroleum industry in Australia many of the companies already had a Minister Bill Marmion recently and Asia.” strong knowledge of WA and expressed addressed 10,000 delegates in Texas, interest in future business opportunities.” While in Houston, Mr Marmion met with US as Western Australia (WA) prepares senior executives from exploration, The trip also saw Mr Sellers visit to host the largest resources event production and services companies from Halliburton to discuss the technologies in its history — anticipated to inject the USA, Europe and Asia. used in the US for natural gas from shale more than $50 million into the and tight rock extraction. State’s economy. “This interaction is crucial, as Western Australia is becoming a world leader in “At the moment WA’s natural gas from In April, Minister Marmion presented shale and tight rock industry is in the LNG,” he said. at the world’s largest Liquefied Natural early exploration phase so the meeting Gas conference, LNG17, where this “By 2016, WA is expected to have an with Halliburton provided a great year’s event organisers, Houston, annual LNG production capacity of more opportunity to get up close and personal passed the hosting duties for the 2016 than 50 million tonnes — up from the with the production activity in the US,” conference to WA. current level of 20 million tonnes.” Mr Sellers said. Mr Marmion used his closing ceremony Minister Marmion was accompanied by Already showing strong interest, address to invite thousands of Department of Mines and Petroleum 60 per cent of the delegates who attended international delegates, exhibitors and (DMP) Director General Richard Sellers. LNG17 in Texas have signed up to attend petroleum industry representatives the Perth LNG18 event in 2016. from more than 80 countries to attend “The Houston visit provided an the next conference, LNG18, in Perth. invaluable opportunity for WA to engage Minister Marmion said Perth was no with the international LNG industry at stranger to catering for significant, “LNG18 is expected to attract 5,000 the highest level,” Mr Sellers said. large events, having successfully hosted delegates and exhibitors and inject the 5000-delegate Commonwealth Heads “Our meetings with several major oil more than $50 million into the State’s of Government Meeting (CHOGM) in 2011. economy, the largest such event in and gas companies, including Chevron WA’s history,” Mr Marmion said. and Hess, included discussions relating “Planning has been underway for some to emerging LNG trends and WA’s time and will ramp up considerably as we “It will be an unparalleled opportunity role as a global energy supplier for the move forward,” Mr Marmion said. to promote Western Australia’s Asian market. petroleum resources and role as a “We are working with industry and global energy supplier, and Perth as a “With Australia positioned to become the government agencies Australia-wide to major centre for expertise and services world’s largest LNG exporter by 2017, make sure we are conference-ready.”

The Minister for Mines and Petroleum Bill Marmion (centre) and State Development’s Giles Nunis (second from left) led WA’s delegation to LNG17.

27 Commenced Operations

AGRICULTURE INFRASTRUCTURE Pilbara – Port Hedland – Atlas Iron ATLAS IRON LTD East Kimberley – Ord – Ord/East Kimberley South West Region – Kemerton (HUILS – Heavy Expansion Project Use Industrial Land Strategy) Atlas Iron Ltd is an iron ore explorer and miner WA STATE GOVERNMENT WA STATE GOVERNMENT focused on a developing a number of projects in the Pilbara region of Western Australia with The Ord East Kimberley Expansion Project is Kemerton Industrial Park, located 17km north exports commencing in December 2008 from a good example of the Commonwealth and of Bunbury, is the main strategic industrial its Pardoo Project, east of Port Hedland. Atlas’ State Government working closely together to area in the South West region and the nearest second mine, Wodgina, commenced operations deliver economic and Indigenous participation regional heavy industrial site to Perth. It is in 2010. Production has recently commenced opportunities and much-needed infrastructure designed to supplement the Kwinana Industrial at its third mine, Mt Dove, located 65km south to a regional community of Western Australia. Area, only 90 minutes away by road. The estate of Port Hedland. The company plans to bring The State Government has committed comprises 7,543ha of land, including 2,019ha five mines into production in five years, with the $322m to increase the existing amount of of industrial core, 293ha support industry addition of Abydos Mine in June 2013, and the irrigated land in the Kununurra region by area and 5,231ha buffer areas. It is accessible first phase of the Mt Webber Mine in December releasing approximately 15,000ha of additional to the Port of Bunbury by road and a rail link 2013. Atlas aims to export between 7.2Mt and Ord farm lands. This funding will provide is being planned. The estate is serviced by 7.7Mt in the 2013 financial year. Atlas plans the construction of irrigation channels, major road links to the metropolitan area. to progressively expand its exports, targeting roads and off-farm infrastructure to service Under the Heavy Use Industrial Land Strategy, 15Mtpa by 2015 and 46Mtpa during