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Minerals Council of Australia

Vision 2020 Project

The Australian
Minerals Industry’s
Infrastructure Path
to Prosperity
An assessment of industrial and
community infrastructure in major
resources regions.

Prepared by ACIL Tasman for the Minerals Council


of Australia as part of the Vision 2020 Project
Executive Summary

Vision 2020 Project: The


Australian Minerals Industry's
Infrastructure Path to Prosperity
An assessment of industrial and
community infrastructure in major
resources regions

Prepared for the Minerals Council of Australia

May 2009
ACIL Tasman Pty Ltd
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Internet www.aciltasman.com.au

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For information on this report


Please contact:
Dr John Söderbaum
Telephone (02) 6103 8200
Mobile 0404 822 302
Email j.soderbaum@aciltasman.com.au
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Contents
Introduction 1
Western Australia 3
Queensland 16
New South Wales 27
Victoria 32
Tasmania 37
South Australia 40
The Northern Territory 50

List of figures
Figure 1 Regional development regions, Western Australia 5
Figure 2 Pilbara population projections to 2020 8
Figure 3 Incremental gas demand from the minerals and energy sector 12
Figure 4 Outlook for self extracted water, South West and Great Southern 15
Figure 5 Queensland mineral, petroleum and energy resources 17
Figure 6 Estimated value of minerals and metal exports from NSW in 2007-08
($million) 27
Figure 7 Map of NSW major metallic mines and deposits 28
Figure 8 Projected annual coal consumption in scenario 3 33
Figure 9 Major Victorian resources projects 34
Figure 10 Map of Gippsland region 35
Figure 11 The Cradle Coast growth region 38
Figure 12 Mineral exploration expenditure in South Australia 41
Figure 13 South Australia’s major operating mines and mineral development
projects 43
Figure 14 Map of the Eyre Peninsula region 47
Figure 15 Northern Territory onshore mineral and energy resources 52

List of tables
Table 1 Value of regional minerals and energy production, 2007-08 3
Table 2 Key infrastructure gaps and needs for the Kimberley growth region 6
Table 3 Key infrastructure gaps and needs for the Pilbara growth region 9
Table 4 Key infrastructure gaps and needs for the Mid West growth region 11
Table 5 Key infrastructure gaps and needs for the Goldfields-Esperance growth
region 13
Table 6 Key infrastructure gaps and needs for the South West and Peel growth
regions 14
Table 7 Key infrastructure gaps and needs for the Mount Isa-Townsville growth
region 18

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 8 Key infrastructure gaps and needs for the Newlands-Abbot


Point/Bowen growth region 20
Table 9 Key infrastructure gaps and needs for the Northern Bowen Basin-
Mackay growth region 22
Table 10 Key infrastructure gaps and needs for the Fitzroy growth region 24
Table 11 Key infrastructure gaps and needs for the Surat Basin growth region 25
Table 12 Key infrastructure gaps and needs for the Hunter Valley growth region 29
Table 13 Key infrastructure gaps and needs for the NSW Southern region 31
Table 14 Key infrastructure gaps and needs for the Central and Far Western
growth region 32
Table 15 Key infrastructure gaps and needs for the Gippsland growth region 36
Table 16 Key infrastructure gaps and needs for the Western Victoria growth
region 37
Table 17 Key infrastructure gaps and needs for the Cradle Coast growth region 40
Table 18 Key infrastructure gaps and needs for the SA Northern growth region 45
Table 19 Key infrastructure gaps and needs for the SA Eyre Peninsula region 48
Table 20 Key infrastructure gaps and needs for the Fleurieu/Mid North/South
East/Riverland region 49
Table 21 Key infrastructure gaps and needs for the Darwin growth region 53

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Acknowledgements
ACIL Tasman would like to acknowledge the considerable and willing
assistance they have received from the following organizations:
• MCA’s Infrastructure Taskforce
• The Chamber of Minerals and Energy of Western Australia
• Queensland Resource Council
• NSW Minerals Council
• South Australian Chamber of Mines and Energy
• Victorian Division of the MCA
• Northern Territory Resources Council
• Tasmanian Minerals Council
• Centre for Environmental Management, Central Queensland University
• Department of Primary Industries and Resources, South Australia
 

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Introduction
This study is part of the Vision This report forms part of the Mineral Council of Australia’s Vision 2020
2020 Project Project – a project with the objective of addressing capacity constraints to
growth that have afflicted the minerals industry in the past and are likely to
return and erode Australia’s market share and thus visit opportunity costs on
the industry and the nation into the future. The aim is avoid repeating the
mistakes of past inactivity in building the social and physical infrastructure
needed to meet the burgeoning global demand of the industrialising and
urbanising emerging economies.
The First Phase of the Project, released in 2008, examined the global demand
potential for the minerals industry through to 2020 and assessed the supply-
side requirements, including the skilled labour, needed for Australia to maintain
or grow its share of the global market.
It examines the infrastructure This study, the Second Phase, examines existing and potential capacity
needs of a growing minerals constraints in ports, railways and roads; energy, telecommunications and water
industry
networks; as well as housing, labour and other social needs that affect the
growth of the mining industry and the wellbeing and development of the
communities in which it operates across Australia. It considers the potential
for growth in 21 Australian resources regions under a scenario that broadly
aligns with the Advance scenario outlined in Phase One and assesses the need
for infrastructure to support that growth. 1 Separate reports have been
prepared for each State and the Northern Territory. While the main focus of
the work is on the minerals industry, in some cases the reports for some
growth regions have also considered the growth outlook for other industries.
Infrastructure constraints Expansion of the nation’s infrastructure (hard and soft industrial and
have contributed to the drop community infrastructure) has not always kept pace with the rapid and
in our share of global
sustained growth in export and domestic demand. Consequently, many growth
markets
regions around Australia now have significant infrastructure constraints. This
in turn has reduced Australia’s ability to meet the global demand for mineral
products. Other nations have stepped in to fill that gap and as a consequence
Australia’s market share has fallen.
Vision 2020’s goal is to This phase of the Vision 2020 Project lays the foundation for developing the
recapture that market share policy and regulatory frameworks that will enable the timely provision of the
industrial and community infrastructure needed to support an increase in
Australia’s minerals production capacity. It is hoped that this in turn will
enable Australia to rebuild its share of the global minerals market.

1 Two reports were produced by Access Economics: Infrastructure 2020 – Can the domestic supply
chain match global demand? and Global commodity demand scenarios.

Introduction 1
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The Vision 2020 Project’s growth scenarios were prepared prior to the
The global economic crisis
emergence of the global economic crisis. While the strong negative impacts on
will temporarily slow minerals
demand growth
global growth and demand are clearly evident, most commentators believe that
those impacts are likely to largely play out over next 6-18 months. ACIL
Tasman believes that robust economic conditions for the minerals sector will
largely return within that timeframe, and that growth is likely to return to
However, demand is likely to longer term trend lines. The Asian markets in particular, with their innate
rebound quickly and
demand driven by large, aspirational populations, are likely to bounce back
strongly
quickly and strongly.

Three scenarios were prepared by Access Economics - Advance, Holding the


Line and Decline. The Access Economics scenarios were developed using a
top down approach and provided forecasts of potential growth in national
production of seven minerals (lead, coal, copper, iron ore, aluminium, zinc and
nickel). They represent, respectively, the production that Australia would need
to achieve to increase its market share for these commodities, to maintain its
market share and to continue on the current path of declining market share.

It was not possible to disaggregate the scenario forecasts across the growth
corridors examined in ACIL Tasman’s report. Rather ACIL Tasman
developed bottom up growth scenarios based on public reports such as various
ABARE publications and State or Territory government documents. Where
necessary we have supplemented that information through our own research
and consultations with industry.
The regional growth The regional growth scenarios have been constructed to reflect credible growth
scenarios are credible in minerals production for each region. The analysis also includes the
development of mines that produce mineral products not included in the
Access Economics scenarios. Including these additional resources in the
discussion provides a more complete picture of a region’s infrastructure needs.

The regional growth scenarios will in aggregate broadly align with the Advance
scenario of Access Economics.
But if infrastructure We would note that a failure to implement (or delays in implementing) some of
constraints are not the existing infrastructure expansion plans would lead to the anticipated
addressed growth will be
growth in minerals production being constrained and actual outcomes being
slower
pushed more towards those suggested by the Holding the Line and Decline
scenarios. Obviously, to the extent that growth in minerals production is
lower, then the demand for new or upgraded infrastructure will be reduced.

This analysis of growth corridors does not include a detailed assessment of the
effect of an emissions trading system. The Minerals Council of Australia argues
that the proposed Carbon Pollution Reduction Scheme in its present form will
significantly undermine the competitiveness of Australian minerals sector.

Introduction 2
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The minerals production outlook and infrastructure needs for each of the
This report examines 21
growth regions are discussed in turn in this summary. The full report contains
growth regions
much more detail as this executive summary tends to focus on the highlights.
Readers interested in a particular growth region (or regions) should read the
full report for that region to get a more complete picture of the minerals
outlook for the region and the implications across the full range of
infrastructure needs of the minerals industry.

Western Australia
WA is the nation’s resources Western Australia is the nation’s resources powerhouse and produces some 38
powerhouse per cent of the country’s exports. This report examines the resources regions
of the Kimberley, Pilbara, Mid West, Goldfields-Esperance and South West
(including Peel). The map in Figure 1 shows the locations of these and other
regions. The value of production from these regions is shown in Table 1.

Table 1 Value of regional minerals and energy production, 2007-08


Region Value ($m)
Pilbara 21,490
State Offshore Petroleum 870
Commonwealth Offshore Petroleum 18,417
Peel 4,522
Mid West 2,250
Kimberley 1,545
Goldfields-Esperance 7,836
Other 1,680
Total 58,610
Note: Totals may not add due to rounding
Data source: Department of Mines and Petroleum 2008

Strong growth to continue The Chamber of Minerals and Energy of Western Australia (CME) released a
report, Developing a Growth Outlook for WA’s Minerals & Energy Industry 2 in April
2009. The report found that despite the short-term effects of the global
financial crisis, the minerals and energy sector should expect to experience
rapid growth of both construction and output to 2014 and ongoing growth to
2020. It found that:
– Increased demand for all
• State-wide demand for labour is projected to grow rapidly for the period
inputs
2008-2014, with a peak demand of 38,000 in 2012 due to coincidence of

2 The Chamber of Minerals and Energy of Western Australia Inc (CME 2009), Developing a
Growth Outlook for WA’s Minerals & Energy Industry, April 2009.

Western Australia 3
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

major construction projects. The majority of this growth is expected in the


Pilbara and Mid West regions.
– driving population
• The minerals and energy sector is expected to drive a population increase
increase
of up to 125,000 relative to 2007 levels by 2020, creating higher demand for
community infrastructure in both regional towns and in Perth.
• Annual State-wide demand for electricity by the minerals and energy sector
is projected to grow significantly for the period 2008-2013 to more than
16,000 GWh, followed by steady growth to 2020 to about 19,000 GWh.
Most of the forecast growth in demand is expected to be met by self
generation rather than grid electricity.
• Gas demand from the minerals and energy sector is forecast to remain
relatively static for the period 2008-2010, before resuming strong growth.
Annual gas demand by 2020 is expected to reach about 300 PJ, 50 per cent
higher than in 2009
• Demand for water is expected to grow strongly from 2010 to about 1300
GL/year, more than 50 per cent above 2009 demand.
Demand for these inputs and for other requirements such as transport will
create strong demand for additional and upgraded infrastructure.

The principal infrastructure shortcomings in Western Australia currently are:


• Inadequate community infrastructure and services in remote regions,
particularly to support families with children, educate and train workforces
of the future, and support the community profile
• Port infrastructure inadequate to meet mineral export demand
• Impending shortages of water both for industrial and community use
• Energy production and supply networks inadequate for growing demand
• Rail infrastructure inadequate in several regions to meet future demand
• Inadequate airport infrastructure in several regions and Perth
• Telecommunications infrastructure is inadequate in WA’s regions.
There is a critical need to address these inadequacies if the resources sector is
to continue to grow.

Western Australia 4
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 1 Regional development regions, Western Australia

Source: Department of Local Government and Regional Development 2009


Western Australia 5
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The Kimberley growth region

Minerals and LNG The Kimberley is a highly prospective region for minerals and energy
resources, including copper, lead, zinc, silver, nickel, uranium, coal, tin and
mineral sands. Large offshore gas and condensate fields are expected to supply
new LNG operations. The availability of domestic gas supplies associated with
LNG development could be a key enabler of new mineral developments.

Under the growth scenario, production of iron ore is assumed to reach 10


million tonnes a year, with production of nickel and zinc concentrates each
expected to be around 100,000 tonnes a year. Diamonds and gold will
continue to be produced.

The resident population of the Kimberley is expected to rise from 39,000 in


2006 to about 58,000 in 2020.
Kimberley has very limited The Kimberley is a remote region with a small population, limited
infrastructure development and very limited infrastructure. New resources projects will put
pressure on existing infrastructure and services and generate requirements for
substantial new infrastructure. Table 2 provides a summary of key
infrastructure gaps and infrastructure needs in the Kimberley growth region.

Table 2 Key infrastructure gaps and needs for the Kimberley growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads inadequate to support minerals • Sealed road on Dampier Peninsula to support gas development
and energy development and gas processing hub
• Upgraded regional roads to the Kalumburu area in the North
Kimberley and Tanami in the East Kimberley
• Ongoing upgrades of the Great Northern Highway to improve
reliability
• Modifications to town roads and bypasses to accommodate heavy
truck traffic in towns and to ports and industrial areas
Ports • Current ports inadequate to support • Upgrades to existing Broome port to accommodate increased
minerals and energy growth usage
• New ports required for minerals and • New ports for LNG and base metals
energy products • Supply base(s) required for offshore development and operations
Airports • Airport facilities and capacity • Upgrades to Truscott and Kalumburu airstrips in North Kimberley
inadequate to support minerals and to service future mining and offshore operations
energy growth • In the short term, upgrade Broome Airport to service increased
passenger and freight throughput
• Longer term, establish new Broome Airport to north of town and
redevelop current site for residential and commercial use
• Upgrade Kununurra airport and Balgo & Halls Creek airstrips

Energy • Electricity supply requires expansion to • Additional electricity supply infrastructure to support expanded
support regional growth towns and industrial activity
• Fuel tankage at Broome inadequate to • Development of LNG / gas processing hub to host one or more
support demand increases from major LNG and gas processing plants
minerals growth • Expanded fuel tankage and supply infrastructure at Broome Port

Western Australia 6
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Water and • A lack of appropriate quality and • Additional water supplies for towns to support expanded
wastewater quantity of water for drinking and or population and industry
processing • Water supplies for minerals and energy projects
Telecommunications • Telecommunications, particularly • Upgraded broadband and mobile infrastructure to support
broadband availability, inadequate to business and community growth
support regional growth
Community • Community infrastructure requires • Upgraded community infrastructure to cope with increased
infrastructure and upgrades and expansions to support population in Derby, Broome and Kununurra
services growth and meet the local community • Developed land for housing, commercial activities and light
profile and needs of residents industry in Broome, Kununurra and Derby
• Land availability restricted for housing, • Health and education systems re-examined to meet the expected
commercial and industrial use, inflating increase in population and local health and education profiles
costs

The Kimberley requires major new infrastructure of all types to support


resources development.
Roads Mining and energy developments in remote regions would generate
requirements for major upgrades of current low quality roads, for example:
• The Tanami Road in the East Kimberley
• Access roads to the North Kimberley off the Gibb River Road
• A road to service the LNG / gas processing hub at James Price Point.
Port infrastructure In order to service gas developments and to export mineral products,
additional port infrastructure will be required, including:
• A supply base for offshore petroleum operations, located in the vicinity of
Broome or Derby
• Dedicated ports and export facilities for mineral concentrates located at
sites within feasible transport distance from mines and with adequate deep
water
• LNG export facilities adjacent to LNG plant(s).
Upgraded airports are needed, and longer term, a new airport is required for
Broome.
LNG precinct Agreement has been reached between traditional owners, government and
industry to build an LNG precinct at James Price Point north of Broome.
LNG projects provide the opportunity for domestic gas supply for minerals
processing.

Telecommunications require extensive upgrade to provide the levels of service


needed by industry and expanded communities.

Western Australia 7
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Land and community Priorities for community infrastructure are land for housing, education facilities
infrastructure and health care facilities.

The Pilbara growth region

The Pilbara is crucial to the economy of the State and the nation, providing
two of the largest export revenue earners – iron ore and liquefied natural gas.
Iron ore alone amounted for almost $19.5 billion of the region’s exports in
2007-08. The region is the fastest growing minerals and energy production
centre in the nation.
Rapid production growth to The outlook is for that rapid growth to continue. Iron ore production is
continue expected to increase from the current 235 million tonnes per annum (Mtpa) to
more than 600 Mtpa by 2020. Three new LNG production facilities and other
gas-based industries such as ammonia are expected to be built over the same
period. LNG production is expected to increase from around 16 Mtpa in 2008
to between 45 and 50 Mtpa by 2020. New copper, gold, manganese and
uranium projects are expected to be developed.
Population will increase The Pilbara’s population is projected to grow significantly to meet the demand
significantly for labour from the minerals industry (see Figure 2). More than 50,000 people
are expected to reside in the Pilbara by 2020. The number of employees
participating in fly-in, fly-out (FIFO) is projected to more than triple from
5,000 to as many as 17,000 by 2015.

Figure 2 Pilbara population projections to 2020

Source: Pilbara Industry’s Community Council (2008), Planning for Resources Growth in the Pilbara: Employment &
Population Projections to 2020

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 3 provides a summary of key infrastructure gaps and needs in the Pilbara
growth region.

Table 3 Key infrastructure gaps and needs for the Pilbara growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Land • Land availability in Pilbara towns is • Expedite planning, land release and approvals need to meet the
inadequate to meet current and future accommodation needs of rapidly growing population, reduce
demand for housing housing costs and improve service worker attraction and retention
• Possibly establish a single authority to facilitate land planning and
development
Community • Education facilities and services • Improvements to education to provide:
infrastructure inadequate to support Pilbara – adequate schools and education services to meet needs of
community profile and meet needs of increased populations and to be able to attract and retain
families families, particularly those with teenage children
• Health facilities and services – special attention to Indigenous education and training to
inadequate to support Pilbara overcome the major gap in outcomes and workforce
community profile and meet needs of participation
residents • Re-engineer the Pilbara health system to redress the lack of
• Childcare facilities inadequate to relevant and adequate services and align capacity with demand
support Pilbara community profile and
• Increase the amount, quality and availability of childcare to
meet needs of families support families, broaden employment choices and attract and
retain skilled workers in the region
Roads • Highways and regional roads require • Upgrade highways and regional roads to accommodate
upgrades and extensions to meet construction traffic, minerals transport and traffic associated with
industry and community growth needs movement of workers and community members
• Road infrastructure in towns • Upgrades to road infrastructure in towns to service additional
residents and businesses
Railways • Uncertainty over third party access • Resolve third party access arrangements to existing single-user
arrangements for current single user railways to provide investment certainty to all parties
railways
Ports • Port infrastructure requires major • In order to service gas developments and to export mineral
expansion to support major increases products, additional port infrastructure will be required, including:
in export tonnage – expanded iron ore export facilities at existing sites
– two new ports for iron ore export
– expanded export facilities for mineral concentrates
– one or two new supply bases for offshore petroleum
operations
– LNG export facilities
Airports • Perth Airport terminal facilities • Upgrade airports in the Pilbara and Perth Airport to deal with
inadequate for current and future passenger and freight growth
passenger traffic
Energy • Lack of an integrated electricity system • Develop business cases for all stakeholders for the proposed
in the Pilbara inhibits efficiency integrated Pilbara electricity network
• Provide gas supplies and infrastructure to new customers
Fuel • Fuel import infrastructure requires • Upgrade the import tankage capacity in both Dampier and Port
expansion to supply mining demand Hedland to service mining growth
growth
Water • Lack of a region-wide, integrated water • Develop a strategic approach to long term water supply, matching
strategy sources and supplies to demand - an overarching water supply
strategy is required

Western Australia 9
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Community infrastructure is a Community infrastructure and services such as schools, health care facilities,
priority and sporting and recreation facilities do not meet the needs of residents.
These shortfalls are a key reason for the problems in attracting and retaining
workers in the Pilbara, including persons who work in the service industries.
Land availability is critical This is the reason why the Pilbara Industry Community Council (PICC) has
identified land for accommodation as a critical factor for improving services
delivery by government and business and ensuring the sustainability of
Pilbara’s communities. Better processes are needed to expedite land releases
and development approvals.

Efficient rail infrastructure is critical to the success of the Pilbara as one of the
world’s premier iron ore mining regions. Third party access arrangements
need to be resolved to provide investment certainty to all parties.

In order to accommodate large growth in minerals exports additional port


infrastructure will be required, including both expanded and new iron ore
export facilities and expanded export facilities for mineral concentrates. In
addition, there will be a need for new LNG export facilities and for additional
supply bases for offshore petroleum operations.

Airports in the region will need to be upgraded to accommodate additional


throughput of passengers, particularly the FIFO work force.

Onshore LNG developments may result in additional domestic gas becoming


available for use in power generation and by gas processing operations. Gas
customers will need to negotiate commercial arrangements for gas supply and
transport. Government may need to facilitate access to land for infrastructure
corridors.

Import tankage capacity in Dampier and Port Hedland will need to be


upgraded to meet large increases in the demand for diesel fuel.

While short term water supplies are adequate, long-term water supplies are less
assured. An overarching water strategy is required for the Pilbara to resolve
serious uncertainties for the minerals and energy sectors in the region.

Mid West growth region

Emerging mining region The Mid West has a broad economic base dominated by mining but with
major contributions also from the agriculture, retail, tourism, fishing and
manufacturing industries. Due to the strong demand for resources from China
and other Asian economies, there is strong and growing interest in the Mid
West’s resources, in particular iron ore.

Western Australia 10
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The Mid West’s mineral resources also include gold, nickel, mineral sands, iron
ore, zinc-copper, talc, lead, gypsum, lime sands and garnet. The region also
produces oil and gas.

Iron ore production in the region is poised to grow significantly – up to 80


Mtpa by 2020. Other production will include nickel, copper and gold.

Table 4 summarises infrastructure requirements for the Mid West in 2020


under the growth scenario.

Table 4 Key infrastructure gaps and needs for the Mid West growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Regional roads and some highways • Upgrades of highways and regional roads are required to
are inadequate to support major accommodate construction traffic, minerals transport and traffic
minerals growth associated with movement of workers and community members
Rail • Current rail infrastructure is inadequate • Rail infrastructure and rolling stock upgrades required for first
to transport large tonnages of iron ore stage iron ore exports through Geraldton port
and not sufficiently extensive to service • For production over 25Mtpa, new rail lines are required to
more than 25 Mtpa transport ore from north and east minesites to the Oakajee port
Ports • Geraldton Port inadequate to cope with • New rail unloading, shipping berths and loading facilities are
more than about 15 Mtpa required at Geraldton Port to handle increased tonnages (up to
• Maximum capacity of Geraldton after 25Mtpa)
upgrades well below potential • Oakajee Port to be developed as dedicated bulk port
production
Ore pipelines • No slurry pipelines yet exist to • Pipelines for transport of magnetite slurry from minesites to
transport magnetite ore Geraldton port and/or Narngulu

Energy • Electricity supply capacity falls well • Major new capacity in transmission and generation is necessary to
below needs of future mining provide the energy for new minerals projects
• Gas pipeline capacity currently below • Capacity increase for Dampier to Bunbury pipeline, other potential
future demand pipelines and feeder line upgrades to support mining and industry
developments
Water • No comprehensive, integrated plan for • Prepare comprehensive regional water plan to ensure efficient
water supply and use of water for mining and other users

Community • Community infrastructure in smaller • Enhanced community infrastructure to service increased


infrastructure towns inadequate to service populations in towns
populations that mining could attract

Land and • Land use planning not yet adequate to • Developed land will be required for the industrial estate at
infrastructure service needs of communities and Oakajee, new residential subdivisions, new and expanded
corridors mining industry industrial estates
• Infrastructure corridors will be required for new and future rail
lines, slurry pipelines, gas pipelines and electricity transmission
lines, utilities to service urban development

Minerals development and population growth will require development of a


region-wide water plan to assure adequate supply.

