WESTERN AUSTRALIA’S INTERNATIONAL RESOURCES DEVELOPMENT MAGAZINE

June–August 2003 $3 (inc GST)

New gas Trunkline Construction swings into action

Iron ore New mine gets go-ahead

Gold

rint post approved PP 665002/00062 rint post approved Deposits among P world’s top ten WESTERN AUSTRALIAN OFFICES Department of Industry and Resources Mineral House • 100 Plain Street • EAST PERTH WA 6004 Tel: +61 8 9222 3333 • Fax: +61 8 9222 3430 www.doir.wa.gov.au Investment 168–170 St Georges Terrace • PERTH Western Australia 6000 FROM THE MINISTER Postal address: Box 7606 • Cloisters Square PERTH Western Australia 6850 estern Australia is committed to retaining its position Tel: +61 8 9327 5555 • Fax: +61 8 9222 3862 Email: [email protected] as a global supplier of mineral and petroleum INTERNATIONAL OFFICES commodities and an international destination for Europe W resources investment. Government of Western Australia European Office • 5th floor, Australia Centre The Western Australian resources sector, together with Corner of Strand and Melbourne Place Clive Brown, MLA LONDON WC2B 4LG • UNITED KINGDOM Government, is working to ensure this future. Minister for State Tel: +44 20 7240 2881 • Fax: +44 20 7240 6637 Development Email: [email protected] The State Government has responded to the need for economic, India — Mumbai social and environmental sustainability by releasing a draft State Western Australian Trade Office 93 Jolly Maker Chambers No 2 sustainability strategy. The draft strategy outlines Western 9th floor, Nariman Point • MUMBAI 400 021 INDIA Australia’s contribution to global sustainability and gives this Tel: +91 22 230 3973/74/78 • Fax: +91 22 230 3977 Email: [email protected] State a "sense of place" in the world. A part of the overall India — Chennai strategy deals with how Western Australia’s many resources can be developed in a way Western Australian Trade Office - Advisory Office that brings social and environmental benefits, as well as economic wellbeing, both 1 Doshi Regency • 876 Poonamallee High Road Kilpauk • Chennai 600 084 • INDIA locally and internationally. Tel: +91 44 640 0407 • Fax: +91 44 643 0064 E-mail: [email protected] The recent success of the Australian and International Hydrogen Energy Conference in Indonesia — Jakarta Broome has highlighted the important role Western Australia can play in the creation of Western Australia Trade Office alternative energy sources. The high attendance and international attention generated c/- Australian Trade Commission • Australian Embassy JI H R Rasuna Said Kav C15 - 16, Kuningan by the conference also reflects the global importance of the quest for sustainability. Jakarta 12940 • INDONESIA Tel: +62 21 2550 5331 • Fax: +62 21 522 7103 Western Australia is uniquely positioned to take the lead in the drive towards E-mail: [email protected] sustainability. Our rich resources endowment and international reputation for Indonesia — Surabaya innovation provide an excellent platform from which to ensure a sustainable future. Western Australian Trade Office 4th floor, World Trade Centre • Jalan Pemuda 27-31 Surabaya 60275 INDONESIA Tel: +62 31 531 9123 • Fax: +62 31 531 9118 Email: [email protected] Japan — Tokyo FROM THE DIRECTOR GENERAL Western Australian Government Office Australian Business Centre he role of the Department of Industry and Resources is to 28th floor, New Otani Garden Court 4-1 Kioicho, Chiyoda-Ku • TOKYO 102-0094 JAPAN advance the responsible development of industry and Tel: +81 3 5214 0791 • Fax: +81 3 5214 0796 resources for the benefit of Western Australians. Our focus Email: [email protected] T is on creating jobs and prosperity through sustainable Japan — Kobe Western Australian Government Office development, broadening the State’s economic base and 6th floor, Golden Sun Building • 3-6 Nakayamate-dori protecting the community and the environment. 4-Chome Chuo-Ku • KOBE 650-0004 JAPAN Tel: +81 78 242 7705 • Fax: +81 78 242 7707 This focus is in keeping with a triple bottom line approach to Email: [email protected] Malaysia economic development, an approach that is shared across the Jim Limerick Western Australian Trade Office resources industry. Director General 4th floor, UBN Tower • 10 Jalan P Ramlee Department of Industry KUALA LUMPUR 50250 MALAYSIA In recent years the community’s view of how resource and Resources Tel: +60 3 2031 8175/6 • Fax: +60 3 2031 8177 Email: [email protected] development should take place has changed. Fortunately, the Middle East State’s resources sector is leading the way in the quest for Western Australian Trade Office • Emarat Atrium sustainability and the creation of new efficiencies. PO Box 58007 • Dubai • UNITED ARAB EMIRATES Tel: +971 4 343 3226 • Fax: +971 4 343 3238 Many in the resources sector are re-working their processes to E-mail: [email protected] develop new and sustainable ways of doing business, and, in People’s Republic of China — Shanghai Western Australian Trade & Investment Promotion doing so, are often generating new market opportunities. Shanghai Representative Office • Room 2208, CITIC Square 1168 Nanjing Road West • Shanghai 200041 In this edition, Prospect examines the many aspects of sustainability and how it has been THE PEOPLE'S REPUBLIC OF CHINA Tel: +86 21 5292 5899 • Fax: +86 21 5292 5889 embraced by the business community and society as a whole. Email: [email protected] Prospect highlights how sustainable development is achieving long-term prosperity for People’s Republic of China — Hangzhou Western Australian Trade & Investment Promotion Western Australia, and how the State Government and resource companies are working Hangzhou Representative Office together to achieve this common goal. Room 910 • World Trade Office Plaza Zhejiang World Trade Centre I trust you will find some interesting ideas and information from the range of issues and 15 Shuguang Road • Hangzhou 310007 PEOPLES REPUBLIC OF CHINA case studies covered in this edition of Prospect. Tel: +86 571 8795 0296 • Fax: +86 571 8795 0295 E-mail: [email protected] Taiwan WA Business Development Manager Australian Commerce & Industry Office Australian Business Centre Suite 2606, International Trade Building #333 Keelung Road Section 1 • TAIPEI 110 TAIWAN Tel: +886 2 8725 4280 • Fax: +886 2 2757 6707 Thailand WA Business Development Manager Australian Trade Commission • Australian Embassy 37 South Sathorn Road • BANGKOK 10120 • THAILAND Tel: +662 287 2680 Ext 3307 • Fax: +662 287 2589 E-mail: [email protected] in this issue Picture courtesy TiWest

2 GAS TRUNKLINE 23 PETROLEUM Pipe laying begins on a second gas trunkline for the North A string of recent oil discoveries in the northern Perth Basin West Shelf project. on Western Australia’s Mid-West coast has aroused considerable interest within the Australian petroleum industry. 4IRON ORE The go-ahead is given for the development of a new iron 24 CORE LIBRARY ore mine, at Tallering Peak, in the State’s Mid West. First The Department of Industry and Resources opens a new drill production is expected in July 2003. core library in the Perth suburb of Carlisle.

5 GOLD 24 CHINA Western Australia boasts two of the world’s top ten Western Australian exports to China have increased undeveloped gold resources. substantially over the last decade — and are set to get bigger in the years ahead. 6 AUSTRALIAN MARINE COMPLEX First jobs arrive for a major new infrastructure facility at 36 RESOURCES MAP Cockburn Sound, in support of Western Australia’s A subscription form appears on page 35 resources sector.

Front cover: Pipe for the North West Prospect ISSN 1037-4590 Shelf project’s second Western Australian Prospect magazine is published quarterly by the Western Australian Government’s Department of Industry and offshore gas trunkline Resources (DoIR) and Ray Burns Media. being loaded aboard the Editorial management: John Terrell, DoIR Promotions & Marketing Branch. Tel: (08) 9327 5555 • Fax: (08) 9327 5500. lay-barge Semac 1 prior to Advertising management: Ray Burns Media, PO Box 1230, South Perth Westerm Australia 6951 Tel: (08) 9474 3288 • Mobile: 0408 474 328 • Email: [email protected] welding and despatch to Prospect has been compiled in good faith by the Department of Industry and Resources from information and data gathered in the the seafloor. course of the magazine’s production. Opinions expressed in Prospect are those of the authors and not necessarily those of the Department of Industry and Resources. No person or organisation should act on the basis of any matter contained in this publication without considering, and if necessary taking, Department of appropriate professional advice from other sources. The Department of Industry and Industry and Resources Resources, its employees and contracted personnel undertake no responsibility to any person or organisation in respect of this publication. www.doir.wa.gov.au ABN: 69 410 335 356

Prospect June–August 2003 1 New gas trunkline will be firmly secured to seabed

Top weight: Resembling the shape of horse saddles, these 32-tonne concrete gravity anchors will be used to keep the second trunkline for the North West Shelf project firmly in place on the seabed off Dampier.

ome of the heaviest concrete ever to be for most of its length and be weighed down The design is similar to that used for the batched in Western Australia will soon using gravity anchors and rock armour in harsh conditions of the North Sea. Sfind a new home on the seabed off the other places. During the design process, consideration State’s northwest coast. Resembling horse saddles, the tapered was given to trawlers and other fishing vessels Comprising a mixture of Hamersley iron anchors have a 45 degree face and a 70 degree that may come in contact with the anchors in ore, Burrup Peninsula granophyre (similar to slope on the sides. the deep waters off Dampier. granite), water and cement, the concrete was Contractor Thiess Pty Ltd completed 900 The contract awarded to Thiess was worth prepared for a series of high-density gravity of the anchors at a special precast site about A$12 million. The Australian company anchors for a second offshore trunkline adjacent to Woodside’s King Bay supply base has had a long association with the North associated with the North West Shelf (NWS) on the Burrup Peninsula in May. The plan is West Shelf project, having completed more project. to position them over the trunkline between than A$130 million worth of civil and site The new 130 km, 42-inch diameter August and December. Another 750 000 works in various phases of the project over trunkline is costing A$800 million, and will tonnes of stabilizing rock will minimise the the last 17 years. complement a broader NWS expansion effects of strong seabed currents, especially The second offshore trunkline will parallel program including a fourth liquefied natural during cyclones. the existing trunkline for most of its path out gas (LNG) train on the Burrup Peninsula. Each weighing about 32 tonnes, the to sea. It will be tied into the 30-inch infield The project’s original sub-sea trunkline gravity anchors will lie in water depths subsea pipeline that runs between the North was installed by Woodside and its joint ranging between eight and 130 metres and be Rankin A and Goodwyn A production venture partners in the early 1980s. spaced at intervals varying from 50 to 150 platforms. The sub-sea tie-in will take place The old and the new trunklines differ in metres. The gravity anchors have a density of between September and December 2003, that the first was installed using a sea plough, 3.2 tonnes per cubic metre, making them with commissioning of the new trunkline while the second will sit on top of the seabed one-third heavier than standard concrete. scheduled for January 2004.

2 Prospect June–August 2003 Piping hot onstruction of a second offshore gas trunkline for the giant North West … as big trunkline construction CShelf project is well under way in an exercise which petroleum industry experts program swings into action are describing as one of the most interesting and challenging subsea construction projects currently being executed in the Asia–Pacific region. In early May, amid the crunch of ancient Burrup stone and the gentle wash of a receding tide, the first 12-metre sections of concrete-coated steel pipeline were landed on the Burrup Peninsular in northwest Western Australia, after being welded on board the lay-barge Castoro 2, about 300 metres offshore. The initial trunkline installation involved winching the welded pipe to shore using heavy-duty equipment, including a 500- tonne winch connected to the pipe head by a 10 cm thick, 800 tonne-rated steel cable. After installing the first 6 km of the trunkline, the giant semi-submersible barge Semac 1, sourced following a campaign in the North Sea, took over for the deepwater installation work. More than 400 personnel including 70 specially trained Australian welders, plus more than a dozen boats and barges will be involved in the offshore construction exercise. Construction of the 42-inch diameter trunkline — two inches larger than the existing trunkline that delivers natural gas and condensate from the North Rankin A and Goodwyn A production platforms for processing on the Burrup Peninsula — should be completed by the end of August. Then, the focus will switch to securing the trunkline to the seabed, completing tie-ins to the existing 30-inch inter-field pipeline that is

linked to the North Rankin A and Goodwyn A NRA 12" GEL Wanaea/Cossack 30" IFL production platforms, and commissioning GWA

associated process control equipment. 42" NB Trunkline (2TL) During the trunkline’s installation, more than 600 000 tonnes of rock will be placed over the 30 km near-shore section of the 40" NRA Trunkline (1TL) trunkline, while another 20 km near-shore section will be trenched and backfilled. The rock-dumping work will be carried out by Van Final protection: As part of the field joint Oord Offshore BV of the Netherlands, using coating process, a hot mastic material is applied to a freshly welded section of trunkline the specialist rock-dumping vessels, the Jan pipe, on board the lay-barge Semac 1. Steen and Rocky Giant. The remaining 80 km deepwater section of the trunkline will be secured to the seabed by 900, 32-tonne The second trunkline complements the gravity anchors placed every 50–150 metres current expansion of the North West Shelf LNG PLANT (see separate article opposite). project’s onshore gas processing facilities, Dampier Karratha The offshore installation program is due to which includes a A$1.6 billion fourth WESTERN AUSTRALLIA be completed by December in readiness for liquefied natural gas processing train and commissioning and start-up in early 2004. associated infrastructure.

Prospect June–August 2003 3 New iron ore mine on starting blocks Snakes arned about their potential resource, 160 km northeast of presence, personnel from Geraldton. Other life-of-mine WBGC Contracting are perhaps contracts previously signed grateful that they did not encounter any included those with Glencore giant olive pythons during a recent International AG (350 000 t/a) and fauna relocation exercise on the Burrup a subsidiary of Stemcor Limited Peninsula near Karratha. (600 000 t/a). As part of the environmental This will allow mining to conditions associated with the commence at Tallering Peak in July development of a quarry to supply rock 2003, with the first railing of iron ballast for the Trunkline System ore to the port of Geraldton in early Expansion Project, six BGC staff and a October 2003, followed by project manager from Woodside were shipments later that month. required to undertake a special snake- The cost of developing the handling course. Tallering Peak operation has been During their sweep through the area, estimated at A$50 million, with 80 the BGC staff captured and relocated a total of ten snakes including two deadly New peak: The number of producing iron ore construction jobs and 30 full-time companies in Western Australia will rise from four to jobs being created. King Browns, a few harmless carpet five when Mt Gibson Iron Ltd begins mining its The company is also looking at pythons, but no olive pythons. Which is Tallering Peak resource 160 km northeast of commissioning a second iron ore just as well, because the latter can be Geraldton in July 2003. mine in the Mid West region, at Mt frightening at first sight, as they grow up Gibson about 300 km southeast of to 6.5 m long and about 150 mm in nother new iron ore mine is on the Geraldton. It could be operating by the end diameter. Their diet includes rock threshold of development in of 2004 and have the same 1.5 Mt/a wallabies and small euros, which they Western Australia — at Tallering A production rate as Tallering Peak. are capable of crushing to death and Peak in the State’s Mid West. Mr Johnson said both the Tallering Peak devouring whole, by dislocating their After securing a 550 000 tonne per year and Mt Gibson operations have a projected bottom jaw. iron ore sales agreement with a Chinese life span of eight to ten years. Department of Conservation and steel mill in late April, Mt Gibson Iron Ltd Western Australia’s Department of Land Management research scientist Managing Director Brian Johnson said the Industry and Resources currently has 22 iron Dave Pearson described the olive company had now fully sold its planned ore projects listed on its major projects python as a threatened species that 1.5Mt/a production from the Tallering Peak database, ranging from Cockatoo Island in inhabited rocky places like gorges and the north, down to the yet- terrain common to the Burrup Tallering Peak Peninsula. (Hernatite) undeveloped Southdown project southeast of Albany. "While generally reclusive, they could Mullewa Among these are 16 operating strike someone if they were iron ore mines — six by BHP Billiton, mishandled," Mr Pearson said. "But, Geraldton six by Hamersley Iron and two each more likely than not, they will ‘freeze’ Existing and do no person any harm." shiploading by Robe River and Portman Mining. facilities He said olive pythons could readily Mingenew Morawa Collectively, these mines produced Dongara 160 Mt of iron ore worth just over swim, and were most active in the late Perenjori A$5 billion in 2001–2002. afternoon and at night. Mt Gibson "While a schedule-one threatened (Hernatite & Magnetite) Increased production from existing iron ore mines, plus a flurry species, I have seen more than 100 of or new mines such as Tallering Peak, them during my extensive research for Wubin Mt Gibson, Mining Area C, Eastern CALM in different parts of the Pilbara," Ranges, Hope Downs and areas Mr Pearson said. "The largest one that north of Koolyanobbing should I’ve seen was about 4.5 metres long." enable Western Australia to regain its "Due to its need to hide in rock mantle as the world’s No. 1 iron ore crevices, the olive python is slimmer exporter during the next decade. than its cousin, the giant tree python of 0 20 40 60 80km The State has the potential to Indonesia." Road Route Rail Route increase production by as much as Mr Pearson said two sub species of 100 Mt/a to 260 Mt/a by 2010, and the olive python exist; one is found in output is expected to continue to rise the Kimberley, the other in the Pilbara. beyond that timeframe. The latter is known as Morelia olivacea Perth barroni, or simply the Pilbara olive python.