the 2017 the future needs of the region’s growing the Government is progressing Kemerton calendar year. In April 2013 Atlas announced population and sustain economic growth. towards project ready status by undertaking the completion of the first phase of the rail On 20 November 2012 the State Government environmental, heritage and planning approvals Alliance study with Aurizon Operations Limited announced that Kimberley Agricultural for the estate. Work towards progressing and Brockman Mining Limited. The parties have Investment (KAI) was the preferred proponent approvals commenced in 2009 and is anticipated extended the existing Alliance Study Agreement to lease and develop 13,400ha of irrigation land to be completed in 2014/15, by which time the to 1 July 2013, to examine the integration of the in the Goomig and Knox Plain areas. structure plan and zoning adjustments will also East Pilbara rail development and the proposed KAI, a subsidiary of China’s Shanghai Zhongfu have been completed. North West Infrastructure port development in Group, proposes to establish a sugar industry South West Creek in Port Hedland. in the Kununurra region. To achieve a diverse agricultural mix for the region and to support IRON ORE Expenditure: $500m. local enterprise, an additional 1,700ha of Mid West Region – Karara Iron Ore Employment: Operation: 570 newly developed land in the Ord West Bank KARARA MINING LTD (GINDALBIE METALS LTD will be available for the development of up to / ANSTEEL JOINT VENTURE) 25 new farms. The Commonwealth Government RARE EARTHS The Karara Iron Ore Project is Karara Mining’s has committed $195m of funding for social Mt Weld – Rare Earths Mine cornerstone production project in the Mid and common use infrastructure in the East LYNAS CORPORATION LTD Kimberley region through the East Kimberley West region. Karara is exporting 10Mtpa Development Package (EKDP) National of iron products, comprising 8Mtpa of high The Mt Weld deposit is located about 35km south Partnership Agreement (NPA). Construction grade magnetite concentrate and 2Mtpa of of Laverton and contains an estimated resource of the 21 State Coordinated projects is almost Direct Shipping Ore hematite through Geraldton of 23.9Mt at an average grade of 7.9% for complete with the remaining three projects Port. The Project is underpinned by a 1.9Mt rare earth oxides (REO). The development currently underway. The Kununurra Education JORC-compliant resource base, comprising includes an open pit mine and a concentration Precinct and the Out of School Hours Care a 977Mt magnetite reserve, a 2.518Bt magnetite plant, located 1.5km from the open pit mine. Facility are the most recent project completions. resource, a 10.9Mt hematite reserve and a The first feed of ore into the 33,000tpa The Package will be fully implemented by 16.2Mt hematite resource. concentration plant occurred in May 2011 and June 2013. Expenditure: $1.975b. the plant was officially opened in August 2011. The concentrate is bagged and containerised Expenditure: $517m. Employment: Construction: 1500; Operation: 500 on site, and trucked to the Port of Fremantle Employment: Construction: 761 for export. The first feed of concentrate from Pilbara – Hope Downs 4 Iron Ore Mine Mt Weld to Lynas’ processing plant in Malaysia RIO TINTO IRON ORE GOLD occurred in late 2012. Ramp up of production Rio Tinto and Hope Downs Iron Ore Pty Ltd, as at the Malaysian plant is currently underway, Boddington – Gold Mine equal Joint Venture participants, are developing with initial production capacity of 11,000tpa NEWMONT BODDINGTON GOLD PTY LTD the Rio Tinto-operated Hope Downs 4 iron ore REO expected to be reached by the end of Q2 Newmont Boddington Gold (NBG), a major mine at an estimated capital cost of US$1.2b. 2013. Construction of the Phase 2 expansion of gold and copper mine in the south east The open-cut mine will have a production rate the Mt Weld concentration plant to 66,000tpa of Western Australia, 120km from Perth, of 15Mtpa of iron ore. The development of Hope was completed in Q1 2013. The Malaysian commenced operations in 2009 after a Downs 4 involved the construction of a 53km processing plant’s expanded production capacity $3b expansion of the original Boddington Gold railway line to connect to the existing Hope of 22,000tpa REO is expected to be reached in Mine, a joint venture which had been in care Downs 1 rail spur and the construction of a 220kV late 2013. and maintenance for several years. NGB is electricity transmission line to connect to the Expenditure: $135m. existing Rio Tinto power network. First ore left now 100 per cent owned and operated by Employment: Construction: 120; Operation: 110 United States global miner Newmont Mining the Hope Downs 4 mine on 22 April 2013. Corporation. First gold was poured in September Expenditure: $1.556b. 2009 and 18 months later the operation Employment: Construction: 2100; Operation: 720 achieved its first one-million-ounce milestone. An estimated 700,000-750,000 ounces of gold per annum is expected to be produced for the life of the mine, officially more than 24 years, but it is possible the mine life could be further extended. NBG also produced 67Mlbs of copper in 2012 and this amount is expected to increase to between 70-80Mlbs in 2013. Employment: Operation: 650