Roads will need to be upgraded to accommodate construction traffic, minerals


transport and traffic associated with movement of workers and community
members.

Western Australia 11
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Rail and port upgrades The existing rail network will initially need to be upgraded to accommodate
needed increasing iron ore transport requirements to the Port of Geraldton. New rail
routes to the future port of Oakajee and connections to Narngulu need to be
built.

New berths and loading facilities at Geraldton Port are required at Geraldton
Port to handle increased tonnages (up to 25Mtpa). The Oakajee deepwater
port needs to be developed to service additional iron ore tonnages. The
importance of these developments has been recognised in the Infrastructure
Australia report delivered in May 2009 and the proposed federal and State
funding contributions.

Minerals development will result in increases in electricity demand.


Uncertainty regarding the timing, scale and energy requirements of new mining
proposals is an impediment to more detailed planning for supply and
distribution of electricity. Gas demand from the minerals sector is forecast to
grow sixfold between 2009 and 2012 (see Figure 3).

Figure 3 Incremental gas demand from the minerals and energy sector

Source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

Land and community Developed land will be required for the industrial estate at Oakajee, new
infrastructure residential subdivisions, and new and expanded industrial estates.
Infrastructure corridors will be required for new and future rail lines, slurry
pipelines, gas pipelines and electricity transmission lines, and utilities to service
urban development.

Enhanced community infrastructure will be needed to service increased


populations in towns, particularly small towns close to mining operations.

Western Australia 12
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Goldfields-Esperance growth region

Global nickel production The economy of the Goldfields-Esperance region is based on the extraction
centre and processing of mineral resources, principally gold and nickel. By 2020, the
region is likely to have consolidated its position as one of the world’s major
nickel producing region, with up to three large scale laterite nickel mining and
processing operations, plus ongoing sulphide nickel production. Production of
gold, base metals, and iron ore will also increase. The coalfields at Salmon
Gums could supply a coal-to-liquids (CTL) fuel plant.

Table 5 summarises infrastructure requirements for the Goldfields-Esperance


region under the growth scenario to 2020.

Table 5 Key infrastructure gaps and needs for the Goldfields-Esperance growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads require progressive upgrades to • Ongoing road upgrades as planned
cope with increased traffic

Railways • Railways require upgrades to transport • Track upgrades to improve safety, reliability and speeds
greater tonnages of iron ore • Additional and longer passing loops for additional and larger trains
Establishment of a multiple-user intermodal terminal hub in
Kalgoorlie-Boulder
• Possible rail realignment in Kalgoorlie-Boulder to improve
efficiency and community amenity through noise attenuation
Ports • Port of Esperance and associated • Implementation of the Esperance Port Enhancement Program ,
transport corridor inadequate for including:
increased tonnages of iron ore and for – upgrades to the sea port including a new berth
increased imports to service the mining
– enhancement of the transport corridor and construction of a
industry rail balloon loop and additional car dumper for efficient iron
ore unloading
– development of Shark Lake Industrial Park inland port
Energy • Energy infrastructure will require • Ongoing upgrades to electricity infrastructure to match demand
expansion to meet increased demand • Expanded and extended gas supply pipelines as required
Water and • Water supplies to Goldfields will • Ensure water supply of adequate quantity and quality, and at
wastewater require upgrades and diversification of competitive cost
supply to ensure amenity, security and
competitive costs
Land • Land for housing in Kalgoorlie • Ensure sufficient land is developed for housing to accommodate
insufficient to meet growth increased population, in particular in Kalgoorlie-Boulder

Rail upgrades Rail transport upgrades will be needed including additional and longer passing
loops to cope better with iron ore traffic as well as additional nickel traffic
from the Kalgoorlie region, a balloon loop to allow for more efficient and
higher capacity iron ore unloading at the Port of Esperance if tonnage is to rise
above 11 Mtpa, and the establishment of a major multiple-user intermodal
terminal hub in Kalgoorlie-Boulder.

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Port expansion The Esperance Port Enhancement Program Pre-Feasibility Study included a
detailed market demand study. The implementation of this study should
ensure that the port will meet the needs of the minerals sector over the outlook
period. It should be noted that significant expansion of the port will require
large capital expenditure.

South West growth region

15 per cent of world’s This growth region encompasses both the South West and Peel regions. The
alumina growth region is a globally significant minerals region, producing some 15 per
cent of the world’s alumina, as well as mineral sands (including zircon), gold
and coal. The manufacturing of titanium dioxide pigment and silicon are
significant mineral related industries.
Growing alumina and gold There are a number of developments that will significantly increase minerals
production production in the region. The Worsley Alumina Refinery will increase its
capacity from 3.5 Mtpa to 4.6 Mtpa from the first half of 2011. The proposed
Wagerup Refinery expansion would increase production from 2.6 Mtpa to 4.7
Mtpa. The latter project is currently on hold due to global economic
conditions.

The Boddington gold mine will commence operations during 2009. Annual
production will be around 800,000 oz of gold and about 30,000 tonnes of
copper over a 17 to 20 year mine life.

Table 6 summarises infrastructure requirements under the growth scenario to


2020.

Table 6 Key infrastructure gaps and needs for the South West and Peel growth regions
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • While N-S linkages are generally • Definition of a high wide load corridor
adequate, E-W linkages are • Provision of adequate road infrastructure to cater for the
inadequate for future freight and expansion of communities and industrial facilities
passenger vehicle traffic • Ensuring adequate east-west linkages to the main highways for
• High wide load corridor has not been rapidly growing areas, so that freight can access the road network
adequately defined for over-dimension
loads such as plant modules
Rail • Rail network currently congested at key • Improve capacity of rail network initially in congested areas and
locations and capacity is inadequate to later over whole route
cope with growth in traffic •
Ports • No dedicated handling facilities for coal • Rail unloading facilities and dedicated stockpile areas for coal
at Port of Bunbury – all coal shipped • A high capacity bulk loading facility for coal
via Fremantle • Deepening the port’s inner harbour to accommodate fully-loaded
• Water depth at Port of Bunbury is Cape-size vessels
insufficient for fully-loaded Cape-size
vessels
Energy • Electricity transmission capacity needs • Provide adequate transmission capacity to connect generation
to be upgraded between Collie and with customers (underway)
demand centres

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Water and • Water planning and current water • Develop integrated regional water plan to overcome future
wastewater sources and supply infrastructure is shortages for industry use
inadequate for future growth of industry
and population
Community • Demand from fast growing population • Continue to develop community infrastructure to provide for fast
infrastructure runs ahead of supply of community growing population, anticipating needs where possible
infrastructure and services

Rail upgrades The Perth-Bunbury rail corridor is already near capacity and when planned
plant upgrades and new export projects come into operation, demand will
exceed the capacity of the existing rail network. The existing number and
length of passing loops currently limit the length of freight trains. Immediate
priorities are to increase capacity (including to Bunbury Port) through greater
axle load limits, duplication of the more heavily trafficked sections. More train
passing opportunities will also be needed to provide capacity for the greater
volumes of freight transport predicted.
Road links For roads, priorities include providing adequate east-west linkages to the main
highways for rapidly growing areas, so that freight can access the road network,
and establishing defined high wide load routes for indivisible loads.

Longer term priorities include providing adequate infrastructure to cater for


the expansion of communities (such as Mandurah, Binningup and Myalup) and
industrial facilities, such as Kemerton Industrial Area.
Coal loading facilities The bulk loading facilities at the Port of Bunbury are constrained by limited
capacity and issues of incompatibility of products. These constraints currently
severely limit the ability of the port to handle coal for export.

Figure 4 Outlook for self extracted water, South West and Great Southern

Source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Water constraints As can be seen in Figure 4, total groundwater demand for the region is
expected to exceed current allocations from 2012. Developing a regional water
plan would help avoid potential future shortages in water supplies for industry
use.

Queensland
Minerals the engine room of The mining industry is the engine room of the Queensland economy. The
Queensland economy industry and the communities it supports depend on infrastructure of all kinds
to be able to operate efficiently and to reach their potential. The following
Queensland growth regions are discussed in this report:
• North Queensland Minerals Province (Mt Isa – Townsville growth region)
• Central Queensland Coal Regions – including the Bowen and Galilee coal
basins
− Newlands-Abbot Point/Bowen growth region
− Central Bowen Basin-Mackay growth region
− Gladstone-linked (Fitzroy) growth region
• Surat Basin growth region
• Moreton Basin growth region.
Coal, bauxite, base metals While coal dominates mining production in Queensland, the State is also a
major producer of other minerals, including base metals, gold, phosphate,
magnesite and bauxite. The North West Queensland Minerals Region is a
world class base metals province. Queensland also produces oil and gas and
has large resources with potential for shale oil production. There is excellent
potential for uranium and coal seam gas to become significant export
industries.
Infrastructure constraints The principal infrastructure shortcomings in Queensland currently are:
• Supply chains that are unable to meet industry transport needs
• Uncertainty as to how expected future demand for water will be met
Inadequate community infrastructure and services, particularly to support
families with children and to educate and train workforces of the future
• Inadequate road and air transport infrastructure.
There is a critical need to address these inadequacies if the resources sector is
to continue to grow in Queensland.

Queensland 16
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 5 Queensland mineral, petroleum and energy resources

Source: Department of Mines and Energy

Queensland 17
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Mt Isa – Townsville growth region

This region contains Australia’s largest deposits of copper, lead-zinc-silver, and


phosphate rock, and substantial deposits of gold, uranium and other minerals.
There are at least ten new mines that were scheduled to commence operations
by 2012, although that time frame might now be a little less certain.

Realisation of the growth scenario would greatly increase infrastructure


requirements in the region. The various infrastructure planning exercises that
have been proposed would need to be accelerated and expanded.

Table 7 provides a summary of key infrastructure gaps and needs in the Mount
Isa-Townsville growth region.

Table 7 Key infrastructure gaps and needs for the Mount Isa-Townsville growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Railways • Great Northern Railway inadequate to • Expand the capacity of the Great Northern Railway between Mt
meet mineral tonnage growth Isa and Townsville to cope with a 165 per cent increase in
• New lines required to service mines tonnage by 2013
and provide port access • Build spur lines to new mines (eg Lady Annie phosphate)
• Provide new rail access route to the Port of Townsville in the Port
Eastern Access Corridor
• Upgrade North Coast line to enhance rail access to Abbot Point
State Development Area, including a direct link between the Great
Northern Line and North Coast Line
• Possible railway built by private sector from Mt Isa to Tennant
Creek to provide alternative, standard gauge link to another Port
(Darwin)
Roads • Roads generally require upgrades to • Provide new Port of Townsville Access Road constructed in the
service mineral and supplies haulage Port Eastern Access Corridor
• Townsville port access road requires • Upgrade road from Chillagoe to Charters Towers; Gregory
re-routing Development Road (north and south of Charters Towers) and
Burke Development Road (Cloncurry to Normanton) to support
transportation of concentrates to railhead and port facilities as well
as services to remote mining communities
• Upgrade roads to improve pavement width, strength and road
reliability, particularly in periods of flooding
Ports • Townsville Port inadequate to services • Accelerated implementation of the Port of Townsville Master Plan
minerals growth • Development of the Abbot Point State Development Area and
• Additional port required for major multi-user port
expansion
Airports • Airports will require upgrades to • Upgrading of Townsville, Mount Isa and Cloncurry airports to
accommodate increased passenger cope with increased passenger and freight traffic
traffic
Energy • Mt Isa electricity supply inadequate to • Expand the capacity of the Mount Isa Interconnected System to
support new mines supply new and expanded minerals projects
• Energy costs are high in the Mt Isa • Continue to facilitate exploration for oil and gas in the Georgina
region Basin that may help to lower energy costs in the north-west
minerals province
• Develop a new base load power station in the region to support
new development and reduce transmission costs
Water • Water resources and infrastructure are • Plan to provide adequate water to support further development of
inadequate to support new mines and mining activities in the region
expanded populations

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and mobile
broadband, inadequate and costly in telecommunications across the region, and in broadband backhaul
many parts of the region
Land • Serviced land required for industry in • Ensure serviced land is available for future light and heavy
major towns industrial development in Mount Isa, Cloncurry, Townsville and
Bowen
Community • Community infrastructure in regional • Give much greater attention to planning for, and provision of
infrastructure towns is inadequate for current community infrastructure (eg health, education, family services) in
population and for growth the region in order to provide facilities and services that will
support the liveability of resource communities and help to attract
and retain employees and their families

Rail capacity Additional investment in rail capacity will be required to transport up to 10


Mtpa of product to Townsville by 2010-11. Carriage of additional tonnages
to the port of Townsville would require new rail access to the port via the Port
Eastern Access Corridor.
Road reliability and capacity Parts of the region’s road are narrow or in poor condition. This, coupled with
old, low-strength bridges limit these roads’ capacity to handle future demand.
A number of major roads are subject to seasonal flooding that can disrupt
traffic for periods up to several weeks. Roads require upgrading to meet
demand from minerals growth. In addition, new roads are required to provide
access to mines and more efficient access to ports.
Port expansion Significant expansion of Townsville port facilities and associated infrastructure
is required to facilitate both imports and exports of minerals. Implementation
of the master plan for the port will need to be accelerated. The proposed
development of a multi-purpose port at Abbot Point could relieve pressure on
the Port of Townsville by taking some of the export load
Water Availability of adequate water of appropriate quality is vital to the further
development of mining in the region. A comprehensive plan is needed for
water supply and use.
Energy competitiveness Energy prices in the region are relatively high. Access to competitively-priced
electricity and gas in the region has been assessed as a critical issue for further
exploitation of the region’s mineral resources and the development of energy-
intensive mineral processing activities.
Housing and community The growth of mining and processing has been constrained by the difficulty of
infrastructure attracting and retaining staff who are concerned about the adequacy of health,
education, and child care services, as well as the price and availability of
housing. Adequate housing and community infrastructure is therefore a
priority.

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Newlands-Abbot Point/Bowen growth region

The Newlands-Abbot Point/Bowen growth region encompasses the far


northern end of the Bowen Basin coal resources, a world class coal province.
The region currently produces some 27 Mtpa of coal. If the necessary
transport and export infrastructure was available then this could potentially
increase to more than 100 Mtpa.

The Chinese aluminium producer CHALCO is investigating building an


alumina refinery at Abbot Point. Capacity would be 2.3 Mtpa of alumina
manufactured from up to 10 Mtpa of bauxite shipped from Aurukun on Cape
York.

Table 8 provides a summary of key infrastructure gaps and needs in the


Newlands-Abbot Point/Bowen growth region.

Table 8 Key infrastructure gaps and needs for the Newlands-Abbot Point/Bowen growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Railways • Rail link missing between Goonyella • Construct the Goonyella-Abbot Point Expansion (GAPE) “northern
and Newlands systems, inhibiting mine missing link” and consequential upgrades to the Newlands line
development and efficient coal • Electrify the Newlands line
transport • If freight volumes justify, construct a direct link between Great
• If new port developed, will require new Northern Line and North Coast Line near Bowen
rail links from NW minerals province • Provide direct rail access to the multi-cargo/user port
Ports • Abbot Point Coal Terminal requires • Expand and upgrade the Abbot Point Coal Terminal to 100+ Mtpa
expansion to facilitate exports capacity
• Multi-cargo, multi-user port required for • Develop the Abbot Point State Development Area and multi-
other minerals shipments cargo/user port
Roads • Roads require upgrades to service • Provide access roads to the Abbot Point State Development Area
minerals industry and larger population • Provide access roads to new mines in the region
• New roads required to service new • Upgrade existing roads to improve pavement width, strength and
mines and port road reliability, particularly in periods of flooding. Further
upgrades of Bruce Highway and regional roads needed to support
growth
Airports • Current Proserpine airport inadequate • Upgrading of Proserpine Airport or further development of new
for the region’s current and future Laguna Whitsundays airport
needs
Energy • Generation and transmission require • Develop a new base load power station in North Queensland to
upgrade and expansion to service support new development and reduce transmission costs
industry and population growth • Provide transmission infrastructure to mines railways, ports and
industry in the Abbot Point State Development Area
Water • Water supply inadequate to service • Proceed with Water to Bowen project to supply minerals industry,
mines, industry and population horticulture and domestic/commercial consumers
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and mobile
broadband, inadequate and costly in telecommunications across the region, and in broadband backhaul
many parts of the region
Land • Serviced land required for light and • Ensure that serviced land in Abbot Point State Development Area
heavy industry is available for industrial development
• Land for housing and light industry will be required in Bowen and
Collinsville

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Community • Community infrastructure inadequate • Give much greater attention to planning for, and provision of
infrastructure for larger population community infrastructure (eg health, education, family services) in
the region in order to provide facilities and services that will
support the liveability of resource communities and help to attract
and retain employees and their families

Join and upgrade rail Industry is keen to progress the development of the GAPE “northern missing
systems link” and consequential upgrades to the Newlands line. Significant upgrades
will be required to allow opening of new mines in the region and to provide an
alternative export outlet for coal from the central Queensland coal region.
Expand coal terminal The Abbot Point Coal Terminal will need to be expanded to deal with
capacity increased coal exports. Construction of the Abbot Point State Development
Area and the initial stage of a multi-cargo, multi-user port would be required to
support the development of the CHALCO alumina refinery. Further
development of the area and port would be required for other minerals
processing and the export of concentrates and other bulk minerals such as
phosphate.
Proposed new rail link to The Northern Economic Triangle Infrastructure Plan proposes a direct link between
service exports from North the Great Northern Railway (Mt Isa-Townsville) and the North Coast Line
West Queensland
near Bowen to provide access for minerals traffic from the North West
Queensland Minerals Province to the proposed multi-cargo, multi-user port at
Abbot Point – if freight volumes justify it.

Much greater attention is required to planning for, and provision of


community infrastructure (eg health, education, family services) in the region.

Northern Bowen Basin-Mackay (Goonyella) region

The Northern Bowen Basin-Mackay growth region is a major coal production


hub. Optimistic forecasts for coal production suggest it could top 160 Mtpa
by 2020 and 175 Mtpa by 2025. The Dalrymple Bay Coal Chain (DBCC)
group has aspirations for exports of up to 290 Mtpa through three coal
terminals (including the Abbot Point Coal Terminal) at some time in the
future.

To support growth to 160 Mtpa, service population of coal towns in the region
could rise by 30 per cent to around 39,000.

Table 9 summarises infrastructure gaps and needs for the Northern Bowen
Basin-Mackay growth region.

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 9 Key infrastructure gaps and needs for the Northern Bowen Basin-Mackay growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Coal supply chain • Supply chain does not operate to rated • Better planning and coordination of supply chain
capacities of each element – mines,
rail, port
Railways • Goonyella system requires upgrades • Construct the GAPE “northern missing link” and consequential
and major augmentation to meet upgrades to and electrification of the Newlands line
capacity needs, plus access to third • Upgrades of the Goonyella System to carry additional coal of up to
port 30 Mtpa to DBCT and APCT
• Construct new heavy haul railway(s) to carry coal from Galilee
Basin mines to new or expanded ports
Ports • Ports require further expansion to meet • Expand DBCT to say 100 Mtpa capacity
coal export needs • Expand APCT by up to 50 Mtpa
Roads • New mines require access roads • Provide access roads to new mines in the region
• Roads in region require progressive • Upgrade existing roads to improve pavement width, strength and
upgrades to meet industry and road reliability. Further upgrades of regional roads needed to
community needs support growth
Airports • Regional airports require upgrades to • Upgrade regional airports to support commuter flights
meet needs
Energy • Transmission infrastructure requires • Provide transmission infrastructure to mines railways, ports
upgrades and expansion to service
growth
Water • Current water sources and • Complete Moranbah Pipeline Project and eastern and southern
infrastructure inadequate for industry pipeline extensions to supply minerals industry and
and communities and to support domestic/commercial consumers
growth • Undertake longer-term planning for water
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and mobile
broadband, inadequate and costly in telecommunications across the region, and in broadband backhaul
many parts of the region
Transport • Lack of viable public transport system • Develop integrated and viable transport services for the region
Land and housing • Land and housing supply inadequate to • Undertake much more rigorous planning for housing to provide
meet needs of communities, more market information to encourage investment and provide
particularly accommodation for service adequate housing for government service workers
workers • Ensure that serviced land is available for light industrial
development in coal service towns
• Provide land for housing
Community • Community infrastructure inadequate • Give much greater attention to planning for, and provision of
infrastructure for sustainable communities community infrastructure (eg health, education, family services) in
the region in order to provide facilities and services that will
support the liveability of resource communities and help to attract
and retain employees and their families

Goonyella Abbot Point rail Achieving production of 160 Mtpa by 2020 would require the construction of
expansion the Goonyella Abbot Point Expansion (GAPE) and consequential upgrades to
and electrification of the Newlands line, upgrades of the Goonyella System.
Beyond this, construction of a new heavy haul railway(s) to carry coal from
Galilee Basin mines to new or expanded ports is required to develop mining in
that area.
Coal terminal expansion The future sustainable capacities of the Dalrymple Bay (DBCT) and Hay Point
(HPSCT) coal terminals are considered by the port owners/operators to be 85

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Mtpa and 55 Mtpa respectively, giving a total of 140 Mtpa. Therefore, major
expansion of the Abbot Point Coal Terminal is also required.
Water sustainability The long-term supply of water to the resources sector and associated industries
in the Bowen Basin is likely to be a continuing constraint on future
development. Industry and government need to work together to address the
longer term issues of water demand, supply and reliability in the region.
Community infrastructure If the anticipated expansion of coal production proceeds then there will be a
need to give greater attention to planning for, and provision of, community
infrastructure in the region in order to provide facilities and services that will
help attract and retain both mining industry and service sector workers and
their families.

The Fitzroy growth region

Coal, minerals processing, The coal region linked to Gladstone (broadly, the Fitzroy Region) is
future LNG Queensland second major coal producing region. Gladstone is the coal port
for the region and is also a major mineral processing centre and is poised to
become a major LNG export hub as well, utilising coal-seam gas from the
region and the Surat Basin.

Alumina refining and aluminium smelting also generate significant resource


exports. There are two alumina refineries Gladstone. In 2008 they processed
over 13 Mt of bauxite shipped from Weipa on the Cape York Peninsula.

The Wiggins Island coal terminal (WICT) is expected to have a capacity of 90


Mtpa by 2020. If one or more of the Galilee Basin coal projects are developed,
an additional 50 Mtpa of coal could be railed to the coast by 2020.

ACIL Tasman projects that up to three LNG plants could be built near
Gladstone (out of five currently proposed) with a total capacity of up to 20
Mtpa.

To support this growth (and general economic growth in towns such as


Emerald), the service population of coal towns in the region could rise by 30
per cent to around 49,000 by 2020. Gladstone population is projected to grow
to about 80,000, although LNG development could push population higher.

Table 10 summarises infrastructure gaps and needs for the Fitzroy growth
region.

