Vale Mission 2012Belo HorizonteBrazil Australian Technology: Inspiring Global Mining Innovation Robert Trzebski CEO – Austmine Ltd
Challenges of future miningUnprecedented demand driven by the needs of emerging economies Mature ore bodies and fewer tier one surface deposits being discoveredInevitable migration from surface to underground operations Lower grades with longer haul distances combined with massive volume demandNext generation ore bodies bringing inherently complex mineralisation . Stakeholders demanding less environmental impact from our operationsCarbon constrained future framed by the context of Global warming Structurally higher energy prices and possibly real energy constraintsFuture being different from the past in some fundamental, unavoidable ways.
Australia’s mining industry• Mining industry currently represent for approx. 8% of GDP• Minerals exports account for $138 billion – more than 50% of Australia’s exports• Annual investments over $50 billion – $4 billion in R&D• Directly employs some 200,000 Australians (2% of total national employment)• Total government revenue payments (taxes and royalties) of US$4 billion• Global supplier – 2nd largest minerals sector by value of production (after USA)• Commodity exports will reach $480 bilion in 2030 from a base of $210 billion in 2010.
+758 (3.8% pa) Source: AFR 4 March 2012
Specialist Mining Services Companies lisited in ASXCategory Annual Revenue Example companiesMining contractors $16.5 bn Leighton, Transfield Services, Downer, MacmahonConstruction $13.7 bn Leighton, Mondelphous, Watpac, CloughConsumables $13.2 bn Orica, Wes Trac, Incitec, OneSteelEngineering $8.3 bn Worley Parsons, Coffey, Ausenco, CardnoLogistic Suppliers $8.1 bn QR National, Toll, Asciano, K&SRail Equipment & infra $5.0 bn Downer, UGL, Bradken, EngencoLabour Hire $4.3 bn Workpac, Skilled Group, Programmed Group, HumanisElectrical Contractors $2.8 bn Hastie, Norfolk, Southern Cross ElectricalUtilities $2.6 bn Duet Group, APA, EnvestraDrillers $2.1 bn Boart Longyear, Ausdrill, AJ Lucas, SwickEquipment Hire $2.1 bn Coates Hire, Emeco, Boom LogisticsSpecialist Equipment $1.3 bn Boart Longyear, Ludowici, ImdexFabricators $1.1 bn RCR, AusGroup, Austin EngineeringTesting Services $1.1 bn Campbell BrothersRemote Housing $938 m Decmil, Fleetwood, NomadMining Software $878 m Runge, Data 3, ISS GroupRecycling, Waste Management $476 m CMA Corp, Tox Free, Electrometals TechnologyFinancial Services $468 m Wilson HTM, Bell FinancialOther $122 m Greencap, Aspermont, Environment Group, Clean TeQ
Australia’s mining technology sector• Exports of technology, equipment and services represent 3.3% of total goods and services exports• Directly employs some 500,000 Australians globally - over 5% of total national employment• Global supplier – 2nd largest exporter of mining products and services (after USA)• Leader in mining innovation in terms of funding of R & D - estimated $4 billion per year
The demand for resources continues to expand in China, India, Russia, the FSU, Brazil and smaller emerging economies This is driving the demand for Mining Technologies like never before, particularly in the areas of exploration, mine development tools, automation and communication, and advanced mineral processing ALL economic predications continue to emphasise the probability of an ongoing Supercycle in the demand for resources
We believe the coming years will see the highest ever demandfor resources and therefore technologies to find, mine andprocess these commodities and convey them to market safelywith the highest level of productivity.
Out of Crisis the Emergence of the “Technology Age of Mining” “Boom Age of Mining” 2004 to 2007 “Financial system repair 2009” • High commodity prices • Massive government stimulus • Easy access to capital 2009 • Growth returns ’03 to ‘07 • High Labour costs/low availability • Emerging nations power ahead • More volume = more equipment • Confidence returns • Exploit known deposits, marginal new ground. • “Shell shock” hangover Historical High Global Mining +2010 Activity Index “Technology Age of Mining” ’07 to ‘08 • Unprecedented volume challenge “Global financial melt down ’07 to ‘09” • Combat declining gradesPost crash Low • Banker driven risk taking stalls system • Productivity focus/low cost • Distorted balance sheets uncovered • Autonomy & Smart Systems • Housing market distortions spread panic • Safety via technology • Monopoly money mentality grinds to a halt • Less people = more technology Time (Year)
The Outlook for mining technologies…• The Mining Technologies & Services (MTS) sector has had an excellent period of growth since the Global Financial Crisis• Exports of Australian MTS have accelerated and we believe that the total value of exports is in excess of $15 billion• Development of mining opportunities continues to grow across the globe, but particularly in the previously ignored geographies in more remote locations
Top 50 ASX-listed Mining Technology & ServicesCompanies 1. Orica ($4.74 billion) 2. Downer ($1.95 billion) 3. Boart Longyear ($1.48 billion) 4. WesTrac ($1.18 billion) 5. Monadelphous ($830 million) Minimum export revenue in 2010: 6. UGL ($773 million) $6.4 billion 7. Ausdrill ($632.9 million) Australia’s MTS sector consist of 8. NRW ($610 million) over 1,200 companies ; approx. 9. Bradken ($578 million) 500 are exporters 10. WorleyParsons ($562.5 million) Total exports of Australian 11. Ausenco ($513.4 million) mining products and services is in excess of $8 billion 12. Sinclair Knight Merz ($500 million) 13. Barminco ($485.8 million) . … 15. Imdex ($121 million) 16. Lycopodium ($120.3 million) 17. Australian Contract Mining ($110 million) 18. Boom Logistics ($105.3 million) Source: HighGrade.net
Who we are… Austmine LtdoAustralian Export Association of Mining Technology & Services oEstablished in 1989 oSome 150 member companies across Australia oExporting over $6 billion to over 72 countries oWorld’s leaders in mining innovationoChampion productivity, cost-efficiency, safety and environmentoCost-effective marketing support to the global mining network oInternationally recognised brand
What we do… oRepresent Australia’s METS export sector internationally oPromote members’ capability globallyoInfluence governments and relevant stakeholders in Australia and beyond oNetworking platform for the mining communityoDatabase of new and information on projects, companies, markets oTrade missions to overseas exhibitions and mine site visits oPublish the annual Austmine Directory oBiennial Austmine Conference & Exhibition
Snapshot of member companiesOur Members: a snapshot
Outlook 2012 and beyond…•Austmine Networking Series 2012 in Brisbane, Melbourne, Wollongong, Newcastle, Perth… for more info visit www.austmine.com.au•Missions to Brazil (16-20 April), Mining World Russia (23-27 April), South Africa / Mozambique (May/June), Mining World Central Russia – Kazakhstan (September), MinExpo 2012 – USA (September), West Africa (October) and IMME India (December) •13th Edition of Austmine Directory, April 2012 •Austmine Seminar – MCA Minerals Week, Canberra 30 May •2012 Austmine Annual Dinner – Perth 20 June •Austmine 2013 Conference & Exhibition in Perth – May 2013
Smart Mining… Made in Australia www.austmine.com.au THANK YOU! www.austmine.com.au