28 This section is intended as an overview and does not constitute an exhaustive list of projects within the Western Australian resources industry. Committed Projects

AMMONIUM NITRATE HEAVY MINERAL SANDS Pilbara – BHPB – Port Blending and Rail Yard Facilities Kwinana – Ammonium Nitrate Keysbrook – Heavy Mineral Sands Mine BHP BILLITON IRON ORE PTY LTD Facility Expansion MZI RESOURCES LTD CSBP LTD In March 2011, BHP Billiton announced approval of MZI is proceeding to develop a mineral sands US$7.4b (BHP Billiton’s share US$6.6b) of capital In December 2011, the Wesfarmers Board gave mine located near the township of Keysbrook, investment to continue production growth in the final approval to proceed with the expansion of approximately 70km south of Perth. The project company’s Western Australian iron ore operations. CSBP’s ammonium nitrate production facility at has received environmental approval from the It will deliver an integrated operation with capacity Kwinana from its current capacity of 520,000tpa Minister for Environment, as well as development in excess of 220Mtpa. The investment includes to 780,000tpa. CSBP received environmental approvals and extractive industry licences from US$1.4b (BHP Billiton’s share) to optimise approval for the expansion in October 2011. the Shires of Murray and Serpentine-Jarrahdale. resource and enhance efficiency across the The expansion involves the construction of Keysbrook has a mineral resource of 78.9Mt at an BHP Billiton WA iron ore operation supply chain. an additional nitric acid plant and ammonium average grade of 2.5 per cent total heavy mineral The project is currently on schedule (overall nitrate plant, together with an upgrade of the (THM) and an ore reserve of 670,000t THM, project is 65% complete) and on budget. existing prilling plant and other infrastructure which underpins the first 5.5 years of operations. work. Construction is progressing well and the The Feasibility Study, which was completed in Expenditure: $1.5b. expansion is on track to be operational in the October 2012, indicated a mine life of 7.2 years Employment: Construction: 2100; Operation: 720 first half of 2014. based on accessible mineral resources plus Pilbara – Jimblebar Iron Ore Mine Expansion Expenditure: $550m. shire approvals. Based on the total mineral resource estimate, the potential mine life could BHP BILLITON IRON ORE PTY LTD Employment: Construction: 300; Operation: 10 be more than 15 years. Approximately 110,000tpa In March 2011, BHP Billiton announced approval of heavy mineral concentrate from Keysbrook Pilbara – Burrup Industrial Estate Site D of US$7.4b (BHP Billiton’s share US$6.6b) will be trucked 120km south to Doral’s mineral – Yara Pilbara Nitrates of capital investment to continue production separation plant in Picton, near Bunbury, YARA INTERNATIONAL ASA growth in the company’s Western Australian where it will be toll treated under a processing iron ore operations. It will deliver an integrated Yara, Orica and Apache have formed a agreement. MZI plans to start site construction operation with capacity in excess of 220Mtpa. joint venture, Yara Pilbara Nitrates Pty Ltd in Q2 2013, with first production expected in The investment includes US$3.3b (BHP Billiton’s (YPNPL). YPNPL has executed an Engineering, Q1 2014. The project is expected to produce share) to increase installed mining and processing Procurement and Construction (EPC) contract 62,200tpa of leucoxene products and 28,700tpa capacity at Jimblebar mine to 35Mtpa with for the construction of a circa 350,000tpa of zircon concentrate, which will be exported incremental debottlenecking opportunities to Technical Ammonium Nitrate (TAN) plant to from the Bunbury Port. 55Mtpa. The project is currently on schedule be located on the Burrup Peninsula. Ammonia Expenditure: $64m. (overall project is 75% complete) and on budget. feedstock will be supplied from Yara Pilbara Employment: Construction: 35; Operation: 30 Fertilisers Pty Ltd (YPFPL), which operates Expenditure: $3.2b. its facility directly adjacent to the proposed Pilbara – Solomon – Chichester expansion and location for the new TAN plant. YPFPL will be the INFRASTRUCTURE Solomon Mine Project operator of the TAN plant and Orica will manage the product sales and distribution. Yara and Pilbara – Ashburton North Strategic FORTESCUE METALS GROUP LTD Orica each have a 45 per cent interest in the joint Industrial Area Fortescue has recently completed the expansion venture and Apache the remaining 10 per cent. WA STATE GOVERNMENT of its existing mines at Cloudbreak and Christmas It is expected all manufactured product will be The State Government is developing the Creek to 95Mtpa (including 5Mtpa from BC Iron). sold into the Pilbara region. Work on the project Ashburton North Strategic Industrial Area The existing rail and port facilities have been has commenced and it is expected that the new (ANSIA) as a hydrocarbon precinct in the Shire expanded by the duplication of 120km of railway plant will be commissioned during the first of Ashburton, 11km south west of Onslow, to south of Port Hedland, installation of two new quarter of 2015. enable the development of natural gas projects train unloaders, and construction of two additional Expenditure: $600m. and associated industries to exploit the gas berths and associated infrastructure resulting in a rail and port capacity of 120Mtpa. Construction Employment: Construction: 600; Operation: 65 reserves in the Carnarvon Basin and Exmouth Gulf. The ANSIA includes three larger sites of infrastructure in support of the Solomon Hub, for major gas processing proponents, which includes the new 20Mtpa Firetail iron ore GOLD secondary processing sites, areas for general mine at Solomon and the 127km railway spur support industries and supply base operations, to Fortescue’s existing Christmas Creek to Port Kalgoorlie – Tropicana Gold a port with common user facilities to be managed Hedland rail line, has been recently completed. ANGLOGOLD ASHANTI/INDEPENDENCE GROUP by the Dampier Port Authority and common The Solomon Hub is planned to involve at least JOINT VENTURE user access and infrastructure corridors. two mining areas and two processing plants. AngloGold Ashanti, as Joint Venture Manager, Two foundation proponents, BHP Billiton First production from the Firetail deposit at has continued to progress development of the Petroleum and Chevron Australia have been Solomon was achieved in November 2012. Tropicana Joint Venture gold mining project allocated land within the ANSIA. Chevron FMG recently announced that it is resuming proposal, 330km north east of Kalgoorlie. Australia commenced construction in late 2011 construction of its 40Mtpa Kings mine at Solomon Following State and Commonwealth with first LNG exports scheduled for 2016. BHP with first production expected late 2013. Environmental approvals in the second half of Billiton Petroleum is nearing completion of the Expenditure: $9b. 2010, key State and local government approvals construction of its domestic gas plant, with gas Employment: Construction: 7000; Operation: 6000 required for construction of a 225km road, production scheduled for mid-2013. bore field, pipelines, airstrip, accommodation village, power station and mine plant are IRON ORE PROCESSING either in place or in the final stages. Road IRON ORE Pilbara – Cape Preston – Sino Iron construction is complete and a sealed 2.1km Pilbara – BHPB – Inner Harbour Expansion CITIC PACIFIC airstrip is operational. Engineering design and – Port Hedland procurement activities were finalised at the BHP BILLITON IRON ORE PTY LTD The Sino Iron project is located at Cape Preston, end of 2012. Construction at 31 Dec 2012 was 100km south west of Karratha. Construction of the estimated as 56 per cent complete. The project is In March 2011, BHP Billiton announced approval largest magnetite mining and processing project in on track for first gold production in Q4 2013. of US$7.4b (BHP Billiton’s share US$6.6b) Australia is at an advanced stage, with production of capital investment to continue production Expenditure: $700m. from the first and second of six scheduled lines to growth in the company’s Western Australian commence in 2013. On completion, the project will Employment: Construction: 700; Operation: 400 iron ore operations. It will deliver an integrated comprise of in-pit crushers, six autogenous and six operation with capacity in excess of 220Mtpa. ball mills, concentrators, 6Mtpa pellet plant, 25km The investment includes US$1.9b (BHP Billiton’s slurry pipeline, combined cycle 450MW power share) to increase total inner harbour installed station, new port and trans-shipment facilities, capacity to 220Mtpa. First production was and a 51GL desalination plant. At full production achieved in Q4 2012. The overall project is 85 the project will export up to 21.6Mtpa of magnetite per cent complete. Further debottlenecking concentrate and 6 Mtpa of high grade pellets. opportunities are being evaluated. Expenditure: $5.2b. Expenditure: $2b. Employment: Construction: 4000; Operation: 500

This section is intended as an overview and does not constitute an exhaustive list of projects within the Western Australian resources industry. 29 Committed Projects Projects Under Consideration