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 10 Key infrastructure gaps and needs for the Fitzroy growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Railways • Rail system requires upgrades and • Major upgrades to QR Network rail system to increase capacity
expansion to service additional and to supply the new WICT
production and new Wiggins Island • New railway(s) to serve new Galilee Basin mines
Coal Terminal
Ports • Wiggins Island Coal Terminal (under • Expand the new Wiggins Island Coal Terminal to 90 Mtpa
construction) requires expansion to • Construct new coal terminal in Fitzroy region and expand existing
service additional production terminals (in Fitzroy and/or Northern Bowen Basin) to service
• Additional coal terminal required for Galilee Basin mines at 50 Mtpa
Galilee Basin production
Roads • New mines require access roads • Provide access roads to new mines in the region
• Roads in region require progressive • Upgrade existing roads to improve pavement width, strength and
upgrades to meet industry and road reliability, particularly in periods of flooding. Further
community needs upgrades regional roads needed to support growth
Airports • Gladstone Airport runway inadequate • Upgrade Gladstone runway to accommodate larger planes and
to service air traffic and fully meet meet aviation safety standards
standards • Upgrade regional airports to service population and industry
• Regional airports require upgrades to growth
meet needs
Energy • Transmission infrastructure requires • Provide transmission infrastructure to mines railways, ports
upgrades and expansion to service
growth
Water • Current water sources and • Proceed with planned water projects to supply minerals industry
infrastructure inadequate for industry and domestic/commercial consumers
and communities and to support • Undertake longer-term planning for water
growth
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and mobile
broadband, inadequate and costly in telecommunications across the region, and in broadband backhaul
many parts of the region
Transport • Lack of viable public transport system • Develop integrated and viable transport services for the region
Land and housing • Land and housing supply inadequate to • Undertake much more rigorous planning for housing to provide
meet needs of communities, more market information to encourage investment and provide
particularly accommodation for service adequate housing for government service workers
workers • Ensure that serviced land is available for light industrial
development in coal service towns
• Land for housing
Community • Community infrastructure inadequate • Give much greater attention to planning for, and provision of
infrastructure for sustainable communities community infrastructure (eg health, education, family services) in
the region in order to provide facilities and services that will
support the liveability of resource communities and help to attract
and retain employees and their families

Rail capacity Rail capacity will need to be expanded to match growth in mine output, with
line duplication, new lines, railway yards and rolling stock all needed.
Greenfields rail infrastructure will also be needed to service new coal mines in
the Galilee Basin.
Coal terminal capacity

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The Wiggins Island Coal Terminal (WICT) is being constructed to lift coal
export capacity from Gladstone.

Community infrastructure
Much greater attention will need to be applied to planning for, and provision
of, community infrastructure (particularly in relation to health, education and
family services) in order to help attract and retain workers.

Surat Basin growth region

Emerging coal mining and The Darling Downs is a farming region on the western slopes of the Great
gas production region Dividing Range. The coal deposits of the Surat Basin underlie much of the
western and northern parts of the Darling Downs. Export coal production is
currently about 5 Mtpa. The Surat Basin is likely to become a major coal and
gas production region in the future. The Surat Basin rail project, linking the
region with Gladstone, will be the key facilitator of this.

The Surat Basin hosts coal bed methane and underground coal gasification
operations. These sectors are likely to grow rapidly in response to demand for
export LNG and domestic gas supplies.

The growth scenario to 2020 for coal from the Surat Basin growth region
assumes that following the slowdown, growth will return to the strong levels
seen earlier. Coal production in the Surat Basin region is expected to reach 40
Mtpa by 2020.

To support this growth, the population of some towns in the region is


expected to rise substantially.

Table 11 summarises infrastructure gaps and needs for the Surat Basin growth
region.

Table 11 Key infrastructure gaps and needs for the Surat Basin growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Railways • Rail infrastructure inadequate for major • Completion of Surat Basin Rail project
coal exports

Ports • New and expanded coal export • Completion of the new Wiggins Island Coal Terminal and
infrastructure required expansion to 90 Mtpa

Roads • Roads will require upgrades to support • Provide access roads to new mines in the region
industry and population growth • Upgrade existing roads to improve pavement width, strength and
road reliability. Further upgrades regional roads needed to
support growth
Airports • Regional airports will need upgrades to • Upgrade regional airports to service population and industry
support traffic growth growth
Energy • Mines and expanded towns will require • Provide transmission infrastructure to mines
addition energy supplies

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Water • Comprehensive water planning for • Undertake integrated planning for water
mining growth is yet to be undertaken
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and mobile
broadband, inadequate and costly in telecommunications across the region, and in broadband backhaul
many parts of the region
Transport • Public transport under-developed and • Develop integrated public transport services for the region
requires upgrading to support
community growth
Land and housing • Land supply and housing not adequate • Undertake rigorous planning for housing, encourage investment
to support major growth and provide adequate housing for government service workers
• Ensure that serviced land is available for light industrial
development in towns
• Provide land for housing
Community • Community infrastructure inadequate • Give close attention to planning for, and provision of community
infrastructure to support growth infrastructure (eg health, education, family services) in the region
in order to provide facilities and services that will meet the current
and future projected needs for these resource communities, and
avoid the serious shortfalls experienced in other areas such as the
Bowen Basin

Coal transport and loading To support growth, the Surat Basin Rail project needs to be completed. In
addition, the Wiggins Island Coal Terminal needs to be expanded beyond its
first stage to handle increased tonnages.
Water management As a vital input in major coal mines, water will be supplied from coal seam
water and the new Nathan Dam. Coal seam water will be a major new resource
for multiple uses, including agriculture.
Land use planning Rigorous planning for land, housing and light industry is needed to encourage
investment and to provide adequate services.

Ipswich growth region

Constraints of suburban rail Currently there has only been limited mine development in the area due to the
limitations on the rail system’s ability to provide sufficient capacity through the
Brisbane suburban area and on the Toowoomba Range. Coal exports in 2007-
08 totalled 5.6 Mt, with an additional 500,000 t transported to power stations.
Port of Brisbane coal export Expansion of infrastructure and rail capacity for this region is dependent upon
facilities an expansion of the Port of Brisbane’s coal export facilities. Further increase in
capacity is also contingent upon the cost effectiveness upgrades within the
congested Brisbane metropolitan area, and available train paths for coal
carrying services down the Toowoomba Range.

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Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

New South Wales


The NSW minerals sector is Mining has a long history in NSW. The first coal mine was opened in the
dominated by coal, Hunter Valley in 1799 near Newcastle. 3 Mining remains an important provider
aluminium, iron and steel of employment and significant contributor to the NSW economy. The mining
industry is the State’s largest single merchandise exporter.

The estimated value of NSW minerals and metal exports in 2007-08 is shown
in Figure 6. The export market is dominated by coal, followed by aluminium,
petroleum, iron and steel and copper exports. The provisional estimate of
royalties collected from the NSW minerals sector in 2007-08 was $572 million. 4
Total employment in the NSW mining sector in the May quarter of 2008 was
31,200. 5

Figure 6 Estimated value of minerals and metal exports from NSW in


2007-08 ($million)

Zinc, 6.8
Aluminium, 2092

Copper, 589

Iron and steel, 883

Coal, 8185

Petroleum, 1635

Note: The export values shown for 2007-08 are preliminary estimates.
Data source: NSW Minerals Council Key Industry Statistics 2008

3 NSW Minerals Council website, http://www.nswmin.com.au, accessed 20 May 2009.


4 NSW Minerals Council Key Industry Statistics 2008.
5 ibid.

New South Wales 27


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

This study draws on the results of a range of existing resources and


infrastructure studies to examine potential growth in minerals production and
potential gaps in infrastructure in the following three NSW growth regions:
• The Hunter Valley region
• The Southern region
• The Central and Far Western region.
The current and projected principal infrastructure constraints in NSW are:
• Rail and road networks that are unable to meet the minerals industry’s
current or projected transport needs
• Energy production and supply networks that are inadequate for meeting
growing demand
• Port infrastructure that is unable to meet current or projected demand for
minerals export services
• Shortages of water both for industrial and community use.

Figure 7 Map of NSW major metallic mines and deposits

Source: NSW Department of Primary Industries

New South Wales 28


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Hunter Valley growth region

Coal dominates in the Hunter The Hunter Valley growth region includes the Gunnedah, Hunter and
Valley Newcastle Coalfields, and the northern part of the Western Coalfield. The
region also hosts two aluminium smelters, together they produce about
690,000 tonnes of aluminium per year.
Coal exports are limited by The capacity of the Hunter Valley transport corridor is currently well below
transport constraints what coal producers have advised they would like to produce. Work is already
underway to expand the capacity of the Hunter Valley rail network.
Both rail and port constraints Construction of additional coal loading capacity at the Port of Newcastle is
are being addressed
already underway and further capacity additions have been approved although
construction start dates have not yet been announced.

Negotiations are underway on the plan, announced by the NSW Minister for
Ports, Joe Tripodi, in December 2008. The plan is intended to encourage
investment in additional loading capacity at the port of Newcastle and manage
the allocation of that capacity. Details of the triggers that would require new
capacity to be built and the mechanisms for coal producers to have
“guaranteed access” will be critical to the economic and commercial viability of
terminal investments and operations. The details are scheduled to be finalised
by mid 2009. Given the strong incentives for all parties to address the capacity
problem, we are relatively optimistic about the chances for a successful
outcome.
Access to water is an In the medium term access to adequate water may become an issue. Current
emerging issue. extraction limits are expected to be exceeded sometime after 2014.
Table 12 summarises the key infrastructure gaps and needs in the NSW Hunter
Valley growth region.

Table 12 Key infrastructure gaps and needs for the Hunter Valley growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Rail • Rail infrastructure insufficient for Implement the ARTC’s 2008-2024 Rail Infrastructure Strategy
transporting forecast growth in
production
Ports • Lack of sufficient coal loading capacity Upgrade the existing coal loaders at the PWCS terminal and the
NGIC terminal. Build additional coal loaders as and when required.
Water • Lack of water supplies Ensure that adequate supplies of water are available, particularly
post 2014 when the current extraction limit is likely to be exceeded

New South Wales 29


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Southern growth region

Coal mining important in The Southern NSW growth region covers the southern part of the Western
Southern region Coalfield, and the Central and Southern coalfields and relevant transport
corridors. In 2007-08, almost 11.5 Mt of coal was exported through Port
Kembla, which is the end of the coal supply chain for the NSW southern
region.

BlueScope Steel's Steelworks at Port Kembla produces five million tonnes a


year of finished and semi-finished flat steel products for sale in Australia and
overseas. In 2007-08, Port Kembla exported 13.3 Mt of coal and coke and
3.16 Mt of steel products. 6
Coal production expected to Coal production in the region is expected to increase by 1.3 Mt in the near to
grow medium term. The Woodlawn development will produce some 150 kt of Cu,
Pb, Zn and Ag concentrates. The start date for this project is now likely to be
Production of coal seam gas
some time after the originally intended date of 2011. Stage 2 of the Camden
and other minerals will also
increase
coal seam gas project could produce some 12PJ of gas a year.

The region will continue to grow in importance as a source of minerals


exports. The main infrastructure issue for the region is the capacity of the
transport infrastructure (road and rail). The growth in the volume of imports
through Port Kembla will add to the pressures on the transport infrastructure
in the region.
Lack of transport Congestion on the northern and southern ends of the Sydney to
infrastructure may limit Wollongong/Port Kembla road corridor will need to be addressed. Similarly,
growth
the road link between the southern part of the Western Coalfield and Sydney is
at or near capacity for about 40 km west of Eastern Creek.
Both road and rail capacity If more of the transport task associated with vehicles imported through Port
need to be increased Kembla is shifted onto rail then this may delay the need for some road
upgrades, however it may accelerate the need for rail upgrades.

Increasing competition between freight and passenger services in the region


will need to be addressed. Already planned ARTC upgrades and
enhancements should be completed.

Coal loading capacity appears to be adequate for the time being with several
million tonnes of spare loading capacity currently available. Given that the
coal loading terminal is co-owned by the five major coal mining firms active in
the region suggests that capacity expansions will occur in a timely manner.

6 Australian Coal Report, October 2008.

New South Wales 30


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

There may be a need to upgrade storage and ship loading facilities to allow for
increased minerals movements.
Energy supply infrastructure The age of the Wallerawang power station suggests that a replacement may be
will need to be built needed before the end of the outlook period. New gas projects (including coal
seam methane (CSM)) may require new gas pipelines to be built, including to
supply planned new gas fired power stations.

Table 13 summarises the key infrastructure gaps and needs in the NSW
Southern growth region.

Table 13 Key infrastructure gaps and needs for the NSW Southern region
Infrastructure class Current and future gaps Upgraded or additional infrastructure required
Roads • Some roads are at capacity • Congestion on the northern and southern ends of the Sydney-
Wollongong/Port Kembla road corridor will need to be addressed
• The link between the southern part of the Western Coalfield and
Sydney is at or near capacity for about 40 km west of Eastern
Creek
• A second major road link between Sydney and Wollongong /Port
Kembla may be needed
• If more of the imported vehicles transport task is shifted onto rail
this may delay the need for some road upgrades
Railways • Rail infrastructure unlikely to meet • Increasing competition between freight and passenger services in
growth in freight task the region will need to be addressed
• Planned ARTC upgrades and enhancements should be completed
• If more of the imported vehicles transport task is shifted onto rail
this may accelerate the need for rail upgrades
• Improvements to the Moss Vale–Unanderra rail line to improve
utilisation
• Implementation of the Maldon – Dombarton line pre-feasibility
study findings
Ports • A lack of capacity to service export • Upgrades to storage and ship loading facilities to allow for
growth increased minerals movements. Although coal loading capacity
appears to be adequate for the near future
Energy • Generation, transmission and • Electricity suppliers will need to upgrade their supply infrastructure
distribution capacity inadequate for to deal with increased demand from industrial, commercial and
growth domestic customers
• A replacement for Wallerawang power station may be required.
• New gas projects (including CSM) may require new pipelines to be
built, this may include pipelines to supply new gas fired power
stations
Community • Community facilities may not keep • The main driver of the need for enhanced community
infrastructure pace with increase in demand from infrastructure will be increasing population in the region. Land for
growing population housing, schools, health care facilities, sport and recreation and
child care will all need to be addressed

New South Wales 31


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Central and Far Western growth region

Access to water is critical to The Central and Far Western region covers much of the rest of NSW. The
growth in the Central and Far geography of the region is diverse and in most areas the minerals industry co-
Western region
exists with agriculture. Water management, complementary land use and
access to energy are the key issues for the region.

Access to water will be improved by the development of well-functioning


markets which will encourage reductions in water use and provide impetus for
investment in improving supply.
Energy demand likely to NSW energy demand is rising faster than supply with the National Electricity
outstrip supply by 2013 Market Management Corporation predicting a potential short fall in the
capacity required to meet its reliability target by 2013/14.7

Table 14 summarises the key infrastructure gaps and needs in the Central and
Far Western growth region.

Table 14 Key infrastructure gaps and needs for the Central and Far Western growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Water • Access to adequate water supplies Aid the development of well-functioning markets which will both
ration water and provide impetus for investment. This requires the
over-allocation of water entitlements for agriculture in the Murray
Darling Basin to be addressed
Energy • NEMMCO is projecting a potential • Upgraded distribution infrastructure (power and gas)
short fall in generating capacity • Additional generation capacity
required to meet reliability targets by
2013/14
• Lack of distribution networks away
from the central basin

Victoria
Mining is growing in Victoria Mining activity is growing in Victoria on the back of new discoveries, new
minerals and new technologies for exploiting existing reserves. There is
excellent potential for new gold discoveries, while new geological models
suggest that there is potential for discoveries of base metals.

The principal current and projected infrastructure constraints in Victoria are:


• Inadequate transport networks, including using a mixture of broad and
standard rail gauges

7 Cited in NSW Minerals Council submission to electricity inquiry June 2007.

Victoria 32
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

• The need for new bulk port facilities outside of metropolitan Melbourne
and direct rail and road links from production regions
• Energy supply networks inadequate for growing demand in regional
Victoria
• Common-user carbon capture and storage (CCS) infrastructure.
Mineral sands outlook is Victoria’s reserves mineral sands are world-scale. Western Victoria is ramping
particularly strong up to become a major production centre for mineral sands, while a large
discovery in eastern Gippsland holds promise for another major mine.

Figure 8 Projected annual coal consumption in scenario 3

Source: Latrobe 2100 Coal Resources Project, Scenario 3

Clean coal technology Victoria also has massive reserves of brown coal (lignite). These could supply
crucial for future of brown feedstock for conversion industries for over a hundred years (see Figure 8).
coal
This would, however, depend on new technologies being available to reduce
emissions associated with brown coal use in power stations or as feedstock in
other plants.

Victoria 33
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 9 Major Victorian resources projects

Source: Department of Primary Industries, Victoria, February 2009

Gippsland growth region

The export economy of Gippsland is predominantly based on primary and


secondary production. Energy production is one of Gippsland’s major
industries. The region produces around 90 per cent of Victoria’s electricity and
97 per cent of Victoria’s natural gas, and 46 per cent of Australia’s oil comes
from the Bass Strait fields. The region also has a range of agribusinesses
including agriculture, forestry, fishing and associated processing industries.
Rail infrastructure needs to Transport infrastructure has been identified as an important need for the
meet both passenger and future development of the region. Growing demand for passenger services
minerals demand
(including for transporting workers for minerals developments) could impede
minerals development. Ensuring that Victoria’s ports and their land transport
connections can meet growing demand from industry will also be crucial.

Victoria 34
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 10 Map of Gippsland region

Source: Department of Primary Industries Victoria

Water infrastructure is another key area. The Gippsland Basin water resource
Water shortages are an is currently over utilised. Groundwater levels are declining, river habitats are
emerging constraint unhealthy and the Gippsland Lakes are in poor condition. Unless addressed,
this situation could lead to severe restrictions on use of water by mining and
other industries, constraining their growth.
Carbon capture and The region has potential as a site for future sequestration of CO2. There may
sequestration infrastructure be justification for government involvement in facilitating early-stage
required for brown coal use
sequestration infrastructure.

Table 15 summarises the key infrastructure gaps and needs in the Gippsland
growth region.

Victoria 35
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 15 Key infrastructure gaps and needs for the Gippsland growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Some highways and regional roads • Upgrades to highways and regional roads
inadequate to support large-scale • Designation of additional over-dimension load corridor from Barry
development Beach port
• Over-dimension corridors inadequate
Railways • Railway infrastructure, rolling stock and • Upgrade existing rail infrastructure
port access inadequate for bulk • Construct new rail route to Hastings bulk port when traffic justifies
minerals
• Deal with short term bottlenecks at interim ports
• No direct route to proposed Hastings
bulk port
Ports • Existing port bulk handling facilities • Construct new bulk port near Hastings on Westernport Bay
inadequate and port access routes are
congested
• No dedicated bulk port near Gippsland
Fuel • Additional capacity required for growth • Growing demand for fuel from mining operations will require the
timely construction of new liquid fuel import and storage facilities
Water • Water supply inadequate for growth • Implement integrated water supply strategy involving all sources
and uses, including recycling, desalination and new sources
Carbon capture and • No integrated plan for CCS yet, • Establish a sound regulatory framework and then investigate and
storage although potential recognised, implement common-user CCS systems in close cooperation with
research being conducted and some the private sector
planning underway

Western Victoria growth region

The Western Victorian region has emerged as an important source of minerals


sands – predominantly rutile, ilmenite, and zircon.
Transport and port Road and rail infrastructure is being progressively upgraded. The lack of a rail
infrastructure will need to be unloading facility at the Port of Portland for bulk materials limits the use of the
upgraded
rail network. The throughput at the port is expected to approximately double
if planned minerals sands developments proceed. The port’s facilities will need
to be upgraded to cope with this increase in utilisation.
Ensuring adequate water Water availability continues to limit mineral developments. Upgrades to water
supplies will be important supply infrastructure have improved the potential efficiency of the system
when the volume of water increases.

Table 16 summarises the key infrastructure gaps and needs in the Western
Victoria growth region.

Victoria 36
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 16 Key infrastructure gaps and needs for the Western Victoria growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Gap in the High Productivity Freight • Upgrade to the HPFV network in west of the state
Vehicles (HPFV) network between the
north and south of the state at its
western border
Rail • Parts of Victoria’s broad gauge network • Complete conversion of broad gauge network to standard gauge
not yet converted to the standard on interstate routes
gauge • Construct a bulk materials unloading facility at Port of Portland
• Lack of a bulk materials unloading
facility at the Port of Portland limits
viability of rail network as a transport
option
Ports • Existing port bulk handling facilities • Construct a bulk materials rail unloading facility at Port of Portland
inadequate

Energy • Distribution networks failing to keep • Address regulatory hurdles creating barriers to the upgrading of
pace with growth electricity distribution networks
Water • Supplies of water likely to be • Implement measures to increase water supply, including recycling,
inadequate for growth desalination and new sources

Tasmania
Mining is important to The mining industry is a major contributor to the Tasmanian economy. The
Tasmania Cradle Coast growth region is the principal minerals producing region in the
State. The volume and value of minerals production has increased in recent
years. Projections indicate that the amount of metallic mineral concentrates
exported from the State could quadruple to 2 million tonnes a year. Iron ore
Minerals production is
expected to increase
production is expected to increase to almost 3 Mtpa. 8 Production of other
mineral products (tungsten, silica flour and cement) is also forecast to grow.

The principal current and projected infrastructure constraints in the Cradle


Coast growth region of Tasmania are:
• Single lane road networks are inadequate for the growing volume of users
from multiple sectors – mining, forestry and tourism
• Rail networks and port facilities with insufficient capacity for expected
growth in minerals traffic
• Lack of gas supplies to the West Coast
• Lack of broadband telecommunications competition.

8 This represents about 1 per cent of the nation’s iron ore production. While the volume is
small, it is important to Tasmania because it provides greater diversification in employment
opportunities.

Tasmania 37
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 11 The Cradle Coast growth region

Source: Department of Transport and Regional Services, Cradle Coast Regional Profile, 2003

Transport task is expected to Upgrades of road, rail and port infrastructure in the region will be required to
increase significantly cope with the expanding minerals transport task. Improving road safety will be
a priority, to ensure that increasing minerals and forestry truck traffic on
narrow winding roads does not compromise passenger car safety.

In 2005/06 around 450,000 tonnes of mineral and metallic ores was


transported, the majority by rail (335,000 tonnes). By 2010, this task is forecast
to more than double to nearly 1.1 million tonnes, roughly split between road
and rail.

Tasmania 38
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The road task in the region is forecast to increase from 115,000 tonnes in 2007
to 600,000 tonnes in 2010. The difficult terrain, remoteness and dispersed
location of mining sites are major impediments to the movement of mining
product by road.
Roads will need to be
upgraded… Regional roads that are deficient in terms of width, horizontal and vertical
alignment include the mining-industry critical Murchison Highway (from
Zeehan to Ridgley Highway), the Ridgley Highway (to Burnie) and Bass
Highway (from Port Sorell to Deloraine, Deloraine to Illawarra Main Road,
Burnie and west of Wynyard).
... as will the rail network Significant improvement in the efficiency and productivity performance of the
rail network is necessary if rail is to remain competitive for contestable freight
for both existing and new industries. In particular, limitations on train length,
load capacity and operating speed, due to short passing loops, tight curves and
steep gradients need to be overcome where technically and economically
feasible. Rail’s share of the freight task is expected to decline, increasing by
165,000 tonnes to a total of 500,000 tonnes by 2010.
Existing port services are not The demand for Burnie port services for minerals exports could increase
adequate to meet growth fourfold by 2023. Burnie suffers from inefficient port infrastructure and is
unable to cater to higher freight volumes. Channel infrastructure, storage and
handling areas, wharf infrastructure and handling equipment will not meet
needs out to 2020.

However, expansion of the port is highly constrained by adjacent land uses


(this is also true of other ports). Consequently reclamation of land adjacent to
current port areas may be needed to provide for increased storage and
operational areas.

Burnie airport can handle only turboprop aircraft and not B737/A320 class
jets, and Devonport is marginal for jets. Upgrading one of these airports to jet
standard may be necessary under the growth scenario.
Energy supply networks will With its high degree of dependence on hydro, electricity generation can be
also need to be enhanced constrained, particularly during a drought. The transmission network will
require additions to connect new generation sources and new load centres.
Tasmania currently produces close to half the renewable grid electricity in
Australia (hydro and some wind). Further development in this area will be
limited by constraints in the transmission network unless there is significant
investment in transmission infrastructure.

Table 17 summarises the key infrastructure gaps and needs in the Cradle Coast
growth region.

