Importance of the Resources Sector on
the National Economy – Particularly the
Record Production of Iron Ore in WA
Mining t...
In 2013-14, the sector accounted for:
• $109 billion in sales value
• 89% of state and 47% of national
merchandise export ...
• In operation for 112 years and over 200 members representing
95% of production value in WA
3
About CME
“To champion the ...
40,000 Bp - Flints, clays, salts, gravel,
stones and ochre
4
5
1872 - Cossack founded -
pastoral and pearling
6
1891 - Gold at Marble Bar
Gold Locations in the Pilbara
7
8
1896 - Port Hedland gazetted
gold, pastoral and pearling
9
1911 - Railway Marble Bar to
Port Hedland
10
Port Hedland 1920
11
1937 - Wittenoom Gorge
Asbestos Mine
12
World War II
1939-45 - WWII caused many mines to cease operation
13
Manganese 1951
14
Port Hedland 1966
15
Port Hedland 1966
16
Port Hedland 1969
17
Port Hedland 1969
Port Hedland – Size of Ships
• 1951 Jetty – Manganese
• 1965 65,000 DWT
• 1968 120,000 DWT
• 1975 185,000 DWT
• 1976 225,0...
Development Phases over
past 50 Years
• 1952 - First Manganese Exported
• 1960 - Commonwealth Government lifts iron ore ex...
Phase 1 – Swinging 60s
• 1960 – Iron Ore Embargo Lifted
• 1962 – Small town of Port Hedland (900 people)
• 1963 - Port of ...
21
1967
2010
Phase 2 – Stellar 1970s
• 1970, first development of South Hedland
• 1970 - Pannawonica built
• 1971 - New Port Hedland ai...
Phase 3 – Quieter 1980s
• 1982 - The mine at Goldsworthy was closed on 22 December 1982
• 1985 – Port hedland suffers a se...
Phase 4 – Ramping up slowly
in the 1990s
• 1993 - Operations ceased at Shay Gap
• 1992 – Mesa J opened (Robe)
• 1996 - Aus...
Just a quick mention - Oil and
Gas
• Late 1970s Woodside Offshore Petroleum and their joint venturers
decided on Dampier a...
Phase 5 – 2002 to 2014
26
• Fotescue Metals Group – New Mines, Railway and Port
• Major Expansion at BHP Billiton
• Major ...
27
28
Record Recent Iron Ore
Production and Future Export
Tonnages
29
Focus on Royalty and Tax
Contribution of Resource
Companies
• 55-73% of total value of WA’s
resources
• $56.37 billion tot...
31
WA Royalties Increasing
• Government revenue is highly sensitive to the iron ore price,
• Iron ore royalties projected ...
Community Perceptions of
the Resources Sector
32
“Provide funds for local areas with regards to
sporting facilities, enter...
Important Role of Resource
Companies Contributions
33
• Community Programs
• Company Towns
• Members have built approx. 10...
Important Role of Resource
Companies Contributions
34
• Iron Ore Industry employment adds to a vibrant regional Western
Au...
Plug - WA Resources Sector
Outlook
• CME’s flagship publication
• Member surveys for supply
and demand forecasts:
– people...
The Chamber of Minerals and Energy of Western Australia
Level 10, 2 Mill Street
Perth WA 6000
T 08 9325 2955
F 08 9221 370...
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Chub Witham - Chamber of Minerals & Energy WA - Importance of the resources sector on the national economy- particularly the record output of iron ore in WA

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Chub Witham delivered the presentation at the 2014 Mining the Pilbara Conference.

The 2014 Mining the Pilbara Conference explored current projects and regulatory updates in the Pilbara region.

For more information about the event, please visit: http://www.informa.com.au/pilbaramining14

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Chub Witham - Chamber of Minerals & Energy WA - Importance of the resources sector on the national economy- particularly the record output of iron ore in WA