4 Prospect June–August 2003 alive!

Western Australia has two of world’s top 10 undeveloped gold deposits

More gold at depth: The proposed Boddington project would exploit the sulphide orebody that underlies the existing open pit that ceased operations in November 2001. The mine produced 234 000 ounces of gold in 2001.

estern Australia, one of the world’s be the Target (South Africa), Sukhoi Log Not so calm: CALM officer Andy Williams great mineral provinces, was again (Russia), Telfer (Western Australia), Pascua with a mid-sized Pilbara olive python that highlighted in a talk by Paul Lama (Chile), Donlin Creek (Alaska), Cerra was relocated to Perth for research W Casale (Chile), Boddington (Western Australia), purposes. Burton, editor of the World Gold magazine, to a large international audience at the annual Turquoise Hill (Mongolia), Burnstone (South Prospectors and Developers Association of Africa), and Pueblo Viejo (Dominican Canada (PDAC) convention that was held in Republic). Toronto during March 2003. PDAC is one of The projects were ranked according to their the largest trade shows in the world, bringing contained gold, but readers should note that together thousands of people involved in the development scenarios are uncertain, and exploration and mining around the world. precise timetables are not available. About 8000 delegates, exhibitors, visitors, and The largest project, Target in South Africa, guests attended — a record attendance — consists of resources containing a staggering and there was some optimism that one of the 72.3 million ounces of gold. By comparison, worst downturns that the industry has ever Western Australia’s gold production for 2002 experienced may be at an end. was 6.1 million ounces. The Department of Industry and Summary details of the two Western Resources, representing the Western Australian projects in the top 10 list, Telfer and Australian Government, was among the 280 Boddington, are tabulated below. companies and governments exhibiting at Meanwhile, many smaller and medium- the Trade Show. All were eager to provide sized companies reported exploration success information about their services, equipment, at gold prospects in Western Australia during and jurisdictions. In the Investors Exchange, late 2002 and early 2003, with many of these 225 exploration and mining companies had representing new discoveries. These include the display booths. The convention attracted a prospects of Bronzewing South, Harbour View, significant number of delegates and Baldock, Gunbarrel, Claypan Dam, Wallbrook, exhibitors from overseas with some 74 Gidgee (Airport, Whistler and Victory Creek), countries represented. Lake Carey (Fortitude and Stealth), Wilthorpe, The top 10 undeveloped gold projects in Snake Well, Maybell, and The Mount. the world were considered by Paul Burton to Search and rescue: Senior Project Manager PROJECT ORE TONNAGE AVERAGE CONTAINED CONTAINED POSSIBLE ANNUAL Rod Mapstone was one of several BGC (MILLION GRADE GOLD GOLD (MILLION PRODUCTION RATE Contracting staff members who undertook TONNES) (G/T AU) (TONNES) OUNCES) (OUNCES/YEAR) special training to clear snakes from a section Telfer 526.5 1.53 805.2 25.89 800 000 of the Burrup Peninsula. Boddington 730.5 0.84 614.3 19.75 900 000

Prospect June–August 2003 5 Australian Marine Complex Quick off the mark

ven though it is yet assembly hall, a 4800 square to be officially metre shed that is designed to Eopened, the A$200 travel up to 80 metres on an million Australian Marine east-west traverse. Highly Complex Common User adaptable for multi-purpose Facility (AMC-CUF) at fabrication, assembly and Cockburn Sound near loadout work, and suitable for Perth, is already taking in multiple overlapping projects, work, albeit on a small the hall design incorporates scale at this early stage. extensive portal and gantry In February, several crane systems with 30 metre, months ahead of its under-hook capacity of 200 scheduled completion date, tonnes. the facility was used to test The 40 hectare common- an underwater observatory user facility has two wharfs, one for the Busselton tourist 350 metre-long marine services industry. The concrete wharf, and a shorter loadout observatory structure was wharf, as well as amenities for a brought alongside the workforce of 500 per shift, AMC-CUF’s 15 000-tonne projects offices and warehouses. marine services wharf and The marine services wharf has a sunk 12.5 metres to the nominal rollout capacity of 15 floor of a berthing pocket, 000 tonnes, while the loadout before being barged to its wharf has a nominal 3000-tonne eventual resting place crane rollout capacity. A study below the Busselton jetty. Massive building: Centrepiece of the AMC’s common-user facility is Australia’s is in progress to evaluate dry- Then in April, a 25 tonne biggest mobile assembly hall, a 4800 square metre shed that is designed to docking facilities for the AMC- travel up to 80 metres on an east-west traverse. sea buoy from the CUF. Fremantle Port Authority was shipped in ❝ Two offshore oil and gas projects currently and unloaded for maintenance. being eyed for the AMC-CUF are n Floating Servicing jobs of a much larger scale, in In some cases, there is scope Production and Storage Offtake (FPSO) vessel particular those associated with the oil and to reduce project costs by as for Woodside’s Enfield oilfield and a similar gas, resources, marine and defence sectors, much as 20% facility, perhaps a converted FPSO, for Santos’

are expected to flow as momentum builds Mutineer oil project. Some of the resource at the world-class fabrication, repair and ❝ projects that may use the facility include the assembly facility. proposed GTL Resources and Dampier Currently about A$3.8 billion worth of cheaper cost than sending trade teams to Nitrogen projects. Local shipbuilders are also petrochemical projects are either remote areas for extended periods. In some actively bidding for work that is well suited to committed or on the drawing board cases, there is scope to reduce project costs the new facility. waiting to be developed on the Burrup by as much as 20%. The AMC-CUF project, which has been Peninsula, near Karratha. It is hoped that “We have large buildings, laydown areas heavily backed by the Western Australian and many of the modular units required for and loadout facilities that companies can Commonwealth Governments, represents a these developments will be fabricated and lease for what ever period they want. Project substantial infrastructure investment aimed shipped to the North West using the AMC- managers can draw on 400 trade-related at maximising Australian content in local CUF. businesses backing on to the AMC-CUF resource development projects. According to Mike Bailey, Director of complex, as well as vast back-up resources Australians have proved in the past that facility manager JBFM Babcock Pty Ltd, from the nearby Kwinana industrial strip.” they can match their trade and management there is a definite trend towards There are currently about 3000 skills with the best in the world. This new modularisation as distinct from “stick tradespeople working close by the AMC-CUF, facility is on the doorstep of Perth giving the build” projects in Western Australia. and with a forecast A$200 million worth of city an excellent opportunity to develop yet “The AMC-CUF provides an ideal work being generated annually at the facility, another centre of excellence in support of the facility for contractors to assemble and there is a strong possibility that this State’s A$27 billion per year resources commission sophisticated modules,” Mr employment level could double over the next industry. Bailey said. decade. While construction of the world-class “At Cockburn Sound, contractors will The centrepiece of the AMC’s common- AMC is virtually completed, no date has been have access to highly skilled labour at a user facility is Australia’s biggest mobile fixed at this stage for its official opening.

6 Prospect June–August 2003 Salinity, waterlogging They can also control wind and and erosion are damaging water erosion, improve water Marketforce FPC0073 regional WA. And the quality, provide shelter for protection of native forests, stock in grazing areas, and How do both here and around the even generate renewable world, has meant that new biomass energy. timber resources are And, of course, by absorbing urgently needed. carbon dioxide from the Surprisingly, a single atmosphere, growing trees innovation could help to also help reduce the we grow a address all of these issues. Greenhouse Effect – a global environmental issue. InfinitreeTM is a unique new tree farming program Solid Government backing. developed by the Forest Products Commission. Infinitree is an initiative While providing a valuable of the Forest Products sustainable cash crop for farmers, it also Commission, which develops targets specific environmental and promotes a sustainable and economic issues. timber industry. Doing plantations in a new With the shift in focus from way, and in new places. old growth forests, the Forest Products Commission is Infinitree tree farms are co-ordinating new products future? integrated with the existing, and markets for a vibrant new traditional agricultural activities plantation industry. on a farm, and, in many ways, can enhance them. Given its very positive implications for rural The key to Infinitree is the economies and the targeted selection of tree environment, Infinitree enjoys species. Working with several strong support from the varieties, Infinitree is able to State Government, making the match trees to soil and program a secure partnership rainfall conditions. for farmers, and an attractive So, Infinitree is able to create ethical product for institutional profitable tree plantations even investors. in the more extensive, lower- The future begins now. rainfall zones – the areas most affected by salinity. Trees on farms are a truly renewable resource. And the In determining a location, economic and environmental Infinitree also considers how a issues they address are not new tree farm could link with just important to rural Western existing local processing. Or, Australia, but to the nation and indeed, how it might generate the rest of the world as well. new local industry, and a stronger local economy. Infinitree is an important step in establishing a sustainable Now, growing the economy environmental and economic can help the environment. future for WA. The right trees, grown in the Where to find out more. right place, and working with the right industries, provide a For more information on commercial contribution to the the Infinitree program, visit battle against both salinity and www.infinitree.com.au or We start waterlogging. call 1800 241 688. planting

An initiative of the Forest Products Commission of Western Australia. Infinitree is a registered trademarkone of the Forest Products Commission. now.

Sustainable development

Within 50 years the world’s population is expected to increase by 50%. Human impacts will grow accordingly, and so will public concern about likely associated effects.

In response to this, resource companies, many of them with world-scale operations in Western Australia, are endeavouring to apply the principles of sustainable development to their operations.

Articles in this feature explain the concept of sustainable development, and provide examples of what resource companies are doing in support of this endeavour.

Prospect June–August 2003 9 Sustainability — gains for companies and communities

he world is at an unprecedented stage BY RAIF SARCICH industry in relation to sustainable development. in its usage of natural resources. The DEPARTMENT OF INDUSTRY AND In 2000, with the World Summit on Sustainable Tmineral and petroleum wealth of the RESOURCES Development to be held in August 2002 in mind, world has brought prosperity to a huge What is the Government doing about the GMI decided to initiate a project to examine number of people, but is it sustainable sustainability? the role of the minerals sector in contributing to sustainable development. wealth? The pursuit of sustainability aims to The Western Australian Government is Through the World Business Council for ensure that it is. Enduring sustainability can working hard on sustainability issues, and is Sustainable Development, the GMI contracted be achieved by following the principles currently in the process of finalising its the International Institute for Environment and defined by the seminal Brundtland Report in flagship initiative — the State Sustainability Development to undertake a scoping study and 1987 as “development that meets the needs of Strategy. In addition to covering a wide range subsequently in April 2000, a two-year the present without compromising the ability of issues such as integrated transport independent process of research and of future generations to meet their own systems, air quality, improved planning for consultation – the Mining, Minerals and needs”. There are many varied definitions of water, energy efficiency, development of Sustainable Development Project (MMSD) . sustainable development, but most express alternative fuel technologies, and waste MMSD had the following broad objectives: similar aspirations as the Brundtland Report*. reduction and recycling strategies; it also has ■ To assess the potential contribution of the In practice, sustainability is considered in significant implications for the way the global mining and minerals sector in the terms of economic, environmental and social resources sector does business in project transition to sustainable development; objectives. Industry and government alike facilitation, planning and regulation. These ■ To identify how the services provided are moving towards integrated analysis of all initiatives will aim to improve the social and through the minerals supply chain can be three objectives as a matter of course in their environmental outcomes of development delivered in ways that support sustainable decision-making processes. In addition, the whilst preserving and enhancing the State’s development; and processes by which sustainability is pursued economic competitiveness. ■ To build platforms of analysis and are subject to increasing standards of good Other strategies and plans that are either engagement for ongoing communication governance, which aim to protect the in place or under development, which relate and networking among all stakeholders in integrity of the process and demonstrate that to resources sector business and contribute the sector. sustainable outcomes have been met. to the achievement of sustainability The end results of the MMSD Project were The reason? For Governments, principles include: five regional reports, one being specifically by sustainability points the way to achieving ■ Development of a State Greenhouse and for Australia. The final report examines the optimal outcomes for its citizens, and Strategy; global mining industry, its contributions to resolving some of the side-effects of ■ Development of the State Industry Policy; sustainable development, and where change is economic growth by integrating both ■ Keating Review of the Projects Approvals needed to move forward. The final reports of all environmental and social values into System (including recommendations regions place a high value on the need for development decisions. For companies, their relating to sustainability assessments for community engagement and an open, interest lies in sustaining the legitimacy, projects of significance); transparent approach by the mining industry. profitability, and community confidence in ■ Establishment of the Premier’s Science The GMI has now been wound up, but their present and future enterprises. By Council and Innovate WA Strategy; and important outcomes worth mentioning were the providing sustainable outcomes to diverse ■ Future Perth — a new strategic plan for establishment of the International Council on stakeholders, barriers to future growth will be Perth and the South West. reduced and they will invest in their Mining and Metals (ICMM) and the Resourcing community ‘license to operate’. What is the Resources Industry doing the Future Conference of May 2002 in Toronto. Economic development has often been about sustainability? The ICMM is a leadership body designed to seen by business and community as coming In 1998, the “Global Mining Initiative” advance the cause of sustainable development at a cost in social and environmental terms. (GMI), consisting of nine of the world’s in the mining industry. The Toronto conference But, by working through development in an largest mining companies (Anglo American, gave rise to the “Toronto Declaration” of integrated and flexible way, it has been shown BHP, Billiton, Codelco, Newmont, Noranda, sustainable development principles that that development can be managed so that Phelps Dodge, Placer Dome, Rio Tinto, and member companies should aspire to. These acceptable outcomes can be achieved for WMC) was formed with the goal of re- initiatives have made the global mining sector most stakeholders. defining the role of the global mining one of the most progressive industries in sustainability terms.