Tasmania 39
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 17 Key infrastructure gaps and needs for the Cradle Coast growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads inadequate to deal with growth • Upgrade of the Murchison Highway from Zeehan to Ridgley
in freight traffic Highway
• Road safety potentially compromised • Upgrade of the Ridgley Highway to Burnie
• Upgrade of the Bass Highway: Port Sorell to Deloraine, Deloraine
to Illawarra Main Road, Burnie and west of Wynyard
Railways • Rail capacity, loading and unloading • Upgrades to Melba to Burnie line, including additional spurs to link
facilities insufficient for growth in to mine sites, longer passing loops to allow for longer trains
minerals traffic • Upgrades to Main (Hobart to Tamar) and Western lines, to support
higher speeds and increased axle loads
• Rail loops or duplication, Railton to Devonport Port to facilitate
cement and general freight transport
• Rail infrastructure to support additional major processing
industries at Port Latta, if they are to be developed
Ports • Current capacity at Port Bernie unlikely Infrastructure to handle up to 2Mtpa throughput at Port Bernie:
to be sufficient to cope with demand • Capacity to handle longer trains at ports if rail network
growth infrastructure improvements support this
• Increased storage and operational areas to overcome existing
constraints
• Provision of channel infrastructure for navigation purposes
(greater depths, larger turning basins etc)
• New handling equipment such as loading machinery
Airports • While currently adequate, airport • Upgrading of one of Burnie or Devonport Airports to jet (E170/190
capacity may need to be increased to or B737) standard
deal with demand growth • Upgrade of Strahan Airport to develop it as a sub-regional airport
Energy • Gas supply infrastructure is insufficient • Gas pipeline to supply West Coast mines
to meet demand growth • Transmission infrastructure to connect additional wind and
pumped storage facilities
Telecommunications • Not all regions have adequate access • Independent open access fibre optic backhaul link connecting
Tasmania and Melbourne
• Additional 3G coverage from second carrier
Community • Service levels may not match needs of • Upgrades to deliver services to expected standards, and to deliver
infrastructure growing population enhanced services within the current community infrastructure
envelopes

South Australia
SA is among the world’s most South Australia is a key minerals supplier, with almost 40% of the world’s
prospective minerals regions known recoverable uranium reserves and significant volumes of copper, gold
and silver. The State has huge mining potential. It was ranked the 4th most
prospective location in the world by Canada's Fraser Institute. 9
Exploration expenditure has South Australia currently has approximately $13 billion worth of projects at
grown strongly various stages of development in the minerals and energy sector. Mining
contributed $2.8 billion (4.6%) to the State's Gross Value Added in 2006-07.

9 Primary Industries and Resources SA, MESA Journal, pages 7-41, 2008.

South Australia 40
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Expenditure on mining exploration was some $355 million in the year to the
June quarter 2008 (see Figure 12).

Figure 12 Mineral exploration expenditure in South Australia

Note: PACE – SA government’s Plan for Acceleration Exploration


Data source: Presentation to SAIREC 2009 by Paul Heithersay, PIRSA, South Australia’s growing mining sector, May
2009

The value of mine gate production reached $2.5b in 2006–07. 10 The bulk of
mine gate production was from metallic minerals (88%). The bulk of South
Australia’s mineral production is exported. The value of exports reached
$2.35b in 2006–07. South Australia’s primary mineral exports are copper and
uranium.

The Mining industry employed a total of 10,000 people for the year ended
February 2008, accounting for 1.3 per cent of employment in South Australia.

This Report considers three growth regions, namely the Northern region, the
Eyre Peninsula region and the Fleurieu / Mid North / South East / Riverland
regions.

10 SA Government, South Australian Resources Production 2006–07.

South Australia 41
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The principal current and projected infrastructure shortcomings in South


Australia are:
• Transport infrastructure that is unable to meet projected growth in
minerals industry transport task, particularly ports
• Energy production and supply networks inadequate for meeting growing
demand
• Access to adequate water supplies both for industrial and community use
• Community infrastructure, particularly accommodation and health care.
Addressing these and other infrastructure constraints will be critical for the
resources sector to continue to grow.

South Australia 42
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 13 South Australia’s major operating mines and mineral development projects

Source: Department of Primary Industries and Resources South Australia

South Australia 43
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

SA - The Northern growth region

The northern region of South Australia (commonly referred to as the Flinders


Ranges and Outback) comprises over 80 per cent of the State's land area with
less than 5 per cent of the population.
Minerals production is The Northern SA region is a highly prospective region for minerals
expected to grow strongly development. There is significant scope for substantial growth in minerals
production if policy settings are favourable and infrastructure is available in a
timely manner. Such growth could drive a significant expansion of the
northern economy.

The growth scenario assumes a significant expansion of mining activity in the


region. This will be both from expansion of existing mines as well as the
development of new mines. Minerals products include uranium, copper, gold,
iron ore, zinc, cobalt and silver.
Transport infrastructure will While rail capacity is generally adequate, the rail connection to Darwin may
need to keep pace need to be upgraded if there is a significant increase in the utilisation of that
rail corridor to move minerals production from SA to Darwin for export.
There may be a need to consider an intermodal facility as part of a state-wide
intermodal strategy to improve efficiency of freight movement.

Access roads into Port Pirie need to be improved, as well as the access to the
port area for heavy commercial vehicles. Expanded operations at Olympic
Dam may require transport services to be augmented. Other road
infrastructure to support mining developments in the region will need to be
considered on a case-by-case basis.

The export facilities at Whyalla may need to be upgraded to enable the


shipping of haematite. The construction of a common user facility at Port
Bonython is also a high priority for several mining firms. The project has been
acknowledged by Infrastructure Australia in its May 2009 report to the Council
of Australian Governments.

An upgrade to airport facilities at Whyalla and Port Augusta may be needed to


deal with a larger number of FIFO flights servicing new and expanded mining
operations.
Coal from Leigh Creek may If the production life of the Leigh Creek coal mine is not extended then there
need to be replaced will be significant implications for power generation in SA since the power
stations that are fuelled by that mine currently supply some 40% of the State’s
power. Should coal seam methane projects be successfully developed then
they may provide a possible source of fuel for a new gas fired power plant.

South Australia 44
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The capacity of the Moomba to Adelaide natural gas pipeline, including links
to Port Pirie and Whyalla is at present fully committed, constraining any major
increase in gas consumption by industry at either of those two locations.
The Advance scenario is likely to result in large increases in the demand for
diesel fuel. This may require upgrades of the import tankage capacity in the
region.
Table 18 summarises the key infrastructure gaps and needs in the Northern
region of SA.

Table 18 Key infrastructure gaps and needs for the SA Northern growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads inadequate to deal with growth • Augment transport services to deal with new and expanded
in freight task operations, particularly at Olympic Dam. Construct an intermodal
facility to improve the efficiency of freight movement
Railways • Rail capacity insufficient for growth in • While the capacity is currently adequate, the rail connection to
minerals traffic Darwin may need to be upgraded if there is a significant increase
in the use of the rail corridor to take SA minerals (including coal to
liquids product) to the port of Darwin for export
Airports • Facilities may not be adequate for • An upgrade to airport facilities at Whyalla and Port Augusta may
growth in FIFO be needed to deal with a larger number of FIFO flights servicing
new and expanded mining operations
Ports • Port infrastructure not sufficient to • Upgrade the export facilities at Whyalla to enable the shipping of
service expected growth in minerals haematite
exports • Develop a common user export facility at Port Bonython
Energy • Fuel supplies for power sector • Electricity suppliers will need to upgrade their supply infrastructure
declining to deal with increased demand from industrial, commercial and
• Generation, transmission and domestic customers
distribution capacity inadequate for • If life of Leigh Creek mine is not extended then alternative sources
growth of fuel will need to be identified
• Fuel import capacity may not be • New gas projects (including CSM) may require new pipelines to be
sufficient to service growth a built, this may include pipelines to supply new gas fired power
stations
• SA is an area where imports of petroleum products have been
identified as potentially suffering from constraints due to a lack of
import infrastructure
Water and • Process and potable water in short • While responsibility for water supply and wastewater management
wastewater supply falls on the mine operator, there may be a need for more regional
planning and coordination to ensure adequate supplies are
available
• The Olympic Dam expansion will require a significant increase in
water supplies
Community • Service levels may not match needs of • Increasing population in the region the main driver for enhanced
infrastructure growing population community infrastructure
• Land for housing, schools, health care facilities, sport and
recreation and child care will all need to be addressed
• Investment in transport services and mobile health facilities to
improve access to primary and acute health care services
• Support the development of increased telemedicine supporting
rural clinical networks
• Provide improved communications with and between tertiary
health sites in Adelaide
Note: Infrastructure Australia has included Port Bonython in its list of 28 projects that might receive government funding in the future. a ACIL Tasman analysis

South Australia 45
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

SA - Eyre Peninsula region

The Eyre Peninsula is highly Mining is a smaller industry sector compared to the Northern region. The
prospective current mining operations are largely for materials such as sand, gypsum,
graphite, jade and granite. Gypsum and salt are the two largest established
commodities being mined in the region. Exploration has identified prospective
deposits of mineral sands, gold, diamonds, iron ore and coal.

The growth in the volume of minerals traffic is potentially very significant.


Minerals have to compete
with other products for
Freight routes to terminals and port facilities will need to be upgraded in line
transport services with that growth. Upgrades to rail (including truncation), road and loading
facilities have been identified as priorities. The construction of intermodal
transfer facilities may be one area that will need particular attention.

The transport network will also need to deal with the movement of other bulk
products such as grain. The Eyre Peninsula Grain Transport Plan should be
integrated with similar studies for other sectors to ensure that the planning and
implementation of transport infrastructure takes into account the needs of all
users of the transport sector.
Water shortages are a barrier Access to water for both drinking and process uses is a key barrier to growth in
to growth the region. Existing sources of water (ground water) are already being tapped
at or near sustainable rates. Significant augmentation of existing water supplies
will be required to realise the growth scenarios. Desalination is one option that
is being considered.

South Australia 46
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 14 Map of the Eyre Peninsula region

Source: SA Office for Infrastructure Development, Strategic Infrastructure Plan for South Australia, 2005

Port capacity will need to Expanded mineral activity in the Gawler Craton and Eucla Basin will place
increase extra demand on the capacity and efficiency of the region’s two ports. The
Eyre Regional Development Board’s Integrated Eyre Peninsula Ports Master
Plan should help ensure that the use of the Port Lincoln and Thevenard
facilities are maximised. Upgrades to loading facilities have been identified as
local priorities.
The existing deep water port at Port Lincoln is unlikely to be sufficient to
satisfy the demand for export facilities if all the planned minerals developments
proceed as envisaged under the growth scenario. The proposed port of Sheep
Hill would provide an additional deep water port.

Table 19 summarises the key infrastructure gaps and needs in the Northern
region of South Australia.

South Australia 47
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 19 Key infrastructure gaps and needs for the SA Eyre Peninsula region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads may not be adequate to deal • The capacity is currently adequate. Although if rail infrastructure
with growth in freight traffic does not keep pace with minerals developments then it will put
additional pressure on the road network. Intermodal transfer
facilities are likely to be needed
Railways • Age and capacity of rail network • While the capacity is currently adequate, the rail infrastructure is
relatively old and is likely to need to be upgraded as minerals
projects are developed
Airports • Capacity insufficient for higher FIFO • Upgrades to regional airport facilities may be needed to deal with
numbers a larger number of FIFO flights servicing new and expanded
mining operations
Ports • Insufficient port capacity • The existing deep water port at Port Lincoln is not likely to satisfy
demand if planned minerals developments proceed as currently
intended
• The proposed port of Sheep Hill would provide an additional deep
water port
Energy • Generation, transmission and • Electricity suppliers will need to upgrade their supply infrastructure
distribution capacity inadequate for to deal with increased demand from industrial, commercial and
growth domestic customers
• The region has been identified as having an excellent potential for
wave and wind power. Transmission infrastructure may need to
be upgraded to deliver production to market
• SA is an area where imports of petroleum products have been
identified as potentially suffering from constraints due to a lack of
import infrastructure 11
Water and • Existing groundwater resources • Desalination is likely to be necessary to augment supplies. The
wastewater producing at (or near) sustainable potential exists to use wave energy technology to produce
levels. desalinated water
• A lack of potable and process water
Community • Service levels may not match needs of • Increasing population in the region the main driver for enhanced
infrastructure growing population community infrastructure
• Land for housing, schools, health care facilities, sport and
recreation and child care will all need to be addressed
• Investment in transport services and mobile health facilities to
improve access to primary and acute health care services
• Support the development of increased telemedicine supporting
rural clinical networks
• Provide improved communications with and between tertiary
health sites in Adelaide

SA - Fleurieu / Mid North / South East / Riverland region

In the Murray and Mallee region, there are substantial deposits of mineral
sands. Geological surveys have highlighted potential for other minerals to be
exploited including gold, lead, zinc, iron ore, nickel, chromium, coal, granite,
gypsum and diamonds.
Access to water is again a
critical issue

11 ACIL Tasman analysis.

South Australia 48
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Access to adequate and appropriate quality water supplies both for drinking
and industrial purposes is a critical issue for the region. There is already
considerable pressure on supplies of water from both the Murray River and
groundwater aquifers and predicted changes in rainfall patterns due to climate
change over the next 30 to 70 years may exacerbate this situation.
Consequently access to water is expected to pose a significant challenge to
expansions of the minerals industry.

Rising groundwater levels and dryland salinity are a threat to the use of River
Murray water. The Murray-Darling Basin Agreement requires salt interception
schemes to be put in place to allow new development to proceed.
There are competing The key transport issues in the region are largely the result of the competing
demands on transport transport needs of freight, tourism, commuters and local and regional travel to
infrastructure.
use road and rail networks. Increases in agricultural production will increase
the competition for access to transport infrastructure.
Health services are under pressure from the growing (and aging) population in
The social infrastructure the region.
needs of the workforce must
be satisfied.
Access to land for accommodation will be needed to underpin growth in the
workforce associated with expansion of mining activity and the improvement
Accommodation and health and expansion of services such as health care provision. There is already
services are particularly strong demand for accommodation in parts of the region making it difficult for
important. firms and services to attract and retain staff.

Table 20 summarises the key infrastructure gaps and needs in the Fleurieu/Mid
North/South East/Riverland region of South Australia.

Table 20 Key infrastructure gaps and needs for the Fleurieu/Mid North/South East/Riverland region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Transport • Competing demands from the • There is significant and growing demand for the use of roads and
agricultural sector may constrain use rail for transporting agricultural production. Identifying and
by minerals sector upgrading local linking freight routes in order to improve the
• Some parts of the region have efficiency of freight handling and transfer is likely to be a priority
inadequate infrastructure • The proposed development of a substantial mineral sands deposit
near Mindarie, between Karoonda and Loxton, may require an
improved transport link to Tailem Bend
Energy • Generation, transmission and • Augmentation of electricity and gas networks may be required to
distribution capacity inadequate for meet the demands for energy from both the minerals industry and
growth an expanded workforce
• The Fleurieu Peninsula region electricity system in particular has
been identified as needing major augmentation and upgrading to
accommodate increased demand for electricity due to changes to
the dairy industry, and continued population and industry growth in
areas such as Mount Barker, Barossa and Victor Harbor

South Australia 49
Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Fuel • Inadequate fuel import infrastructure • SA is one area where imports of petroleum products into have
been identified as potentially suffering from constraints due to
import infrastructure 12
Water and • Water availability and quality is a • Salt interception schemes need to be put in place before new
wastewater critical issue throughout the region developments can proceed
• Many septic tank effluent disposal schemes (STEDS) across the
region are already at capacity. A number of STEDS will need to
be upgraded to cater for residential and industrial growth.
However, in some cases the ability to do so will depend on access
to reliable water supplies
Community • Land for accommodation in short • Health services may need to be augmented. Access to land for
infrastructure supply accommodation will be needed to underpin both growth in the
• Health care facilities inadequate to workforce associated with expansion of mining activity and the
meet growing demand improvement and expansion of services such as health care
provision

The Northern Territory


Mining, including petroleum, contributes almost a quarter of the economic
activity in the Northern Territory. Industry investment and production have
expanded rapidly in recent years, and are forecast to grow further during the
next decade. The Northern Territory hosts a number of large scale mining
operations, including:
• Gove bauxite and alumina operations operated by Rio Tinto Alcan
• Groote Eylandt manganese operations of BHP Billiton
• McArthur River base metal mine, operated by Xstrata
• ERA’s Ranger uranium operations
• Newmont’s Tanami gold operations.
In addition, a number of smaller mines operate in several regions. The
resources sector’s economic contribution is boosted by major petroleum
projects, including the Laminaria-Corallina oilfield in the Timor Sea, and gas
and condensate production from Bayu-Undan, feeding the Darwin LNG plant.

The growth outlook for minerals and petroleum is strong. A number of new
and expanded mines are proposed, including iron ore, gold, rare earths and
phosphate. INPEX is proposing to build an LNG plant in Darwin. The
Adelaide to Darwin railway is set to provide a valuable transport link for
mineral products from both the NT and South Australia.

12 ACIL Tasman analysis for the Department of Resources Energy and Tourism, 2009.

The Northern Territory 50


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

The principal infrastructure shortcomings in the Northern Territory currently


are:
• Darwin port needs to be upgraded to handle increases in throughput of
mineral products from the Northern Territory and South Australia
• Additional railway spur lines, sidings, loading facilities and passing loops are
required to service new mines and mineral transport requirements
• Electricity supply reliability in parts of Darwin is poor, and generation,
transmission and distribution capacity is inadequate for growth
• Land for housing and industry in Darwin needs to be developed
• All classes of community infrastructure are inadequate for projected growth
• Telecommunications services in rural and remote areas are poor.
Addressing these inadequacies will be critical for the continued growth of
resources sector in both the Northern Territory and South Australia.

The Darwin growth region

The Darwin region hosts several mining operations and an LNG plant.
Darwin is also an important and growing minerals logistics, service and export
hub. Darwin’s infrastructure serves a much larger area than the Darwin region.
Darwin is a growing export port, both for Northern Territory mines and
several South Australian mines.

It is likely that more mines will be developed in the Darwin region, more will
utilise Darwin as a supply and export hub and that Darwin will host a second
LNG plant, supplied with gas from the Browse Basin, with construction
commencing in 2010. The existing Darwin LNG plant is also likely to be
expanded.

The Northern Territory 51


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Figure 15 Northern Territory onshore mineral and energy resources

Source: Northern Territory Economy, Budget 2008-09

The rapid growth of resources-related activity and population in the Darwin


region is placing strains on both industrial and community infrastructure.

Table 21 summarises the infrastructure gaps and needs for the Darwin region,
and the supply chains servicing it, under the growth scenario.

The Northern Territory 52


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Table 21 Key infrastructure gaps and needs for the Darwin growth region
Infrastructure class Current and future gaps Upgraded or additional infrastructure required
Roads • National highways prone to flooding • Upgrades to Stuart Highway, Victoria Highway and Barclay
and need upgrading for additional Highway to and Darwin trunk roads to make them more reliable
heavy traffic allow for increased minerals movements
• Local roads unreliable in the West • Upgrades to local roads in Darwin regions to allow for more
Season reliable movement of people and goods
• Port access roads inadequate
Railways • Additional loading, unloading facilities • New loading sidings and associated infrastructure to service new
and rail capacity required for minerals NT mineral developments along the Adelaide to Darwin railway
traffic and in South Australia
• Additional unloading facilities at the Port of Darwin
• Possible construction of a Wonarah to Tennant Creek rail link, with
possible extension to Mt Isa
• If minerals projects in SA proceed with plans to export their
production out of Darwin then this may require some additions to
rail infrastructure
Ports • Port bulk handling facilities inadequate • Upgrades to storage and ship loading facilities to allow for
for increased volumes above 2.5Mtpa increased minerals volumes
• A second ship loader may be required in the longer term,
particularly if minerals projects in SA proceed with plans to export
their production out of Darwin or if the Wonarah – Tenant Creek
rail link proceeds
Airports • Terminal and apron inadequate for • Terminal and apron upgrades will be need to handle increased
increasing passenger and freight traffic passenger traffic
Energy • Electricity supply reliability in parts of • Remotely located companies are responsible for generation and
Darwin is poor supply of electricity to their own operations
• Generation, transmission and • PWC will need to upgrade Darwin supply infrastructure to improve
distribution capacity inadequate for reliability and deal with increased demand from industrial,
growth commercial and domestic customers (~7% annual growth)
• New gas projects will require new pipelines to be built, this may
include pipelines to supply mining operations
Fuel • Additional capacity required for growth • Growing demand for fuel from mining operations will require the
timely construction of new liquid fuel import and storage facilities
Water and • Water and wastewater facilities • Water and sewerage upgrades required for Darwin population
wastewater inadequate for growth growth and industrial expansion
• Responsibility for water supply and wastewater management falls
on the mine operator
Business • Lack of common user facilities for • An upgrade to the existing common user facility for the fabrication
infrastructure large-scale fabrication, storage and of engineered modules, storage of semi-fabricated structures and
supply servicing of vessels and large-scale equipment
• Supply base for offshore oil and gas operations
Community • Land and all classes of community • Land for housing, schools, health care facilities, sport and
infrastructure infrastructure are inadequate for recreation and child care will all need to be addressed. Doing so
growth in the Darwin metropolitan area is likely to be easier than in
• Telecommunications services in rural remote areas
and remote areas are poor • Upgrade telecommunications services in rural and remote areas

The Northern Territory 53


Vision 2020 Project: The Australian Minerals Industry's Infrastructure Path to Prosperity

Darwin and the minerals industry is very reliant on transport infrastructure,


which due to climatic extremes can be unreliable. The closure of the Barkly
Highway for several weeks in early 2009 due to flooding is a case in point.
Upgrades to highways and major roads are needed to improve year-round
reliability.

The Adelaide to Darwin railway is a key enabler of minerals development in


both the Northern Territory and South Australia, and exports through the Port
of Darwin. The railway is currently operating at below capacity. However,
new loading sidings and associated infrastructure may be required to service
mineral developments under the growth scenario. Several minerals projects in
South Australia may proceed with plans to export their production out of
Darwin. Under the growth scenario, the current railcar unloading facility at
the Port of Darwin will need to be upgraded and duplicated, and a rail loop
installed.

The Port of Darwin’s mineral stockpile and reclaiming facilities and the ship
loader would require major upgrades to deal with the big increase in export
tonnages envisaged under the growth scenario.

A common user facility that firms can access to fabricate engineered modules,
store semi-fabricated structures and service of vessels and large-scale
equipment has been identified as an important piece of infrastructure for
Darwin. During 2008, a ‘common-user area’ with minimal facilities was
opened. A more comprehensive facility, plus an adjacent marine supply base
would enable Darwin industry to participate more fully in resources projects
and to provide the services that are needed.

The development of a major new LNG project in Darwin would result in a


step-change in demand for infrastructure of all types. Increased population in
Darwin as a result of minerals and energy industry activity will drive the need
for developed land and enhanced community infrastructure, including housing,
schools and health care facilities. Integrated planning of infrastructure in the
Northern Territory and close coordination with the Australian Government is
required.

The 2009/10 Federal Budget allocated $50 million towards the development of
the Port of Darwin, with a focus on mineral export facilities. With the
allocation of $100 million from the Northern Territory Government, the
project still only has only half the funds needed. The expected output from
South Australian mines (Prominent Hill and Olympic Dam) will not be able to
be handled adequately without further funding to complete the development.

