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Department of State Development
Dr Paul Heithersay Deputy Chief Executive
Australian Industry Group
February 2015
The information contained in this presentation has been compiled by the Department of State Development and originates from a variety of sources. Although all reasonable care has been taken in the preparation and compilation of the information, it has been provided in good faith for general information only and does not purport to be a professional advice. No warranty, express or implied, is given as to the completeness, correctness, accuracy, reliability or currency of the materials.
The Department of State Development and the Crown in the right of the State of South Australia does not accept responsibility for and will not be held liable to any recipient of the information for any loss or damage however caused (including negligence) which may be directly or indirectly suffered as a consequence of use of these materials. The Department of State Development reserves the right to update, amend or supplement the information from time to time at its discretion.
Disclaimer
Priority 1 – Unlocking the full
potential of South Australia’s
resources, energy and renewable
assets
South Australia – Economic Priorities
South Australia’s Economic Priority No.1
Five Point Plan to unlock the full potential of South Australia’s resources, energy and renewable assets.
1. PACE Frontiers
2. Implementing recommendations of the Oil and Gas Roundtable – Sealing the Strzelecki Track
3. South Australia Copper Strategy
4. Low Carbon Investment Plan
5. South Australia Iron Ore Strategy
Resource supply chain plays an important role in each of these points
RECORD HIGH
RECORD HIGH
RECORD HIGH
South Australian Resources Industry Indicators
• Petroleum ($531.3m) and Minerals ($116.3m)
$647.6 million EXPLORATION EXPENDITURE 2013-14
• ~$40 billion of potential capital for Minerals and Energy projects in the Major Developments Directory
$1.8 billion CAPITAL EXPENDITURE 2013-14
• Minerals ($5.6 b) and Petroleum ($1.9 b)
$7.5 billion RESOURCES PRODUCTION 2013-14
• Minerals ($4.5 b) and Petroleum ($0.2 b)
• 39% of South Australia’s total exports ($11.9 b)
$4.7 billion EXPORTS 2014
• Minerals ($157.4 m) and Petroleum ($133.9 m)
$291.3 million ROYALTIES 2013-14
• more than double - 6,641 ten years ago
16,299 people EMPLOYED November 2014
Copper Strategy making South Australia a globally significant copper producer
Grow exports to 1 mt/yr in 10-15 years
Address Copper Value Chain challenges – better productivity, better product
Synergies through Government/Industry/Research Collaboration
Olympic Dam - long life
Olympic Dam > 200 years resource life - longest life core asset of global mining major, BHP Billiton
Contained resource:
78 Mt copper, 2.5 Mt uranium,
95 Moz gold & 307 Moz silver
world’s largest uranium deposit
world’s 4th largest copper deposit
~65% of Australia’s copper resources
Resource Life - BHP Billiton’s core assets
Carrapateena – positive PFS
OZ Minerals announcement - 18 August
Pre-Feasibility study confirms Carrapateena is a technically and financially viable project
Capital cost $2.985 billion
12.4 Mtpa block caving via 2 x 500m lifts
producing copper-gold concentrate
114,000 tpa copper and 117,000 ozpa gold
low operating costs and a 24 year mine life
potential to use Prominent Hill concentrator
base case demonstrates ore exported via Port Adelaide - closer ports to be investigated
next stage – feasibility study and development of exploration decline
Ore reserve:
270Mt at 0.9 %Cu, 0.4 g/tAu, 4.5 g/t Ag
= 2.5Mt Copper, 3.5Moz Gold & 39Moz Silver
Government of South Australia PACE co-funded discovery in 2005
Parks with no petroleum exploration access
Officer Basin
Pedirka Basin
Cooper
Basin Arckaringa
Basin
Eromanga Basin
Arrowie Basin
Stansbury Basin
Bight Basin
Otway Basin
Petroleum exploration licence (Onshore: PEL Offshore EPP) Petroleum exploration licence application (PELA)
Polda Basin
Moomba
Olympic
Dam Mine
Simpson Basin
200 km
Gas pipeline Gas and liquids pipeline Oil pipeline
Acreage release blocks – bids close 29 May 2014
Selected mine
4 Cooper CO2013 blocks attracted aggregate $103 million work program bids (Senex x 2, Strike, Bridgeport)
Western Flank oil play in the Cooper-Eromanga continues with 50+ % success in finding avg. 2.5 mm bbls oil
Huge potential for gas in unconventional reservoirs in the Cooper Basin
Encourage results from Otway Basin exploration (Beach/Cooper)
Bight Basin attracting the majors – massive investment
Frontier basins’ plays include: Conventional oil and gas Unconventional regional plays
Overview – oil and gas onshore and offshore South Australia
BP & Statoil
EPPs 37 to 40
CHEVRON
EPP44 & 45
SANTOS & MURPHY
EPP43
BIGHT PETROLEUM
EPP 41 & 42
Offshore Bight Basin Commonwealth Waters
$1.2 bln guaranteed 2011-16 + $1.1 bln non-guaranteed 2017-20
Roadmap for Unconventional Gas informed by the Roundtable for Oil and Gas Projects
Informed by a Roundtable of: industry; governments; peak bodies for protecting environments and aboriginal people; research institutions & a few individuals. Now 615 members
Now under the auspices of the Roundtable for Oil and Gas Projects with 7 working groups to inform potentially affected people and enterprises while enabling cooperation amongst competitors.