OIL & GAS DEVELOPMENTS Pilbara – Macedon Domestic Gas Project AMMONIA/UREA BHP BILLITON PETROLEUM (AUSTRALIA) Carnarvon Basin – Greater Western Flank Shotts Industrial Park – Collie Coal to Urea PTY LTD Phase 1 PERDAMAN CHEMICALS AND FERTILISERS PTY LTD WOODSIDE ENERGY BHP Billiton Petroleum (Australia) Pty Ltd and Apache Energy Limited are currently Perdaman Chemical and Fertilisers Pty Ltd is The broader Greater Western Flank (GWF) constructing a domestic gas plant for Western proposing a $3.5b coal to urea plant at the new area consists of 16 fields located to the south Australia at the Ashburton North Strategic Shotts Industrial Park, near Collie. The plant will west of the Goodwyn A (GWA) platform, which Industrial Area near Onslow. The development use proven coal gasification and fertiliser production lies off the north-west coast of Australia and is involves a number of sub-sea gas wells technologies. Around 2.7Mtpa of coal will be used estimated to hold up to 3Tcf of recoverable gas connected to the gas field, offshore and onshore to produce approximately 2Mtpa of urea, primarily and up to 100MMbbl of recoverable condensate. wet gas pipelines, an onshore gas processing for export. The urea will be transported to Bunbury On 8 December 2011, Woodside, as Operator, plant 11km southwest of Onslow and a sales Port by rail. A 20-year off take agreement has been announced the North West Shelf Project gas pipeline connected to the Dampier-to- signed with Incitec Pivot. The coal supply contract participants had approved the development of the Bunbury Natural Gas Pipeline. Daily production is yet to be finalised. The company has received first phase of the GWF Project. The GWF Phase 1 is expected to be in the order of 200TJ/d. Gas all its environmental and all other approvals from Project will develop the Goodwyn GH and Tidepole production is expected to commence in mid 2013. both the Western Australian and Commonwealth fields, via a subsea tie-back to the existing governments. Construction is expected to commence GWA platform and represents the next major Expenditure: $1.5b. Q2 2014, with the first shipment of urea planned development for the North West Shelf Project. Employment: Construction: 700; Operation: 14 for Q4 2017. Project start-up is expected early in 2016. Expenditure: $3.5b. Pilbara – Wheatstone LNG Development Expenditure: $2.5b. CHEVRON AUSTRALIA PTY LTD Employment: Construction: 2000; Operation: 200 Carnarvon Offshore Basin – Barrow Island Chevron Australia Pty Ltd is currently – Gorgon Project constructing a LNG plant, domestic gas plant HEAVY MINERAL SANDS and port facilities at the Ashburton North GORGON JOINT VENTURE Happy Valley – Heavy Mineral Sands Mine Strategic Industrial Area near Onslow for its The Gorgon Joint Venture (GJV) made its final CRISTAL MINING AUSTRALIA LTD investment decision on the Gorgon Project in Wheatstone project. The project will initially Located adjacent to Cristal’s Gwindinup deposits mid September 2009. The GJV’s foundation have two LNG trains with a combined capacity south of Bunbury, the company proposes to mine project on Barrow Island includes a three-train of 8.9Mtpa, expandable to five or six trains with the Happy Valley North and South mineral sands LNG development capable of exporting 15.6Mtpa a total capacity of 25Mtpa, and a 250Mcf per day deposits situated on private land and in State Forest. and a domestic gas project capable of delivering domestic gas plant connected to the Dampier-to- The two deposits contain over 750,000t of recoverable at least 300TJ/d of gas to the mainland. Cost Bunbury Natural Gas Pipeline. The first export of heavy mineral concentrate, with average production estimates for the foundation were increased LNG is scheduled for 2016. expected to be around 150,000tpa over a combined from $43b to $52b following a cost and schedule Expenditure: $29b. mine life of eight years. The concentrate will then review conducted by Chevron in December Employment: Construction: 5500; Operation: 400 be trucked to Cristal’s Bunbury Mineral Separation 2012. The development on Barrow Island Plant for final processing. The Company is awaiting includes potentially the largest commercial the outcome of its environmental approvals process. geosequestration project in the world. SILICON METAL The project obtained State and Commonwealth Expenditure: $35m. Kemerton – Silicon Metal Plant Expansion environmental approval in August 2009. Employment: Construction: 100; Operation: 30 The project is based on gas from both the SIMCOA OPERATIONS PTY LTD offshore Gorgon and Jansz/Io gas fields. Simcoa announced in October 2009 its decision Shark Bay – Coburn Zircon Project On-island activity commenced in late 2009 to expand the company’s 32,000tpa capacity GUNSON RESOURCES LTD and the major construction work for the silicon metal plant at Kemerton. The first processing plant commenced in 2011. The GJV stage expansion, involving installation of a Gunson proposes to develop the Coburn is undertaking environmental investigations third furnace, will increase the plant capacity zircon project, located south of Shark Bay and (PER level) for a fourth LNG train. to 48,000tpa and came online in Q3 2012. approximately 250km north of Geraldton. It contains total ore reserves of 308Mt at an average grade Expenditure: $52b. Providing world demand for silicon continues to increase strongly, a second stage expansion, of 1.2% heavy minerals, all of which lie within Employment: Construction: 5554; Operation: 300 involving installation of a fourth furnace is under the portion of the project area that has received consideration and could take place by 2014 and government environmental approvals for mining. Carnarvon Offshore Basin – North Rankin increase plant capacity to 64,000tpa. The Optimisation Study was completed in February – North Rankin Redevelopment 2013 which indicates a mining rate of 23.4Mtpa and WOODSIDE ENERGY Expenditure: $100m. a mine life of 19 years. As a result of the Optimisation Study, the project is expected to increase average In March 2008 the North West Shelf Project Employment: Construction: 120; Operation: 40 annual production to 49,500t of zircon, 109,000t participants approved funding of the $5b North of chloride ilmenite and 23,500t of a mixed rutile- Rankin Redevelopment which will recover leucoxene HiTi90 product. remaining low pressure gas from the North Rankin and Perseus gas fields, and extend the Expenditure: $202m. field life to around 2040. The project involves Employment: Construction: 170; Operation: 110 the installation of a new second platform – North Rankin B – with gas compression facilities, low pressure separators, utilities INFRASTRUCTURE and accommodation. North Rankin B will be Dampier Peninsula – Browse LNG Precinct connected by two 100m bridges to the existing WA STATE GOVERNMENT North Rankin A platform and on completion both platforms will be operated as a single The State Government is developing the Browse integrated facility known as the North Rankin Liquefied Natural Gas (LNG) Precinct approximately hub. The North Rankin Redevelopment project 60km north of Broome. By focussing development also includes the necessary connections to North at a suitable location the Precinct will minimise Rankin A and some refurbishment of the North the environmental footprint of gas processing and Rankin A platform. North Rankin B is scheduled any social impacts in the region, while maximising for start-up in 2013 and will support the North opportunities for the local community to benefit West Shelf Project’s onshore gas requirements from development of the Browse Basin gas fields. to supply future customer commitments. The Precinct will have the capacity to accommodate at least two LNG processing operations, with a combined Expenditure: $5b. capacity of up to 50Mtpa. Woodside Energy Ltd, as the operator of the Browse Joint Venture, remains a potential foundation proponent of the Precinct. Expenditure: $30b. Employment: Construction: 6000; Operation: 400