The Northern Territory 54


Western Australia

Vision 2020 Project: The


Australian Minerals Industry’s
Infrastructure Path to Prosperity

An assessment of industrial and


community infrastructure in major
resources regions

Prepared for the Minerals Council of Australia

May 2009
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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Contents
1 Introduction to the 2020 Vision Project 1
2 Western Australia overview 3
2.1 Minerals in Western Australian regions 3
2.2 Infrastructure requirements 5
2.3 Growth of minerals and energy production 7
2.3.1 People 7
2.3.2 Electricity 10
2.3.3 Gas 12
2.3.4 Water 16
3 The Kimberley growth region 18
3.1 Description of region 18
3.2 Current resources production 20
3.3 Planned and proposed resources production 20
3.4 Demographic characteristics 22
3.5 Current infrastructure 22
3.5.1 Energy 22
3.5.2 Ports 23
3.5.3 Airports 23
3.5.4 Roads 24
3.5.5 Water resources 25
3.5.6 Education 25
3.5.7 Health 26
3.5.8 Telecommunications 26
3.5.9 Land and housing 26
3.6 Infrastructure constraints 27
3.7 Infrastructure planning 27
3.7.1 Planning initiatives 27
3.7.2 Planned infrastructure 28
3.7.3 Infrastructure issues 28
3.8 Growth scenario, Kimberley growth region 29
3.8.1 Overview 29
3.8.2 Mineral production 31
3.8.3 Infrastructure requirements 32
4 The Pilbara growth region 38
4.1 Description of region 38
4.2 Current resources production 39

iii
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

4.3 Planned and proposed resources production 43


4.4 Proposed developments 45
4.5 Resources-related demographic characteristics 46
4.6 Current infrastructure 47
4.6.1 Land and housing 47
4.6.2 Education and training 49
4.6.3 Health services 50
4.6.4 Town infrastructure 51
4.6.5 Recreation and community facilities 52
4.6.6 Energy 52
4.6.7 Water 55
4.6.8 Ports 58
4.6.9 Roads 61
4.6.10 Railways 61
4.6.11 Airports 62
4.6.12 Telecommunications 63
4.7 Infrastructure planning 64
4.8 Growth scenario, Pilbara growth region 65
4.8.1 Overview 65
4.8.2 Resources production 67
4.8.3 Population growth 68
4.8.4 Infrastructure requirements 69
5 Mid West growth region 77
5.1 Description of region 77
5.2 Current resources production 79
5.3 Planned and proposed resources production 82
5.4 Resources-related demographic characteristics 89
5.5 Current infrastructure 91
5.5.1 Water 91
5.5.2 Energy 92
5.5.3 Transport – Roads 94
5.5.4 Transport – Rail 95
5.5.5 Transport – Ports 96
5.5.6 Transport – Air 97
5.5.7 Land and corridors 97
5.5.8 Education and training 97
5.5.9 Health services 99
5.6 Infrastructure planning 100
5.6.1 Planning initiatives 100
5.6.2 Planned infrastructure 101

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

5.7 Growth scenario, Mid West growth region 104


5.7.1 Overview 104
5.7.2 Mineral production 105
5.7.3 Infrastructure requirements 106
6 Goldfields-Esperance growth region 112
6.1 Description of growth corridor 112
6.2 Resources-related demographic characteristics 115
6.3 Current resources production 116
6.4 Planned and proposed resources production 116
6.4.1 Recently opened projects 116
6.4.2 Projects under construction 117
6.4.3 Projects under consideration 117
6.5 Current infrastructure 118
6.5.1 Transport - Roads 118
6.5.2 Transport - Rail 118
6.5.3 Transport - Port 119
6.5.4 Transport – Air 119
6.5.5 Electricity 120
6.5.6 Water 122
6.5.7 Telecommunications 123
6.5.8 Land and corridors 123
6.5.9 Health services 124
6.6 Infrastructure planning 124
6.7 Overview of growth scenarios 125
6.7.1 Mineral production 126
6.7.2 Infrastructure requirements 127

7 South West growth region 130


7.1 Description of growth corridor 130
7.1.1 South West and Peel regions 130
7.1.2 Peel region 133
7.2 Current resources production 135
7.3 Planned and proposed resources production 137
7.4 Resources-related demographic characteristics 139
7.5 Current infrastructure 140
7.5.1 Transport - Roads 140
7.5.2 Transport - Rail 141
7.5.3 Transport – Port facilities 142
7.5.4 Transport – Airports 144
7.5.5 Energy 144
7.5.6 Water supply 145

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

7.5.7 Education 148


7.6 Infrastructure planning 149
7.6.1 Planning processes 149
7.6.2 Planned infrastructure 149
7.7 Overview of growth scenarios 150
7.7.1 Infrastructure requirements 151

List of figures
Figure 1 Production of selected WA commodities relative to production in rest of
Australia and the world, 2007 3
Figure 2 Regional development regions, Western Australia 4
Figure 3 WA regional production of minerals and petroleum, proportion by value 2007-08 5
Figure 4 Minerals and energy driven population growth, WA – from survey results
(relative to 2007) 8
Figure 5 Minerals and energy driven population growth, WA – severely constrained
scenario (relative to 2007) 9
Figure 6 Forecast electricity demand growth, WA – from survey results (relative to 2007) 10
Figure 7 Forecast electricity demand growth, WA regions – from survey results (relative
to 2007) 11
Figure 8 Electricity demand growth, WA – severely constrained scenario (relative to 2007) 12
Figure 9 Energy resources and infrastructure map, Western Australia 13
Figure 10 Forecast gas demand growth, WA – from survey results and other data (relative
to 2007) 14
Figure 11 Forecast minerals and energy sector gas demand – severely constrained scenario
(total demand) 15
Figure 12 Forecast minerals and energy sector gas demand by region (relative to 2007) 15
Figure 13 Forecast water demand growth, WA – from survey results and other data (total
demand) 16
Figure 14 Forecast minerals and energy sector water demand – severely constrained
scenario (total demand) 17
Figure 15 Map of the Kimberley region 19
Figure 16 Map of the Pilbara region 39
Figure 17 Forecast electricity demand growth, Pilbara (relative to 2007) 54
Figure 18 Forecast minerals and energy sector gas demand, Pilbara (relative to 2007) 55
Figure 19 Self extracted water outlook, Pilbara 56
Figure 20 Aerial view of Port Hedland 60
Figure 21 WA cable network 64
Figure 22 Pilbara population projections to 2020 68
Figure 23 Map of Mid West region 78
Figure 24 Location of resource deposits, Mid West Region, with iron ore projects
highlighted 83
Figure 25 Minerals and energy driven population growth, Mid West (relative to 2007) 90
Figure 26 Forecast minerals and energy electricity demand, Mid West (relative to 2007) 93
Figure 27 Minerals and energy sector gas demand, Mid West (incremental to 2007) 94
Figure 28 Oakajee port and infrastructure 108
Figure 29 Production value, selected industries, Goldfields-Esperance Region 113
Figure 30 Map of Goldfields-Esperance Region 114
Figure 31 Minerals and energy driven population growth, Goldfields/Esperance 115
Figure 32 Mining electricity demand, Goldfields – Esperance (incremental to 2007) 121
Figure 33 Western Australia – South West region 130
Figure 34 Map of South West region 132
Figure 35 Map of Peel region 134
Figure 36 Self extracted water outlook, South West and Great Southern 147

vi
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

List of tables
Table 1 WA regional minerals and energy production, by value 2007-08 5
Table 2 Summary of infrastructure requirements under 2020 growth scenario for
Western Australia 6
Table 3 Kimberley region – industry contributions to Gross Regional Product, 2007-08 18
Table 4 Minerals production in the Kimberley region, 2007-08 20
Table 5 Summary of growth scenario to 2020 for the Kimberley growth region 30
Table 6 Summary of infrastructure requirements under growth scenario to 2020 for the
Kimberley growth region 30
Table 7 Mineral production at 2020, growth scenario, Kimberley region 32
Table 8 Mineral production in the Pilbara region, 2007-08 40
Table 9 Employment by industry – Pilbara region 47
Table 10 Port of Dampier tonnages (2007/08) 58
Table 11 Port Hedland tonnages (2007/08) 59
Table 12 Summary of growth scenario to 2020 for the Pilbara growth region 66
Table 13 Summary of infrastructure requirements under growth scenario to 2020 for the
Pilbara growth region 66
Table 14 Mineral and petroleum in Mid West region, 2007-08 79
Table 15 Summary of Mid West resources projects committed or under consideration 82
Table 16 Employment by industry – Mid West region, 2006 89
Table 17 Summary of growth scenarios to 2020 for the Mid West growth region 105
Table 18 Summary of infrastructure requirements under growth scenario to 2020 for the
Mid West growth region 105
Table 19 Mining and petroleum in the Goldfields-Esperance region 2007-2008 116
Table 20 Summary of growth scenario to 2020 for the Goldfields-Esperance growth
region 125
Table 21 Summary of infrastructure requirements under growth scenario to 2020 for the
Goldfields-Esperance growth region 126
Table 22 South West region production ($ million) 131
Table 23 Mineral and petroleum in South West region, 2007-08 135
Table 24 Value of mining in South West region, 2001-02 to 2006-07 135
Table 25 Employment by industry – South West region 140
Table 26 Summary of growth scenarios to 2020 for the South West and Peel growth
regions 150
Table 27 Summary of infrastructure requirements under growth scenario to 2020 for the
South West and Peel growth regions 150

vii
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

1 Introduction to the 2020 Vision


Project
This report forms part of the Mineral Council of Australia‟s 2020 Vision
Project – a long term study into the needs of, and opportunities for, the
Australian minerals industry. The project examines existing and potential
capacity constraints in ports, railways and roads; energy, telecommunications
and water networks; as well as housing, labour and other social needs that
affect the growth of the mining industry and the wellbeing and development of
the communities in which it operates across Australia. It considers the
potential for growth in 20 Australian resources regions under a scenario that
broadly aligns with the Advance scenario outlined in an earlier report prepared
as part of the Vision 2020 Project and assesses the need for infrastructure to
support that growth.1 Separate reports have been prepared for each State and
the Northern Territory.

While the main focus of the work is on the minerals industry, the reports for
individual growth regions have, in some cases, also considered the growth
outlook for other industries. In particular, other industries have been
considered in regions where they are important competitors for access to
infrastructure, or where their needs are complementary to those of the mining
industry.

Expansion of the nation‟s infrastructure (hard and soft industrial and


community infrastructure) has not kept pace with the rapid and sustained
growth in export and domestic demand. Consequently, Australia now has
significant infrastructure constraints. This in turn has reduced Australia‟s
ability to meet the global demand for mineral products. Other nations have
moved to fill that gap and as a consequence Australia‟s market share has fallen.

The ultimate objective of the 2020 Vision Project is to encourage the


establishment of the policy and regulatory frameworks that will enable the
timely provision of the industrial and community infrastructure needed to
support an increase in Australia‟s minerals production capacity. It is hoped
that this in turn will enable Australia to rebuild its share of the global minerals
market.

The 2020 Vision Project‟s growth scenarios were prepared prior to the
emergence of the global economic crisis. While the strong negative impacts on
global growth and demand are already clearly evident, most commentators

1 Two reports were produced by Access Economics: Infrastructure 2020 – Can the domestic supply
chain match global demand? and Global commodity demand scenarios.

Introduction to the 2020 Vision Project 1


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

believe that those impacts are likely to largely play out over next 6-18 months.
ACIL Tasman believes that robust economic conditions will return within that
timeframe, and that growth is likely to return to longer term trend lines. The
Asian markets in particular, with their innate demand driven by large,
aspirational populations, are likely to bounce back quickly and strongly.

This study draws on the results of a range of existing resources and


infrastructure studies. It examines the growth potential for Western Australia‟s
minerals industry and identifies existing and potential gaps in infrastructure in
five key regions: Kimberley, Pilbara, Mid West, South West and Peel, and
Goldfields-Esperance.

Introduction to the 2020 Vision Project 2


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

2 Western Australia overview


2.1 Minerals in Western Australian regions
Western Australia is the nation‟s resources powerhouse and 38 per cent of the
country‟s exports. WA‟s production of selected commodities relative to the
rest of Australia and rest of the world is shown in Figure 1.

Figure 1 Production of selected WA commodities relative to production


in rest of Australia and the world, 2007

Alumina

Diamonds

Garnet

Gold

Ilmenite

Iron ore

LNG

Nickel

Rutile

Salt

Tantalum

Zircon

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Western Australia Rest of Australia Rest of World

Source: Department of Mines and Petroleum 2008, based on ABARE and USGS data

Western Australia‟s regional development regions are shown in Figure 2. This


report examines the principal resources regions of the Kimberley, Pilbara, Mid
West, Goldfields-Esperance and South West (including Peel).

Western Australia overview 3


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 2 Regional development regions, Western Australia

Source: Department of Local Government and Regional Development 2009

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Production value by region is shown in Table 1 and Figure 3.

Table 1 WA regional minerals and energy production, by value 2007-08


Region $ Value 2007-08
Pilbara 21,489,821,772
State Offshore Petroleum 870,102,553
Commonwealth Offshore Petroleum 18,417,294,842
Peel 4,522,136,447
Mid West 2,249,839,418
Kimberley 1,544,523,046
Goldfields-Esperance 7,835,651,100
Other 1,680,143,930
Total 58,609,513,081
Data source: Department of Mines and Petroleum 2008

Figure 3 WA regional production of minerals and petroleum, proportion


by value 2007-08

Goldfields-
Esperance Other
13% 3%
Kimberley
3%
Mid West
4% Pilbara
37%
Peel
8%

State Offshore
Petroleum
Commonwealth 1%
Offshore
Petroleum
31%

Data source: Department of Mines and Petroleum 2008

2.2 Infrastructure requirements


The key infrastructure requirements for Western Australian growth regions are
summarised in Table 2.

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Table 2 Summary of infrastructure requirements under 2020 growth scenario for Western Australia
Region Infrastructure Current and future gaps Upgraded and additional infrastructure required
class
Kimberley Roads • Roads inadequate to support • Upgrades and new roads to key development areas, plus town
minerals and energy roads to accommodate truck traffic
development
Kimberley Ports • Ports inadequate to service • Export ports required for mineral and gas products, plus a supply
resources growth base to support offshore operations
Kimberley Developed • Lack of developed land for • Development and implementation of a comprehensive land
land housing and light industry will development plan is required
drive up costs and inhibit growth
Kimberley Community • Inadequate community • Community infrastructure to support strong population growth
infrastructure infrastructure to support and assist in attracting and retaining people
population growth

Pilbara Developed • Inadequate land availability in • Development and implementation of a comprehensive land
land Pilbara towns to meet current development plan is required
and future demand for housing
Pilbara Community • Education, childcare and health • Improvements to education to provide adequate schools and
infrastructure facilities and services education services to meet needs of increased populations, with
inadequate to support special attention to Indigenous education and training
community profile and meet • Re-engineer the Pilbara health system to align capacity with
needs of families demand
• Increase the amount, quality and availability of childcare
Pilbara Ports • Port infrastructure requires • Develop: expanded iron ore export facilities at existing ports;
major expansion to support big expanded export facilities for mineral concentrates; two new
increases in export tonnage ports for iron ore export; new supply bases for offshore
operations; LNG export facilities
Pilbara Water • Lack of region-wide, integrated • Develop integrated water strategy for the Pilbara covering all
water management strategy sources and uses
Mid West Rail • New railway lines required to • Develop planned new multi-user rail system to service new
transport iron ore mines
Mid West Ports • Geraldton Port inadequate for • Develop Oakajee as dedicated bulk port
future throughput
Goldfields- Rail • Railways inadequate for greater • Track upgrades required for safety, reliability and higher capacity
Esperance tonnages of iron ore
Goldfields- Port • Port lacks capacity for future • Expand and upgrade Esperance Port and rail unloading facilities
Esperance iron ore tonnages to handle 15 Mtpa or more
Goldfields- Land • Land for housing in Kalgoorlie • Ensure sufficient land is developed for housing to accommodate
Esperance insufficient to meet growth increased population, in particular in Kalgoorlie-Boulder
South Roads • East-west linkages are • Ensure adequate east-west linkages to the main highways for
West & inadequate for future freight and rapidly growing areas, so that freight can access the road
Peel passenger vehicle traffic network
South Rail • Rail network congested and • Improve capacity of rail network initially in congested areas and
West & capacity is inadequate to cope later over whole route
Peel with growth in traffic
South Ports • No dedicated coal export • Develop rail unloading facilities, stockpile areas and shiploader
West & facilities at Bunbury for coal
Peel
South Water • Water supply and planning • Develop integrated regional water plan to overcome future
West & inadequate for future growth of shortages for industry use
Peel industry and population

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2.3 Growth of minerals and energy production


The Chamber of Minerals and Energy of Western Australia (CME) released a
report, Developing a Growth Outlook for WA’s Minerals & Energy Industry2 in April
2009. This report is the outcome of a joint industry-government growth
outlook study to provide an integrated outlook of industry and government
development plans in the minerals and energy sector, focused on the key
growth enablers of people, energy and water. The report is based on an
industry survey conducted in July 2008 and subsequent scenario analysis to
give a better understanding of the potential impact that the global financial
crisis may have on minerals and energy sector growth. Based on the survey
data Western Australia was forecast to experience unprecedented growth in the
minerals and energy sector for the period 2008-2014. Since this survey was
undertaken, however, the minerals and energy sector outlook has dramatically
altered with the advent of the global financial crisis and access to capital, at
least for the next 12-24 months, has become the more likely growth constraint
rather than access to people, energy or water. In light of this, in addition to the
business as usual growth scenario based on surveyed data, two alternative
constrained growth scenarios, one moderate and one severe, were developed to
give a better understanding of the potential impact that the financial crisis may
have on the minerals and energy sector.

The survey results indicated that the minerals and energy sector will experience
rapid growth of both construction and output to 2014 and ongoing growth to
2020, presuming policy settings remain favourable. In most cases, each of the
constrained outlook scenarios exhibited similar rapid growth rates to the
survey results (although at different times) with similar long term industry scale
outcomes.

The following sections summarise the CME report‟s findings. This report on
infrastructure needs is in part based on the CME growth scenarios to 2020.

2.3.1 People

The CME report found that State-wide demand for labour from the minerals
and energy sector is projected to grow rapidly for the period 2008-2014, with a
peak demand of 38,000 in 2012 due to coincidence of major construction
projects. The majority of this growth is expected in the Pilbara and Mid West
regions where new and expanding projects, in particular iron ore, are planned.
Under the constrained growth scenarios, growth is generally static for the
period 2008-2010, followed by high rebound growth for the period 2011-2014.

2 The Chamber of Minerals and Energy of Western Australia Inc (CME 2009), Developing a
Growth Outlook for WA’s Minerals & Energy Industry, April 2009.

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State-wide direct labour demand from minerals and energy sector is projected
to grow at a compound annual growth rate (CAGR) of 7 per cent to 27,000 by
2014. Thereafter, employment growth is forecast to slow, but is still expected
to grow by 68,000 over 2007 employment.

The minerals and energy sector is expected to drive additional population of up


to 125,000 relative to 2007 levels by 2020, based on surveyed direct
employment expectations and associated indirect labour and family population
estimates (see Figure 4). Under moderate and severe constrained growth
scenarios, mining employment and population growth rates are lower in out to
2011, before resuming strong growth (severe constrained scenario illustrated in
Figure 5)

WA‟s population in expected to grow by over 500,000 by 2020 to a total of


2,627,000.

Figure 4 Minerals and energy driven population growth, WA – from


survey results (relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

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Figure 5 Minerals and energy driven population growth, WA – severely


constrained scenario (relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth, adjustments for constrained growth and GEM
Consulting analysis

Under all scenarios, the highest growth regions are expected to be the Mid-
West, Goldfields/Esperance and the Pilbara. Labour and growth outlooks for
each growth region are discussed in the following regional chapters.

Based on survey results, the majority of additional planned employees are fly-
in, fly-out (FIFO) workers with a peak incremental requirement of 27,000 in
2012 versus a residential workforce requirement of 11,000 in the same period.

The infrastructure implications of strong minerals and energy employment


growth, and consequent population growth include:
• High demands on community infrastructure in both regional towns and
Perth
• The need for high standards of community infrastructure and services in
regional towns for them to be able to attract and retain people
• Demands for high quality and reasonably priced utilities, including
electricity, water and telecommunications
• The need for high quality transport infrastructure to enable efficient
movement of people and goods over long distances.

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2.3.2 Electricity

Based on survey growth data, the CME report found that state-wide demand
for electricity by the minerals and energy sector is projected to grow
significantly for the period 2008-2013, followed by steady growth to 2020 (see
Figure 6).

Figure 6 Forecast electricity demand growth, WA – from survey results


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

The majority of the forecast growth in sector electricity demand is expected to


be met by self generation rather than grid electricity.

The majority of this growth is expected in the Pilbara and Mid West regions.

Western Australia overview 10


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 7 Forecast electricity demand growth, WA regions – from survey


results (relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

Electricity demand growth in the Pilbara by 2014 is expected to be 82 per cent


of State-wide resources sector demand growth. Demand projections for each
growth region are discussed in relevant chapters.

The constrained growth scenarios show a softening of growth in the period


2008-2010, followed by rapid rebound growth (Figure 8).

An important consideration for future growth in electricity supply is future fuel


availability and the security of its supply. Physical, economic and policy
constraints on gas and coal supply will be determinants behind future delivery
of new generation capacity.

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 8 Electricity demand growth, WA – severely constrained scenario


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth, adjustments for constrained growth and GEM
Consulting analysis

2.3.3 Gas

Gas provides about 50 per cent of the primary energy consumed in Western
Australia. Gas is the primary fuel source for the minerals and energy sector
uses about 55 per cent of total gas, with the remainder going to grid-connected
electricity generation and commercial and domestic users.

Availability and pricing of gas are critical factors for minerals industry growth.
So too is timely availability of pipeline infrastructure to deliver gas. Figure 9 is a
map showing energy resources and infrastructure in Western Australia.

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Figure 9 Energy resources and infrastructure map, Western Australia

Source: Office of Energy Western Australia 2008

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Similar to electricity, gas demand growth is expected to rise sharply in Western


Australia. The CME report found that, based on survey results, total State-
wide demand for gas is forecast to grow strongly for the period 2008-2014,
with a CAGR of 5.3 per cent (Figure 10). This growth is driven by demand
from the minerals and energy sector. In 2014, the additional demand for gas
from the sector is 94.2PJ per annum over 2007 consumption, representing 73
per cent of the total additional State-wide sector demand (133PJ/a).

The supply-demand equation for gas is expected to be finely balanced out to


2010 or 2011. Beyond then, new upstream gas projects are expected to be able
to meet demand growth.

Figure 10 Forecast gas demand growth, WA – from survey results and


other data (relative to 2007)

Data source: CME 2009, based on survey data and projections from various sources

Under the severely constrained scenario, gas demand from the minerals and
energy sector is forecast to remain relatively static for the period 2008-2010,
before resuming strong growth (Figure 11). Gas demand by 2020 is expected
to be the same as forecast from survey data.

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 11 Forecast minerals and energy sector gas demand – severely


constrained scenario (total demand)

Data source: CME 2009, based on survey data with extrapolated growth, adjustments for constrained growth and GEM
Consulting analysis

Minerals and energy sector demand is being predominantly driven by activity in


the Pilbara, followed by the Mid West and Perth-Peel regions (Figure 12).
Demand in each growth region is discussed in the relevant chapter.

Figure 12 Forecast minerals and energy sector gas demand by region


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

2.3.4 Water

State-wide demand for water from the minerals and energy sector is projected
by survey data to grow significantly for the period to 2020 (Figure 13). The
majority of this growth is expected in the Pilbara, Perth-Peel and Mid West and
South West-Great Southern regions.

Under the severely constrained scenario, demand growth will fall below the
survey-based forecasts out to 2013, before returning to forecast demand
(Figure 14).

Water demand in each growth region is discussed in the relevant chapters.

The CME report found that the minerals and energy sector will continue to
rely heavily on groundwater resources. There is significant growth in demand
for scheme water in the South West-Great Southern and Pilbara regions,
however.

The South West region has experienced a 10-20 per cent downturn in rainfall
since the 1970‟s, together with increased demand, and therefore has an
increased reliance on groundwater.

Figure 13 Forecast water demand growth, WA – from survey results and


other data (total demand)

Data source: CME 2009, based on Water Availability Report, Department of Water, 2008; direct survey data with
extrapolated growth; GEM Consulting Analysis

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Figure 14 Forecast minerals and energy sector water demand – severely


constrained scenario (total demand)

Data source: CME 2009, based on survey data with extrapolated growth, adjustments for constrained growth and GEM
Consulting analysis

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3 The Kimberley growth region


3.1 Description of region
The Kimberley region contributes about 4 per cent of the total regional
contribution to Western Australia‟s Gross State Product.

The region has a diverse regional economy, but one that is small relative to its
size. Mining, retail, construction, pearling, pastoral and irrigated agriculture are
major contributors to the region‟s economic output. The mining industry is the
biggest economic contributor to the Kimberley, with output valued at $991
million in 2006/07. Diamonds are the region‟s main mineral product with the
Argyle diamond mine being the largest supplier of diamonds in the world.
Nickel and iron ore are also significant industries.

The Kimberley‟s gross regional product in 2006/07 was estimated to be $1,662


million which represented 1.2 per cent of Western Australia‟s Gross State
Product3. The Kimberley gross regional product has increased by 51 per cent
since 2001/02. Table 3 shows the share of different industries in GRP.