* For more details about the Brundtland Report: www.brundtlandnet.com/brundtlandreport.htm

10 Prospect June–August 2003 sustainable development

The petroleum sector is dealing with some significant issues on an individual Resources are still the company basis, with the sector demonstrating a commitment to attain long term environmental and social bedrock of the economy outcomes. The petroleum industry will be the sector which deals with one of the crucial newly released Sustainable Development issues of sustainability – the transition to report by the Advisory Group, the fuels of the future. With finite reserves AChamber of Minerals and Energy Ros Kelly, said of petroleum products and the costs of of Western Australia the global greenhouse gas increasingly factored into further illustrates the pursuit of the global economy, this will be of critical importance of the sustainable development importance to every sector of the economy. resources sector to the was integral to Petroleum companies are tackling this State’s economy, as well as significant the future of the issue head on, with many new fuels being environmental and resources championed, including Methanol and Di- social returns to the sector. methyl Ether, for which WA’s Burrup community. “The industry Peninsula is a leading investment location. The chamber’s Bedrock recognises this The flagship new fuel is hydrogen, and the of the Economy 2003 and industry best practice is sector is working with the automotive report shows that mineral and petroleum focused on sector to develop fuels and infrastructure production topped A$27 attempting to for a new generation of hydrogen fuel-cell billion in 2002, provided meet the vehicles. direct employment for needs of our more than 40 000 current people, and returned generation more than A$1 billion in without H Go royalties to the State compromising Government. the needs of 2 our future These royalties are generations,” sufficient to pay for the ydrogen will no doubt figure she said. entire cost of running the prominently in the worldwide search H Western Australian Police Force for the next “The resources sector is taking a leadership for long-term sustainable energy options. year (A$574 million), the State’s entire role in Australia in attempting to get this Australia will soon be confronted with a community development budget (A$210 balance right.” definite energy dilemma, says Federal million), construction of 100 km of nine metre Chamber of Minerals and Energy Chief Resources Minister, Ian Macfarlane. wide country highway (A$56 million), Executive, Tim Shanahan, said the Bedrock of "We are a resource-rich country, but by construction of 20 primary schools (A$80 the Economy 2003 report showed that the 2010 we’ll be importing about 60% of our million), construction of four high schools minerals and energy sector was vital to the crude oil, racking up annual debt of about (A$100 million), and construction of five 8-10 Western Australian economy, our standard of A$8 billion," he told a recent hydrogen bed hospitals in the north of the State (A$22 living and the future prosperity of the State. conference in Broome. million). “But,” he added, “the sector is about a lot "For Australia, energy security and Among the significant performers in the more than just economic numbers. It has guarantee of supply, is presently one of resources sector for 2002 were the oil and demonstrated that it is expanding its economic our primary competitive advantages." gas industry, with production up 1.7% to bottom line more and more to include However, that advantage could be A$10.2 billion, the iron ore industry, with environmental and social benefits. Through threatened. production worth A$9 billion, and the gold and responsible and careful management, the The Australian Government fully alumina industries, each with production worth existence of this sector is as sustainable as it recognises the potential of the emerging A$3.4 billion. is desirable for our future growth and well- hydrogen economy, and is due to release In terms of national significance, the Western being,” said Mr Shanahan. the results of a national study on the Australian resources sector last year Bedrock of the Economy 2003 uses case subject by the end of 2003. accounted for: studies from a number of resource companies Hydrogen, produced from renewable ■ Almost half of Australia’s total resources to demonstrate how the minerals and energy energy, is an extremely clean fuel. wealth; sector is actively pursuing sustainable However, in the transition to the hydrogen ■ Nearly 80% of Australia’s oil and development, looking beyond its economic economy, the most likely feedstock will condensate production; responsibilities to its environmental and be hydrocarbons, predominantly natural ■ 100% of Australia’s LNG production; community responsibilities. gas. ■ More than 60% of Australia’s mineral As well as summarising the outcomes for key That places Western Australia in good exploration investment; and commodities over the last year, the Bedrock of ■ the Economy 2003 report also provides the stead because of its vast reserves of About 70% of Australia’s petroleum economic outlook for Australia and the world natural gas. exploration investment. over the coming year. Speaking at the launch of the Bedrock of the Economy 2003 report, former Federal For further information, access the chamber’s Environment Minister and current Chair of the website: www.cmewa.com (under the What’s Minerals Council of Australia’s External New section).

Prospect June–August 2003 11 High praise for Western Australia’s approach to sustainable development

he President of the World Business BY PROFESSOR PETER NEWMAN, Focus on the Future: The Western Council for Sustainable DIRECTOR, SUSTAINABILITY POLICY UNIT, Australian State Sustainability strategy TDevelopment, Bjorn Stigson, gave DEPARTMENT OF THE PREMIER AND Consultation Draft is a 250-page document covering 42 areas of government Western Australia a huge pat on the back CABINET. for its positive approach to sustainable responsibility, but with an emphasis on development when he visited Perth last partnership with the community and October to help with a series of Sustainability: Hope for the Future in Western business. For example, a State local workshops relating to the development Australia’, with the assistance of the Rio Tinto government roundtable is working through of the State’s Sustainability Strategy. The Fund for the Future. Premier Gallop sent this 150 of the 249 recommended actions to workshops covered the six main CD-ROM, together with the draft strategy, to create a sustainability partnership elements of the strategy including all Western Australian schools. agreement. Governance, Global Contributions, The third reason for the significant level of Business organisations and industries Natural Resources, Settlements, and engagement is that the Western Australian have had intense internal discussions before Community and Business. public is keenly interested in issues to do with making submissions on the draft strategy at Stigson concluded that he hadn’t their long-term future. Community and the end of February 2003. The Sustainability found a similar level of engagement on professional involvement in the strategy Policy Unit is keen to progress some sustainability anywhere else in the world. development process have been high, with Partnership Agreements with business as part There are three potential reasons. more than 140 invited presentations or of the process of developing the final strategy. Firstly, the Western Australian seminars across the whole State in the past Key issues are sustainability assessment, Government was elected with a six months. The WA Collaboration (an regional sustainability strategies and industry commitment to produce such a strategy. alliance of peak civil society groups) has been sustainability covenants. But, the reality of this engagement is due, funded by Lotterywest to participate in the More information: in no small way, to the commitment of process of developing the strategy. www.sustainability.dpc.wa.gov.au the resource industry to sustainability. They have engaged in this concept globally for over a decade and, hence, Sustainable development when we began to try to define it and seek policy implications in Western Australia, collectively the resources and education industry was already many steps down the road. The industry’s contribution to topic virtually unheard the debate has helped us to see how Aof 20 years ago, sustainable development is sustainability can benefit business and now a popular part of the community. curricula at some The second feature of the educational institutions in engagement in the State Sustainability Western Australia. strategy has been the partnership with For example, sustainable university students who worked on the development is firmly embedded in general strategy. Fifty-three undergraduate and mining and environmental postgraduate students were given management courses at certificates of appreciation by Western the Western Australian Australia’s Premier, Dr Geoff Gallop, for School of Mines, and from next year, “sustainable their help in contributing to the strategy. Seat of learning: The Western Australian School of Mines in production and They wrote 30 background papers Kalgoorlie is one of a growing number of tertiary learning consumption” will be a institutions where sustainable development is embedded in summarising innovations from around specific unit for third-year mining and environmental courses. the world, and 43 case studies that students undertaking a helped show what sustainability already degree course in environmental engineering. means in practice in Western Australia. Perth’s Murdoch University currently offers “I expect the focus on sustainable The website containing this material has arts and science under-graduate and post- development will broaden further as been a hive of activity with over 30% of community awareness increases and new graduate degrees in sustainable development, the hits coming from the US. The case challenges emerge for the resources and hosts the Institute for Sustainability and studies, many of which tell the stories of sector,” said Professor Eric Grimsey, the Technology Policy unit under the leadership of resource industries, have been developed Director of the WA School of Mines. Professor Peter Newman. as a CD-ROM ‘Case Studies in

12 Prospect June–August 2003 Corporate Social Responsibility Road to hell or salvation?

responsibility was to its shareholders, it needed to embrace the wider community to survive in the longer term. “It is an essential process of engagement,” Mr Bourne said. “For business to thrive, so too must the society in which it operates also thrive. To neglect this is to put at risk the interests of company shareholders.” Shifting boundaries Going back many decades, BP and other resource companies took on social responsibility for entire local communities. Originally, for them, social responsibility Let’s thrive together: “For business to thrive, so too must the society in which it operates also thrive,” says BP Australasia’s Regional President, Greg Bourne. meant philanthropy. Then, as the base of its international n active approach to the management Greg Bourne, Regional President for BP operations broadened and the paternalistic of corporate social responsibility has Australasia, told the recent Australian era ended, corporate social responsibility A become a significant industry trend in Petroleum Production and Exploration evolved into a business-in-the-community recent years, with resource companies among Association (APPEA) conference in approach; for example, underwriting skills those leading the way. Melbourne, that while a company’s prime training and generally stimulating enterprise. Energystatistics & research

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14 Prospect June–August 2003 sustainable development

Enron, WorldCom and other corporate scandals have accelerated acceptance of the business-in-the-community Sustainable approach. “You can fix a bad business model, but in today’s business environment, bad behaviour will finish you off,” Mr Bourne said. Competitiveness He said companies had to adjust to the changing needs and attitudes of societies in which they operate. International hydrocarbon companies must endeavour to provide extra energy that the Earth needs as its population continues to increase, but they need to do so in ways that maintain the viability of the planet’s ecology. “We know that social progress rests on economic progress, which, in turn, depends on the provision of energy,” Mr Bourne said. “Further, we know that two billion people on the planet do not have electricity supplies today, and that in the next 50 years global population will grow by an estimated 50%.” For solutions to be found, more meaningful partnerships need to be developed. Resource companies have to think differently, but most importantly they should strive to provide a legacy of their presence. “They have to ask themselves am I proud of what I am doing today? And, am I proud of what I am leaving behind,” Mr Bourne said. In summary, he said, social investment by companies should be the means by which business adds value for society, as well as a means by which business manages its impacts on society.

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n independent Swiss economic research organisation has Prospect rated Australia highly in terms of its ability to provide a A framework that sustains the competitiveness of enterprises. The International Institute for Management Development’s World Competitiveness Yearbook 2002 ranked Australia 14th overall for competitiveness among 49 of the world’s leading industrialised economies. The United States was again ranked No. 1, with the United Kingdom 16th, France 22nd, Malaysia 26th, Japan 30th, Brazil 35th, South Africa 39th, Indonesia 47th and Venezuela 48th. And reach 10,000 Industry Executive, Suppliers, Australia was ranked world’s best in the category “Economic Financiers and other participants in the Worldwide performance — resilience of the economy to economic cycles” and second in the category of “Government efficiency — the exchange- Resources Industry every quarter. rate policy of your country”. Significantly, from a resources perspective, given that Western To advertise call Ray Burns of Ray Burns Media Australia produces about 40% of the nation’s total mineral and petroleum output, Australia was ranked world No. 2 for self- Phone 0408 474 328 sufficiency in non-energy raw materials, No. 3 for political stability or Email [email protected] and quality of life, No. 7 for government economic policies and financial institutions’ transparency, and No. 8 for information technology skills. It is these attributes that help sustain the flow of investment DON’T MISS NEXT ISSUE into the State, generating sound financial returns for companies, SEPTEMBER-NOVEMBER 03 and at the same time provide a quality way of life for Western Australians.

Prospect June–August 2003 15 Golden Gecko Awards Building relationships from Rewarding environmental the ground up HP Billiton Iron excellence Ore may be a Bgiant when it comes to mining and Golden Gecko award is a treasured prize among people associated with the resource sector in processing iron ore, AWestern Australia. Winning one is roughly but it takes nothing for equivalent to an athlete winning a State title. granted on the ground, When the concept of an award for environmental especially in the excellence in Western Australia’s minerals and backblocks of the petroleum industries was mooted in the early 1990s, Pilbara where most of environmental awareness had well and truly hit the public its iron ore resources and political agenda. are located. Anticipating the growing importance of the environmental The company Handled with care: Martu Idja Banyjima language group representative Guy Parker debate, staff from the then Department of Minerals and provided proof of this places a tag on one of 1000 stones from a when handling a Energy decided on a proactive approach that would unique stone arrangement prior to its encourage and promote environmental excellence within sensitive heritage relocation to make way for the development the resources sector. issues associated with of BHP Billiton’s Mining Area C iron ore It was decided that the key would be to use an awards the development of its project north of Newman. With him is program to encourage the mining and petroleum industry newest mine at Mining archaeologist Fiona Hook. to continually strive for excellence. Area C, about 120 km Achievements would be promoted publicly to north of Newman in the Central Pilbara. demonstrate that environmental awareness and action Potentially standing in the path of development was a unique stone was growing in the industry, that much more was needed arrangement comprising well over 1000 stones of different shapes and than simply complying with legislative requirements, and sizes that appeared to have been placed there by Aborigines from a that a positive balance could be struck between previous era. economic development and the maintenance of The biggest group of stones, around 800, was positioned in an area environmental values. where BHP Billiton Iron Ore planned to develop its Mining Area C The inaugural Awards for Environmental Excellence were operations. held in 1992 and subsequently renamed the Golden The traditional land owners — the Innawaonga Bunjima Naipaili (IBN) Gecko Awards in 1997. and the Martu Idja Banyjima (MIB) tribes — were themselves intrigued by Over the years numerous companies and individuals the pieces of banded ironstone and chert buried in the ground and have been rewarded, either with presumed they were placed there by ancestors. Golden Gecko Awards or After a lengthy consultation period that included liaison with Certificates of Merit, for outstanding examples of archaeologists, various Aboriginal groups and native custodians of the environmental endeavour. area, a deal was struck to enable the stone arrangement to be shifted to a new site about 7 km away. The site, which had the same valley sweep as Entries for this year’s awards closed recently, the original location, was far enough away from the proposed mining with a total of 15 activities to ensure its protection. nominations being In a painstaking operation lasting three months, each of the stones was received. placed in the same relative positions as before, including distance apart, The evaluation orientation and depth in the ground. process, which It was an outcome that pleased everyone. incorporates that by From a financial perspective, BHP Billiton Iron Ore spent A$750 000 on both a technical the relocation project, an investment over and above normal heritage panel and a requirements. Additionally, BHP Billiton Iron ore will provide substantial selection panel, is financial support to the IBN and MIB trusts over a mine life that will currently in extend beyond 20 years. The company has also committed to increasing progress. indigenous employment to 12% of its workforce over the next 10 years, Winners are beginning with a minimum of 5% indigenous employment on the due to be construction of Mining Area C. announced on More than anything else, the stone relocation exercise demonstrated 18 September 2003. BHP Billiton Iron Ore’s willingness to work harmoniously with community stakeholders, and at the same time address the divergent needs of its mining operations. BHP Billiton Iron Ore was subsequently awarded the Yamatji Land and Sea Council’s 2002 Snakewood Award which honours corporate contributions to the native title process and the communities involved.

16 Prospect June–August 2003 sustainable development Photo courtesy Rio Tinto Community initiative: Volunteers lend a helping hand in a Rio Tinto-backed project to help curb the spread of an invasive weed called mesquite on Mardi pastoral station in Western Australia’s Pilbara region. Rio Tinto aspires to be a long- term caring neighbour

io Tinto is not only a world leader in input for Greening Australia (WA), an “The fund has only been in existence for a finding, mining and processing indigenous history program, and a sport and little over a year. However, we’re already Rmineral riches from the earth’s crust, recreation volunteer project. starting to see some excellent results from the the company also views itself as a positive Significantly, the fund is not a grant partnerships we’ve put in place.” and caring neighbour. scheme, but rather a partnership program. Rio Tinto believes that sustainable It has amply demonstrated this in Western Manager of the Rio Tinto WA Future Fund, development cannot be achieved by industry Australia through the establishment of the Tania Hudson, said the fund aimed to help to alone. It needs to be a collaborative effort Rio Tinto WA Future Fund, under its Business make a difference to the welfare of Western from various levels of industry, governments with Communities program. Australians and the economic prosperity of and the wider community. Launched in August 2001, the WA Future the State. The Rio Tinto group of companies Fund is a A$2 million per annum initiative “We believe that the greatest benefit employs about 36 000 people worldwide and that supports the development of more comes when industry works hand in hand has operational assets worth US$13 billion on sustainable communities in Western with the community and with government to five continents. About 20% of these assets, Australia. form partnerships that are based on common mainly iron ore and diamond operations, are So far the fund has agreed to support 27 goals,” Ms Hudson said. located in Western Australia. different projects in Western Australia, with “Rio Tinto is a major player in the To continue operating successfully as a the length of funding varying from one year resources sector in Western Australia, and we mineral and metals producer, the company to five years. Among the projects are a have a real commitment to make this State a feels that it must be committed to strictly biodiversity mapping program for the Pilbara, better place in which to live and work. adhering to the principles of sustainable an innovative timber and craft initiative, development.

Prospect June–August 2003 17 Pilbara’s pristine waters continue to sparkle

osting Australia’s largest tonnage port Hover a 30-40 year history of intense industry growth, the high conservation value waters of the Dampier Archipelago remain essentially pristine — which is a credit to all those who use them, including Western Australian resource developers and exporters. The waters of the North West Shelf support the highest biodiversity recorded anywhere in Australia. They contain a remarkable array of marine fauna, including tropical fish, turtles, corals, sponges, crustaceans and molluscs, as well as charismatic large fauna like whale sharks, turtles and dugongs. The extensive marine habitats that support this biodiversity include major coral reef systems, coastal mangroves, sub-tidal and inter-tidal rocky shores, reefs, sandy flats and muddy flats, beaches and salt flats. Up until the mid-1960s, Clean image: The hub of Australia’s largest offshore petroleum industry and the export channel for tens of millions of the remote Pilbara region of tonnes or iron ore every year, the waters of the Dampier Archipelago remain outstandingly clean after 40 years of WA was archetypal frontier industrial activity country, with industry BY VICTORIA JACKSON, DEPARTMENT OF consisting mainly of Study, (NWSJEMS), was managed by Dr Chris INDUSTRY AND RESOURCES pastoralists and a few mining operations. Fandry on secondment from CSIRO to the Since then, Dampier Port has progressively Department of Environment. the Department of Industry and Resources is expanded to accommodate growing export This A$6 million study, jointly funded by contributing to the planning process to tonnages of iron ore and salt. the WA Government (A$2.7 million) and the ensure economic growth is maintained in The offshore discovery of hydrocarbons in CSIRO (A$3.4 million) melded research parallel with sound environmental the early 1970s brought further expansion of already undertaken by industry, Western management. the port. To facilitate gas supply to both Australian and Federal Government Two scientific studies in progress that will domestic and export markets, a sub-sea authorities and research organisations. greatly enhance knowledge of the marine pipeline was constructed across the seabed The study’s main objective is to develop ecosystems are nearing completion. in1982. and demonstrate a practical, science-based, Industry’s contribution of the provision The area is now the hub of Australia’s iron regional marine ecosystem management valuable data and funding is an estimated ore and petroleum industries, much of which approach to assist in decision making A$20 million. Since its inception, the oil and is serviced through Dampier. The value of towards sustainability. gas industry has undertaken environmental sales of petroleum products from the region What has emerged from the study is that research and collected data from the marine amounted to about A$9billion in 2002, with the NWS ecosystem displays very high and climatic environment in which it additional flow-on benefits to the economy. natural variability. It experiences the highest operates. To protect the ecological value of marine incidence of tropical cyclones along environment, three marine parks are being NWS joint study Australia’s coast that can cause massive developed throughout the North West Shelf. The first of these studies, the North West destruction to coastal areas and seabed In line with the principles of sustainability, Shelf Joint Environmental Management habitats.