30 This section is intended as an overview and does not constitute an exhaustive list of projects within the Western Australian resources industry. Projects Under Consideration

Oakajee – Oakajee Midwest Development Mid West Region – Jack Hills Expansion Pilbara – West Pilbara Iron Ore Project WA STATE GOVERNMENT CROSSLANDS RESOURCES API MANAGEMENT PTY LTD The Oakajee Port proposal includes common user The Jack Hills Expansion Project will involve The Australian Premium Iron Joint Venture is infrastructure (channel, breakwater, turning basin, the development of a 20Mtpa magnetite mine. proposing to develop the West Pilbara Iron Ore navigational aids, provision for tug and pilot boat The magnetite concentrate is proposed to be Project. Stage 1 of the project is based on the pens, port administration offices and roads and transported by a new railway to a new deepwater production of 30Mtpa of direct shipping iron ore utilities) funded by the State and Commonwealth port at Oakajee. from its Red Hill and Mt Stuart mine sites located Governments and private use infrastructure (at Expenditure: $2b. 35-80km south west of Pannawonica. The ore will least one Cape Class iron ore berth, as well as be transported by a new heavy haul railway for associated materials handling equipment and rail Employment: Construction: 450; Operation: 350 export via the proposed multi-user 350Mtpa port infrastructure) developed by Oakajee Port and Rail at Anketell. Subject to the successful completion Mid West Region – Weld Range Iron Ore Mine Pty Ltd. The Port proposal also includes provision of feasibility and environmental studies, and for a non iron ore berth in the future to provide SINOSTEEL MIDWEST CORPORATION LTD receipt of government regulatory approvals, the import/export capability for value-adding industries Sinosteel Midwest Corporation proposes to company anticipates that the first shipment of in the Oakajee Industrial Estate. A northern railway develop a 15Mtpa iron ore mine at Weld Range ore will occur in 2014. Environmental approval is planned to link the port to mines to the north- 65km southwest of Meekatharra, producing a for the mine and rail elements of the project was east of Geraldton and a southern railway will link to mix of hematite lump and fines. The project is received in December 2011. the mines in the south-east. The northern rail line expected to utilise a proposed new rail line and Expenditure: $7b. is proposed to be operated by Oakajee Port and Rail deepwater port facility at Oakajee. The company Employment: Construction: 3500; Operation: 1000 though an open access regime. finalised a bankable feasibility study in July 2010. Expenditure: $4b. Expenditure: $1b. Yilgarn – Deception Iron Ore Deposit Employment: Construction: 2000; Operation: 300 Employment: Construction: 1000; Operation: 500 CLIFFS ASIA PACIFIC IRON ORE PTY LTD Cliffs proposes to expand its Koolyanobbing Pilbara – Anketell – Anketell Port and SIA Pilbara – Cape Lambert Iron Ore Project Operation to include an additional iron ore (Strategic Industrial Area) MCC AUSTRALIA SANJIN MINING PTY LTD mining area at the Deception Deposit, located WA STATE GOVERNMENT MCC Australia Sanjin Mining Pty Ltd is developing approximately 150km north of Southern Cross. The Anketell project involves the establishment a 15Mtpa magnetite iron ore mine in the Pilbara The Deception Deposit contains an estimated of a multi-user, multi-commodity, deep-water and aims to ship its first ore in 2016 via the 7.1Mt of iron ore and is expected to have a mine port and associated strategic industrial area proposed multi-user 350Mtpa plus port at life of around five years. The Deception Deposit (SIA) at Anketell, located 30km east of Karratha Anketell. The Project comprises a proven JORC received environmental approval in June 2012 on the Pilbara coast. The port and associated compliant 1.9Bt iron ore resource, a beneficiation and first production is expected in first half infrastructure will be a proponent-funded but State plant, power plant, desalination plant, port of 2015. owned Port which will be managed and operated facilities for exporting concentrate and other Expenditure: $35m. under the Port Authorities Act 1999. The strategic related infrastructure. MCC has completed industrial land will fall under the jurisdiction of the feasibility studies for the port, power supply, Western Australian Land Authority (LandCorp). water supply, accommodation and general NICKEL During its initial phase, it is expected that Anketell site infrastructure. The mine and processing Mt Windarra – Windarra Nickel will be an iron ore export facility and that, at its studies are progressing. A native title agreement POSEIDON NICKEL NL peak capacity, at least 350Mtpa will be exported was reached with the Ngarluma Aboriginal to customers, mainly in Asia. A number of iron ore Corporation in June 2011. A draft PER document Poseidon Nickel Ltd has submitted a project producers with mining assets in the Pilbara have has been submitted to the EPA. development proposal for the redevelopment of expressed interest in using the planned facilities at the Mt Windarra underground nickel mine, the Expenditure: $3.7b. Anketell. It is likely that the Port will be developed development of the new Cerberus underground in stages to accord with the development of the Employment: Construction: 3000; Operation: 1000 nickel mine, the construction and commissioning various mining operations which are spread of a nickel sulphide concentrator, a gold tailings throughout the Pilbara. Pilbara – Roy Hill Iron Ore Mine & Infrastructure re-treatment plant and associated project ROY HILL HOLDINGS PTY LTD infrastructure at Mt Windarra, the historic site of previous mining and processing operations. IRON ORE Roy Hill Holdings is a private company which is majority-owned by Hancock Prospecting Pty Ltd, Subject to obtaining all relevant approvals Great Southern Region and has key international investment partners and project funding, Poseidon is forecast to – Southdown Magnetite Mine with strategic steel-making interests. They are commence construction in 2013. GRANGE RESOURCES LTD/SRT AUSTRALIA developing the Roy Hill iron ore project located Expenditure: $250m. JOINT VENTURE 115km north of Newman. This project is expected Employment: Construction: 80; Operation: 180 to come into production in 2015 and will produce The Southdown Magnetite deposit is situated 55Mtpa of iron ore for 20 years following ramp- 90km north east of Albany, near Wellstead. up. The project includes mine development, mine Southdown is an advanced development project. processing infrastructure, a new heavy-haul Work completed includes engineering feasibility railway, and significant new port facilities at studies, an extensive drilling program, land Port Hedland’s inner harbour. Environmental acquisition and most major approvals. Results of approval for Roy Hill mine Stage 1 was received in the Definitive Feasibility Study were announced December 2009 and environmental approval for in Q2 2012. Grange Resources (70%) recently Stage 2 was received in March 2010. In July 2011, announced a significant reduction in 2013 project Roy Hill Infrastructure was granted a Special expenditure as it continues to seek a new equity Railway Licence to develop a 344km railway from investor for the project. its mine in the eastern Pilbara to Port Hedland. Expenditure: $2.88b. All primary approvals have been secured and Employment: Construction: 2000; Operation: 600 major project works commenced in late 2012. Dredging of the new berth areas at South West Mid West Region – Extension Hill Magnetite Mine Creek was finished ahead of schedule, the airstrip ASIA IRON and internal mine roads have been completed, the rail construction villages are completed and Asia Iron has primary environmental approval to works are well advanced on the construction produce up to 10Mtpa of magnetite concentrate, of mine and port accommodation villages. In which will be transported by slurry pipeline to addition, the new Corporate HQ and Remote the port of Geraldton for export. The company Operations Centre at the Perth International is currently seeking secondary approvals and Airport business precinct is under construction. undertaking an implementation study for the project. Expenditure: $9.9b. Expenditure: $2b. Employment: Construction: 3600; Operation: 2000 Employment: Construction: 1000; Operation: 350