Table 3 Kimberley region – industry contributions to Gross Regional


Product, 2007-08
Mining 63.1%
Other services 6.7%
Rental, hiring & real estate services 5.2%
Construction 4.4%
Transport, postal & warehousing 3.5%
Manufacturing 3.3%
Agriculture, forestry & fishing 2.7%
Health care & social assistance 2.4%
Retail trade 1.9%
Electricity, gas, water & waste services 1.4%
Professional, scientific & technical services plus Education & training 1.2%
Administrative & support services + Public administration & safety 1.1%
Wholesale trade 1.0%
Financial & insurance services 0.9%
Accommodation & food services 0.6%
Information media & telecommunications 0.5%
Arts & recreation services 0.2%
Data source: Kimberley Development Commission 2009, based on data from DLGRD

3 Department of Local Government and Regional Development 2008.

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Figure 15 Map of the Kimberley region

Source: Department of Local Government and Regional Development 2009

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3.2 Current resources production


Table 4 shows the value of mineral production in the region by commodity
and local government in 2007/084.

Table 4 Minerals production in the Kimberley region, 2007-08


Product $ Value 2007-08 Location by Shire $ Value 2007-08
Diamonds 610,674,805 Derby-West Kimberley 683,657,825
Iron ore 366,510,630 Wyndham-East Kimberley 511,420,702
Nickel and cobalt 281,824,832 Halls Creek 343,125,630
Copper, Lead Zinc, Silver and Gold 276,073,406 Broome 6,318,889
Other 9,439,373
Total 1,544,523,046 Total 1,544,523,046
Data source: Department of Mines and Petroleum 2008

Diamonds production accounts for almost 40 per cent of the value, followed
by iron ore (23 per cent) and nickel and cobalt (18 per cent) and base metals
and gold (also 18 percent).

3.3 Planned and proposed resources production


Current and proposed resources development projects in the Kimberley
include the following:
• Development of the Argyle Diamond Mine as an underground operation is
at an advanced stage and is expected to extend mine life to 2024. At the
same time, Argyle has been „localising‟ most of its workforce in the East
Kimberley. By 2010, the organisation aims to have 80 per cent of its
workforce East Kimberley based, and expects half of this workforce to be
Aboriginal.
• Panton Sill Platinum Project, Platinum Australia Limited: the Panton
platinum-palladium deposit is located 60 km north of Halls Creek in the
Kimberley region of Western Australia. A bankable feasibility study (BFS)
has found that, while the project is technically sound, it is not currently
commercially viable.
• Browse Basin – Torosa, Brecknock and Calliance gas fields, Woodside
Energy: Woodside is planning to develop gas and condensate offshore
about 425 km northwest of Broome and 250 km from the mainland. The
reserves in these fields are currently held as a contingent resource and are

4 2007/08 figures are available for mineral and petroleum production and have been utilised.
Only 2006/07 figures are currently available for other economic data.

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estimated to be in excess of 20 Tcf of gas and 300 Mbbls of condensate5.


The Kimberley is now Woodside‟s favoured location for processing
Browse gas, and the Browse joint venture is expected to make its decision
on the site for a processing facility in 2009, which is anticipated to have a
production capacity in the range of 10 to 15 million tonnes per annum.
Start-up of LNG production is expected in the period 2-13 to 2015.
• Ichthys LNG Development, INPEX: Japanese company INPEX is
proposing to develop the Ichthys gas and condensate field in the Browse
Basin and transport gas by pipeline to Darwin for processing into LNG.
Reserve estimates are 12.8 Tcf of gas and 527 Mbbls of condensate and an
expected operational life of over 40 years.
• Shell Development is also considering an LNG project, probably using
floating LNG (FLNG) technology, in the area known as Block F in the
Browse Basin.
The development of the Browse Basin by these proponents would represent a
step change in the level of economic activity in the region. The gas projects
could be the enabler of other minerals and energy projects.

In April 2009, Woodside, the Government of Western Australia and the


Kimberley Land Council on behalf of Traditional Owners, concluded a Heads
of Agreement for the establishment of a LNG Precinct in the James Price
Point area, north of Broome. The declared area will accommodate a 1,000
hectare site and buffer zones. The Heads of Agreement is subject to a number
of conditions, and will require the conversion of the Heads of Agreement to an
Indigenous Land Use Agreement to be negotiated and entered into later in
2009.

A new supply base will also be required to service these offshore projects.

There are a number of mining projects proposed for the Kimberley based on
known mineral deposits.

In addition, the WA and NT Governments, with the support of the


Commonwealth, are planning for a major expansion of the Ord Irrigation
Area. The Ord Stage 2 irrigation and land development project will develop
the Weaber, Keep River and Knox Creek Plains, which are black soil plains
straddling the WA/NT border. These plains are suitable for broad acre
cropping such as sugar cane, cotton or leuceana. Construction of a major new
irrigation channel (the M2 channel) is necessary for the establishment of
irrigation in this area. The M2 channel and other infrastructure will allow for
irrigation of up to 50,000 ha of black soil plains.

5 Department of Minerals and Petroleum 2006.

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The Ord Stage 2 project will stimulate further growth of Kununurra, placing
pressure on already stretched community infrastructure. In particular, more
land for housing is required to keep supply in balance with demand and to
keep housing affordable.

3.4 Demographic characteristics


There are four local government areas in the Kimberley, the Shires of Broome,
Derby-West Kimberley, Halls Creek and Wyndham-East Kimberley. The
estimated population of the region in 2007 was 33,1586. In the last ten years,
population growth has been 2.2 per cent, on average. The Shire of Broome has
the largest population with 44.5 per cent of the region, followed by the Shire of
Derby-West Kimberley (23.1 per cent), Wyndham-East Kimberley (21.8 per
cent) and Halls Creek (10.6 per cent).

The population of the Kimberley is forecast by the WA Planning Commission


to grow by 75 per cent to about 57,500 by 2020.

The Kimberley has a large Indigenous population. The 2006 Census found
that some 13,300 people, or 42 per cent of the population, are Indigenous. Of
the Indigenous population, 36 per cent are aged under 15 years. There are 22
language groups.

The 2006 Census indicates that the largest employers in the region are health
care and social assistance, public administration and defence, retail trade, and
education and training.

3.5 Current infrastructure

3.5.1 Energy

Horizon Power provides the Region‟s urban centres with electricity, using
independent diesel oil generators in all centres except Kununurra and
Wyndham where hydro-electric power is utilised. In 2004, the State
Government contracted Energy Developments Limited (EDL) to replace
existing power stations in Broome, Derby, Fitzroy Crossing, Halls Creek and
Camballin-Looma. This project will ensure the Region‟s growing energy needs
are met. A privately owned 30 MW hydroelectric power generation station is
operating at the Ord River Dam on Lake Argyle, 80 kilometres south of
Kununurra. The station is the largest single contributor to renewable energy
electricity generation in WA and provides electricity to the Argyle Diamond
Mine and the towns of Kununurra and Wyndham.

6 Australian Bureau of Statistics 2008.

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3.5.2 Ports

Historically, the major mode of transport into the Region was by sea, with
Broome, Derby and Wyndham ports being the gateways for the Region‟s
imports and exports. Broome and Wyndham continue to operate as trade links
for the Region, with Derby potentially resuming its role as a mineral export
port. The State Government continues to support the north-west shipping
service as it operates between the ports of Fremantle, Broome, Wyndham and
Darwin.

Live cattle, mining and other agricultural commodities are exported and general
cargo and fuel is imported into the Region through the Ports of Broome and
Wyndham. Naval vessels, fishing vessels, pearling and tourism vessels also use
these ports. Currently only Wyndham is used for minerals exports (nickel
concentrate). Both Broome and Wyndham are used for fuel imports.

The Port of Broome can accommodate vessels up to 50,000 tonnes. Access to


Broome Port has been improved by a town bypass road that will remove
trucks from near the town centre and shopping areas.

Broome Port has an increasing role as a supply base for offshore petroleum
activities. A supply base operates at the port to service offshore activities and
has recently been expanded. Development of a large scale supply base in the
current port location is problematic due to land constraints. The Port of
Broome is not adequate to service major minerals and energy development as
its site and facilities are unlikely to be able to be expanded significantly due to
environmental constraints.
An alternative location for an offshore supply base about 30km north of Derby
at Point Torment is being investigated. Another supply base option could be
to co-locate with the LNG precinct at James Price Point.

Wyndham Port can accommodate vessels up to 26,000 tonnes and navigation


aids now permit day and night shipping access.

Derby Port was originally designed to handle vessels up to 15,000 tonnes but
its use is very restricted by high tidal range and strong currents.

Barge landing facilities are available at Derby and Wyndham and small craft
facilities are available at Broome, Derby and Wyndham.

3.5.3 Airports

The Kimberley‟s airports and airstrips include all-weather jet airports at


Broome, Derby South (the RAAF Curtin Airbase), Derby (town) and
Kununurra. The Truscott RAAF base in the North Kimberley is utilised as an
air supply base for offshore petroleum operations in the Browse Basin. The

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Broome International Airport has an extended landing strip to cater for large
jet aircraft. Sealed regional airstrips are available at Fitzroy Crossing, Halls
Creek and Wyndham.

A long term plan is to relocate Broome Airport to a site north of the town,
freeing up land for urban development close to the centre of Broome.
Offshore helicopter transfers to and from commercial passenger services may
in future occur at Curtin Airbase near Derby, which is somewhat closer to
offshore operations than Broome

The Kununurra Airport runway is currently not suitable for regular operations
by Code 4C (B737/A320) aircraft, limiting options for operators to respond to
increased passenger and freight demand.

A network of landing areas for general aviation aircraft, the delivery of essential
services, such as mail to indigenous communities, pastoral stations and Royal
Flying Doctor Services are also available. Regular passenger services are
provided to and from the Region from Perth, Darwin, Adelaide, Sydney and
Melbourne. Qantas, Skywest, Virgin Blue, and Airnorth provide air services to
cater for a wide range of clients, including business and tourism demands.
Golden Eagle Airlines provides regular connector services between regional
centres in the Kimberley and a range of local charter operators provide services
across the Region.

3.5.4 Roads

The large distances between towns and communities in the Kimberley places a
high importance on the regional road network. An extensive network of over
7,700 kilometres of roads services the region‟s towns, communities and
resource development projects. The Great Northern Highway provides a
sealed link across the Region. It extends from the North West Coastal
Highway in the Pilbara and connects to the Northern Territory, linking the
largest regional centres. Passenger coach services operate along the Great
Northern Highway.

Comprehensive road freight services are provided by a number of transport


companies with a delivery time between Perth to Broome of two to three days
and Perth to Kununurra of three to four days. Depot facilities are located in all
Kimberley towns. The pastoral industry is heavily reliant upon the Region‟s
road systems to transport approximately 130,000 head of cattle to regional
ports each year.

Heavy rains associated with the wet season can isolate sections of the road
network and provides a challenge in providing consistent road freight delivery.

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Road systems in towns are generally inadequate for major increases in heavy
truck traffic. Modifications to roads and bypasses (for example as was recently
constructed to the Port of Broome and nearby industrial areas) will be required
to separate heavy trucks from town traffic.

3.5.5 Water resources

The Kimberley holds 80 per cent of the State‟s divertible, fresh, surface water
resources. Water supplies for Broome, Derby, Fitzroy Crossing, Halls Creek
and Kununurra are sourced from bore-fields located near the towns. Water is
supplied to Wyndham from the Moochalabra Dam. The State‟s Water
Corporation manages all water supplies to the regional towns.

The storage volume (to the top of the spillway) of the main Ord River
impoundment, Lake Argyle, is 10,763 million cubic metres of water. This
equates to a surface area of 980 square kilometres, and serves the Ord River
Irrigation Area through an open irrigation scheme which is owned by the
Water Corporation and managed by the Ord Irrigation Cooperative. A major
expansion of the Ord River Irrigation Area is expected to utilise much of the
remaining capacity of Lake Argyle.

3.5.6 Education

Both government and non-government schools provide primary and secondary


education in the Kimberley. The State Government provides education
facilities up to Year 12 in all regional towns, although a range of senior
secondary subjects are only offered via distance education. The Kimberley
School of the Air, based in Derby, services students in remote locations across
the Region using a range of communications technologies.

There are six Aboriginal independent community schools operating in remote


communities offering either Kindergarten to Year 7 or Kindergarten to Year
10. The Kimberley College of TAFE offers post-secondary education through
its centres in Broome, Derby, Fitzroy Crossing, Halls Creek, Kununurra and
Wyndham. The College is expanding its services to the Region and continues
to assess infrastructure and service requirements to further enhance post-
compulsory education services available in the region.

TAFE provides vocational studies in Lands, Parks and Wildlife Management,


Art, General Education, Maritime Operations, Community Services, Tourism,
Information Technology, Business, Broadcasting (Radio), Hospitality,
Automotive, Retail Operations, Construction, Aboriginal Environmental
Health Work, Horticulture, Aquaculture, Aged Care, Child Care, Governance
and Pastoral Studies.

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The University of Notre Dame, located in Broome, offers undergraduate


courses in Nursing and undergraduate and postgraduate courses in Education.
Diplomas are available in health and business. Vocational Education and
Training programs are available in Education and Business providing
Indigenous students with pathways into Higher Education degree courses.

3.5.7 Health

A range of integrated facilities, located across the Region, deliver health


services in the Kimberley. Hospitals at Derby, Broome, Halls Creek,
Wyndham, Fitzroy Crossing and Kununurra are complemented by community
clinics, which exist in many remote localities. The region has access to a range
of specialist services including aged care facilities, dialysis capabilities, mental
health and rehabilitation services.

A number of independent community health organisations deliver targeted


services into some of the remote communities across the Region. The Royal
Flying Doctor Service based in Derby conducts routine clinical and medical
consultations in remote communities and pastoral properties. It also provides a
24-hour emergency aero-medical service across the Region.

3.5.8 Telecommunications

Telecommunications services in the Kimberley vary from excellent to poor,


depending on location. Mobile telephone coverage is restricted to towns and
nearby, which high speed broadband access is only available in major towns.
There is some competition in mobile telephone services, but little in
broadband. The State Government is seeking to improve telecommunications
services through its Statewide Broadband Network Strategy through an
aggregation strategy, use of State assets, telecommunications procurement and
representations to the Commonwealth Government.

3.5.9 Land and housing

The Kimberley‟s major towns of Broome and Kununurra have suffered from
chronic residential and industrial land shortages for many years, resulting in
high land costs and shortages of housing. These shortages have been a result of
a combination of delays in receiving agreements from native title claimants and
holders, and lack of adequate planning for growth. While planning and land
release processes are seeking to catch up with the backlog, land costs remain
high and housing shortages remain, inhibiting the ability of these towns to
attract residents.

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3.6 Infrastructure constraints


The Kimberley region suffers from the usual constraints of a large, remote
region with climatic extremes, but in general, infrastructure is adequate for the
current level of economic activity. The major exceptions are land and housing,
which as discussed above are in short supply and are high cost.

The availability of community services is limited, in common with other


remote regions. The quality of health and education infrastructure and
services, while being improved in recent years, is still behind the quality of such
services in Perth.

There are also issues of lack of access to community infrastructure and


services, particularly for Indigenous people in both remote communities and
larger towns.

The Kimberley‟s towns have very little capacity to absorb growth, particularly
rapid growth that minerals and energy development would bring.

In order to be able to increase the level of economic activity, in particular


through resources development, major investment in infrastructure will be
needed. More effective planning and approval processes are fundamental to
achieving timely investment in both infrastructure and minerals and energy
projects.

3.7 Infrastructure planning

3.7.1 Planning initiatives

The principal infrastructure planning processes over the past five years or so
have been:
• East Kimberley Regional Minerals Study (2002)
− Assessed potential minerals growth scenarios and infrastructure
requirements to support exploration and mining, and local participation
through employment and business
• West Kimberley Resource Development Study (2003)
− Assessed scenarios for both minerals and petroleum growth and
infrastructure requirements to support these.
• County Land Development Program – Kimberley, WA Planning
Commission (ongoing).
− The Annual Review of this program examines population projections,
development activity and infrastructure and services, and this
information is used to review planning

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• Northern Development Taskforce studies of gas-based industry


development options (2008)
• Selection, studies and approvals of LNG and gas processing precinct site
(ongoing)
• State Infrastructure Strategy (commenced in 2005, but not released).

3.7.2 Planned infrastructure

Infrastructure to support resources developments and associated industry and


communities has been examined in the studies cited in the previous section.
Major infrastructure initiatives in the Kimberley include:
• Extension and upgrade of the Broome jetty to provide a dedicated fuel
unloading berth
• Development of a bypass road to provide better access to the Port of
Broome and greater amenity for the town
• The Kimberley LNG precinct at James Price Point proposed by the State
Government
• Supply base for offshore petroleum construction and operations
(Broome/Derby/Point Torment).

3.7.3 Infrastructure issues

The Kimberley is a remote region with a small population, limited


development and very limited infrastructure that is inadequate to support
mining industry growth. The Kimberley is a greenfields location for major
projects. Any major new resources projects will both put pressure on existing
infrastructure and services and generate requirements for substantial new
infrastructure. Infrastructure needs are likely to include:
• new and upgraded roads
• a new port for LNG and other petroleum products
• new export facilities for bauxite and mineral concentrates
• a new supply base or bases for offshore petroleum operations
• upgraded airport facilities and longer term, a new airport at Broome
• new electricity supply infrastructure
• gas pipelines
• developed land for industrial and residential development
• community infrastructure such as schools, health facilities, and early
childhood facilities in both major towns and smaller communities.
As set out below, this will require both private sector and government
investment. In particular, unless adequate community infrastructure is

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provided, the region will experience either severe economic and social stress or
it will be unable to engage with the projects, or both.

In parallel with infrastructure development, services of all kinds will need to be


upgraded and expanded by both government and the private sector. Services
include community services such as health, education and municipal services,
as well as business services including logistics construction and professional
services.

3.8 Growth scenario, Kimberley growth region

3.8.1 Overview

As outlined in section 3.2, the principal minerals currently produced in the


Kimberley are diamonds, nickel, iron ore and gold. The region also produces
oil in small quantities. World scale natural gas reserves, in excess of 310 trillion
cubic feet, are contained in the Browse Basin off the Kimberley coast. Large
bauxite reserves are present in the Mitchell Plateau, Cape Bougainville and Mt
Leeming/East Kalumburu areas.

In addition, the Kimberley is prospective for and/or hosts significant deposits


of other minerals and energy resources, including copper, lead, zinc, silver,
nickel, uranium, coal, tin and mineral sands.

The following minerals development and/or production activities are possible


in the Kimberley during the period 2008 to 2020:
• Continued diamond mining at Argyle in the North Kimberley (subject to
resources and project economics beyond about 2018) and at Ellendale in
the West Kimberley
• Continued nickel mining in the North Kimberley at the Savannah Project
of Panoramic Resources, plus possible satellite mines
• Ongoing gold mining in the East Kimberley, with probable development of
new small scale mines or possibly a larger operation in the Tanami area
• Ongoing iron ore mining at small scale on Cockatoo Island and Koolan
Island, with opening of a greenfields iron ore mine on Irvine Island
• Zinc mining in the West Kimberley at the proposed Admiral Bay mine and
possibly at the currently closed Lennard Shelf operations
• Development of the Panton Sill platinum resource and possible other
resources.
In addition, it is expected that one or two gas and LNG operations will be
established offshore and onshore in the region. James Price Point on the
Dampier Peninsula has been selected as the location for an LNG and gas
processing hub.

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The availability of gas supplies associated with LNG development could be a


key enabler of mineral development.

Longer term, the following activities could occur:


• Development of bauxite mining operations in the Mitchell Plateau or the
Mt Leeming/East Kalumburu areas
• Development of export thermal coal resources from Canning Basin
deposits.

Table 5 Summary of growth scenario to 2020 for the Kimberley growth region
Mineral product Expanded and new production under growth scenario
Diamonds Two diamond operations continue
Gold Major new gold mine established in the Tanami area
Iron ore Mining on Cockatoo Island continues, with reopened Koolan Island mine, and new mine on Irvine
Island. Total production 10 Mtpa
Nickel Expansion of Savannah Project with opening of new mines to supply expanded concentrator
Zinc New zinc mine, plus redevelopment of Lenard Shelf operations based on expanded resource. Total
production 100,000 tpa of concentrate
Platinum group minerals New platinum mine, producing 50,000 oz pa

Table 6 Summary of infrastructure requirements under growth scenario to 2020 for the Kimberley
growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads inadequate to support minerals • Sealed road on Dampier Peninsula to support gas
and energy development development and gas processing hub
• Upgraded roads to the Kalumburu area in the North
Kimberley to support offshore supply base and bauxite
mining
• Ongoing upgrades of the Great Northern Highway to
improve reliability
• Modifications to town roads and bypasses to accommodate
heavy truck traffic in towns and to ports and industrial areas
• Upgrades to Tanami Road to support mining
Ports • Current ports inadequate to support • Upgrades to existing Broome port to accommodate
minerals and energy growth increased usage
• New ports required for minerals and • New ports for LNG, bauxite and base metals
energy products • Supply base(s) required for offshore development and
operations
Airports • Airport facilities and capacity • Upgrades to RAAF Truscott and Kalumburu airstrip in North
inadequate to support minerals and Kimberley to service bauxite mining and offshore operations.
energy growth • Short term upgrades to Broome Airport to service increased
passenger and freight throughput
• Longer term, establish new Broome Airport to north of town
and redevelop current site for residential and commercial
use
• Possible upgrades to Halls Creek and Balgo airstrips and
facilities to accommodate larger planes and more
passengers

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Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Energy • Electricity supply requires expansion • Additional electricity supply infrastructure to support
to support regional growth expanded towns and industrial activity

Fuel • Fuel tankage at Broome inadequate to • Expanded fuel tankage and supply infrastructure at Broome
support demand increases from major Port
minerals growth
Water and wastewater • Current water and wastewater • Additional water supplies for towns to support expanded
infrastructure inadequate to support population and industry
major growth • Water supplies for minerals and energy projects
LNG hub • Development precinct required for • Development of LNG / gas processing hub to host one or
major gas-based development more LNG and gas processing plants
Telecommunications • Telecommunications, particularly • Upgraded broadband and mobile infrastructure to support
broadband availability, inadequate to business and community growth
support regional growth
Community infrastructure • Community infrastructure requires • Upgraded community infrastructure to cope with increased
and services upgrades and expansions to support population in Derby, Broome and Kununurra
growth

Land • Land availability restricted for housing, • Developed land for housing, commercial activities and light
commercial and industrial use, industry in Broome, Kununurra and Derby
inflating costs

The following sections discuss the implications of the growth scenario for the
Kimberley growth region.

3.8.2 Mineral production

The growth scenario is constructed as a view of minerals development in the


Kimberley to meet its share of anticipated mineral production for Western
Australia and to reflect the underlying growth forecast derived from the CME
growth outlook project. It is not a “blue sky” view, but is a scenario for
mineral developments that could occur if markets remain strong, policy
settings are favourable and infrastructure is available. This scenario would
drive a transformation of the Kimberley economy.

The growth scenario assumes:


• Expansion of mining of current mineral products over current rates,
including diamonds, gold, iron ore and nickel
• Recommencement of zinc production, from existing operations and from a
new development
• Development of Australia‟s first platinum mine
• Development of bauxite mining, followed by construction of an alumina
refinery.

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Assumed mineral production figures under the scenario are set out in Table 7.

Table 7 Mineral production at 2020, growth scenario, Kimberley region


Mineral 2020 production
Diamonds 25 m carats
Gold 50,000 ounces
Iron ore 10 Mt
Nickel 100,000 t of concentrate
Zinc 100,000 t of concentrate
Platinum group minerals 50,0000

Non-minerals resources development under this scenario includes:


• expanded on-shore oil production with on-shore gas production from the
Canning Basin
• offshore gas production from three facilities in the Browse Basin
• an on-shore LNG plant, with possible by-products plants adjacent
• a second LNG production facility on a floating platform
• pipelines feeding gas to the LNG facilities, including a pipeline to Darwin
to feed an LNG plant there
• a domestic gas pipeline to the Pilbara connecting to the Dampier to
Bunbury Natural Gas Pipeline.