18 Prospect June–August 2003 sustainable development

It is also affected by large-scale variations in ocean temperatures and salinity levels, influenced by the fluctuating flows between Bacteria: stealth miners the Pacific and Indian Oceans. During the occurrence of the El Nino phenomenon in the Pacific Ocean for instance, the water level without boots in the western Pacific is one metre lower than that of the Indian Ocean. This has a profound BY FREELANCE effect on the Leeuwin Current, lowers RESOURCES WRITER nutrient levels and exacerbates coral JOHN McILWRAITH bleaching. The ecosystem has also adapted to the natural leakage of an estimated 3300 acteria could be the tonnes/annum of hydrocarbon material onto miners of tomorrow, the seafloor. Beliminating many of The large variability of this system and the existing processes to scale of natural destructive events illustrate extract commercial minerals the difficulty that industry can experience from recalcitrant ore. when preparing an Environment Impact The environmental Statement for marine based projects. benefits would be significant, Woodside — WA Museum study and, in the view of the On a more intimate scale, Woodside has a companies pursuing this four-year partnership with the Western route, financially attractive. Australian Museum. This project won the While the early research prestigious 2000 Golden Gecko award for has concentrated on nickel, environmental excellence, demonstrating a copper and gold, a Perth substantial economic and physical company, Titan Resources NL, commitment by Woodside to “look after its has bred a dazzling range of own backyard”. bacteria that could be used to Capturing information by conducting extract many other minerals. diving and dredging expeditions, the study Chief executive Bill Ryan Putting bugs to work: Microbiologist Tasmin Williams team mapped the marine biodiversity of the stresses that its process is examines a dazzling range of bacteria that Titan Resources is currently using for mineral processing purposes. Dampier Archipelago for documentation and deliberately low tech — with laboratory analyses. no aggressive reagents, high- Project Manager, Diana Jones of the pressure processes or high for example, and other discussions have Western Australian Museum, said a project temperatures. taken place with companies in Canada and team of over 50 scientists from 11 countries Nor does it require specialised skills for Mexico. was excited by the diversity and abundance mine workers. The BioHeap process is certainly simple. of marine life in the archipelago. The team “This ‘designed simplicity’ is the key to Bacteria have been bred to work in the was also relieved at the relative pristine state success,” Ryan says. “The application of open air (unlike some other bacterial of the environment after several decades of ‘special situation’ biotechnology variations techniques) on ore piled into heaps, either industrial activity. can always be introduced later, as an adjunct dumped directly from a mine, or after only Results have spectacularly increased the to the primary base process”. the most basic crushing. knowledge of all marine groups studied. The Titan Resources’ first goal is to use its A solution containing billions of hungry “Woodside Collection” now totals more than McEwen nickel deposit at Widgiemooltha as bacteria is then sprinkled on the heap, bugs 2200 known species as well as identifying the first full-scale commercial development which consume the sulphur in the ore. many new species. employing its BioHeap process. The resultant oxide seeps to the bottom of A permanent exhibition, the “Woodside The deposit has a current resource of 7.2 the heap and is tapped off for the extraction Dampier Gallery” resides in the WA Museum million tonnes of material with a grade of of the metal. with a second exhibition housed at the 0.87% nickel, or 62 600 tonnes of contained Recoveries as high as 90% have been Woodside visitors centre on the Burrup metal, currently worth about $A800 million, a achieved, at very low cost, but the company Peninsula. A visually exiting television figure which could increase with current seeks to gain even greater efficiencies. documentary “Life on the Edge Down Under” testing. “There are no tailings, and the heaps has also been produced for international A 1.4 Mt/a heap leach process, recovering should be easy to rehabilitate,” says Ryan who release. 80% of the contained nickel, should yield also stresses that the process is a net This well documented pristine marine about 10 000 tonnes of nickel annually in a consumer of greenhouse gases. environment provides an excellent baseline high-value form which would enable Titan to Other metals such as zinc and cobalt can from which can be gauged how well we be much less affected by the vagaries of the also be extracted, with “custom bred” manage increasing pressures being placed on nickel price than the industry as a whole. bacteria. the environment as industry, recreational and There is also overseas interest in tourism pressures expand. employing the process, in a Chinese project,

Prospect June–August 2003 19 Portman to mine around rare plant species

ortman Limited has been granted Portman's northern conditional approval to mine iron ore tenements comprise eight Pon its sensitive Windarling Range deposits, five of which are at tenements, north of Koolyanobbing, where a Windarling, with the balance at rare plant species exists. Mt Jackson. The approval, granted by Western The company could begin Australia’s Environment Minister Judy mining the Windarling Range Edwards, follows Portman’s successful appeal iron ore resource as early as the against an earlier Environmental Protection first quarter of 2004. Ore feed Authority judgement, and recommendations from the northern tenements made by the State Appeals Convenor. forms a key component of the The decision will effectively increase the company’s plan to extend its lifespan of Portman’s iron ore operations in Koolyanobbing operations. the Koolyanobbing area from three-to-four Current mine production for years to 10 years, and possibly longer. the area is around 4.4 Mt/a, Portman’s Managing Director, Barry Floral protection: Iron ore miner Portman Limited has been given although Portman hopes to conditional approval to mine its Windarling Range tenements so Eldridge, said the decision represented a increase this to something long as it restricts mining to 30% of the coverage of the closer to its original objective of workable compromise that took into endangered native plant, Tetratheca paynterae, as depicted above. consideration the environmental 6 Mt/a. sustainability of flora on the Windarling Mining will also be restricted at the Ore from the northern tenements will be Range and the broader economic and social Windarling-1 deposit to protect local trucked up to 100 km to Portman’s central benefits for the wider Goldfields–Esperance landscape and geological features. milling operations at Koolyanobbing. region. As part of its Mining at the Windarling-3 deposit will commitment to initially be restricted so that no more than the sustainable 30% of the rare plant species, Tetratheca development of Never lookA a paynterae, will be affected. Portman will be the area, Portman allowed to increase this to 50% if it can has agreed to assist gifthorse in demonstrate that the plant population can be in funding successfully managed while mining goes on extensions to the around it. the mouth. Mt Manning Tetratheca paynterae, described as a Nature Reserve, spinifex-like shrub with a small pink flower, north of For advertising and design that inhabits rocky crevices in a small section of Koolyanobbing, to is simple, smart and effective the Windarling Range that also contains high- provide greater call DarkHorse Advertising: grade iron ore. currently offering a 15% environmental discount on first jobs Under original plans, the proposed mine protection for a for all new clients. at Windarling was to affect 89% of the rare broad range of Call Sean on: plant population. However, during the plant Mob 0419 031 052 environmental assessment, the project was communities. Phone (08) 9473 0882 scaled back to a potential impact of 60%. After being given the green light to proceed with the restricted development of its northern tenements, Portman announced that it would reactivate its exploration program and come Darkhorse Advertising up with a revised [email protected] | www.darkhorse-advertising.com mining plan.

20 Prospect June–August 2003 sustainable development

Tiwest rides the bumps and builds community partnerships

he Tiwest Joint Venture operates a fully integrated titanium mining and Tprocessing project in Western Australia, which includes the Cooljarloo dredge-and-dry mining operations near Cataby, the Chandala dry separation plant and synthetic rutile plant near Muchea, and a pigment plant at Kwinana. Not unexpectedly, the establishment of the Chandala minerals processing facility in the late 1980s created considerable angst among sections of the local (rural) community. Construction of the site was provided for under a State Agreement Act and there were compelling economic arguments for the preferred location just outside Before and after: The paddock on the right benefited from a new soil-conditioning product known as Muchea, including proximity to gas and TiFix which was created by Tiwest as a byproduct of its heavy mineral sands processing operations at Chandala. power services, road and ■ Provision of the Chittering Landcare rail transport facilities Centre and support for the catchment and a population base improvement activities of the Landcare from which employees Coordinators in improving catchment could be drawn. These quality and management. factors, however, did not ■ Creation of several wetlands on the carry much weight with Chandala property that contribute to many local residents enhanced biodiversity, and reduce who objected vigorously nutrient flow to Ellen Brook and other on the basis of wetlands on the Swan Coastal Plain. anticipated ■ Revegetation of much of the 341 ha environmental impacts. Chandala property. The site also ■ Research to prove up the value of a happened to be within byproduct called TiFix, which has an the sensitive Ellen Brook Community spirit: Men, women and children who combined to exceptional capacity to improve the water catchment area, plant thousands of trees in a program sponsored by Tiwest in the Shire of Chittering. moisture and nutrient retention of sandy which constituted soils, and to significantly enhance crop additional challenges for environmental Management System that not only addresses growth. control, but which also presented many the traditional control of negative In every environmental and community opportunities. environmental aspects, but also embeds initiative, Tiwest explores opportunities for Thus it was fom the earliest stages of significant activities that provide, or have the partnership with local groups. This approach Tiwest’s existence, and out of necessity, that potential to provide, an environmental has led to joint Tiwest/community tree the company was exposed to the principles of benefit. planting days, support for a local school sustainable development: in essence, To date, implementation of the system has nursery, and wetland rehabilitation projects mutually dependent economic, social and been successful in reducing the frequency in conjunction with local primary schools. In environmental success. and scale of negative impacts. While Tiwest addition to its own programs, Tiwest jointly The approach of the Tiwest Chandala site Chandala has not recorded any instances of administers a Community Grants Scheme to sustainable development is reflected in the environmental harm as a consequence of its with the Chittering Shire. company’s environmental policy which activities, comments are occasionally made While Tiwest’s progress since commits to the “ …balanced integration of by some local residents regarding odours and commissioning has alleviated much of the environmental, social and financial aspects in noise emissions. Tiwest considers any off-site community concern with its operations, the our business planning and actions” and impact unacceptable, and continues with challenge is ongoing to optimise aspires to providing an overall environmental work to reduce the risk of these occurrences. performance consistent with its policy benefit within the local community. On the positive side of the environmental objectives and the principles of sustainable This is translated through an innovative ledger sit the following initiatives: development. ISO14001 certified Environmental

Prospect June–August 2003 21 The new Telfer Deep Gold Bonanza

ne of the world’s will develop an underground mine to access biggest gold deeper ore. The latter phase, to cost an Omines is being estimated A$215 million, will be funded from established on the edge internal cash flows. of the Great Sandy Operating costs will be A$150 an ounce, Desert, reviving a little more than a quarter of the recent venture that has already Australian dollar gold price. produced millions of Newcrest Mining is considering several ounces of gold. options for the sale of copper from the mine, The Telfer mine, first including one in which a considerable commissioned 16 years amount of processing is carried out. ago, will be greatly Extensive drilling has greatly increased expanded when the reserves at Telfer. It is estimated to have a current A$1.2 billion resource of 28.4 million ounces of gold, construction program is although only about two-thirds of this has completed. been confirmed in current development When operations plans. were suspended by Going deeper: The Telfer open pit is likely to become larger than This may be compared with output from Newcrest Mining Ltd Kalgoorlie’s Super Pit under stage one of a A$1.2 billion expansion Telfer before it was temporarily closed — six program by Newcrest Mining Ltd. An underground development more than two years ago, million ounces over 13 years, a figure phase is scheduled to follow. there were fears that considered a major contribution to Telfer’s golden era was over, but continued construction. It will ensure that this Australian production in that period. exploration and planning revealed gold and prosperity continues, providing a range of On the edge of a desert, the mine and its copper reserves which will make the mine a flow-on benefits including 1222 new jobs associated facilities will need 55 megalitres of giant in global terms. during construction, and about 620 full-time water a day, two-thirds of which will be Its new life will begin in early 2005, with operational positions. consumed in the processing plant. New bore production estimated at one million ounces Telfer was a mine of modest dimensions in fields will be drilled into the area’s aquifers to of gold and 50 000 tonnes of copper in the the 1970s, and its very existence was a tribute satisfy this requirement. first year of renewed operation. Over the to the determination of the gold mining As many local companies become the longer term, average annual production is industry. It was developed in one of subject of mergers or acquisitions, Newcrest forecast at 770 000 ounces of gold and 27 800 Australia’s most remote and inhospitable remains the biggest — and one of the few — tonnes of copper per year over a 25-year regions, nearly 500 km inland from the Australian-controlled gold companies. The period. The new Telfer is likely to be the Pilbara coast, with no proper roads, and company also owns the New Celebration gold largest operating gold mine in Australia, temperatures that often reach 45 degrees mine and has a 22.2% interest in the ahead of Newmont Mining’s Kalgoorlie Super Celsius. Boddington gold mine, for which a financial Pit, which is currently producing 600 000 to The new Telfer will have an excellent all- commitment to reopen and expand is 700 000 ounces per year. weather airport, and its gas-fired power pending. The project will build upon the already station will be capable of producing up to 100 With the new Telfer, and the continued significant wealth of the Pilbara region, which megawatts of electricity. vigour of its other gold operations, Newcrest is currently Western Australia’s most The first phase of construction, which will become a significant global participant in prosperous resources areas, with billions of began in late 2002, involves redeveloping the the gold industry. dollars of new projects committed or under mine’s open pit. Under stage two, Newcrest

22 Prospect June–August 2003 Petroleum Western Australia strives to keep the nation well oiled

ustralian liquid hydrocarbon BY LISA GIBBONS AND DARREN production (crude oil and FERDINANDO, RESOURCES A condensate) is currently 75% of its BRANCH, PETROLEUM DIVISION, domestic demand. If no new fields are DEPARTMENT OF INDUSTRY AND developed in the foreseeable future, this RESOURCES figure is predicted to drop to 50% by 2007. This projected decline has emerged as a national issue 400000 due to growing economic 350000 and security concerns with 300000 external markets. It highlights the key role that 250000 200000 petroleum exploration in Angel, Egret, Gorgon Cliff Head success: Gas is flared during an oil

bbls/day 150000 Enfield, Cliff Head Western Australia has in Mutineer/ Exeter production test at Roc Oil’s Cliff Head oil field 100000 Linda, Hovea near Dongara last January. maintaining a reasonable Woollybutt, D Island level of oil self-sufficiency 50000 Current Production for the whole of Australia. 0 Cliff Head is estimated to have 20 to 30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Western Australia’s liquid Year million barrels of recoverable oil. Similar hydrocarbon production, prospects in the area, drilled earlier this year, based on current producing fields, is forecast 2003 and drilled vertically to a total depth of turned out to be dry or non-commercial, and to decline rapidly in coming years. However, 2455 metres. An 18.6 metre net oil column Roc Oil and its joint venture partners are now this will be counterbalanced by a number of was intersected in a sandstone structure. looking at other targets in the region. new liquid hydrocarbon developments At least two more wells are required to Technical and commercial studies are projected to come on stream within the next appraise the Stybarrow field before any underway to determine whether the Cliff five years. These will help offset the decline decision could be made on its development. Head field can be developed commercially, in Australia’s self-sufficiency in liquid Enfield and Laverda will be developed with results expected in late 2003. One hydrocarbon production and provide first. The preferred development option potential development option is to pipe the additional security of supply. accepted by Woodside is a floating oil to an onshore processing facility near Production from existing fields is expected production, storage and offloading (FPSO) Dongara. to decline from 334 000 barrels per day in facility. The facility will be stationed next to The onshore Hovea field has estimated 2002 to 96 000 barrels per day by 2010 as the Enfield field while the Laverda and recoverable reserves of 9.4 million barrels of shown in the graph above. This represents a Stybarrow fields will be tied back to it via a oil. 71% decrease in current production if no new subsea flowline. Initial production is Also, recent new oil discoveries at liquid hydrocarbon resources are developed expected to be 100 000 barrels per day and Jingemia 1 and Eremia 1 have added to the to replace consumption. The the project should have a production life of Dongara area’s growing reputation. Mutineer/Norfolk and Exeter fields (in 150 about 15 years. Despite a number of dry holes and non- metres of water in the Dampier Sub-basin, The development will cost about A$1–2 economic shows in offshore petroleum about 150 km north of Dampier), when billion. So far, Woodside has spent about prospects drilled as follow-ups to the Cliff brought online, are expected to add 88 000 A$250 million on the project including at Head success, there is still a great deal of barrels per day to production by 2005. least A$3 million on environmental research optimism for future hydrocarbon exploration Additionally when Enfield/Laverda/Stybar- in the waters around the Ningaloo Marine in the Perth Basin both onshore and offshore. row development (in the Carnarvon Sub- Park to ensure that any activity at the Enfield The presence of a proven source and suitable basin in 350–390 metres of water) development will have minimal impact on oil migration paths in the north of the basin commences production on 2006 they will add the environment. has reduced much of the risk related to another 75 000 barrels per day to the Western Perth Basin hydrocarbon exploration in the area, leaving Australian production by 2006. Meanwhile, a string of recent oil the focus on determining valid trapping The Enfield, Laverda and Stybarrow fields discoveries in the northern Perth Basin on structures. While many of the prospects are estimated to contain more than 300 Western Australia’s Mid-West coast has delineated to date have potential reserves in million barrels of recoverable oil, making the aroused considerable additional interest in the tens of millions of barrels, that are combined development one of the biggest off the State’s oil potential. considered too small for larger oil-producing the Western Australian coast. The revival of interest in this area came in companies, these fields will enhance the Stybarrow 1 was drilled with the Atwood late 2001, with wildcat successes onshore at future growth of those junior exploration Falcon semi submersible, intermediate water Hovea and Beharra Springs North, and at Cliff companies that are active in Western rig. The well was spudded on 12 February Head about 11 km offshore from Dongara. Australia.