This section is intended as an overview and does not constitute an exhaustive list of projects within the Western Australian resources industry. 31 Visit us online Significant resource projects in Western Australia

Prospect can be downloaded free of Western Australia continues to lead the way as Australia’s premier resources charge from the Internet by visiting the investment destination. There are more than A$180 billion worth of projects either website of the Department of Mines and committed or under consideration for the State during the next few years. These will Petroleum at: www.dmp.wa.gov.au create more than 50,000 construction jobs and more than 15,000 permanent jobs.

This section is intended as an overview and does not constitute an exhaustive list of projects within the Western Australian resources industry. All currency figures are in Australian dollars, as at 01/05/2013.

Project Value Employment (estimated A$m) Construction Permanent Prospect Iron and Steel

Subscription/Change of address API Management Pty Ltd – West Pilbara Iron Ore Project 7000 3500 1000 ABN: 69 410 35 356 Asia Iron – Extension Hill Magnetite Mine 2000 1000 350

BHP Billiton Iron Ore – Inner Harbour Expansion 2000 n/a n/a

BHP Billiton Iron Ore – Jimblebar Mine Expansion 3200 n/a n/a BHP Billiton Iron Ore – Port Blending and Name: 1500 n/a n/a Rail Yard Facilities CITIC Pacific – Cape Preston Mine & Processing Projects 5200 4000 500 z Crosslands Resources – Jack Hills Stage 2 Hematite Mine 2000 450 350

Fortescue Metals Group – Chichester expansion and 9000 7000 6000 Solomon Mine Project Position: Grange Resources Ltd/SRT Australia Joint Venture 2880 2000 600 – Southdown Magnetite Mine

Organisation: Karara Mining Ltd – Karara Iron Ore Project 1975 1500 500

MCC - Cape Lambert Iron Ore Project 3700 3000 1000

Rio Tinto Iron Ore – Hope Downs 4 Iron Ore Mine 1556 2100 720 Address: Roy Hill Holdings Pty Ltd – Iron Ore Mine – Roy Hill 9900 3600 2000

Sinosteel Midwest Corporation – Weld Range 1000 1000 500 z Hematite Mine

Sub Total 52911 29150 13520

Oil, Gas and Condensate Type of business: BHP Billiton – Macedon 1500 700 14

Browse LNG Precinct 30000 6000 400 Phone number: Chevron – Wheatstone LNG 29000 5500 400

Gorgon Joint Venture Gas Processing Project 52000 5554 300

Email Woodside Energy – Greater Western Flank Phase 1 2500 n/a n/a Added to report Please tick the appropriate box Please add me to your mailing list to receive my one Woodside Energy – North Rankin Redevelopment 5000 n/a n/a year subscription of the Prospect magazine. Sub Total (Up 2500) 120000 17754 1114 one year @ $12 (incl. GST) Other My cheque, made out to the Department of Mines and Petroleum, is enclosed OR please debit the amount to AngloGold Ashanti/Independence Group 700 700 400 my credit card using the following details: – Tropicana Gold Project

Type of card: Visa Bankcard Mastercard Ashburton North Strategic Industrial Area n/a n/a n/a

Newmont Boddington Gold Pty Ltd n/a n/a 650 – Boddington Gold Mine Expiry date CSBP – Kwinana Ammonium Nitrate Facility Expansion 550 300 10 This form will become a tax invoice for GST purposes when payment is made.