3.8.3 Infrastructure requirements

Realising the growth scenario for the Kimberley would require a high level of
infrastructure planning and provision from government and the private sector.
Given the close interaction between the minerals sector and the energy sector
in the Kimberley in the future, the infrastructure requirements set out below
take into account developments in both sectors.

Under the growth scenario, ACIL Tasman assesses that the Kimberley
infrastructure requirements are as follows.

Roads

Some upgrades of the Great Northern Highway and regional roads are
required to accommodate more mineral traffic and traffic associated with gas
developments. These upgrades would continue upgrades undertaken in recent
years. Mining and energy developments in remote regions would generate
requirements for major upgrades of current low quality roads, for example:

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• The Tanami Road in the East Kimberley


• Access roads to the North Kimberley off the Gibb River Road
• A road to service the LNG / gas processing hub at James Price Point.
Modifications to town roads and new bypasses are required to accommodate
heavy truck traffic in towns and to ports and industrial areas.

In addition, road infrastructure in towns will be required to service additional


residents and businesses. Governments have responsibility for provisions and
maintenance of public roads.

Ports

In order to service gas developments and to export mineral products,


additional port infrastructure will be required, including:
• A supply base for offshore petroleum operations, located in the vicinity of
Broome or Derby
• Dedicated ports and export facilities for mineral concentrates and bauxite
located at sites within feasible transport distance from mines and with
adequate deep water
• LNG export facilities adjacent to LNG plant(s).
The State Government is in general responsible for provision of multi-user
port facilities. The private sector in cooperation with port authorities is
responsible for provision of single user facilities.

Airports

The growth scenario will generate the need for upgraded airport facilities,
including:
• In the short term, an upgrade to Broome airport to accommodate
additional aircraft movements and throughput of passengers and freight
• Longer term, establish new Broome Airport to north of town and
redevelop existing site for residential and commercial use
• Upgrade of Kununurra Airport runway to accommodate Code 4C
(B737/A320) aircraft and terminal upgrades to accommodate greater
passenger numbers and freight volumes
• Upgraded airport facilities in the North Kimberley (RAAF Base Truscott
and/or Kalumburu airstrip) to service a bauxite operation, and also the
offshore petroleum industry with the airport(s) to be decided according to
the siting of the operations
• Possible upgrades to Halls Creek and Balgo airstrips and facilities to
accommodate larger planes and more passengers.

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In the Broome case, the private sector airport owners have responsibility for
upgrades, with any move of the site being jointly the responsibility of
government and the owners. In the North Kimberley case, the mining and
petroleum proponents, in cooperation with the airport owner(s) will be
responsible.

Energy

Electricity

The CME survey found only modest growth in electricity demand gas by the
minerals and energy sector in the Kimberley to about 145 GWh per annum.
However, if a number of major projects go ahead, electricity demand by
industry and commercial and industrial users could be considerably greater.

Each mining operation under the Kimberley growth scenario requires


electricity supplies. In general, the companies involved are responsible for
generation and supply of electricity to their own operations where these are
remote from networks. Where parts of the mining and export operations are
within network areas (for example close to Broome, Derby and Kununurra)
these operations have the option to have electricity supplied by the generator
and network operator under normal commercial arrangements.

Gas

The CME survey found only modest demand for gas by the minerals and
energy sector in the Kimberley of about 300 GJ per annum by 2020. However,
the availability of gas and development of new mineral resources in the region
could combine to increase demand to much more than that.

Onshore LNG developments may result in domestic gas becoming available


for use by minerals operations. Mining operators would need to negotiate
commercial arrangements for gas supply and transport. Government may
need to facilitate access to land for infrastructure corridors.

Pipeline infrastructure will be required to deliver gas. A proposal is being


examined to build a pipeline between the Kimberley and the Pilbara to
transport Browse Basin gas to the Burrup Peninsula for processing. This is a
potential alternative to the proposed LNG hub at James Price Point in the
Kimberley.

Fuel

The growth scenario will result in large increases in the demand for diesel fuel
for mining vehicles and equipment.

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Current and recent mining operations that obtain their fuel through Broome
have reported periodic shortages due to inadequate tankage capacity in
Broome. While the switch of power generation to LNG has reduced regional
diesel demand, any large scale mining development in the West Kimberley that
relies on petroleum imports though Broome is likely to generate a need for
increased import tankage capacity.

The import tankage and infrastructure at Wyndham has recently been


upgraded and is adequate to cope with increased demand in the North and
East Kimberley for the next 20 years.

Water and wastewater

The Kimberley has large ground and surface water resources.

The CME survey found that there is modest forecast growth in the minerals
and energy sector groundwater demand in the Kimberly region. Nevertheless,
several new projects by 2020 could result in a jump in both industrial and
domestic demand – and consequent need for water extraction, storage and
delivery infrastructure.

Water supply and wastewater management for mining operations in the


Kimberley is the responsibility of mine operators.

In towns, it is the responsibility of government water utilities – in this case the


Water Corporation. Increased populations will generate increased demand for
these services.

Telecommunications

Telecommunications services in the Kimberley are generally of a lower


standard than in urban locations due to remoteness and sparse population. In
particular, high speed broadband access not available outside the major towns,
with slower and less reliable satellite broadband often the only alternative.
Mobile telephone coverage is limited to major towns, some Indigenous
communities and some mine sites.

Mining operations will require efficient telecommunications, which will need to


be procured from providers by minerals companies. Household
telecommunications will also need to be are the responsibility of providers,
with government providing CSO payment for telecommunications services in
remote regions. In the Kimberley, intervention by State and Commonwealth
Government will continue to be required so that businesses and households
can have access to telecommunications to the standard of major cities.

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Competition in wholesale backhaul capacity would be likely to result in lower


wholesale costs.

Business infrastructure

The economic activity generated by additional minerals and energy projects will
in turn generate a need for industrial infrastructure such as serviced land that
will require government and the private sector to plan and develop.

Service industries are under-developed for the needs of the minerals and
energy sector and for major population growth. Principal requirements for
service sector development are competitively priced land for facilities and
housing for employees.

Community infrastructure

The Kimberley has a community infrastructure and associated services that are
in keeping with other regional locations. The towns of Broome, Derby and
Kununurra offer infrastructure and services such as schools, health care
facilities, sporting and recreation facilities, and child and aged care facilities.
Smaller communities have fewer local services, with other services being
delivered in the region‟s larger towns.

The principal drivers of the need for enhanced community infrastructure are
increased populations in towns as a result of minerals and energy industry
activity. The resident population is expected to rise from 39,000 in 2006 to
about 58,000 on 20207. The Broome population is expected to rise 53 per
cent to about 24,000 by 2020. The Shire of Derby-West Kimberley‟s
population is expected to rise 55 per cent to about 15,000 and the population
in the Shire of Wyndham-East Kimberley is forecast to rise by 36 per cent to
about 11,700. Actual increases in each location will depend largely on the
pattern of future investment in resources, agriculture and tourism. Community
infrastructure requirements across the region under the growth scenario are, in
summary:
• Land for housing: adequate land is required within a timeframe that meets
the needs of population growth so as to avoid land shortages and
consequent steep price increases
• Schools: adequate schools are a key determinant of the ability of the
minerals industry to attract and retain staff, with the current school facilities
being adequate but needing to be expanded and upgraded to service
increased populations

7 Western Australian Planning Commission 2005, WA Tomorrow.

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• Health care facilities: the current facilities are adequate but may need to be
expanded and upgraded to service increased populations
• Sport and recreation: the current facilities are adequate but may need to be
expanded and upgraded to service increased populations
• Child care: additional child care facilities will be required to meet the needs
of additional families in towns.

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4 The Pilbara growth region


4.1 Description of region
The Pilbara region in Western Australia is bounded by the Indian Ocean to the
west and the Northern Territory border to the east. The Kimberley Region lies
to its north across the Great Sandy Desert and the Pilbara‟s southern reaches
border the Gascoyne, Mid West and Goldfields-Esperance Regions.

The 2006 population totalled 41,000 people, with the majority residing in the
western third of the Region. The eastern third is largely desert and is home to a
small number of Indigenous people. There are four local government areas in
the Region, the Shires of Ashburton, East Pilbara and Roebourne, and the
Town of Port Hedland. The major town centres are Port Hedland, South
Hedland and Karratha, with other important centres being Roebourne,
Wickham, Point Samson, Dampier, Onslow, Pannawonica, Paraburdoo, Tom
Price, Yandeyarra, Marble Bar, Newman, Jigalong and Nullagine.

The population profile of the region consists of Indigenous people, and those
associated with the resources sector (minerals, oil and gas), government
services, small business and the pastoral industry. The Indigenous population
of the Pilbara is 5,632 or 13.7 per cent of the total population. This is
significantly higher than for Western Australia as a whole where Indigenous
people make up only 2.3 per cent of the population. Relative to their share of
the population, Indigenous people have low participation in unsubsidised
employment.

The Pilbara is crucial to the economy of the State and the nation. It is the
source of two of the largest export revenue earners – iron ore and liquefied
natural gas. Other major economic activities in the Pilbara include mining of
iron ore and base metals, and the production of oil, gas and salt. There is a
small manufacturing and service industry as well as tourism, agricultural and
fishing activities. The value of the Pilbara‟s iron ore and petroleum products
amounted to more than $38 billion in 2007-08. Commercial activities in the
Pilbara primarily service the mineral and energy sector, with engineering,
surveying, personnel and equipment hiring services well represented. Retail
turnover was estimated at $399.5 million in 2006/07. Manufacturing,
consisting mainly of small businesses supplying the regional market, had an
estimated sales and service income of $309.1 million in 2001/02 (latest
available figure). In addition, total agricultural production was valued at $46.0
million in 2003/04, comprised largely of livestock disposals (98 per cent of
agriculture production) valued at $45.2 million.

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The Pilbara Region experienced robust growth in building activity in recent


years as a result of large projects in the mineral and petroleum sector. In
2004/05, there were 255 residential dwelling approvals valued at $67.1 million.
In comparison, non-residential building approvals were valued at $45.1 million.

Figure 16 Map of the Pilbara region

Source: Department of Local Government and Regional Development

4.2 Current resources production


Mining is the largest industry by value of production. Iron ore is the region‟s
main commodity. Copper, gold, manganese and salt are other mineral
products. Table 8 shows the value of mineral production in the region by
commodity and local government area.

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Table 8 Mineral production in the Pilbara region, 2007-08


Product $ Value 2007-08 Location by Shire $ Value 2007-08
Iron Ore 19,460,546,588 East Pilbara 13,862,046,976
Copper 869,714,013 Ashburton 7,263,436,236
Gold and Silver 604,648,751 Roebourne 276,942,144
Manganese and Salt 429,782,562 Port Hedland 87,179,287
Other 125,129,858 Karratha and Marble Bar 217,129
Total 21,489,821,772 Total 21,489,821,772
Note: Manganese and salt production not separated in published Pilbara production data
Data source: Department of Mines and Petroleum 2008

Iron ore accounts for 91 per cent of the value of Pilbara minerals production.

In 2007/08, the Pilbara‟s total minerals production was valued at $21.5 billion,
representing 55 per cent of the State‟s total value of mineral production and 37
per cent of all resources production. The bulk of the State‟s petroleum $19.3
billion worth of petroleum production is from the island and offshore areas
adjacent to the Pilbara.

Iron ore

The Pilbara is Western Australia‟s principle iron ore mining region. In


1995/96, the value of iron ore production was $2.9 billion, which increased to
$19.5 billion by 2007/08. The Pilbara produces more than 95 per cent of the
State‟s iron ore by value.

The Pilbara‟s iron ore export continues to create record volumes. In 2004/05,
China became the largest export market. China dominates Western Australia‟s
iron ore exports, accounting for 58 per cent or $12 billion of the total amount
shipped for 2007–08. Japan received 26 per cent during 2007–08 whilst other
markets were South Korea (11 per cent), Taiwan (4 per cent) and Europe (one
per cent). Iron ore production is directly linked to the steel industry and
developments in the world‟s steel market. Economic prosperity in China has
facilitated strong demand for steel and therefore iron ore. Western Australian
producers are setting world standards in efficiency (lower per unit costs),
ensuring they are in a good position to take advantage of growth in the
Chinese market.

There are two very large producers in the Pilbara and several emerging
producers.
• Rio Tinto Iron Ore owns and operates six mines (Brockman, Marandoo,
Mt Tom Price, Paraburdoo, Yandicoogina and Nammuldi) and also
operates the Pannawonica, West Angelas, Channar, Eastern Range and
Hope Downs mines in joint venture. Iron ore from Rio Tinto operations

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is exported through the ports of Dampier and Wickham at a rate of more


than 170 Mtpa.
• BHP Billiton operates seven mine sites including one of the largest single-
pit, open-cut ore mines in the world – the Mt Whaleback mine in Newman.
Nearby are the satellite ore bodies 18, 23, 25, 29, 30 and 35, Jimblebar,
Yandi, Area C and Yarrie. BHP Billiton iron ore is exported through Port
Hedland at a current rate of more than 122 Mtpa.
• Fortescue Metals Group (FMG) opened its Chichester Range Iron Ore
Cloud Break mine in 2008 at an initial capacity of 55 Mtpa and shipping
through Port Hedland.
• Atlas Iron commenced mining at its Pardoo mine in October 2008,
becoming the first junior iron ore company to move into production the
Pilbara region. Production is currently ramping up to an initial level of 1
million tonnes for the first year of operations, with ore trucked 75km by
road from Pardoo to Port Hedland. Atlas plans to ramp up production to 3
million tonnes per annum by 2010.
Planning for new investment in iron ore production has proceeded at a rapid
pace. This is discussed in section 4.3.

Copper and gold

The value of copper production in the Pilbara was $870 million in 2007/08.
Aditya Birla Minerals Ltd operates the Nifty copper mine, 350 kilometres east
of Port Hedland. Nifty currently has a capacity of 25,000 tonnes per annum of
copper cathode from an open pit and heap leach operation.

Aditya Birla also has a large copper sulphide resource estimated to be around
1.9 million tonnes of copper equivalent. The commissioning of the
underground mine with a copper concentrate plant, ramped-up to full capacity
through 2007. The mine has a capacity of 2.3 million tonnes per year. The
concentrate product is trucked to Port Hedland for shipping.

Straits Resources Limited operates the Whim Creek and Mons Cupri copper
cathode projects located midway between Karratha and Port Hedland. After
mining, oxide copper ore is trucked to a processing facility located midway
between the two ore bodies. During 2007/08, Straits produced a total of
13,547 tonnes of copper cathode.

Newcrest Mining Limited‟s Telfer copper–gold project, 310 kilometres


northeast of Newman, produced a total of 26,772 tonnes of copper in
concentrate during 2007/08.

The Telfer mine is currently the State‟ second largest gold producer with an
output of up to 590,000 oz gold and some 28,000 tonnes of copper in

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2007/08. The Paulsens gold mine is operated Intrepid Mines 180km west of
Paraburdoo, with gold production of 70,000 to 80,000 ounces per annum.

Manganese

Manganese is produced from the Woodie Woodie manganese mine operated


by Consolidated Minerals, located 400 kilometres south-east of Port Hedland.
Production was 886,000 tonnes in 2007/08.

Petroleum

Oil

The value of crude oil produced in the Pilbara was about $12.5 billion in
2007/08. A fluctuation in volume was experienced over the decade due to
several mature oil fields depleting their reserves. The falls however, were offset
by output increases from a number of new fields, the most significant
contributors being Hermes, Hovea and Woollybutt. The value of petroleum
condensate production for 2004/05 was $2.1 billion, which accounted for 99
per cent of the State‟s production.

Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG).

LNG in the Pilbara is produced by the North West Shelf Venture (NWSV) gas
project, with offshore facilities located 130 km off the Pilbara coast and the
LNG plant on the Dampier Peninsula. NWSV‟s six major participants are
Woodside Petroleum Ltd, BHP Billiton Ltd, BP Developments Australia,
Chevron Australia, Japan Australia LNG (MIMI) and Shell Development
(Australia).

Woodside is the operator of the venture.

LNG production was valued at $5.1 billion in 2008. In 2008 total annual
capacity rose to 16.3 million tonnes with the commissioning of a fifth LNG
train.

LPG is produced as a by-product of gas and LNG production. In 2007-08,


production of LPG was valued at $683 million.

One new LNG development, Woodside Energy‟s Pluto Project is under


construction and three other LNG projects are proposed: Gorgon, Wheatstone
(Chevron operator of both) and Pilbara LNG (operator BHP Billiton).

Domestic gas

The Pilbara produces most of the natural gas in Western Australia for domestic
consumption by industry, commerce and households in WA.

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There are three major natural gas transmission pipelines supplying the Western
Australian gas market from the Pilbara:
• the Dampier to Bunbury Natural Gas Pipeline (DBNGP), which transports
gas from the North West Shelf to customers in the Geraldton, Perth,
Mandurah and Bunbury areas
• the Goldfields Gas Pipeline (GGP), which transports gas from the North
West Shelf to customers in the Pilbara and Eastern Goldfields regions
• the Pilbara Energy Pipeline, which transports gas from the North West
Shelf area to Port Hedland.
In the Pilbara, a major gas user is the Burrup Fertilisers Ammonia Plant, which
produces 760,000 tonnes of liquid ammonia annually. The other major use of
gas in the Pilbara is to generate electricity to power the industry and towns of
the region.

4.3 Planned and proposed resources production


Since 2002–03, when China indicated that it was rapidly growing its
infrastructure needs and thus its intensity of steel demand, producers have
been seeking to capitalise on the current strong market by increasing supply
through investment in expansions and exploration. The recent financial turmoil
and uncertain outlook for global economic growth may have the potential to
slow some expansions and developments in the iron ore industry.
Nevertheless, most projects are expected to proceed, even if over a longer
timeframe. Nevertheless, most projects are expected to proceed, even if over a
longer time frame, absent government policy interventions that significantly
undermine project viability. The following sections summarises committed
and proposed projects in minerals and petroleum.

New projects and expansions committed in 2007 and 2008 include the
following8.
• CITIC Pacific Mining is developing the Sino Iron project 100 kilometres
south of Karratha, based on a resource of two billion tonnes of magnetite
ore, with rights and options to a further four billion tonnes. The Sino Iron
project will export about 27 million tonnes of magnetite concentrate and
pellet each year with first production due to commence in second half
2010. Total investment in the project is estimated to be $5.2 billion and will
include the construction of:
− production and processing facilities
− port and materials handling facilities
− 25-kilometre slurry pipeline

8 Sources are Department of State Development and company websites.

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− a 450MW gas-fired electricity plant


− 51 gigalitre desalination plant
− accommodation infrastructure and an airport.
• BHP Billiton‟s $1.53-billion Rapid Growth Project 3 (RGP 3) which will
increase the capacity of its Pilbara iron ore operations to approximately 129
million tonnes per annum. The key elements of RGP 3 comprise the
expansion of Area C mine by 20 million tonnes per annum, additional
sidings on the Newman railway and port works at Nelson Point and
Finucane Island. Initial production began in the last quarter of 2007 with
full production anticipated by 2008–09.
• BHP Billiton‟s Rapid Growth Project 4 (RGP 4) was approved in March
2007, with initial production expected to commence in the first half of CY
2010. This will increase its Western Australian operations to 155 million
tonnes per annum. Key elements include development of a new crushing
and screening plant, additional stockyards, car dumping facilities and train-
loading facilities at Mt Whaleback. At Yandi there is to be a new ore
processing handling facility. Upgrades are to be also made at Jimblebar and
Yandi along with infrastructure improvements at Nelson Point and
Finucane Island.
• BHP Billiton‟s next expansion plans comprise increasing installed capacity
to more than 200 million tonnes per annum during calendar year 2011.
Work will include the duplication of the railway track between the Yandi
mine and Port Hedland and expansion of the inner harbour at Port
Hedland. In parallel with this project, BHP Billiton is advancing studies on
further expansions to its operations.
• Rio Tinto has completed its US$1.55 billion port expansions at Dampier
and Cape Lambert to increase shipping capacity to 220 million tonnes per
annum.
• In support of the Cape Lambert and Dampier port expansions, Rio Tinto
has invested a further US$113 million in additional rolling stock and
associated rail infrastructure to support the increased levels of production.
• Rio Tinto will develop and construct the Mesa A (Waramboo) mine and
related infrastructure. The mine is forecast to be completed by 2010 with
progressive ramp-up to a projected 25 million tonnes per annum by 2011.
Mesa A (Waramboo) is located 48 kilometres west of Pannawonica.
Production from this new mine will replace current production from the
Mesa J deposit now nearing the end of its mine life. Rio Tinto will also
develop the Brockman 4 mine 62 kilometres west of the Mt Tom Price
townsite. The first phase (which will take two years to construct and
commission) will see an output from this new mine of 22 million tonnes
per annum with a potential for further expansion. Production is planned to
begin in early 2010. The combined investment in these two mines will be
around $3 billion.

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• Rio Tinto is investing in more sustainable power generation and


transmission infrastructure near Karratha worth US$503 million to supply
electricity to its port and mine operations. It will use natural gas turbines,
resulting in a significant reduction in emission rates compared with the two,
steampower stations currently in operation at the Cape Lambert and
Dampier ports, which will be decommissioned.
• In December 2007, the Hope Downs Joint Venture approved a $71-million
feasibility study to expand the Hope Downs 4 project which is located 35
kilometres northwest of Newman and 45 kilometres east of the Hope
Downs 1 mine.
• Woodside Energy Ltd approved its Pluto LNG project in Q3 2007.
Construction of the project on the Burrup Industrial Estate is more than 50
per cent complete. Initial capacity is 5 Mtpa.

4.4 Proposed developments


In addition to the extensive expansions being carried out by existing producers
in the Pilbara, there are a number of new projects being proposed or planned.
These include the following.
• Aurox Resources Limited‟s Balla Balla project near Whim Creek between
Karratha and Port Hedland is progressing through environmental
approvals and is scheduled to commence production in 2010. It has sales
contracts in place with a Chinese steel producer. The project will produce
titanomagnetite concentrate with possible production of ilmenite.
Concentrate production rate is 6 Mtpa from 2010 ramping to 10Mtpa by
2014.
• CBH Resources Limited‟s proposed Panorama project is located 160
kilometres by road from Port Hedland. The Panorama project is based on
the development of the Sulphur Springs copper–zinc ore body. A bankable
feasibility study has been completed and environmental approvals are being
finalised for a 1.5 million tonne per annum open-cut mine and ore
processing plant to produce 80 thousand tpa of copper concentrate (25 per
cent copper) and 90 thousand tpa of zinc concentrate (53 per cent zinc).
Other potential iron ore projects in the Pilbara include:
• Atlas Iron‟s Abydos Project located 130km south of Port Hedland
• Australasian Resources Ltd‟s Balmoral South Iron Ore project
• Aquila Resources Limited and AMCI Holdings Australia Pty Ltd 50:50
joint venture‟s West Pilbara Iron Ore Project
• MCC Mining (Western Australia) Limited‟s Cape Lambert Magnetite
Project
• Iron Ore Holdings Ltd‟s Phil‟s Creek deposit
• Brockman Resources Limited‟s Marillana iron ore project

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• BC Iron‟s Nullagine iron ore project


• The Apache/Santos Reindeer/Devil Creek domgas project will provide gas
for the Citic Pacific Cape Preston operations, and condensate for export.
• LNG projects under consideration include the following:
− The proposed Gorgon gas project is centred on the development of an
LNG facility on Barrow Island. Chevron Australia is the operator on
behalf of the Gorgon joint venture. A final investment decision on this
15 Mtpa project is expected by mid 2009
− The Wheatstone LNG project is also under consideration by Chevron
− BHP Billiton‟s proposed Macedon domestic gas development near
Onslow
− Apache Energy‟s proposed domestic gas devil Creek development
Project, approximately 40 km southwest of Dampier
− Another potential LNG project is BHP Billiton‟s Exxon Mobil‟s LNG
Scarborough field.

4.5 Resources-related demographic


characteristics
In 2006 the estimated resident population (ERP) for the Pilbara Region was
44,333. The Pilbara currently makes up 7.2 per cent of regional Western
Australia‟s population and 2 per cent of the State‟s population. The dominance
of the minerals industry has impacted on the populations of specific
communities. The influx of large temporary workforces during the
construction phase of large projects has caused community populations to
fluctuate.

