Attachment I
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ATTACHMENT I OVERVIEW OF VALUE-ADDING TO F QUEENSLAND MINERALS APRIL 1999 I.— OVERVIEW OF VALUE ADDING TO QUEENSLAND MINERALS Prepared by Project Development & Facilitation Division Department of State Development In Conjunction with the Department of Mines and Energy April 1999 — — LW. I z.L...J’2 TJZU TABLE OF CONTENTS ALUMINIUM 1 MA CN1l’CTTTM 8 COPPER 8 NICKEL 8 LEAD 8 ZINC 8 SILVER 8 COAL 8 ENERGY - 9 ENERGY - OIL CHAT r 10 ENERGY - PETROLEUM OIT 11 114 MINERAL SANDS - TITANIP 12 GOLD 13 LIMESTnNTI’ 14 PHOSPHATE ROC~ 15 REFERENCES 16 ALUMINIUM Current Status Mining Extent of Processing Manufacturing Global Outlook Aluminium: QAL Gladstone: Boyne Island Aluminium Smelter (Boyne Smelters Source: ABARE 1999 Comalco —30.3% Limited) (Gladstone): • World Bauxite Production Alumina Production Alcan — 21.4% Tolling operation with Comalco having approx 55% PechineyResources — 20% shareholding, rest being Japanese interests — 1997 - 125,863 kt 1997 - 46,739 kt Kaiser Australia — 28.3% 2003 - 140,000 kt 2004 - 55,215 kt Sumitomo, Marubeni, SLM, Kobe, YKK, Ryowa • World’slargest alumina refinery with a capacity of • Capacity 490,000 tpa • Primary Aluminium 3.65 Mtpa. • 3potlines Production • 10% of world’s alumina from bauxite mined at • Largest in Australia 1997 - 21,803 kt Weipa. • 4~ largest in world 2004 - 26,353 kt • Employs appiox 1200 Proposed Comalco Alumina Refinery under Manufacturing: Australia: evaluation by Comalco • Aichitectumi Al pmduct manufacturu(eg. Al doors, • Bauxite Production Bauxite Exports windows framesetc.) hadaturnoverof$516M. inQld 1997 - 43,000 kt 1997 - 4737 kt in1996 andemployment ofapprox. 3900. 2004 - 55,000 kt 2004-6183kt • Alumina Production Alumina Exports Vertical Integration 1997 - 13,252 kt 1997 - 11,011 kt • QId has the only fully integratedAluminium - 2004 - 13,126 kt 2004 16,460 kt industry in Aust with bauxite mined at Weipa, an • Primary Aluminium Primary Aluminium alumina refinery at Gladstone and an aluminium Production Exports smelter at Boyne Island near Gladstone. 1997 - 1395 kt 1997 - 1060 kt 2004 - 1710 kt 2004 - 1317 kt Queensland: • Weipa bauxite - Substantial reserves of Bauxite at Weipa being mined at the average rate of 9.5 Mtpa. - 250,000 tpa of beneficiated Bauxite from Comalco’s Weipa plant is exported to Korea - 150,000 tpa calcined bauxite produced at Weipa by Comalco suitable for abrasives & refractories manufacture. Product is exported to North America & Europe. Other Cape York bauxite are locatedat Ely (600 Mt bauxite contains about 75 Mt of recoverable bauxite) and Aurukun Ltd (contains mineable bauxite reserves after beneficiation estimated at 300 Mt). Page 1 MAGNESIUM Current Status Mining Extent of Processing Manufacturing Magnesium QueenslandMetals CorporafionMagnesia Magnesium Metal demonstration plant: Australian Resources Include: Processing Plant: • $45 M plant at Gladstone (1500 tpa) to • Golden Triangle Resources NE aims to prove up its inferred (QMAG) Rockhampton prove up the commercialprocess for the full resource of 47Mt of high grade magnesite ore in Tasmania. $180 M plant producing magnesia for scale plant. • Semag Ltd SA have possible project based on deposits in refractory bricks & furnace lining. • Magnesite from Kunwarara deposit Willouran Ranges Magnesia Products: • Crest Magnesium Tasmaniahave $1 Bn magnesium project based - Calcined Magnesium Metal