Prospect June–August 2003 23 Perth hosts second China and the

ince the inception of economic reforms state-run core library in the late 1970s, China has had one of the fastest growing economies in the he Department of Industry S world, with official data showing a real and Resources (DoIR) has annual average growth rate of around 10% Topened a second drill core over the past two decades. Western library in Western Australia to Australia’s exporters have benefited greatly preserve valuable drill core from this growth, experiencing an overall samples, and at the same time help growth rate in excess of 30% per annum over explorers unearth potential new the past three years. With a raft of substantial mineral and petroleum riches industrial and infrastructure developments in across the State. China, it appears that Western Australia can The official opening of the state- expect continued high demand from this of-the-art Perth Core Library in market in coming years. Harris Street, Carlisle, on 16 April, China is now Western Australia’s third- followed the opening of a similar, largest market, with exports amounting to but smaller facility in Kalgoorlie in Book me in: While there are no books in this library, over A$3.5 billion in 2002. Much of China’s July 2002. Chris Brooks has plenty of valuable drill core material demand has been for mineral and resource The Joe Lord Core Library in to show clients who may be interested in visiting the products, which are used both to service Kalgoorlie archives mineral core Department of Industry and Resources’ newly opened rapid infrastructure growth, and as key inputs A$5 million core library in Carlisle. from the Goldfields region (roughly in China’s manufacturing exports to the in an area from Wiluna down to More information about the viewing United States and other parts of Asia. While Esperance), and has a 2880 pallet capacity. arrangements and sampling of drill cores on a China’s own reserves of these commodities The Perth Core Library houses mineral case-by-case basis can be obtained from: are significant, the level of demand is such and petroleum core, cuttings and sidewall Gary Williams at the Perth Core Library — that it is likely to exceed supply in the short to core from the remainder of the State, and has [email protected] or medium term. an 8640 pallet capacity. The oldest piece of Wayne Hitchcock at the Joe Lord Core Library drill core held at the Perth library originated Exports to China in Kalgoorlie — from a government-funded drilling campaign Nominal quarterly value [email protected] in the Cue area in 1901. $ million Alternatively, people are invited to access the 1200 The abandonment of many millions of Department’s website — www.doir.wa.gov.au 1000 dollars worth of drill core in various outlying — (Interactive Computer Systems — WAPIMS 800 parts of Western Australia was a catalyst for a or WAMEX) or 600 A$9 million commitment by the State www.doir.wa.gov.au/geology/record_2002_14. Government in the 1990s to establish an 400 pdf for details about the selection criteria for integrated core library facility for the State. 200 mineral drill core in Western Australian core While it is mandatory for petroleum 0 libraries. Mar 93 Mar 95 Mar 97 Mar 99 Mar 01 Mar 03 companies to lodge drill core samples with the State Government, the Catchment boundary between Perth and same does not yet apply to Kalgoorlie Core Libraries mineral explorers. However, a Flow of mineral drillcore Kununurra • The energy and resources sector has been policy is in place to archive the driving force behind our growing trade important mineral drill core • Derby relationship and will continue to play the Broome • without interfering with Halls Creek• most significant role into the future. This is a exploration and mining fact well illustrated by the recent A$25 billion Port Hedland projects. This will ensure that • liquefied natural gas contract to China’s Karratha • it is preserved for future Guandong Province. While coal remains the generations of explorers to major domestic energy source in China inspect, making it easier and • Newman (providing approximately 70% of the less expensive when they country’s energy needs), there has been a mount fresh exploration move in China to increase utilisation of efforts. cleaner energy sources such as LNG amid DoIR, through the Meekatharra • • Wiluna concerns over air pollution in fast-growing Geological Survey of Western Mt Magnet metropolitan areas. • Australia, is keen to acquire Leonora Geraldton • • As natural gas currently accounts for less new drill core in the years than 3% of the country’s total energy ahead, and it welcomes Joe Lord consumption, there is considerable industry to inspect and Core Library Perth opportunity for expansion. In particular, gas- contribute appropriate drill Core Library •Norseman fired plants will play a major role in future core at its Perth and Kalgoorlie expansion of power generation in coastal repositories. •Esperance provinces, and imported natural gas is 200 km expected to provide part of the increased

24 Prospect June–August 2003 Western Australian economy

BY KURT SIBMA DEPARTMENT OF TREASURY & FINANCE supply requirement. Thus, with Western Australia’s relative abundance of natural gas, the prospects for Western Australian LNG exports are positive. While the outlook for energy exports is positive, the State’s largest commodity export to China is still iron ore, with exports totaling almost A$1.5 billion in 2002. In real terms, exports of iron ore to China have increased by around 40% per annum over the past five years. Exports of confidential items (which includes large volumes of alumina) also account for a significant proportion of Western Australia’s trade with China. The value of these exports was over A$820 million in 2002, representing an increase of 13.7% from the previous year.

MAJOR COMMODITY EXPORTS TO CHINA 2002 Value A$m 2002 on 2001 Growth % Iron Ore 1,480.7 9.0 Confidential Items 821.6 13.7 Petroleum 354.5 18.0 Wool 272.9 25.1

The strength of the Chinese economy continues to be very important for Western Australia’s iron ore exporters, particularly in the context of sluggish demand in the world’s major developed economies. Evidence of this is in Rio Tinto’s recent announcement of a A$200 million first stage expansion of its Western Australian iron operations. Rio Tinto plans to expand the capacity of its subsidiary Hamersley Iron to 85 million tonnes per annum and ramp up production at the new West Angelas iron ore mine to meet this buoyant demand. Not surprisingly, a consequence of the growing trade relationship between China and Western Australia has been a significant increase in Chinese direct investment in the State in recent years. According to official Chinese data, Australia is one of the most Exports growth: Western Australia’s exports to China will receive a major boost when LNG popular destinations for Chinese investment shipments begin in 2005. abroad, with a total of A$3.3 billion invested in Australia to mid-2001. Prominent examples of Chinese investment in Western given the very high level of public concerns over its growing public debt and the Australia include Baosteel’s (China’s largest infrastructure investment in China (including number of State owned enterprises that are steel maker) A$124 million joint iron ore an estimated US$34 billion associated with unprofitable. Further reforms to the state- venture with Hamersley Iron, and Chinese the 2008 Beijing Olympics), the short-to- owned banking sector are also needed to equity stakes in both HIsmelt (Capital Steel) medium term outlook for demand seems ensure that non performing loans are and North West Shelf gas reserves (China assured. handled and higher standards of operation National Offshore Oil Corporation). While China’s short-term outlook appears are achieved. China is working to address Overall, it seems likely that Western positive, the long-term sustainability of these issues and Western Australia can expect Australia’s energy and resources sector will China’s growth will depend on continued to continue to enjoy a strong and broadening continue to benefit from high levels of financial and economic reform. In particular, trading relationship with China. demand from China in coming years. Indeed, the Chinese Government will need to address

Prospect June–August 2003 25 the big picture

The Global Scene 2002. Overall, weaker domestic and international demand combined with some spare capacity, has meant that investment has been slow to recover Slowing global growth, has the recovery stalled? and consequently self-sustaining recovery has been delayed. Of particular concern, business investment, which had shown some signs of recovery in Global recovery faded in the final months of 2002, notably in the industrial late 2002, fell in the March quarter 2003. economies. This reflected rising uncertainty surrounding Iraq and the ongoing effects of deflation of the equity market bubble, particularly in the The outlook is unclear in terms of whether a pick up in investment and self- United States. Industrial production in the major economies stagnated sustaining growth will happen in the short term. and world trade growth slowed. There are signs that global investment is On the positive side, the medium term fundamentals, especially US picking up but it is too early to say whether a slowing in consumption productivity, are sound. Monetary policy stimulus is still in the pipeline growth, particularly in the US, along with softer consumer and investor following the cut in the official interest rate to 1.25% in November 2002 and sentiment, will further stifle the recovery. A recovery in investment is fiscal policy will see a large shift into deficit as a result of increased spending critical if the world economy is to resume the stronger growth it saw in the and tax cuts. The housing sector remains strong and new orders for capital first three quarters of 2002. goods rose in the early months of 2003. Another positive development is that the uncertainty associated with the potential for a prolonged conflict in Indicating an expectation that the recent slowdown may be temporary, the Iraq has dissipated. International Monetary Fund (IMF) has forecast that 2003 will see a modest improvement in global growth, up to 3.2% from a weak 3.0% in However, there are constraints on near-term growth. 2002 and rising to its long term trend, around 4%, in 2004. 2003’s • Household consumption is unlikely to provide the stimulus that it did in performance should reflect a slowing in the United States being offset by the 2002 recovery. Household debt is now high and falling stock prices slight (and lower than previously forecast) improvements in the still fragile have reduced household net wealth, critically the labour market is likely and vulnerable recoveries of Japan and Europe. The non-Japan Asian to remain soft. economies should see resilient growth, though there is some uncertainty as to the impact of the SARS virus in the region. • Investment remains constrained by excess capacity in the IT and manufacturing sector, low profitability levels, high levels of corporate debt TABLE 1: MAJOR ECONOMY OUTPUT GROWTH: 2001 – 2004. and a lack of venture finance. Actual Forecasts 2001 2002 2003 2004 Japanese growth continues at a modest, though World 2.3 3.0 3.2 4.1 slowing, pace United States 0.3 2.4 2.2 3.6 The recovery in the Japanese economy that began in the first half of 2002 Japan 0.4 0.3 0.8 1.0 has also faltered, as domestic demand remains weak and stronger exports to European Union 1.4 0.8 1.1 2.3 China have been offset by weaker exports to the slowing US economy. Germany 0.6 0.2 0.5 1.9 Industrial production has remained flat in line with exports growth. Non-Japan Asia 5.0 6.3 6.0 6.3 While some signs of recovery in manufacturing have emerged, with increased Newly Industrialised Asia 0.8 4.6 4.1 4.5 orders for machinery and improving profitability, other sectors have not Developing Asia 5.7 6.5 6.3 6.5 improved significantly. China 7.3 8.0 7.5 7.5 Deflation remains entrenched. Prices of goods and services have fallen for the past four years and declines have gained pace recently, causing deferrals It appears that geo-political uncertainties, which have affected particularly in spending, rising real debt levels and limits on the effectiveness of the US economy, have settled, with the early resolution of the Iraq war and Japanese monetary policy in boosting growth. Deflationary expectations the prospect of lower oil prices. appear to be worsening, holding out the prospect that the economy will However, a range of factors will be important in determining the outlook continue to soften as consumers and investors cut back further on spending for the world economy as a whole. plans. • The extent to which lower equity prices impinge on balance sheets in Illustrating this, growth slowed in the fourth quarter of 2002 due to a sharp the Japanese financial sector (and to some extent in Europe) and the decline in consumption growth and falling inventory levels. related possibility that investment is constrained. The outlook remains modest for growth. Significant excess capacity, notably • Whether macroeconomic policy stimulus in the US and UK can offset in manufacturing, is putting off a sustained recovery in investment. Domestic the impact on European and Japanese growth of weaker policy demand more broadly is likely to remain weak as record levels of stimulus. unemployment continue to sap consumer confidence. • The extent to which rising euro and yen exchange rates persist and A key downside risk to the Japanese economy is that the banking sector dampen export growth in Europe and Japan. worsens prompted by further declines in equities or attempts to solve the sector’s bad debt problems without adequate measures to build up bank • Developments in the Middle East, including OPEC decisions on oil capital. production, and in North Korea. On the positive side, the swift conclusion of hostilities in Iraq means that the United States growth slows, though some potential for sharply higher oil prices, further shocks to consumer and investor confidence and Japanese equity prices appear to have receded. positives remain The US economy did not sustain the growth spurt it saw in the quarters Non-Japan Asian growth continues following its emergence from recession in late 2001 (Chart 1). Growth in the Asia-Pacific region (excluding Japan) softened a little in the first Growth in mid-2002-03 was soft in part due to waning private months of 2003 following strong GDP growth of 6.3% in 2002. Growth consumption, a key underpinning of the earlier recovery. Softer remains resilient however, with the IMF forecasting growth of 6.0% in 2003. consumption reflected rising unemployment and low stock prices (Chart In contrast with the major economies, China and Korea in particular have 2). Weak stockmarkets lowered consumer wealth perceptions and eroded seen broadly based growth based on both domestic and external demand. sentiment and thus spending growth. The region’s growth has been particularly impressive because it has occurred In addition to weaker consumption, a still (relatively) strong US dollar at a time when global trade, particularly in electronics, has been very soft. In combined with weak domestic demand in other economies meant that net part, this performance reflects supportive macroeconomic policies and the exports made a significant detraction from US growth in the second half of impact of ongoing economic reforms in China and elsewhere in the region.