  1. 1. Importance of the Resources Sector on the National Economy – Particularly the Record Production of Iron Ore in WA Mining the Pilbara 2014 10 July 2014 William (Chub) Witham Manager North West and Kimberley The Chamber of Minerals and Energy of Western Australia
  2. 2. In 2013-14, the sector accounted for: • $109 billion in sales value • 89% of state and 47% of national merchandise export incomes • State royalties of $6.1 billion As at February 2014, 109,200 people directly employed. 2 Western Australia’s Resources Sector 55% 12% 10% 9% 4% 4% 6% WA Resources Sector Value1 Iron ore LNG Crude & condensate Gold Alumina Nickel Others 1 Department of Mines and Petroleum, 2013. Statistics Digest 2012-13. Perth.
  3. 3. • In operation for 112 years and over 200 members representing 95% of production value in WA 3 About CME “To champion the WA resources sector and assist it in achieving its vision to lead the world in sustainable practice, through innovation, and continuing to underpin Australia’s position in the global economy.”
  4. 4. 40,000 Bp - Flints, clays, salts, gravel, stones and ochre 4
  5. 5. 5 1872 - Cossack founded - pastoral and pearling
  6. 6. 6 1891 - Gold at Marble Bar
  7. 7. Gold Locations in the Pilbara 7
  8. 8. 8 1896 - Port Hedland gazetted gold, pastoral and pearling
  9. 9. 9 1911 - Railway Marble Bar to Port Hedland
  10. 10. 10 Port Hedland 1920
  11. 11. 11 1937 - Wittenoom Gorge Asbestos Mine
  12. 12. 12 World War II 1939-45 - WWII caused many mines to cease operation
  13. 13. 13 Manganese 1951
  14. 14. 14 Port Hedland 1966
  15. 15. 15 Port Hedland 1966
  16. 16. 16 Port Hedland 1969
  17. 17. 17 Port Hedland 1969
  18. 18. Port Hedland – Size of Ships • 1951 Jetty – Manganese • 1965 65,000 DWT • 1968 120,000 DWT • 1975 185,000 DWT • 1976 225,000 DWT • 1986 260,000 DWT • 2013 320,000 DWT 18
  19. 19. Development Phases over past 50 Years • 1952 - First Manganese Exported • 1960 - Commonwealth Government lifts iron ore export embargo • 1964 - Oil discovered on Barrow Island • 1965 - Salt production • 1965-66 - Mt Goldsworthy and Mt Tom Price Iron • 1967 - Oil production on Barrow Island begins. • 1981 - The Western Australian Government negotiated an agreement to allow development of the large natural gas reserves on the North West Shelf. • 1987 - Global stock market crash • 1989 - First LNG cargo exported to Japan • 2008 - Global Financial Crisis. • 2009 - Gorgon Consortium signs $50 billion agreement. 19
  20. 20. Phase 1 – Swinging 60s • 1960 – Iron Ore Embargo Lifted • 1962 – Small town of Port Hedland (900 people) • 1963 - Port of Dampier developed in 1963 when Hamersley Iron entered into an agreement with the Government over Mt Tom Price • Thousands of construction workers camped on Spinifex Hill in 1965 where the Port Hedland Civic Centre now stands. • 1965 - the railway from Goldsworthy to Finucane island was started and completed to take its first shipment • 1966 – Parker Point designed to accept vessels up to 60,000 DWT. • 1966 - Leslie Salt Port Hedland • 1967 - The harbour was dredged and the spoil bank created • 1969 – 1st iron ore shipment for Mt Newman sent from Nelson Pt. 20
  21. 21. 21 1967 2010
  22. 22. Phase 2 – Stellar 1970s • 1970, first development of South Hedland • 1970 - Pannawonica built • 1971 - New Port Hedland airport terminal, and 2 high schools • 1972 - Paraburdoo mine starts production • 1972 - Dampier Salt commences operations • 1973 - Shay Gap starts production • 1976 - BHP continued to expand its production with a second processing plant at Nelson Point which increased annual production to 40 million tonnes • 1978 saw a decline in world markets for iron ore due to fall in price for steel. 22
  23. 23. Phase 3 – Quieter 1980s • 1982 - The mine at Goldsworthy was closed on 22 December 1982 • 1985 – Port hedland suffers a set back with mothballing of rail carriages as the demand for iron ore is reduced. Port Hedland's population decreases from 14,000 down to 8,000. • Opening of the Pretty Pool housing estate in 1987 (too late for the 70’s boom). • Focus on gold and nickel exploration in the rest of WA 23