Change of address Oakajee Port, Rail and Industrial Estate 4000 2000 300 (please make changes required on one of your old labels). Ord East Kimberley Expansion Project 517 761 n/a Please photocopy or cut coupon and mail to: Prospect subscriptions Perdaman Chemicals & Fertilisers – Coal-to-Urea Plant 3500 2000 200 Information Centre Yara International ASA – Yara Pilbara Nitrates 600 600 65 Department of Mines and Petroleum Mineral House, 100 Plain Street Sub Total 9867 6361 1625 East Perth, Western Australia 6004 TOTAL 182778 53265 16259 MINERAL SYMBOLS PETROLEUM SYMBOLS COMMODITIES INSET C Precious metal Gas field Au...... Gold 0 5 km Au (or as shown) Major Resource Projects — June 2013 Wonnich Oil field Cr...... Chromium Steel alloy metal Cu...... Copper Wonnich Deep Bambra Ulidia Oil and gas field Ni (or as shown) Significant gas discovery Fe...... Iron Northwest Shelf / Pilbara Region Mutineer Fletcher Speciality metal Processing plant Li...... Lithium Exeter Finucane Lee Ti–Zr (or as shown) LNG...... Liquefied natural gas Bambra East Oil / gas pipeline, operating INSET B Rose Base metal Mo...... Molybdenum Harriet Oil / gas pipeline, proposed Persephone Eaglehawk Hermes Lambert Deep North Alkimos Monty Iron Ni...... Nickel Athena Egret Lambert Pb...... Lead Noblige Josephine Uranium INFRASTRUCTURE Larsen Deep Searipple Montague Angel Baker Pd...... Palladium Larsen Industrial mineral Capella Cossack Simpson Power plant Pt...... Platinum Forestier Agincourt North Rankin Ajax Processing plant Ta...... Tantalum Perseus Wanaea South Plato Chandon Gaea Hurricane Legendre North Irrigation / water / desalination Ti...... Titanium |n Echo/Yodel Goodwyn Legendre South Pedirka Port V...... Vanadium Goodwyn South/Pueblo Little Sandy Keast Double Island Zn...... Zinc Yellowglen Rankin/Sculptor Tidepole Victoria Zr...... Zirconium Dockrell Urania Gorgon LNG West Cycad Wheatstone Dixon/West Dixon Jansz Io Pluto Pemberton Sage Barrow Island Geryon/Callirhoe Saffron Narvik Elfin Eris Iago/North Tryal Rocks Barrow I Io South Reindeer Xena Wilcox Caribou Gnu Brunello Balnaves Corvus Orthrus Chrysaor/Dionysus Bravo Briseis Maenad Wandoo Pardoo Julimar Port Hedland Salt Ridley Tusk Port Hedland Achilles Acme West Tryal Rocks Clio Oryx Stag Equus Clio South Pontus Chamois Poondano Clio North Gorgon John Brookes SEE INSET C Rosella Yarrie Satyr Pilbara Fertilisers Mentorc NWSV LNG / Yara Chester Maitland Cape Lambert Pluto LNG Anketell Spar Halyard Dampier Pilbara Nitrates Sappho / Yara Cape Lambert Dampier Salt Salt Creek Zn Cu Pb Balla Balla Fe V Ti Olympus Sherlock Bay Whim Creek Cu Zn Pb Spinifex Ridge Barrow I Cape Preston Sino Pellet Spinifex Ridge Mo Cu Devil Creek Gas Mt Dove Maitland River Tallaganda Radio Hill Pasco Pilgangoora/Altura Li Whundo Zn Cu Flinders Shoal Sino/Citic Munni Munni Pt Pd Abydos Sulphur Springs Zn Cu Pb Balmoral South Wodgina Wodgina Ta North Star Glacier Valley

Nasutus Mardie South Chervil Cyrano Coniston Nimrod Novara Australind Cadell Eskdale Van Gogh Saladin Mt Webber McPhee Creek Vincent Crest Enfield Ravensworth Corowa Stybarrow Stickle Outtrim Cowle Pyrenees Laverda Scafell Roller Skate Crosby Macedon Blencathra Onslow Middle Robe Mesas Coaster Black Pearl Onslow Salt Mesa A– Leatherback Ashburton North Warramboo Mesa J Wheatstone LNG Macedon Gas Nullagine/Millennium Caliwingina Bungaroo Creek Nullagine CID Bungaroo South Exmouth Investigator Cape Range Lst Rivoli Pilbara/Flinders Firetail–Kings Murrays Hill Solomon West Pilbara

Silvergrass Cloud Break Christmas Creek Nammuldi Roy Hill Manyingee Mt Stuart Rough Range Koodaideri Marillana/Brockman Yanrey Paulsens Brockman 4 Marillana Marandoo Western Turner Syncline Yandi/BHPB Nyidinghu Project labels: Beasley River Western 4 Iron Valley Tom Price Phils Creek PROJECTS OPERATING OR CURRENTLY UNDER DEVELOPMENT WITH AN ACTUAL Yandicoogina/HI Mindy Mindy OR ANTICIPATED VALUE OF PRODUCTION GREATER THAN $A10 MILLION ARE SHOWN IN BLUE Railway Mining Area C PROPOSED OR POTENTIAL PROJECTS WITH A CAPITAL EXPENDITURE GREATER THAN Hope Downs 1 Jinidi $A20 MILLION ARE SHOWN IN RED Rocklea–Hardey Southern Flank PROJECTS UNDER CARE AND MAINTENANCE ARE SHOWN IN PURPLE Rhodes Ridge Opthalmia Wonmunna Turee Syncline HD4 Paraburdoo West Angelas Eastern Range Giles Mini 24–25 Channar Mt Whaleback 18 Jimblebar 35 0 25 50 75 100 Davidson Creek Coobina Cr Kilometres

Nyang Major Resource Projects — June 2013

Laminaria Corallina Laminaria East INSET A Balline Grt Mt Magnet Project labels: Tallering Peak PROJECTS OPERATING OR CURRENTLY UNDER DEVELOPMENT WITH AN ACTUAL Buller 0 50 km Port Gregory Grt Yogi Bilberatha Hill Golden Grove OR ANTICIPATED VALUE OF PRODUCTION GREATER THAN $A10 MILLION ARE SHOWN IN BLUE Alinta Wind Farm Deflector–Gullewa Cu Zn Pb Oakajee PROPOSED OR POTENTIAL PROJECTS WITH A CAPITAL EXPENDITURE GREATER THAN Eradu Pig Iron Kirkalocka $A20 MILLION ARE SHOWN IN RED Geraldton Mount Horner Minjar – Narngulu synthetic rutile Corybas Karara Mt Mulgine PROJECTS UNDER CARE AND MAINTENANCE ARE SHOWN IN PURPLE Geraldton brick Dongara Irwin River Eremia Centauri 1 Mungada Hovea Apium Magnetite Range Dongara Koolanooka South Xyris Extension Hill Jingemia Tarantula Three Springs Tlc Beharra Springs hematite Cliff Head Beharra Springs North Mt Gibson Prometheus/Rubicon Petrel Redback Eneabba Extension Hill Redback South Central West magnetite Mimia Frigate Tern Concerto/Ichthys Echuca Shoals Woodada Warro Kronos Crown Badgingarra Wind Farm Cornea Cooljarloo/Image Ichthys West Emu Downs Wind Farm Moora Chert Torosa Ichthys Prelude Cape Bougainville Blacktip Cooljarloo/Tronox Burnside Kwinana–Rockingham Cataby Brecknock Yerecoin Gwydion Alumina refinery Brecknock South Calliance Turtle Gingin West Mitchell Plateau Ammonium nitrate Red Gully Oil refinery Wandoo Cement and lime Neerabup/NewGen Chandala synthetic rutile Chlor alkali Wesbeam timber Darling Range North Ord Stage 2 Desalination Malaga brick Middle Swan brick Fused alumina Caversham tile Midland brick Wyndham PERTH Ord Stage 1 Fused zirconia Airport brick Cockatoo Island LNG Fremantle Armadale brick Sorby Hills Pb Zn Cu G Irvine Island Cardup brick Koolan Island LPG Bulk terminal Ord River Hydro Energy Nickel refinery Pinjarra Al Keysbrook Wagerup Al Huntly Willowdale Sparks Kln Speewah V Ti Fe Speewah Fl Power station Southern Seawater Sodium cyanide Boddington Au Cu Oobagooma Ridges desalination Marradong Titanium pigment Chlor alkali Point Torment Argyle Zirconia Silicon smelter Kemerton Sisd Saddleback Point Torment Smoke Creek / Venus Worsley Al Bluewaters 1-2 Titanium pigment Dampier Derby Lloyd Australind titanium pigment Collie Browse LNG Precinct Boundary West Terrace Savannah Bunbury Muja Ewington Ellendale Wespine timber Premier Sundown Dardanup Blina Copernicus Wesfi timber Gwindinup Collie–Shotts urea Panton Pt Pd Cape Synthetic Rutile Chicken Creek Broome Ungani Wonnerup Happy Valley Valhalla Tutunup Muja South Yoongarillup Duchess–Paradise Koongie Park Zn Cu Pb Hastings REE Nb Zr Whicher Range Tutunup South Greenbushes Li Ta Manjimup Timber Lamboo Jangardup South Pictor East Kapok West – Lennard Shelf Pb Zn Ag Browns Range REE SEE INSET B Admiral Bay Zn Pb (inside cover)