Strategic actions: • Demonstrate where the net present value of cooperation (JVs for JVs)
exceeds the value of go-it-alone planning / investment; • Local businesses given a ‘heads-up’ to use competence to build
capacity to compete (local skin in the game)
Conclusions: Descend cost & ascend productivity curves to survive supply-side competition Regional sharing of costs mitigates distance for remote operations
Roundtable for Oil & Gas Working Groups
1. Training (Tonsley CoE, Chair Unconventional reservoirs)
2. Supply hubs, roads, rail and airstrips for the Cooper-Eromanga basins (Innamincka airport, depots, Strez. Track)
3. Water use in the Cooper-Eromanga basins
4. Minimize redtape for interstate 'wharf to well' corridors to/fro the Cooper-Eromanga basins (heavy vehicle, wiring)
5. Cost-effective, trustworthy GHG detection
6. Suppliers’ forum (make locals smart) (MIPO)
7. Use gas for transport and heavy equipment
OZ Minerals Research Partnership
• Relocates corporate head office to Adelaide
• The company is committing $18 million to copper research partnership, which will include the construction of a demonstration plant in SA
• State Government is investing $10 million in new research with OZ Minerals and local universities
• Purpose - develop new technologies to boost copper extraction
Royal Commission – South Australia’s nuclear industry potential
• Explore opportunities and risks of South Australia’s involvement in the full cycle for peaceful use of nuclear energy
• Former Governor Mr Kevin Scarce will be appointed to head the Commission
• SA 25% of world’s uranium resources
• More than 25 years of production stewardship
Mining Industry Participation Office
Takes a strategic approach to supply chain development
Mission
Objectives
Strategy
Actions/Programs
Measures/KPI’s
Vision: Unlocking the Full Potential of South Australia's Resources, Energy and Renewable Assets
Mission
Industry Participation Office programs deliver jobs, increased revenue and increased capabilities to SA minerals and energy suppliers.
Mining Industry Participation Office
Vision: Unlocking the Full Potential of South Australia's Resources, Energy and Renewable Assets
2015 Objectives - IPO
Objectives
1. Develop SA SME business development marketing and export readiness skills.
2. Commercialise new technologies by facilitating collaboration between researchers, SME’s and industry.
3. Grow the number of service companies in SA.
4. Increase the value of contracts won by SA minerals and energy suppliers.
5. Diversify non minerals and energy suppliers into the resources sector.
Mining Industry Participation Office
How can the Australian Industry Group engage with MIPO?
Mining Industry Participation Office
Actions/Programs
• Minerals and Energy Information and Communication Technology Roadmap
• Industry Capability Network South Australia
• Minerals and Petroleum Services Centre of Excellence
• Oil and Gas Projects Roadmap: Working Groups #1 and #6
• PACE Manufacturing
Mining and Petroleum Services Centre of Excellence
• Supporting the development of South Australian capabilities that assist local supply chains to compete nationally and globally, providing high value added products and services to the resources sector
Objective
Opportunity for Australian Industry Group
New Onshore Oil and Gas training facility at Tonsley
Aim: to develop and train skilled workers for the expanding onshore petroleum industry. CoE Funding: $500,000 Status: Pilot training 24-26 November, official launch 16 February 2015.
Remote Mining Operations Centre (ROC) Stages 1 & 2
An opportunity identified by the ICT Roadmap.
Stage 1 achievement:
Remote data transmitted from Prominent Hill to UniSA using 3G.
Partners: OZ Minerals, UniSA, IPACS and DSD.
CoE Funding: $383,000
Report released October 2014.
Stage 2:
Engagement with new mining industry partners, Lucas TCS/Arrium, Midas Environmental Technologies and Thiess/OZ Minerals.
Aim: establish a working ROC in Adelaide.
CoE Funding: $500,000 in 2014/15.
Real time Drill Site Project
Aim: To design, build and implement an
ICT platform that integrates geoscience
data thereby speeding up the exploration
to development cycle.
CoE Funding: $350,000
Status: Stage 1 – Technical Feasibility and business case.
Photo; courtesy DET CRC. Researchers testing down hole sensors at the Brukunga Drilling Research & Training Facility
Recently Approved CoE Projects
IMPTEC Super Fine Crusher – “game changing” technology
LAB SA Proppant Testing for the onshore petroleum industry
Normet Australia’s first electric underground light vehicle
Partnering with industry
Capabilities, skills and jobs for the future
Innodev/CSIRO ‘Big data’ analytics. Real time mineral processing optimisation
Arrium / Ian Wark Optimised sinter feed blend, from SA iron ores
FOX Trace element in iron oxide, detection and analysis
Vision: Unlocking the Full Potential of South Australia's Resources, Energy and Renewable Assets
Mining Industry Participation Office Priority #1: KPI’s
• Facilitate $50M of local contracts through ICNSA
• Progress working Group #1 and #6 recommendations from O&G Projects Roadmap
• Develop sales, marketing and export readiness capabilities for 68 companies
• Attract 3 service companies into SA in 2015
• Approve 10 Centre of Excellence projects and develop a further 10 ready for submission
High Level IPO KPI’s for 2015
Measures / KPI’s
For more information on the Mining Industry Participation Office, please contact:
PAUL GOIAK
Director, Industry Participation Office
Ph: 08 8303 2465
www.statedevelopment.sa.gov.au
SOUTH AUSTRALIA Department of State Development
Dr PAUL HEITHERSAY
Deputy Chief Executive
Ph: 08 8303 3298
www.statedevelopment.sa.gov.au