Commercial Plant: on Lyon/ArthurRiver deposit - Electrofused: capacity 30,000 tpa • Est. Cost A$800 M; Stanwell Site of 200 ha; • MtGrace Resources NE magnesium metal project near Batchelor - Deadburned: capacity 120,000 tpa operational by 2002. in the NT. Feasibility study to prove up resources. • Initial capacity 90 000 tpa with potential to expand to 360 000 tpa. Queensland Resources: • Committed to sell 45,000 t of magnesium • QMC Magnesite at Kunwarara. This resource - 1.2 Bnt contains annually to Ford Motor Co for up to 10 years. 500 Mt of nodular magnesite, is considered to be one of the • Employment: 1000 construction + 300 world’s largest magnesite deposits. operational Production in 1997/98 was 344,076 t of beneficiated high-grade magnesite. Other substantial deposits include Yamba, Marlborough, and Herbert Creek. Page 2 COPPER Current Status Mining Extent of Processing Manufacturing Global Outlook Copper: Copper Refinery Limited Townsville (CRL): Value adding Comment Source: ABARE 1999 • Qld’s major processor of Cu, refining anodeCu to • Manufacture of copper castings and alloys occurs • World Copper Consumption Metal Production high grade Cu sheet for export through Port of in QId on a domestic scale. 1997 — 13,094 kt 1997 — 13,640kt Townsville. • CRL copper wire plant was closed in 1997 2004 — 15,2SOkt 2004 — 15,750kt • World leader in electrolytic Cu refining technology. • Copper Sulphate plant • World Stocks Price (LME) (Nominal) • Expansion of refinery will take capacity to 270,000 1997 - 897kt 1997 - US$2,277/t tin 1999. 2004— 1,260kt 2004 - US$2,070/t MountIsa Copper Smelter Upgrade: Australia: • Completed 1998. Capacity 250,000 tpa (Can now • Mined Production Refined (Primary) treatore from other mines) 1997 - S6Okt 1997 - 305kt Proposed QSMELT Copper Smelter Project: 2004 - 790kt 2004 - 660kt • Located at Phosphate Hill and dependent on WMC • Exports contracts. Commissioning by end 2000 possible. Copper Ore& Concentrates Copper Refined • Propose to process concentrates from Trekelano, 1996/7 - 890kt 1996/7 - 128kt Selwyn (care & maintenance), Osborne, Eloise for 2003/4 - 403kt 2003/4 - 465kt production of Cu Matte (63% Cu) & Sulphuric • While not dominant in the world copper market, Australia’s copper industry Acid by product. is nevertheless a significant supplier, accounting for 5% of world mine • Process 250,000 tpa of copper concentrate to production and around 3% of world primary refined production in 1998. produce 150,000 tpa copper matte & 170,000 tpa Queensland: Sulphuric Acid Total Production 1997-98 270,723 t Mount Isa Mines 55% of total Cathode Copper is produced on siteat Gunpowder, • Others include: Australia and Mt Cuthbert mines and is sent by road to Port Kembla and Sydney for manufacture into copper Osborne 36,615 t Selwyn-Mt Elliot 23,087 t wire Eloise 20,500 t Emest Henry 20,934 t Great Australia 3,896 t Thalanga 4,723 t • MountIsa Mine - largest copper producer in Australia. • Mount Isa, Cloncurry & Olympic Dam (SA) are main centres for copper in Aust. • Est45% of world copper production by year 2000 will be processed by SX-EW technology at a cash cost of less than US$0.50/lb Page 3 - — — -F.. — . — . a _ NICKEL Current Status Mining Extent of Processing Manufacturing GlobalOutlook Nickel: QNI Nickel CobaltRefinery: Queensland: Source: ABARE 1999 • Yabulu near Townsville. Capacity 30,000 tpa. • No stainless steel is manufactured in QId at • World Production Consumption Processing 3.3 Mt imported nickel ore. present. 