26 Prospect June–August 2003 Economic trends

Compiled by DoIR’s Resources Policy Branch

There has been also further confirmation during the recent cycle that demand in China is now a key component of growth in the east-Asian economies. Notwithstanding recent strong performance however, global trade remains a Chart 1: Recent Major Economy Output Growth key underpinning for domestic demand in the region’s economies that have per cent per cent large traded-goods sectors. Any further softening in world growth is an 6.0 6.0 important risk to the growth outlook for the region. The region’s export 5.0 5.0 earnings are a key driver of crucial investment. In addition, the emergence of 4.0 4.0 China as a growing market for exports of other regional economies is a 3.0 3.0 double-edged sword. A key risk facing China’s economy currently, and therefore the resilience of the region’s growth prospects, is the uncertain 2.0 2.0 extent of the impact of the SARS virus. 1.0 1.0 0.0 0.0 There has been some divergence in regional performance over the past year, largely reflecting trade performance. Growth in Indonesia has slowed due to -1.0 -1.0 a sharp fall in tourism in the wake of the Bali bomb attack, while Hong Kong’s -2.0 -2.0 growth rose following a sharp pick-up in tourism. The SARS virus is likely to -3.0 -3.0 have some ongoing impact on the region through its impact on tourism and -4.0 -4.0 confidence more generally. Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 US Euro area Japan Through the year economic growth. Source RBA Bulletin Europe Since mid-2002 euro area growth has been poor. GDP expanded only marginally in the final quarter of 2002, with manufacturing and construction output falling further. Flat industrial output and falling business confidence, particularly in Germany, have failed to respond to resilient household consumption. Chart 2: Global Sharemarkets to end March 2003 Index Jun-99 = 100 In these conditions, it is possible that if investment fails to respond and the 160 stimulus to Europe from US export demand fades, worsening labour market conditions combined with falling consumer confidence will pull the last leg, consumption, out from under the euro economy. A rapidly rising euro 140 exchange rate is currently doing nothing to help stimulate export growth. In response to weak conditions and falling inflation the European Central Bank 120 (ECB) cut Europe’s official interest rate by 25 basis points to 2.5 % in March 2003. 100 While growth remains moribund in Germany, France and Italy, the UK economy has been a little stronger. However, even here, the first quarter of 2003 saw 80 a softening in the economy, with services sector output weaker and retail trade slowing to a crawl. A recent fall in sterling should provide some 60 assistance to the manufacturing sector, though its potential inflationary impact may deter the Bank of England from further reducing interest rates. 40 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Western Australia’s economy continues to grow The recent State Budget contained estimates for growth of 4.25% in gross US Japan Germany Aust State product (GSP) for 2002-03. This strong growth performance, Source: Reserve Bank Bulletin particularly in the face of the drought, reflected buoyant domestic demand driven by business and dwelling investment. Employment is predicted to have grown by 2.5%. Chart 3: Australian dollar exchange rate against The State economy is forecast to grow by a strong 4.5% in 2003-04, in part major currencies reflecting a rebound in agricultural production. Domestic demand growth is TWI,Yen $US,Euro expected to moderate though as the expansionary phase of the housing cycle 85 0.70 slows. Business investment is expected to remain robust, reflecting current 80 construction and a number of large projects in the pipeline. 75 0.65 The Australian dollar continues to rise 70 0.60 The Australian dollar (A$) has continued to appreciate, though the record 65 against different currencies has varied. Against the US$ it has risen by over 60 27%, from around US51 cents at the end of 2001 to over US64 cents in mid 0.55 55 May 2003. To a large extent the A$’s rise has reflected a decline in the US$ as capital has shifted from that slowing economy to other regions and 50 0.50 currencies. The A$’s performance against other currencies has been varied, 45 depreciating by 2.7% against the strengthening euro and appreciating 13.1% 40 0.45 against the yen, it has also appreciated against the Asian currencies. Net of May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 these movements it has risen a substantial 14.6 % against the trade weighted index. Source: Reserve Bank Bulletin TWI Yen $US Euro

Prospect June–August 2003 27 the big picture

Cautious commodity market outlook The heavy duty aspect of war with Iraq may be over, but the solution for the aftermath continues to precipitate a climate of uncertainty for investors. Unresolved questions also remain about the pace and composition of economic growth in the US. Oil prices, while Demand lets down copper down, still remain relatively high and the outlook for most metals continues to be tentative. US$/t 1,70

Base metals – a failed lift off? 1,65

Performance of base metals, comprising copper, lead and zinc has been symptomatic of 1,60 uncertain global demand for mineral commodities. As production cutbacks in copper, for example, began to bite, prices by February 2003 had firmed up by around 15% since the 1,55

September quarter of last year. But demand remains the key driver for a sustained 1,50 improvement in prices. ABARE expects world copper consumption to grow by 4.1% and 4.5% respectively in 2003 and 2004. In particular, consumption in China is expected to grow 1,45 strongly. Year on year, Chinese apparent consumption of copper in the first quarter of 2003 1,40 increased by more than 21%, the strongest quarterly growth rate since the fourth quarter of 2001. 1,35 Jul-02 Jan-03 Jun-02 Apr-03 Apr-02 Oct-02 Feb-03 Feb-02 Jan-02 Aug-02 Nov-02 Dec-02 Mar-03 Mar-02 May-02 However, as revealed by the International Copper Study Group’s assessment in April 2003, Sept-02 the overall global copper market was in surplus for the third consecutive month in January Source: Metalprices 2003. Not surprisingly, copper prices have therefore since retreated by around 6%. A similar picture has unfolded for the depressed lead market where demand remains weak. Likewise, bloated supply maintains fragility in the zinc market.

Gold’s war premium implodes, but prices stage a comeback After rising strongly in late December last year through to a six year peak of nearly US$390/oz in early February, gold prices retreated. In early April 2003 gold fell below $320/oz for the first time in four months in a mirror reaction to the positive gains seen in equity markets and the rally in the US dollar. Both of the latter movements were based on rapid progress towards military success in Iraq. However, gold found good support around these levels. With a mixture of physical demand and trade, prices managed to strongly rise Gold — staging another recovery? back above US$360/oz in late May. US$/oz 430 … and the mood is upbeat 410 On 10 April 2003 Gold Field Mineral Services (GFMS) released Gold Survey 2003, its annual 390 survey of the world gold market. The report delivered a positive outlook for gold prices, with 370 GFMS believing that the recent correction in the gold price from its high in early February 350

2003 could be at least partially reversed, probably in the second half of the year. This 330 optimism is founded on more stock market weakness, particularly in the US, largely due to 310 disappointingly poor economic growth. This, in the view of GFMS, would also see the US dollar depreciate further while interest rates would remain at low levels. GFMS also 290 highlighted that the gains in gold prices could be stronger if the US extends its war on terror 270 following the military success in Iraq. 250 1/1/95 1/1/01 1/1/97 1/1/94 1/1/02 1/1/03 1/1/93 1/1/98 1/1/96 1/1/99 1/1/00 All up, GFMS predicted that gold prices could be firmer, at around $340/oz during the third Source: London PM quarter of 2003 and then increase to around $370/oz in 2004. This is despite expectations that physical demand will remain extremely poor.

Oil remains under some pressure As the war with Iraq played itself out, crude oil prices dropped below US$30 per barrel (WTI) in early April 2003 to around US$27-28 per barrel. In addition to the dissipation of the war premium, other factors responsible for the easing prices have been moves towards re- establishing Venezuelan production and the end of the northern hemisphere winter. Also, at the 124th Meeting of the Conference of the Organization of the Petroleum Exporting Oil Price (WTI) Countries (OPEC), held in Vienna on 11 March 2003, OPEC noted that high prices above its US$/b price band were predominantly a reflection of uncertainties resulting from prevailing 40 geopolitical tensions. However, whilst the Conference decided to maintain current OPEC production ceilings in light of supply/demand fundamentals, OPEC also reiterated its resolve 35 to make up for any supply shortfall resulting from developing events. To this end, Saudi Arabia has been largely responsible for oil production capacity increments and lifting production in recent months. 30 Indeed, world oil production rose by a further 740,000 barrels per day in March after February’s 2.25 million barrels per day increase. OPEC crude supply gained 95,000 barrels 25 per day, with higher output from Venezuela, Saudi Arabia and Kuwait helping offset losses from Iraq and Nigeria. Non-OPEC supply increased by 240,000 barrels per day and OPEC natural gas liquid (ethane, propane, butane and condensate) and non-conventional supply 20 was up by 405 000 barrels per day.

15 Jul-02 Oct-02 Jan-03 Jun-02 Jan-02 Apr-02 Apr-03 Feb-02 Feb-03 Aug-02 Sep-02 Nov-02 Dec-02

… and the price path remains uncertain Mar-02 Mar-03 May-02

Though damage to oil infrastructure in Iraq appears limited so far, the timing and extent of Source: EIA (Official Energy Statistics from the US Government) supply recovery is uncertain. Current OPEC spare capacity is low, but that is partly offset by significant volumes of oil currently in transit plus seasonal decline in demand. Low stocks

28 Prospect June–August 2003 Commodity trends

Compiled by DoIR’s Resource Economics Branch

and increasing refinery activity are therefore providing a floor for prices and some market focus has now switched to US gasoline supplies in advance of the peak summer driving season. With the removal of some global uncertainty following the Iraq conflict, most of the risk premium on prices should have dissipated – but to what extent is unclear. ABARE’s Check on nickel's growth 9,500 March edition of Forecasts and Issues points out that one of the key factors dictating price direction will be OPEC’s ability to continue maintaining price controls if UN sanctions on Iraq 9,000 are lifted. Integrating Iraqi oil production with other member states will necessitate a 8,500 reallocation of production quotas and this can put discipline pressure on OPEC. 8,000 Conversely, the removal of uncertainty and lower oil prices following the war in Iraq can be 7,500 expected to provide some impetus for business confidence leading to a boost in world economic growth which increases oil demand. This may in turn place upward pressure on oil 7,000 prices. 6,500

6,000 Nickel — time for correction 5,500 Nickel has performed strongly since the beginning of 2002, demonstrating large climbs in prices to a peak of US$9 105/tonne (US$4.13/lb) in late February. However, after breaking 5,000 that psychological US$4/lb barrier, a large correction downwards ensued. As for many Jul-02 Jan-02 Jan-03 Jun-02 Apr-02 Apr-03 Oct-02 Feb-02 Feb-03 Aug-02 Sep-02 Nov-02 Dec-02 Mar-02 Mar-03 May-02 metals, rapid price rises had induced some consumer restocking activity, with nickel probably Source: Metalprices undergoing the largest spurt of buying with speculative purchasing being backed up by physical buying, particularly from China. Nickel prices did bounce back though by mid April to reach US$8 155/tonne ($3.70/lb). Much of the blame for the downturn in nickel prices has also been placed on the Russian nickel producer, Norilsk Nickel. Norilsk decided to pay back part of a loan which comprised a 60 000 tonne stockpile in Rotterdam as collateral. A portion of this stockpile was sold in March and delivered to Rotterdam LME warehouses. When news of this leaked out, selling by speculators took profits on long positions and drove prices sharply lower. Despite all the negative press about Norilsk’s release of the nickel, this metal’s prices remain robust. Analysts also point out that the early release of nickel by Norilsk from its stock is Cobalt prices — change of fortune? actually a bullish development for the market, indicating that Norilsk does not have a lot of US$/lb other stocks to meet current strong demand. 15.0 14.0 ... but have cobalt prices turned the corner? 13.0 In late 2002 the OM Group (OMG) announced that it would cut cobalt output at its Kokkola 12.0 plant in Finland by 20%. At the same time it was also revealed that George Forrest 11.0 International’s Luiswishi mine in the Democratic Republic of Congo would cease cobalt output, 10.0 removing some 10% of global cobalt supply, and Konkola Copper Mines reported its cobalt

9.0 output would be restricted due to repairs on its Nkana smelter in Zambia. These

8.0 developments provided an impetus for cobalt prices to begin climbing since late 2002. The average price of cobalt during March 2003 for example, was US$9.54/lb, up by 23% on the 7.0 previous month. This has been cobalt’s highest price since September 2001. However, by 6.0 April 2003 cobalt prices began to soften, even in the face of news that production might be Jul-01 Jul-02 Jan-01 Jan-03 Sep-01 Mar-01 Nov-02 Jan-02 May-01 Nov-01 Sep-02 Mar-02 Mar-03 May-02 further cut by OMG in the coming months. Source: Metalprices Of concern among cobalt producers is that OMG has accumulated a large inventory which some see to be in excess of its requirements. If a significant proportion of the inventory is liquidated, it could depress prices to new lows. The fundamentals of the cobalt market also indicate that current demand is not strong enough to support a sustained rally in prices. Global supply of cobalt last year was around 40 000 tonnes and while some improvements were discernible in the chemicals market, the super alloys and aerospace sectors were still very depressed, meaning total world cobalt consumption was around 32 000 to 33 000 tonnes.

Surprising strength in aluminium demand Aluminium prices Weak demand and oversupply plagued the aluminium market in 2002. According to ABARE however, the spot prices of both alumina and aluminium appear to have bottomed out. After US$/tonne 1,800 struggling from an August 2002 low of US$1 292/tonne, aluminium prices climbed to US$1 442/tonne in February 2003, though war-induced uncertainties precipitated a sustained price fall during March to an average of US$1 390/tonne. 1,600 Apparent remarkably strong demand for aluminium, which has outstripped production, is viewed by analysts as responsible for recovery in prices. However, it is difficult to identify 1,400 where exactly the source of demand has come from. Whilst Chinese consumption growth is providing some support, given the continuing weakness of the major Western economies, reported aluminium consumption growth rates appear unbelievable. While the jury is out, 1,200 analysts tentatively suggest that “non-reported” stock-building and ongoing tightness in the scrap and secondary aluminium markets may be forcing up demand for primary aluminium. 1,000 Looking forward, the latest forecasts from ABARE indicate that both alumina and aluminium Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 prices should be higher in 2003 and 2004. This prognosis is based on higher industrial Source: Metalprices production in China in line with rapid infrastructure development. It is also based on historically low interest rates in the US supporting consumer demand for residential construction, transport and consumer durables.