Kentish Knock Brederode Coyote Alaric Arnhem Scarborough Pinhoe

MINERAL SYMBOLS Precious mineral Dmd Cookes Creek W Precious metal Telfer Au Cu Au (or as shown) Nifty Cu O'Callaghans W Cu Woodie Woodie Mn Steel alloy metal Mesa – Ant Hill Mn Maroochydore Cu Co Ni (or as shown) Yeneena Cu Lake Auld K Speciality metal Kintyre Ti–Zr (or as shown) Lake Mackay K Nicholas Downs Mn Base metal Iron Alumina Davidson Creek Lake Disappointment K Bx (or as shown) Robertson Range Coal and lignite Prairie Downs Zn Pb Ag Uranium Industrial mineral Processing plant Cape Cuvier Lake MacLeod Gp Ilgarari Cu Butcherbird Mn Lake MacLeod Salt Abra Pb Cu Zn PETROLEUM SYMBOLS Gas field Beyondie Oil field Plutonuc Dome Grosvenor Plutonic Oil and gas field Glenburgh Telecom Hill Thaduna Cu Ag Significant gas discovery DeGrussa–Doolgunna Cu Au Significant oil discovery Significant oil and gas discovery Jack Hills Wiluna Andy Well West Musgrave Wingellina Processing plant Jundee–Nimary Shark Bay Salt Murchison Paroo Station Pb Matilda Oil / gas pipeline, operating Radio–astronomy Meekatharra Gabanintha V Ti Fe Murchison/Kentor Hinkler Well Oil / gas pipeline, proposed Observatory Wiluna West Lake Way Coburn Hillview Honeymoon Well Weld Range Yeelirrie INFRASTRUCTURE Hollandaire–Eelya Cu Au Ag Nowthanna Mt Keith Gidgee Lake Maitland Power plant Big Bell Cliffs Yakabindie Bronzewing Radio astronomy Great Fingall Barrambie V Ti Fe Odysseus–Cosmos Moolart Well Murchison / Silver Lake Leinster Lawlers MgCO3 Irrigation / water / desalination Lawlers Garden Well, Rosemont Darlot Thatcher Soak Port Agnew–Emu Waterloo Murrin Murrin SEE Victory Bore V Fe Marshall Pool Windarra Yamarna COMMODITIES INSET A Sinclair Bentley Granny Smith – Wallaby Windimurra V Fe Jaguar Zn Cu Pb Zn Pb Cu Ag...... Silver Mt Forrest King of Brightstar Alpha Al...... Alumina Cashmere Downs the Hills Laverton/Focus Mt Weld Phos Au...... Gold Laverton/Navigator Cyclone Mt Bevan Murrin MgCO3 Mikado Bx...... Bauxite Sons of Mt Weld REE Mt Mason Gwalia Murrin Tropicana Co...... Cobalt Mt Ida / GME Fortitude Cu...... Copper Red October Die Hardy Lake Giles Highway Sunrise Dam Second Fortune Dmd...... Diamond Deception Goongarrie Scotia Jump Up Dam Fe...... Iron Aphrodite Windarling Canegrass Kalgoorlie North Mulga Rock Fl...... Fluorite Range Carnegie Siberia Frogs Leg South Laverton – Carosue Dam Gp...... Gypsum Mt Jackson Cawse Lindsays Ponton Carina Black Swan Grt...... Garnet Paddington White Foil K...... Potassium Kundana – Kundana East Kanowna Belle Castle Hill Superpit Nimbus Ag Zn Pb Au Kln...... Kaolin Koolyanobbing Navajo Chief Kalgoorlie nickel smelter Blair South Kal Mt Monger Li...... Lithium Bullabulling Aldiss Coolgardie–Redemption Randalls LNG...... Liquefied natural gas Nepean Kambalda nickel concentrator LPG...... Liquefied petroleum gas Edna May Marvel Loch Mt Marion Li Ta Mica Beta–Hunt Long–Victor MgCO3...Magnesite Nevoria Carnilya Hill Bald Hill Ta Mn...... Manganese Collgar Otter–Juan St Ives Mt Caudan Nova Ni...... Nickel PERTH Wind Farm Spargoville Lanfranchi Nb...... Niobium Bounty Mariners Trident Pb...... Lead Maggie Hays Mt Thirsty Central Eucla West Pd...... Palladium Flying Fox Mt Henry Norseman Phos...... Phosphate Spotted Quoll Lounge Lizard Pt...... Platinum Salmon Gums REE...... Rare earth elements Sisd...... Silica sand Ta...... Tantalum Scaddan Ti...... Titanium Mt Cattlin Li Ta Ravensthorpe Tlc...... Talc Phillips River – Trilogy Au Cu V...... Vanadium W...... Tungsten Esperance 0 100 200 300 400 Zn...... Zinc Zr...... Zirconium Southdown Kilometres

Albany Wind Farm Albany