  24. 24. Phase 4 – Ramping up slowly in the 1990s • 1993 - Operations ceased at Shay Gap • 1992 – Mesa J opened (Robe) • 1996 - Australia's iron ore output expanded by 12 per cent to 145 Mt, the quickest expansion • 1996 - expansion at BHP's Yandi mine; • 1996 - Robe River's investment in infrastructure, • 1996 - Hamersley's Marandoo mine (12Mt/y) • 1996 - Expansion of the Jimblebar operations (+5 Mtpy), • 1996 - Start-up of Yandi 2 24
  25. 25. Just a quick mention - Oil and Gas • Late 1970s Woodside Offshore Petroleum and their joint venturers decided on Dampier as the site of their onshore LNP production plant and export wharf. • 1980 - The North Rankin ‘A’ production platform was constructed about 130km NNW of Dampier and was connected by pipeline to their onshore site at Withnell Bay. The project was the largest engineering works ever undertaken in Australia at the time, and at peek construction about 4,500 workers were employed in the onshore production plant. The total project cost was estimated at $12,000,000,000. • 1995 - A second jetty was constructed. This facility was designed to handle LPG vessels as well as condensate tankers. Approximately 1,500,000 million tonnes of LPG is exported annually. • 2005 – Opening of the Dampier Bulk Liquids Berth, with Burrup Fertilisers Pty Ltd (now Yara International) exporting its first consignment of anhydrous ammonia in June 2006. • 2012 - Pluto LNG Plant first gas was exported 25
  26. 26. Phase 5 – 2002 to 2014 26 • Fotescue Metals Group – New Mines, Railway and Port • Major Expansion at BHP Billiton • Major Expansion Rio Tinto • New Juniors including Atlas Iron, BC Iron and MRL • Expansion of Ports • Automation of Mines and Trains • Rapid Price Hikes • Massive expansion in construction workers • Pilbara Cities and Royalties for regions • Lack of Housing affordability • Lack of Investment since 1970s
  27. 27. 27
  28. 28. 28
  29. 29. Record Recent Iron Ore Production and Future Export Tonnages 29
  30. 30. Focus on Royalty and Tax Contribution of Resource Companies • 55-73% of total value of WA’s resources • $56.37 billion total value (27% annual growth 2003-13) • 513 Million tonnes (+11% annual growth 2003-13) • Royalties - $5.6 billion in 2013- 2014 30 55% 12% 10% 9% 4% 4% 6% WA Resources Sector Value1 Iron ore LNG Crude & condensate Gold Alumina Nickel Others
  31. 31. 31 WA Royalties Increasing • Government revenue is highly sensitive to the iron ore price, • Iron ore royalties projected to account for 19.7% ($5.6 billion) of total revenue in 2014-15 • Iron Ore Royalty income has increased from 4% of total revenue in 2004-05 to an estimated 19.7% in 2014-15
  32. 32. Community Perceptions of the Resources Sector 32 “Provide funds for local areas with regards to sporting facilities, entertainment venues so this can only be a good thing.” “It is a dynamic industry that provides a lot of employment for this state and is the backbone of our economy.” “Provides an income to many people, my house included. We have been able to build a home we otherwise never could have afforded.” “The mining industry in West Australia whether iron ore, gold, oil and gas has been a wonderful uplift for the economy.”
  33. 33. Important Role of Resource Companies Contributions 33 • Community Programs • Company Towns • Members have built approx. 1000 houses in Port Hedland, Dampier, Karratha & Wickham since 2010 and refurbished over 2,400 houses across the Pilbara. • Significant investment in community infrastructure e.g. PICC Health, Great Northern Highway bypass, Karratha LeisurePlex, Wickham Recreation Centre etc etc. • In 2013, members contributed $50.4 million in financial and $16.2 million in in-kind support to community initiatives across Western Australia.
  34. 34. Important Role of Resource Companies Contributions 34 • Iron Ore Industry employment adds to a vibrant regional Western Australia sharing the employment and economic benefits of operations across the whole of WA • At coastal locations, members are approx. 75% residential • Will continue to be in the Pilbara for years to come
  35. 35. Plug - WA Resources Sector Outlook • CME’s flagship publication • Member surveys for supply and demand forecasts: – people – energy – water – roads – rail – ports – aviation 35
  36. 36. The Chamber of Minerals and Energy of Western Australia Level 10, 2 Mill Street Perth WA 6000 T 08 9325 2955 F 08 9221 3701 E chamber@cmewa.com W www.cmewa.com.au Thank you 36

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