1997—1,013kt 1997— 1,005 kt Marlborough Nickel Project • No alloy manufacture at present. 2004— 1,247 kt 2004— 1,236 kt • Proposed mine and nickel cobalt processing plant; $739 M investment; 19,100 tpa nickel; 1000 Wa • Stocks Price Nominal cobalt. - US$/t 6,926 1997 - 153 kt 1997 • Proposes to be in lower half of cost curve for world 2004 - 234 kt 2004 - US$/t 4,450 producers. Production Australia: • Mine (Nickel content of Refined • Ecid leachtechnology for newpiojects mpresents a domestic mine production) (Class I, II and Intermediate) paradigmshift- halving inpraduction costs firm$2 to $1/lb. 1997 - 115 kt 1997- 146kt 2004 - 269 kt 2004 - 303 kt Vertical Integration • Value of Exports Nominal Price Nominal • No vertical integration at present (QNI) however 1997 - A$M 1,172 1997 - A$/t9,261 Marlborough will introduce mining - processing. 2004 - A$M 1,435 2004 - A$/t 6,389 • New projects coming on stream Munin Murrin Cawse Bulong Nickel 45000t 9000t 9000t Cobalt 3000t 2000t boot Queensland: • No mining at present. • Imports from Indonesia & New Caledonia. • Resources at Marlborough (Marlborough Nickel Project — Preston Resources and other company tenures). • Resources at Gunnawarra, Minnamoolka, Greenvale, Lucknow, Valley of Lagoons, Brolga/Canouna, Verde/Tinto. Page 4 LEAD Current Status Mining Extent of Processing Manufacturing Global Outlook Lead: Queensland: Source: ABARE 1999 • World Consumption Mine Production • No refining in Qld at present 1997—6,Ollkt 1997 — 3,033kt • MIM plant (Britannia Refined Metals Ltd) at 2004 — 6,600kt 2004 — 3,3330kt Northfleet UK is the world’s largest primary lead refinery (230,000 t primary lead; 35,000 t • Stocks MetalProduction secondary lead & 500 t of by-product silver) 1997 - 439kt 1997 — 6,O3Okt 2004 - 600kt 2004 — 6,780kt Australia: • Mined Production Refined (Primary) 1997 - 516kt 1997 - 202kt 2004 - 715kt 2004 - 250kt • Bullion Production Bullion Exports 1997 - 191kt 1996/7 - 164kt 2004 - l8Okt 2003/4 - lSOkt • Exports Ore & Concentrates Refined Lead 1996/7 — 178kt 1996/7 - 177kt 2003/4 — 380kt 2003/4 - 215kt Australia with 19% of world mine production in 1998 was the world’s nd largest producer of mined lead after China. 2 Queensland • Australia’s leading producer of lead. • Production 1997/98 — 250,094 t of whichMount Isa & Hilton produce 159,039 t and Cannington 80,846 t. • Century —40 ktpa when commissionedend 1999 Other deposits not yet mined - Dugald River 38 Mt (2.1 %Pb) - George Fisher - reserve 81 Mt (5%Pb) - Lady Loretta —40 ktpa bullion • Crude lead produced at Mount Isa is refined in the UK to produce high quality lead alloys & silver. Page 5 1II~ ZINC Current Status Mining Extent of Processing Manufacturing Global Outlook Zinc: SunMetals Zinc Refinery: Source: ABARE 1999 • Stage 1 - 170 ktpa Commissioning end 1999 • World consumption Mine Production • Eventual capacity350 ktpa 1997 — 7,758kt 1997 —7,335kt • World’s most technically advanced zinc smelting 2004 — 8,S9Okt 2004 — 8,420kt & electrolytic zinc refinery • Custom smelter drawing concentrates from QId • Metal Production Stocks and international sources. 1997 —7,733 kt 1997 - 900kt 2004— 8,760 kt 2004 - 920kt Australia: • Mined Production Refined 1997— 1,O6Okt 1997 - 319kt 2004— 1 1,SSOkt 2004 - SOOkt • Australia produced 14% of zinc mine production in 1998 making it the third largest producer of mined zinc after China and Canada.