Prospect June–August 2003 29 recruitment&resources3 6/20/03 11:44 AM Page 1 R e s o u r c e s R e c r u i t m e n t To Advertise here, call Ray Burns at Ray Burns Media 0408 474 328 Commissioned Projects Committed Projects for the financial year 2002–2003 as at 8 May 2003 Employment: Construction: 15; Operation: 55 GOLD HEAVY MINERAL SANDS Sally Malay — Nickel Project Telfer — Gold Mine (Expansion) Dardanup — Mineral Sands Mine SALLY MALAY MINING LIMITED NEWCREST MINING LIMITED DORAL MINERAL SANDS PTY LTD Construction works are planned to commence at Feasibility studies for the Telfer expansion have Doral has spent more than A$30 million on asset the Sally Malay project during Q2 2003, with plant identified a large low-grade resource (up to 200 acquisition and construction costs to bring a new 130 commissioning scheduled for Q1 2004. The first Mt of sulphide and 50 Mt of oxide ore). 000 t/a open pit mine into operation during Q3 2002. shipment of concentrate to the Jinchuan Group in Newcrest commenced construction of the mine The company plans to mine 120 000 t/a of titanium- China is planned for early in Q2 2004. The project extension in late 2002, with commissioning based minerals and 10 000 t/a of zircon over a nine- proponents plan to employ both open-cut and scheduled at the end of 2004 and full capacity to year period. The ore is being processed at a underground mining methods to extract the ore, be reached by 2005. Production is estimated at refurbished plant at Picton (purchased by Doral from which will be processed via a 535 000 t/a mill. A 800 000 t/a of gold and 30 000 t/a of copper over the Japanese company ISK Minerals Ltd). The project bulk nickel/copper/cobalt concentrate will be a 24-year period. Newcrest Mining will also was officially opened on 8 October 2002. shipped by road and exported through the Port of build a new 18 Mt/a processing plant. A major Expenditure: A$30 million Wyndham. The project is expected to have a mine component of the project will be a 440 km Employment: Construction: 60; Operation: 60 life of 5.5 years on current resource estimates. infrastructure corridor for a gas pipeline from Expenditure: A$50 million IRON ORE Port Hedland to the minesite. Employment: Construction: 150; Operation: 120 Expenditure: A$1.2 billion Nammuldi — Iron Ore Mine OIL & GAS DEVELOPMENTS HAMERSLEY IRON PTY LIMITED Employment: Construction: 1222; Operation: Hamersley Iron is developing iron ore deposits near 620 North West Shelf — Project Expansion its Brockman No 2 iron ore mine, 55 km northwest of IRON ORE — 4th LNG Train, Second Trunkline Tom Price. Environmental approval was granted in Mining Area C — Iron Ore Mine WOODSIDE ENERGY LTD November 2000. The Nammuldi deposits produce BHP BILLITON IRON ORE PTY LTD Proposals by the NWS partners for additional LNG Marra Mamba lump and fine ores either as stand- Trains 4 and 5, and a second trunkline and alone products, or incorporated into the Hamersley BHP Billiton and the State approved the development of Mining Area C on 3 April 2002. expansion of the Domgas plant, received blend. The existing Brockman No 2 loadout facilities environmental approval in 1998 and 1999. The and rail spur are used to transport the ore from the Mining operations at deposit C are planned to commence in Q3 2003. The product and LNG expansion is based on growing Asian energy mine. Production has commenced with potential for markets. In April 2001 the partners committed to expansion of up to 20 Mt/a as demand dictates. capacity expansion (PACE) project at Finucane Island was approved on 19 July 2002. development of the A$1.6 billion LNG Train 4. Development timing is dependent on customer Construction of Train 4 commenced in Q3 2001. In acceptance of Nammuldi trial shipments and Expenditure: A$1 billion Employment: Construction: 500; Operation: 200 December 2001 the joint venturers approved prevailing market conditions. expenditure for the A$800 million second subsea Expenditure: n/a IRON ORE PROCESSING trunkline linking the offshore production facilities Employment: n/a Kwinana — HIsmelt Commercial Iron to the onshore gas plant on the Burrup Peninsula. West Angelas — Iron Ore Mine Making Plant Substantial progress has been made in the construction of Train 4 and the laying of the ROBE RIVER MINING CO PTY LTD HISMELT CORPORATION LIMITED second trunkline has commenced. The trunkline is A new iron ore mine at West Angelas in the Central HIsmelt Corporation, in a joint venture with scheduled to be completed in April 2004 to Pilbara region of Western Australia was officially Nucor (25%), Mitsubishi (10%) and Shougang coincide with the completion of Train 4. opened on 24 August 2002. Based on a resource of (5%), announced on 24 April 2002 a Expenditure: A$2.4 billion around one billion tonnes of Marra Mamba ore, the commercial-scale HIsmelt process plant at Employment: Construction: 2000; Operation: 70 mine is building up to a production rate of 20 Mt/a. A Kwinana, near Perth. The first stage of the plant new joint rail arrangement with Hamersley Iron is in will produce around 820 000 t/a of pig iron from PETROCHEMICALS/CHEMICALS place to allow ore from West Angelas to be delivered to iron ore fines, coal and fluxes. Construction Burrup Peninsula — Ammonia Plant Cape Lambert for export to Japan. West Angelas iron commenced in January 2003 with BURRUP FERTILISERS PTY LTD ore will be transported, in part, via Hamersley’s commissioning due to commence in late 2004. Burrup Fertilisers is developing an ammonia plant railway. These arrangements have involved the Expenditure: A$1.2 billion at King Bay/Hearson Cove industrial area on the establishment of a new entity, the Pilbara Rail Employment: Construction: 320; Operation: 80 Burrup Peninsula, near Karratha. Around 760 000 Company (PRC), which is equally owned by Robe and Mt Gibson — Iron Pellet Plant Rio Tinto. PRC operates the rail network on behalf of t/a of liquid ammonia will be produced and Robe and Rio Tinto. MT GIBSON IRON LTD exported to India and other world markets for the Expenditure: A$1 billion Mt Gibson Iron Ltd will commence a 1.5 Mt/a manufacture of fertilisers. SNC-Lavalin Australia Employment: Construction: 1200; Operation: 330 iron ore mine at Tallering Peak, 160 km Pty Ltd, is the EPC management contractor for the northeast of Geraldton in July 2003. It is also project. The Harriet Joint Venture has an OIL & GAS DEVELOPMENTS evaluating the possibility of commissioning a agreement to supply 82 TJ/d of natural gas to the Woollybutt (Carnarvon Offshore Basin) — second mine at Mt Gibson about 300 km project. Construction commenced on 30 April Oil Field Development southeast of Geraldton by the end of 2004. This 2003 and production is planned to start in Q2 AGIP AUSTRALIA LIMITED has the potential to double the company’s 2005. The Woollybutt oil field development comprises the regional output to 3 Mt/a. Expenditure: A$630 million re-entry and side-tracking of two of the existing three Expenditure: A$50 million Employment: Construction: 500; Operation: 60 wells to drill two horizontal production sections, each Employment: Construction: 80; Operation: 30 TIMBER 500 metres in length. The development wells, NICKEL Flynn Drive — Laminated Veneer Lumber completed in October 2002, are hooked up to an FPSO Cosmos — Nickel Mine (sulphide ore) Plant vessel, to be leased for the life of the field. Produced JUBILEE MINES NL oil is exported via a shuttle tanker arrangement. First WESBEAM PTY LTD A feasibility study based on the Cosmos Deeps oil production from the field commenced at the end WESBEAM Pty Ltd has reached an agreement with ore reserve of 520 000 tonnes at 7.2% nickel was of April 2003. Total field production was expected to the State, which has been ratified by Parliament, completed in April 2001. Development of the increase to around 35 000 barrels per day within a few for the development of an A$80 million laminated decline to the underground orebody is days of production commencement. veneer lumber (LVL) plant at Neerabup. LVL is anticipated to be completed in Q3 2003. This Expenditure: A$120 million prepared by peeling pine logs into sheets, then re- timing will ensure a smooth transition from the Employment: n/a aligning and gluing them to produce very strong open-cut development, and with current ore engineered wood products. Timber feedstocks will reserves, will see production continue until be pine trees harvested from State Government 2008. Exploration drilling is continuing in and owned plantations in Gnangara and other areas. around the Cosmos Deeps orebody. The project will sell LVL and veneers to Australian Expenditure: A$33 million and overseas markets. Expenditure: A$80 million Employment: Construction: 200; Operation: 160

Prospect June–August 2003 31 Projects under consideration as at 8 May 2003

stream generated in Alcoa’s adjacent alumina was appointed in August 1997 to carry out refinery. Timing is dependent on favourable AGRICULTURE feasibility studies into establishing an irrigated market conditions and statutory approvals. agricultural industry based on the ground and Mantinea Flats — Ord River Irrigation Expenditure: A$75 million surface water resources of the Canning Basin and Scheme (Stage 2 Development) — Employment: Construction: 150; Operation: 50 Fitzroy River system. Results to date indicate that Mantinea Flats there is sufficient potential to establish a 20 000 ha GOLD HENRY WALKER ELTIN LTD. groundwater-based irrigated cotton industry in an Boddington — Gold Mine (Wandoo The project consists of developing and servicing area situated about 200 km south of Broome. Expansion) approximately 80 farms (about 4200 ha total) at Feasibility studies have been deferred pending BGM MANAGEMENT COMPANY PTY LTD Mantinea Flats for irrigated intensive horticulture resolution of land access issues. Boddington Gold Mine is managed by BGM which will then be offered for sale. Following an Expenditure: A$600 million Management Company Pty Ltd on behalf of Expression of Interest process in late 1998, a Employment: Construction: 250; Operation: 3000 consortium headed by Henry Walker Eltin Limited Newmont, AngloGold and Newcrest. BGM has was mandated to carry out the development, subject BAUXITE/ALUMINA environmental approval for the expanded Wandoo to a successful feasibility study and associated Wagerup/Willowdale — Alumina project, based on mining the extensive bedrock approvals. The studies have been deferred pending Refinery/Bauxite Mine Expansion that underlies the mined-out oxide resource. The resolution of land access issues. Train 3 project includes a dedicated 100 MW gas-fired Expenditure: A$108 million power station. Project go-ahead will be subject to ALCOA WORLD ALUMINA AUSTRALIA commercial factors. Employment: n/a Environmental approval was granted in August Ord River — Ord River Irrigation Scheme Expenditure: A$500 million 1995 to increase the mining rate and expand the Employment: Construction: 500; Operation: 350 ORD STAGE 2 M2 AREA Wagerup refinery to 3.3 Mt/a by construction of a The potential exists for a 30 500 ha irrigated third production train and round-out of total HEAVY MINERAL SANDS agricultural development immediately to the facilities. A round-out to increase capacity by 25% Jangardup South — Mineral Sands Mine northeast of the existing Ord Stage 1 development. was completed in 1999. Commitment to build the CABLE SANDS (WA) PTY LTD The WA and NT Governments are committed to third train is dependent on market and Cable Sands has outlined a titanium minerals investigating the project feasibility. Both WA and NT community factors. orebody adjacent to D’Entrecasteaux National Governments propose to consult with the local Expenditure: A$1.2 billion Park. Feasibility and environmental studies are community before progressing the re-tendering of Employment: Construction: 1500; Operation: 250 underway. A formal proposal to mine has been put the Ord Stage 2 M2 area. Environmental approval has GALLIUM to Government. The environmental impact been given for an irrigated agricultural project in the Pinjarra — Gallium Extraction Plant statement for the project is expected to be released M2 area. Possible crops include sugar, cotton, in the second half of 2003. leucaena or horticultural crops. GEO SPECIALTY CHEMICALS INC. Expenditure: A$40 million Expenditure: n/a In March 2001, GEO Speciality Chemicals Inc of Employment: Construction: 100; Operation: 50 Employment: n/a the USA announced plans to construct a major new gallium metal extraction facility at Pinjarra, Kemerton — Titanium Dioxide Pigment West Kimberley — Water & Land Plant Expansion Resources Development Project south of Perth, on the site of the former Rhodia gallium chloride plant. The facility is planned to MILLENNIUM INORGANIC CHEMICALS LTD WESTERN AGRICULTURAL INDUSTRIES PTY LTD have a capacity of 100 t/a of ‘4N’ gallium metal. Millennium proposes a major expansion of its Western Agricultural Industries Pty Limited (WAI) The gallium will be extracted from the Bayer liquor Kemerton titanium dioxide pigment plant to 190

32 Prospect June–August 2003 000 t/a. The EPA approved the proposal in April Expenditure: A$90 million contained nickel and 1800 t/a of cobalt to be 1999. A decision to proceed is dependent on Employment: Construction: 50; Operation: 130 processed at QNI’s Yabulu refinery in Queensland. market factors. LEAD The feasibility study is due to be completed by the Expenditure: A$470 million end of Q3 2003. Employment: Construction: 500; Operation: 200 Wiluna (Magellan) — Lead Mine Expenditure: A$950 million Kwinana — Titanium Dioxide Pigment MAGELLAN METALS PTY LTD Employment: Construction: 1000; Operation: 300 Plant Expansion The project is based on a lead carbonate OIL & GAS DEVELOPMENTS (cerussite) deposit 30 km west of Wiluna. The TIWEST JOINT VENTURE company expects to mine 950 000 t/a of ore to Gorgon (Carnarvon Offshore Basin) — Environmental approval for the staged expansion yield 100 000 t/a of concentrate. Magellan is Gas and Condensate Field of the pigment plant capacity to 180 000 t/a has developing this project in association with Ivernia CHEVRON AUSTRALIA PTY. LTD. been given. A decision to proceed with further West Plc, an Irish resource company. Construction A range of alternative development scenarios is stages within this expansion is dependent on is projected to commence in Q3 2003. More than currently being examined. The restricted use of improved market conditions. 50% of production is planned to be exported as a Barrow Island will be considered after an Expenditure: n/a concentrate. evaluation by Government of environmental, Employment: Construction: 108; Operation: 98 Expenditure: A$23 million social, economic and strategic aspects which is IRON ORE Employment: Construction: 150; Operation: 80 currently underway. Potential markets include Hope Downs — Iron Ore Mine MANGANESE domestic gas consumers in Western Australia and HOPE DOWNS LIMITED value-adding gas processing consumers such as Port Hedland (Boodarie) — Manganese LNG or GTL. Gas reserves have been enhanced by Hancock and Kumba have completed a feasibility Dioxide Project - Stage 1 study of the Hope Downs project. The alliance is positive results from an exploration program in HITEC ENERGY LIMITED now progressing project finance, joint venture and the West Gorgon area. Development decisions by HiTec Energy Limited proposes to produce market agreements. the Gorgon joint venturers will be subject to electrolytic manganese dioxide (EMD) the power Expenditure: A$1.05 billion market commitments. source for alkaline batteries. It will be a staged Employment: Construction: 500; Operation: 300 Expenditure: A$4 billion. development at a location to be determined, with Employment: Construction: 2900; Operation: 600 Koolyanobbing — Northern Expansion - first production levels being 25 000 t/a, with an Macedon/Pyrenees (Carnarvon Offshore Iron Ore Mine expected rise to 50 000 t/a. It will use ore from Basin) — Oil/Gas Fields PORTMAN LIMITED Consolidated Minerals’ Woodie Woodie Portman is proposing to increase iron ore manganese mine in the East Pilbara, about 400 km BHP BILLITON PETROLEUM PTY LTD production at its Koolyanobbing operations to 6 east-southeast of Port Hedland. These are two adjacent, but separate offshore Mt/a in the next few years through the Expenditure: A$136 million hydrocarbon fields within the West Muiron development of deposits located at Mt Jackson Employment: Operation: 77 structure, about 50 km north of Exmouth. The Macedon gas field was discovered in 1992 by the and Windarling, 50 to 100 km north of METHANOL Koolyanobbing. Mining of these areas is West Muiron-3 well with a follow-up appraisal scheduled to commence in early 2004. The Burrup Peninsula — Methanex Methanol campaign in 1994. The Pyrenees oil and gas field company obtained environmental approval to Plant was discovered in 1993. Development of the Pyrenees heavy oil accumulation would likely only proceed with the expansion in April 2003. METHANEX proceed as part of a larger heavy oil project Expenditure: A$25 million Methanex is considering the establishment of a 2 undertaking. Macedon is under consideration for Employment: Construction: 120; Operation: 35 Mt/a methanol plant in two stages on the Burrup domestic market opportunities. Peninsula. Feasibility and approvals work is IRON ORE PROCESSING Expenditure: n/a underway for a decision on the first 1 Mt/a stage of Employment: Construction: 35; Operation: 5 Fortescue (Cape Preston) — Mine and the project in Q3 2003. HBI Plant Expenditure: A$500 million North West Shelf - Project Expansion — AUSTEEL PTY LTD Employment: Construction: 1000; Operation: 100 5th LNG Train The Austeel consortium is promoting a 3.85 Mt/a Burrup Peninsula — Methanol Plant WOODSIDE ENERGY LTD EAF steelmaking project, utilising the Fortescue GTL RESOURCES PLC Proposals by the NWS partners, for LNG Train 5 magnetite deposits. The Austeel plan is to produce GTL Resources proposes to build a plant to and a second trunkline, and expansion of the slab, hot-rolled and cold-rolled coil and galvanised produce 1 Mt/a of methanol from mid-2005. The Domgas plant, received environmental approval steel at a new plant in Newcastle, NSW, that will plant will be situated at Withnell East on the in 1998 and 1999. The LNG expansion is based on receive its feed from a new iron ore mine and HBI Burrup Peninsula. On 17 October 2001, GTL growing Asian energy markets. In April 2001 the production facility at Fortescue. Processing in Resources signed a Memorandum of partners committed to development of the A$1.6 Western Australia includes magnetic Understanding with Apache Corporation, Globex billion LNG Train 4. Train 5 development is concentration, pelletising and DRI processes. HBI Energy Inc and Santos Ltd for the purchase of 108 contingent on future market conditions. will be shipped to Newcastle through new port TJ/d of natural gas to supply the plant. Products Expenditure: A$1.6 billion facilities at Cape Preston. Environmental impact will be sold to Swiss company Vitol for trading on Scarborough (Carnarvon Offshore Basin) assessment for the mine to HBI stage commenced international markets. — Gas Field in late 2000. Other projects based on the Expenditure: A$770 million ESSO AUSTRALIA LTD Fortescue deposits (being promoted by parent Employment: Construction: 500; Operation: 60 company Mineralogy) involve an export DRI/slab The field is located in 900 metres of water, 300 km project and an export pellet project. NICKEL offshore in the Carnarvon Basin. Development will depend on reserves proving up to 7 to 11 Tcf of Expenditure: A$3 billion Mt Keith — Nickel Mine Employment: Construction: 5000; Operation: 1050 gas. Further evaluation work is being undertaken WMC RESOURCES LTD but currently there are no near-to-mid-term KAOLIN WMC Resources is reviewing options to expand its development plans. Thangoo (100km SSE of Broome) — Mt Keith operations from 11 Mt/a to 14.3 Mt/a by Expenditure: n/a late 2004. The Mt Keith feasibility study has Kaolin Mine Employment: n/a confirmed expansion of throughput by 25% to 14 Scott Reef/Brecknock (Browse Basin) MANSFIELD MINING NL Mt/a as a robust project. Implementation options, A major kaolin deposit, to be mined by Mansfield including incremental expansion, are being — Gas Fields Mining NL as the Eaglehawk Kaolin Project, is assessed. WOODSIDE ENERGY LTD situated on Thangoo pastoral station about 100 km Expenditure: A$150 million The latest exploration is focused on Brecknock south-southeast of Broome in the West Kimberley. Employment: n/a South-1 in WA-33-P where a 167 metre It is one of Western Australia’s few high-grade hydrocarbon column over a single interval in the deposits, with proven reserves of around 410 Mt. Ravensthorpe — Nickel Mine primary reservoir objective has been found, a The quality of the resource has been verified by BHP BILLITON - RAVENSTHORPE NICKEL result that was at the high end of expectations. The independent bodies (CSIRO, Universities in Qld OPERATIONS PTY LTD water depth is 420 metres. In February 2001, the and SA). Once operating, the A$90 million project BHP Billiton’s Ravensthorpe Nickel Operations Pty recoverable reserves for the Scott Reef/Brecknock could produce and export 700 000 t/a of kaolin Ltd (RNO) is currently evaluating the production project were upgraded to 20.49 Tcf of gas and 311 and by-product minerals such as silica sand, of up to 220 000 t/a of mixed nickel/cobalt million barrels of condensate after multi- ilmenite and leucoxene. hydroxide that contains up to 50 000 t/a of disciplinary studies incorporating the results of

Prospect June–August 2003 33 Projects under consideration as at 8 May 2003

drilling at Brecknock South. The fields are considered commercially viable in the future, but await firm development plans dependent on significant growth in domestic gas and LNG markets. Expenditure: n/a Employment: n/a Tern/Petrel (Bonaparte Offshore Basin) — Gas Field SANTOS LIMITED The offshore Petrel gas field, discovered in 1969, is located about 250 km west of Darwin on the WA/NT seabed border in the Bonaparte Basin. The offshore Tern gas field, discovered in 1971, is located about 300 km west of Darwin in WA waters in the Bonaparte Basin. Field development options include installation of unmanned offshore production platforms with a pipeline to a gas treatment plant south of Darwin. The development possibilities for these fields have been enhanced by recent significant discoveries by other parties nearby, which may provide tie-in potential for Petrel and Tern to service domestic gas customers. A recently completed technical review will assist in focussing in 2003 on commercialisation of the fields. Expenditure: n/a Employment: n/a Whicher Range (Perth Onshore Basin) — Gas Field AMITY OIL NL The Whicher Range gas field, located 21 km south of Busselton, was discovered in 1968. The four wells drilled to date have confirmed a significant-sized gas field, but gas flow rates have been sub-commercial. Recent work by Amity Oil to increase gas flow rates from the extremely tight sands, including high pressure injection of carbon dioxide, has increased the possibility of commercial development. Under a farm-in deal, announced in April 2003, Korea National Oil Corporation and Seoul City Gas Company Ltd will earn a 35% interest by committing up to $6.7 million for co-funding exploration activities, including drilling of a new well (Whicher Range-5). If a commercial gas flow is obtained, the well would be completed for production. Expenditure: n/a Employment: n/a PETROCHEMICALS/CHEMICALS Barrow Island — Gas to Liquids Fuels SASOL CHEVRON GLOBAL JOINT VENTURE Sasol Chevron is considering Australia as a location for a plant to produce environmentally clean diesel fuel from natural gas. This gas-to-liquid fuels plant would initially produce about 50 000 barrels a day of synthetic liquid product. Future expansions would provide up to 200 000 barrels a day to supply both Australian and South East Asian markets with total investments of A$10 billion and utilising around 20 Tcf of gas over the 25-year design life. Possible locations in the North West of Western Australia are being investigated. Expenditure: A$2 billion Employment: Construction: 2500; Operation: 200 Burrup Peninsula — Ammonia Urea Plant DAMPIER NITROGEN Agrium Inc of Canada, Plenty River Corporation Ltd, Thiess Pty Ltd and Uhde GmbH of Germany have signed a Project Development Agreement to complete a bankable feasibility study for the construction of a A$900 million ammonia and urea plant on the Burrup Peninsula near Karratha. The world-scale plant will produce around 1.2 Mt/a of granular urea and 100 000 t/a of ammonia. Urea is widely used as a fertiliser, while ammonia is used in fertilisers, explosives and as a chemical feedstock. Expenditure: A$900 million Employment: Construction: 1000; Operation: 130 Burrup Peninsula — Dimethyl Ether Project JAPAN DME LTD. Japan DME Ltd, a joint venture of Japanese companies comprising Mitsubishi Gas Chemical Company, Itochu Corporation, Mitsubishi Heavy Industries and JGC Corporation, plans to develop a world-scale dimethyl- ether (DME) plant on the Burrup Peninsula near Karratha. DME is used as an aerosol propellant and is a likely future environmentally clean fuel for the power generation and transportation industries. The proposed plant will produce methanol for conversion into 1.7 Mt/a of DME from around 220 TJ/d natural gas. Detailed feasibility studies are underway. Environmental consultant, Parsons Brinckerhoff (Aust) Pty Ltd, has commenced work on obtaining environmental approval for the project. A commitment to proceed is expected in the latter half of 2003. Current planning is for the plant to be operating by late 2006. Expenditure: A$1 billion Employment: Construction: 1000; Operation: 150

34 Prospect June–August 2003 Significant resource projects underway or planned in Western Australia PLATINUM GROUP METALS IRON AND STEEL PROJECT VALUE (ESTIMATED) Halls Creek — Panton Sill — Platinum Project Mining Area C iron ore mine and infrastructure $1000m PLATINUM AUSTRALIA LIMITED Hope Downs iron ore mine $1050m The Panton platinum-palladium project is located 60 km north of Fortescue (Cape Preston) mine and HBI plant $3000m Halls Creek in the Kimberley. It will be an open cut and Kwinana HIsmelt pig iron and steel plant $1200m underground mine operation and is expected to have a mine life of at least 10 years. The proposed high-grade plant will consist of Koolyanobbing iron ore mine expansion $25m crushing, milling and flotation to produce a final flotation Tallering Peak iron ore mine $50m concentrate. It is proposed that 650 000 tonnes per annum will be Sub total $6325m processed through the plant. The company anticipates NICKEL/COBALT construction to commence in late 2003. Platinum Australia has Ravensthorpe mine $950m completed pilot plant testwork on a process resulting in 90% Cosmos Deeps $33m recovery of platinum, palladium and gold. A bankable feasibility Sally Malay $50m study was scheduled for completion in May 2003. Expenditure: A$80 million Sub total $1033m Employment: Operation: 200 PETROCHEMICALS Munni Munni — Platinum Deposit Dampier Nitrogen ammonia–urea plant $900m Burrup Fertilisers ammonia plant $630m HELIX RESOURCES NL Helix Resources NL and UK-based Lonmin PLC, the third largest Japan DME — di methyl ether plant $1000m PGM producer in the world, announced a joint venture covering GTL Resources methanol plant $770m the Munni Munni PGM deposit with Lonmin to provide A$8 Methanex methanol plant (stage 1) $500m million in funding to October 2002 in return for 50% equity in the Sasol Chevron gas-to-liquids plant (stage 1) $2000m project. At the end of September 2001 the indicated resource was Sub total $5800m 9.2 Mt at 2.9 g/t combined platinum, palladium, rhodium, and GAS gold, 0.2% nickel, and 0.3% copper. Preliminary mining studies Gorgon project $4000m suggested a mining rate of combined open cut and underground production of 1.5 Mt/a. Extensive drilling was undertaken to add LNG Train-4 and trunkline $2400m to the resource with work in early 2002 revealing the deposit was Train-5 LNG project $1600m not a typical layered PGM intrusion, with the western and eastern Sub total $8000m margins bounded by steeply dipping faults. In Q3 2002 a A$2 OTHER million diamond drilling program started to test for feeder zones Alcoa Wagerup Train-3 expansion $1200m and downplunge extensions of the Ferguson Reef. The partners Boddington Wandoo gold mine expansion $500m reported in early 2003 that Lonmin had met its initial expenditure Kemerton titanium dioxide pigment plant expansion $470m commitments, but as a result of poor exploration results and a Telfer gold mine expansion $1200m decreased palladium price, that further activities had been postponed. Lonmin subsequently withdrew from the joint Port Hedland manganese dioxide project $136m venture, after spending about A$8.5 million over the preceding 18 Panton Sill platinum group metals project $80m month period. A complete technical review of data was Various port upgrades $220m announced in Q1 2003, seeking to identify the potential for Sundry projects — at least another $3000m smaller tonnage but higher grade shoots. Sub total $6806m Expenditure: n/a TOTAL A$27 964 million Employment: n/a RARE EARTHS Mt Weld — Rare Earths Operations LYNAS CORPORATION LTD A feasibility study is to be completed in mid-2003. Lynas is planning to mine at an initial rate of 130 000 t/a ore, producing 40 000 t/a of rare earths concentrate. In phase 1, the concentrate will Name be exported to China for toll processing. Lynas will take all products from the downstream processing for marketing under Position the Rare Earths Direct “RED” Brand. Lynas is also evaluating the feasibility of secondary processing rare earths carbonate in Organisation Australia. Expenditure: A$40 million Address Employment: Construction: 100; Operation: 35

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Prospect June–August 2003 35 As at June 2003 Major Resource Development Projects: Western Australia

Loxton Shoals N N ExeterOONorfolk Troubador MontaguePitcairnOOMutineer Bard N N INSET B Eaglehawk Egret!Hermes Sunrise Searipple O ! Lambert NKelp Deep Capellauu O uAngel Jahal u ! Cossack O Kuda Tasi Chudditch Perseusu uNorth !O Gaea !Wanaea Laminaria East N Dockrell u Rankin !Legendre North Buffalo OO Krill O Elang-Kakatua KeastuuGoodwyn ! Echo/Yodeluu Sage Burrup N Hingkip Goodwyn South/Pueblo;;Tidepole Legendre @Ammonia UraniaN ! South ! Bayu-Undan ;Dixon/West Dixon @Ammonia-urea NJansz N Saffron NGeryon N Iago/N Tryal Rocks 6Desalination OliverN N Reindeer N Audacious uWilcox uCaribou @ Dimethyl Ether Tenacious ! Corvus N O Maenad Orthrus @ Synthetic Fuels Maple N Jabiru N N Wandoo! N O Challis uChrysaor/Dionysus O and Lubricants Puffin O u West Tryal Rocks Tusk Swan Oryx O OStag @ LNG Padthaway OTalbot NO N Chamois @Methanol Tahbilk N Montara N Petrel John BrookesN SEE INSET C N Crux Cape Lambert Prometheus/Rubicon Gorgonu q q Maitland N Dampier SparN N Tern s Dampier salt Dinichthys East Spar N Karratha Gorgonichthys N OCornea NNN Titanichthys NScott Reef Brewster Blacktip N Woollybutt O ! Pasco nRadio Hill N Brecknock I ! Gwydion Fortescue K Munni Munni N Brecknock South Flinders Shoal ! I Turtle O Austeel DRI/HBI b Mitchell Plateau Chinook/Scindian Mardie INSET C ! Chervil Campbellu Griffin O ! N Coniston O South Chervil !O Nasutus Wonnich EndymionuuSinbad Nimrod N ; Ord Stage 2-M2 ONovara Australind! u Cadell NUlidia Wyndhamq 6 EnfieldOVincent Yammaderry!!Crest BambraN NLinda Ord Stage 2-Mantinea Flats 6 O Pyrenees Harriet BLeeN 6 ! OOuttrimCowle!Saladin OC uuMonty Koolan Island Laverda ! s Pipeline Rose N ! Skate Varanus Island A Cockatoo Island II Ord Stage 1 N ; Blencathra Robe River N.Gipsy!uJosephine Scafell !Roller Rosette u Lake Argyle Hydro 6 MacedonO CoasterO sOnslow I Agincourt! ! Gipsy!uBaker r Natural Ga OGibson/S.Plato Leatherback N Alkimos/Tanami Tubridgi /Simpson !Little Sandy/Perdika/ N Victoria KIMBERLEY O ! Hoover Argyle d Perth-Dampie Barrow Double N Island Island Derbyq Point Torment Barrow Island NNarvik Lloyd O Boundary West Terrace OO Sally Malay n Sundown O dEllendale Broomeq Blina Panton Sill K Nammuldi/Silvergrass I Brockman No. 2 I

O Rough Range 0 100 j Paulsens Z Pillara Zn Pb 200 km 6 West Kimberley Kapok Zn Pb Z RESOURCE SYMBOLS Bauxite-Alumina a Alumina refineries b Mines and deposits SEE INSET B Chemicals / Petrochemicals / Petroleum Port Hedland @ Processing plants / refineries Scarborough N q Port Hedland Salt N Natural gas field Boodarie HBI Y O Oil field y Hitec EMD I Yarrie ! Natural gas / oil field u Natural gas / condensate field Z Whim Creek Cu ; Natural gas / oil / condensate field Chromite Wodginat Z Panorama Zn Cu c Mines and deposits Nifty Cu Coal Woodie Woodier j h Coal mines and deposits Telfer Au Cu ? Lignite mines and deposits PILBARA Copper-Lead−Zinc rAnt Hill Z Maroochydore Cu Co Z Mines and deposits Diamonds Marillana Creek Yandi/BHPB d Mines and deposits Marandoo I I Yandicoogina/HI Tom Price I Gold I j Mining Area C II Hope Downs Mines and deposits West IRhodes Ridge Gypsum Paraburdoo I AngelasI x Eastern Range I I IOrebody 23 & 25 Mines and deposits ChannarI Giles Mini I IJimblebar Heavy mineral sands j Mt Whaleback c Coobina m Mines and deposits — titanium-bearing sands Mt Olympus G Mines and deposits — garnet-bearing sands J Ti02 pigment and synthetic rutile plants Iron ore I Mines and deposits Lake MacLeodqx Lake MacLeod s Y Downstream processing plants Limestone−Limesand 4 Mines and Deposits Carnarvon C Cement plants Plutonic j Manganese ore r Mines and deposits y Downstream processing plants Nickel n Mines and deposits v Smelters and refineries Shark Bayqs Jundee/Nimary j Phosphate Magellan Pb Z P Mines and deposits Bluebird Platinoids m Coburn j Wiluna j Weld Range I K Mines and deposits Honeymoon Well n Rare earth elements R Gidgee j n Mt Keith Mines and deposits Big Bell j j Bronzewing/Mt McClure Salt Yakabindie n s n Production facilities / pans Cosmos Silica − Silica Sand Leinster n w Mines and deposits Hill 50 Bulchina Agnew j j Darlot Port Gregory j j X Silicon smelters Kwinana/Rockingham INSET A ITallering Peak Lawlers j jThunderbox G V Windimurra Marshall Pool Talc q AIS Jetty n T Mines and deposits a Jaguar-Teutonic Bore Z Murrin Alumina Refinery jKirkalocka Granny Smith Tantalum @ Oakajeeq Tarmoola j Murrin BP Oil Refinery Narngulu Synthetic Z Golden Grove Zn Cu n j P t Mines and deposits q − C Cement and Lime Chandala Geraldton JRutile jMinjar Sons of Gwalia j R Mt Weld Vanadium Titanium J Mount Horner j Sunrise Dam V Mines and deposits @ Chlor Alkali Synthetic Yardarino Nu I Koolanooka Mt Ida Timoni j Dongara O Hovea NON-MINERAL PROJECTS @ Chemicals Rutile O Three Springs @ 1 Cliff Head OOm T 6 Irrigation/water schemes Chemicals/ Jingemia uDongara I Flynn Dr N Davyhurst q Major port handling facilities Fertilizers Beharra Springs/ j Windarling Range j jComet Vale 8 @ um Eneabba I Major power stations Fused Alumina PERTH North Beharra Mt Gibson Goongarrie n 1 Downstream timber processsing plant • Springs Woodada Cawse j Carosue Dam @ Fused Zirconia Mt Jackson I Paddington n GAS PIPELINE Y HIsmelt Lady Ida n Black Swan qFremantle j j Kanowna Belle/Red Hill @ LPG Mt Pleasantj jj OPERATING PROJECTS ARE SHOWN IN BLUE Cooljarloo m Koolyanobbing I Kundana/j n Bulong v Nickel Refinery Frogs Leg j j Super Pit POTENTIAL PROJECTS ARE SHOWN IN RED White Foil j v Kalgoorlie Ni Smelter 8 Power Station 0 50km j j PROJECTS ON CARE AND MAINTENANCE ARE SEE INSET A Coolgardie j Jubilee SHOWN IN PURPLE @ Sodium Cyanide Westonia j Kambalda New Celebration n J Titanium Pigment j j Long/Victor n St Ives Marvel Loch/ j t Bald Hill @ Zirconia Southern Cross Yilgarn Star Miitel n aPinjarra PERTH• ab Huntly Pinjarra Gallium j Boddington Au Cu Emily Ann/Maggie Hays n j Central Norseman m Waroona b nForrestania Kemerton aWagerup Saddleback ? O'Sullivans @ Chlor Alkali Kemerton X Silicon Smelter w Sandlewood Western m ?Scaddan Australia J Titanium aWorsley n Rav 8 n Pigment qBunbury h8 Collie Ravensthorpe/BHPB m Ewington h Premier q Esperance Dardanup 1 Dardanup h Muja Capel m Collie Pig IronY 8 Jangardup Capel SyntheticJ m Gwindinup m 1 Manjiump 1 Donnybrook m Rutile m Jangardup South I Southdown Tutunup m Yoganup Whicher Range N tGreenbushes Mirambeena1 Albany

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