The Pilbara as a whole last experienced major construction-driven population


growth during the mid-1980s. The centres of Port Hedland and South Hedland
also experienced a brief period of growth from 1996 to 1998 during the
construction of the hot briquetted iron (HBI) plant. However, over the decade,
from 1995 to 2005, the Region‟s population contracted (on average) by 0.4 per
cent per annum compared to 1.5 per cent growth for regional Western
Australia and the State as a whole. The impact of recent mining developments
has stemmed the decline in the population creating new opportunities resulting
in population growth.

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Table 9 Employment by industry – Pilbara region


Economic activity Employment per cent
Mining 5,745 29.41
Construction 2,087 10.69
Retail trade 1,416 7.25
Education & training 1,359 6.96
Health care & social assistance 1,293 6.62
Public administration & safety 1,124 5.75
Accommodation & food services 990 5.07
Transport, postal & warehousing 916 4.69
Manufacturing 835 4.28
Administrative & support services 716 3.67
Other services 568 2.91
Rental, hiring & real estate services 415 2.12
Professional, scientific & technical services 409 2.09
Wholesale trade 397 2.03
Electricity, gas, water & waste services 203 1.04
Agriculture, forestry & fishing 169 0.87
Financial & insurance services 141 0.72
Information media & telecommunications 83 0.42
Arts & recreation services 76 0.39
Total 19,531 100
Data source: Australian Bureau of Statistics, 2006

Employment is highly skewed towards mining, construction and retail. Table 9


summarises the number of people and distribution of employment by industry
in the region.

Population growth projections are discussed in section 4.8.3.

4.6 Current infrastructure


The infrastructure network that supports the Pilbara Region includes services
in energy, water, transport, and communications, which assist businesses
located in the Pilbara to remain both regionally and internationally competitive.

4.6.1 Land and housing

The rapid expansion of resource sector activity in the North West has
impacted on the availability of quality and affordable housing in the region.

Housing demand in Port Hedland and Karratha is particularly high and


availability low. As a consequence, the cost of purchasing or renting a property
is high. Until recent years, availability of land due to native title issues was a

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major factor in restricting supply. While this blockage has been largely
overcome, the inability of the land supply chain to deliver developed land,
together with high local building costs has kept the cost of housing high.

House purchase prices in Port Hedland and Karratha are 25 to 35 per cent
higher than Perth. Port Hedland and Karratha rental costs are 40 to 65 per
cent higher than Perth. For example, in September 2008 the average price for
rental of a four bedroom house in Karratha was more than $1900 per week,
and a two bedroom unit in was $850 per week. A four bedroom house in Port
Hedland costs an average of $1.4 million, in South Hedland $709,000 and in
Karratha $938,0009.

This restricts the ability of service workers in particular to move to and remain
in Pilbara towns. Service levels in such industries as municipal services, retail,
education and training, health and accommodation, cafes and restaurants can
suffer as a result.

The Government of Western Australia is responding with more responsive


planning and land release. Four new regional planning committees have been
established to advise on planning for the North West of the State.

The Town of Port Hedland is working closely with the Department for
Planning and Infrastructure to fast-track release of vacant land in South
Hedland for residential and industrial purposes. A permanent LandCorp office
has been established in Karratha. In 2008 and 2009, 102 lots at Karratha‟s
Baynton West subdivision were released in for first home buyers, owner-
occupiers and local businesses for employee accommodation. A total of 358
lots are being developed.

Greater supply of affordable housing has been identified by both industry and
government as a priority. Land for accommodation has been identified by the
Pilbara Industry‟s Community Council (PICC) as the critical enabler to solving
existing blockages to improvement in other government services – in particular
to meet the demands being increasingly placed on health and education and
other critical government services in the region.

PICC says that that continued lack of availability of affordable rental


accommodation will exacerbate existing staffing problems for community
service providers, (including government and NGOs) and businesses essential
to developing sustainable communities in the region. This could lead to a
greater reliance on FIFO practice.

9 Pilbara Development Commission 2008.

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The PICC resources companies currently provide over 470 dwellings to


governments, local businesses, contractors and community groups in the
Pilbara.

PICC believes that it is essential that a mechanism to expedite land release and
approvals is implemented.

4.6.2 Education and training

The education challenges for the Pilbara fall into two categories:
• Adequate schools are a key determinant of the ability of the minerals
industry to attract and retain staff, with the current school and VET
facilities being adequate but needing to be expanded and upgraded to
service increased populations.
• Effective education and training are critical to greater participation of
Indigenous people in employment and business, and for long-term
economic and social development.
Education facilities and services in the Pilbara range from pre-school to post-
secondary. Both government and non-government schools are present in
major towns. For primary and secondary students in areas too remote to attend
regular schools, the Port Hedland School of the Air provides opportunities for
children to study by correspondence.

Pilbara TAFE offers a wide range of vocational education and training courses
and services, which are nationally accredited, through its regional campuses at
Karratha, South Hedland, Newman, Tom Price and Onslow.

The Australian Technical College – Pilbara operates campuses in Karratha and


Roebourne. It offers trade training to year 11 or 12 students who want to
begin a trade apprenticeship while completing their Western Australian
Certificate of Education.

Curtin University‟s Centre for Regional Education (CRE) offers a variety of


university courses via campuses in Karratha and Port Hedland.

All major resource industry operators in the region have partnership programs
that promote and facilitate education and training, including support for
facilities, support for improved academic attainment and retention rates in
secondary schools, and providing improved employment and training
opportunities for the local community.

There has been extensive investment by government and industry in Pilbara


education and training. Pilbara secondary schools have improved their Year 12
performances in recent years. There is a perception amongst current and
prospective Pilbara residents, however, that education and training in the

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Pilbara falls short of their family‟s needs. Indeed, perceptions about breadth
and quality of education are reported by employers as a key determining factor
in decisions to move to and remain in the Pilbara. Pilbara demographics bear
this out, with a pronounced dip in 14+ age ranges and in 35-45 year olds
(typically their parents).

Education outcomes for indigenous people remain frustratingly poor on


average, despite long-term efforts by both industry and government to engage
young people and their families. There have been pleasing achievements by
some individuals and in some locations, but much remains to be done to
improve average performance.

4.6.3 Health services

The Pilbara has a network of health services. While services are in general on
par with country towns elsewhere is Australia, they fall short of community
expectations. The greatest and growing demand is for modern, non-bed based
health services. People want access to health services as and when they need
them. They expect GP services and community-based nursing, child, maternity,
school, men‟s, women‟s and mental health services to be readily available. The
health system is often not able to deliver to these needs. In addition a modern
acute-care, bed-based system, is required with particular capacity to deal
effectively with disaster management.

The WA Country Health Service (WACHS) is the largest health service


provider in the Pilbara region, and is the organisation within the WA health
system responsible for the delivery of health services in the regions outside of
the Perth metropolitan area.

The WACHS-Pilbara Health Service is configured around a network of


services joining remote communities (eg Warralong, Jigalong), to small hospital
(eg Tom Price) to district (eg Nickol Bay at Karratha), to secondary hospital
services in Port Hedland. These services are fully networked and
complemented with community nursing, allied health, public health, aged care
and mental health services. The Pilbara is then networked to metropolitan
services via patient transport services.

The hospital at Port Hedland offers the following services: paediatrics,


obstetrics and gynaecology, anaesthetics, internal medicine and general surgery.
A new $135 million hospital is being established in South Hedland to replace
the existing facility. In 2009-10, $10 million will be spent at Karratha‟s Nickol
Bay Hospital for obstetric facilities and staff accommodation.

The towns of Karratha, Roebourne, Wickham, Tom Price, Paraburdoo,


Newman and Onslow are serviced by district hospitals and in the case of

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Karratha and Newman, these are called Integrated District Health Services
offering a wider range of services.

Port Hedland and Karratha hospitals receive visits from specialists. Patients at
other centres are referred to these specialists and may receive travel assistance
for visits to Perth, Karratha or Port Hedland.

Emergency cases in isolated areas and smaller centres may be evacuated to


larger hospitals via the Royal Flying Doctor Service based at Port Hedland.
Community nursing posts or company-operated clinics service smaller
communities. In addition, the Pilbara Population Health Unit provides
community health services (school and child health care), allied health services,
drug and alcohol services and health promotion and education.

The Pilbara‟s health service is configured as a pre-boom health system which,


with the exponential growth in industry and mining since 2000, is now
struggling to cope with the growing population‟s health demands, which will
continue to grow. Major modernisation and reconfiguration of facilities and
service models are required.

The Pilbara health service providers, including WACHS are struggling to


compete in the global labour market for health workers and the WA and local
labour markets for support staff. Major reasons for this are the standards and
costs of housing, and issues of poor community amenity relative to other
locations.

Industry makes significant contributions to the region‟s health services,


including multi-million dollar contributions to the Royal Flying Doctor Service.

4.6.4 Town infrastructure

Some Pilbara towns are „normalised‟ and operate like any other towns, with
local government having primary responsibility for town infrastructure and
municipal services. However, much of the infrastructure and services are
facilitated by resources companies either independently or via partnerships
with governments, and community service providers. This investment is
continuing. For example:
• BHPB contributes to the sustainable development of its communities by:
− improving Indigenous well-being, health and education
− enhancing township amenity with more parks and playgrounds, as well
as upgraded sporting and social facilities
− contributing to improved health services in the townships and remote
areas

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− supporting the development of high quality education and training


programs and facilities, and
− creating opportunities to stimulate community involvement.
The value of BHP Billiton‟s community contribution for the 2007-2008
financial year was about $20 million and has risen to $23 million in 2008-
09.
• In 2008 Rio Tinto announced the redevelopment of the Pilbara town of
Pannawonica to support the new Robe Valley iron ore mine of Mesa A
/Warramboo. The infrastructure upgrade will increase the amount and
standard of accommodation and town infrastructure available to sustain
mining in the Robe Valley. The investment includes:
− refurbishment of 238 houses
− construction of 10 new houses
− upgrading of airstrip for jet services
− new service station and workshop
− a mining operations village
− a renovated meals centre
− upgrades to town buildings, infrastructure and landscaping
− a construction village.

4.6.5 Recreation and community facilities

Pilbara towns have a large number of recreation and community facilities when
compared to metropolitan Perth. However, the majority of this infrastructure
is more than 20 years old and in only adequate to poor condition.
Responsibility for maintenance and replacement of existing infrastructure has
been transferred from the private sector to local government through the
„normalisation‟ process. However, local government finds it difficult to find
funds for maintain such facilities. As a consequence, the private sector often
provides support for particular facilities and sport and recreation clubs. The
resources companies operating in the Pilbara all operate major sponsorship and
donation programs for local organisations.

4.6.6 Energy

A cost competitive energy market is essential for the development of the


Pilbara‟s mining and petroleum sector, which is highly energy intensive. The
North West Interconnected System (NWIS) is the small electricity grid that
links the coastal regions of Port Hedland, Wickham/Cape Lambert and
Dampier/Karratha, and extends inland as far as Pannawonica, Paraburdoo and
Shay Gap. It was formed by the interconnection of systems owned and
operated by Western Power (now Horizon Power) Pilbara Iron, Alinta and

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BHP Billiton. The NWIS currently has a total installed generation capacity of
some 450 MW of electricity, with an additional 35 MW currently under
construction.

The facilities are predominantly fuelled by natural gas sourced from the North
West Shelf, and are comprised of a mixture of aging thermal stations and more
modern gas turbine generators. Babcock and Brown owns the generator
stations at Port Hedland and Newman and Pilbara Iron owns the generator
stations at Cape Lambert, Dampier and Paraburdoo. Horizon Power purchases
its power requirements from the private generators in the region.

Transmission, distribution, marketing and sales of electricity to residential and


commercial customers are split amongst Horizon Power, through its Pilbara
Power Division (responsible for Karratha, Port Hedland, Roebourne and Point
Samson), BHP Billiton (Newman) and Pilbara Iron (Dampier, Tom Price,
Paraburdoo, Wickham and Pannawonica). The larger towns in the Pilbara that
are not connected to the NWIS include Marble Bar, Newman, Nullagine and
Onslow. These towns run on isolated generators. The generators in Marble Bar
and Nullagine are maintained and operated by Horizon Power. Modra Electric
Power operates generators in Onslow, while Alinta operates the generators in
Newman.

The CME study found that significant planned minerals and energy sector
activity in the Pilbara is translating to rapid forecast growth in electricity
demand for the period 2008-2014 (Figure 17). Forecast electricity demand
growth in this region is much greater than that in any other region and in 2014
accounts for 82%, or 13,766 GWh/a, of forecast State-wide incremental sector
demand (16,758 GWh/a) over 2007 consumption levels. Growth is forecast to
slow out to 2020, but is still significant. Sector demand for self generated
electricity in the Pilbara is forecast to grow much more rapidly than demand
for scheme electricity.

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Figure 17 Forecast electricity demand growth, Pilbara (relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

Horizon Power is currently seeking to create a fully interconnected 220kV


network in the NWIS and reducing the number of isolated generation plants
required in the Pilbara. By 2015, Horizon Power forecasts that the Pilbara‟s
required generation facilities in 2015 under a cooperative development scenario
would total 5,200 MW capacity, whereas continuation of the current
arrangements of connected and isolated facilities would require 5,950 MW.
Potential benefits cited by Horizon include:
• Capital productivity improvements: The use of fewer larger generation
plants rather than many smaller generation plants
• Reliability to help underpin regional development and sustainable
communities
• Reduction of greenhouse gases due to the productivity improvement
Facilitation of large scale renewable projects
• Facilitation of growth: Potential uses in rail and mine pit electrification,
certainty for domestic gas investment and power supply certainty and
capital costs reductions for new users.
The CME report notes that realisation of the proposal would require
significant investment and cooperation between the various private network
owners, Horizon Power and government. In addition, planned projects may
have already committed to self generation and made the necessary investments
and therefore may not realise the benefits of a expanded and integrated NWIS.

There is also significant forecast demand for domestic gas in the Pilbara
minerals and energy sector (Figure 18)

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Figure 18 Forecast minerals and energy sector gas demand, Pilbara


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

4.6.7 Water

The East Pilbara and West Pilbara Water Supply Schemes cover most coastal
towns in the Pilbara. The East Pilbara Scheme draws its water from the Yule
and De Grey River Borefields, while the West Pilbara has the Millstream
Aquifer and the Harding Dam.

Port Hedland, South Hedland, Wedgefield and Finucane Island fall under the
East Pilbara Scheme, while the towns of Karratha, Dampier, Roebourne,
Wickham and Point Samson fall under the West Pilbara Scheme. BHP Billiton
supplies water to Newman‟s water tanks and owns and operates the town‟s
reticulation system.

Dampier‟s reticulation system is owned and operated by Rio Tinto, with the
Water Corporation supplying bulk water. Rio Tinto also owns and operates
schemes for Tom Price, Paraburdoo, and Pannawonica.

Major Indigenous community water supply and sewerage schemes are


operating at Jigalong and Yandeyarra, while water supplies are available at
Ngurrawaana, Warralong, Goodabinya, Punmu and Kiwirrkurra.

All industry water demand in the Pilbara is forecast to grow at a CAGR of 7.0
per cent to 558 GL/a by 2014. Most of this growth will be realised in the West
Pilbara Water Demand region. Growing demand is driven primarily by new
and expanding iron ore projects. The Pilbara minerals and energy sector is
expected to continue to source most additional demand through self extracted,

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rather than scheme, water resources although port, rail and coastal power
station operations will utilise additional scheme water. The self-extracted water
forecast is shown in Figure 19

Figure 19 Self extracted water outlook, Pilbara

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

As the CME growth report (p91) notes:


For the entire Pilbara region, total self extracted water demand in 2013 is projected to
exceed current allocation limits. On a more localised level, it is forecast that the total
water demand in the East Pilbara region may outstrip current availability by 2013 and
in the West Pilbara region by 2018. Discussions with the Department of Water have,
however, highlighted that this is unlikely to occur for two reasons. Firstly, the
groundwater in the East Pilbara region is predominantly sourced from fractured rock
aquifers which have a more conservative allocation limit than sedimentary aquifers.
Thus the East Pilbara region is more likely to contain substantial groundwater
resources above the current allocation limits and additional water surveying should
identify the required additional resource. Secondly, a significant proportion of the
forecast demand is expected to be driven by dewatering requirements and not actual
consumption, allowing excess water to either be returned to the aquifers or supplied
to other users in the region to reduce overall demand.

This situation carries unacceptable uncertainties for both the State and the
minerals and energy industry in the Pilbara. While short term groundwater
supplies may be adequate, long-term water supply requires a strategic approach
to matching sources and supplies to demand and at the same time ensuring the
best water management outcomes for the Pilbara. There is currently no
overarching water supply and management strategy for the Pilbara.

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To date, companies have been and remain willing to locate and exploit their
own sources and there is an abundant mine dewatering resource available that
could supply other users albeit at a commercial cost. Citic Pacific Mining is
developing a 51Gl desalination plant to supply its Cape Preston operations, an
industry first in Australia at this scale.

West Pilbara Water Supply Scheme

The West Pilbara Water Supply Scheme serves the domestic and industrial
requirements of the coastal ports and towns of Karratha, Dampier, Roebourne,
Wickham, Cape Lambert and Point Samson.

Scheme water can be sourced from the Harding Dam (surface water) and the
Millstream Aquifer (groundwater). The Harding Dam is currently supplying
100 per cent of the West Pilbara district‟s water needs. The Millstream Aquifer
is the secondary source used only when water is not available for supply from
the Harding Dam. Both of these water sources are highly dependent on
recharge from episodic rainfall associated with cyclonic events that occur in the
North West region during the summer months.

The Harding Dam microfiltration water treatment plant was completed in late
2004, treating and removing suspended solids and organic materials, allowing
the Dam to be used all year round. In addition, the Water Corporation
commissioned a desalination plant, which was built in Burrup Fertilisers‟
complex. The plant is capable of producing 3.6 megalitres (3.6 million litres) of
desalinated water per day, which is currently fully utilised by Burrup Fertilisers.

A decision about the next source to supply to the West Pilbara Water Supply
Scheme has yet to be made. Water Corporation is investigating options,
including a second desalination plant located in the Burrup Industrial Area as a
source of future supply. It would share infrastructure with the current plant.

East Pilbara Water Supply Scheme

Port Hedland currently obtains its water from the De Grey and Yule River
Borefields. Upgrade of these fields has taken place in recent years, increasing
the capacity from 11 GL per annum to 15.5 GL. This project makes water
available for the industrial and community expansions at Port Hedland.

An upgrade of the Port Hedland Wastewater Treatment Plant (WWTP) was


completed in 2003 to cope with growth and deliver better recycling including
use of treated wastewater for watering recreational areas.

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4.6.8 Ports

The ports in the Pilbara handle tonnages far in excess of any other ports in the
State, dominated by the export trade of commodities such as iron ore, salt and
LNG. The Pilbara‟s three largest ports are located at Port Hedland, Dampier
and Port Walcott (Cape Lambert). In addition, the Department for Planning
and Infrastructure operates harbours at Point Samson (John‟s Creek) and
Onslow (Beadon Creek), which primarily service the fishing industry and
provide general marine services. A landing port also exists at Barrow Island.
Pilbara solar salt projects also have shiploading facilities at Onslow and Useless
Loop.

Port of Dampier

The Dampier Port Authority oversees the operations of the Port of Dampier.
Export operations for salt, iron ore, LNG, LPG, condensate and ammonia are
managed by the project operators. In 2008, the Port of Dampier has set a new
Australian record for tonnage throughput – 133.95 million tonnes – and has
confirmed its status as the world‟s largest bulk export port. A record 4029
vessels used the port in 2007/08. Export and import tonnages are shown in
Table 10.

Table 10 Port of Dampier tonnages (2007/08)


Commodity Tonnage
Iron ore 112.2 mt
LNG 12.3 mt
Salt 3.4 mt
Condensate 3 mt
LPG 1.5 mt
Ammonia 745 kt
Petroleum (imports) 378 kt
Data source: Dampier Port Authority 2008

A new multi-user bulk cargo export berth has been constructed at the Dampier
Port to accommodate exports from the emerging gas-to-liquids industry on the
Burrup Peninsula. This new facility was part of a $76.4 million upgrade
undertaken for the Port by the State Government. The facility services liquid
tankers and can be upgraded to handle bulk solid cargo vessels without
disrupting existing operations.

The Port also hosts a large supply base to service offshore oil and gas projects.

In 2008, Dampier Port Authority undertook detailed demand forecasts to


underpin planning work for additional general cargo berth capacity at the port.

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During the year, concept plans were developed, and geotechnical and
environmental work undertaken to support this project. It is expected that the
facility will be built by the end of 2012 in time to meet projected demand for
additional space.

Rio Tinto Iron Ore operates the Parker Point and East Intercourse Island ship-
loading terminals, which have a current capacity of 140 Mtpa, with plans for
further expansion.

Rio Tinto‟s Dampier Salt operation also operates a shiploading terminal at East
Intercourse Island.

Woodside, on behalf of the NWSJV operates LNG and LPG loading jetties.
Woodside is developing a dedicated loading jetty to serve the Pluto LNG
project.

Port Hedland

The Port Hedland Port Authority (PHPA) administers the port operations of
Port Hedland. In 2007/08 the port handled a cargo totalling 130.7 Mt and
1027 vessels. Approximately 96 per cent of exported cargo tonnage was iron
ore. Port Hedland is the world‟s largest iron ore export port. Other export
products included salt, manganese, chromite, copper concentrate and livestock.
The Port‟s received import cargo was dominated by fuel oils. Export and
import tonnages are shown in Table 11.

BHPB operates its own berth facilities at Nelson Point and Finucane Island.
FMG subsidiary, The Pilbara Infrastructure, operates the open access Herb
Elliott port facilities. These berths can handle Cape size vessels of 200,000
tonnes and more. Sites for dedicated port facilities for other future iron ore
producers (Hancock Prospecting, North West Iron Ore Alliance and others)
have been earmarked within the inner harbour. The North West Iron Ore
Alliance (Atlas Iron Ltd, BC Iron Ltd, Brockman Resources Ltd and FerrAus
Ltd) is targeting exports of 50 Mtpa by 2013.

Table 11 Port Hedland tonnages (2007/08)


Commodity Tonnage
Iron ore 125.3 mt
Salt 2.4 mt
Manganese 1.2 mt
Copper 417 kt
Chromite 210 kt
Petroleum imports 620 kt
Sulphuric acid imports 70 kt
Data source: Port Hedland Port Authority 2008

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Figure 20 Aerial view of Port Hedland

Note: BHP Billiton Finucane Island berths at right, BHP Billiton Utah Point berths at lower left, current PHPA No 1 berth and new site at mid picture and FMG
Herb Elliott port facility at upper left
Source: Port Hedland Port Authority

PHPA‟s new berth at Utah Point will be capable of handling vessels up to


120,000 tonnes with capacity of between 17 - 20 Mtpa and is designed to
handle multiple bulk mineral products (including manganese, chromite, iron
ore, titanomagnetite and possibly illmenite in due course). This berth is
designed to receive 9 Mtpa by road with the balance either pumped by slurry
pipeline (magnetite) or railed.

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The removal of manganese and chromite exports from No. 1 berth will enable
significant expansion in general cargo, containers, fuel and concentrates over
the existing public berths from 2010 until such time as new berths are
developed at Lumsden Point and South West Creek to cater for the medium to
long term growth in these commodities. Plans are well advanced for a new
60,000 tonnes multi-user concentrates shed to handle the strong growth in
copper and zinc concentrates, with four proponents seeking export capacity.

The capacity of the Inner Harbour has been indicatively capped based on
certain assumptions at 470 Mtpa. To satisfy demand for additional capacity,
export facilities in the Outer Harbour are being investigated by BHP Billiton.

Cape Lambert

The Cape Lambert port facilities are owned by Robe River Iron Associates and
operated by Pilbara Iron (part of Rio Tinto Iron Ore). The Port is used to ship
iron ore from Robe River‟s Mesa J iron ore operation, based at Pannawonica,
and from its West Angelas mine. Ore from Mesa J and West Angelas is railed
197 kilometres and 420 kilometres respectively to the processing plant and
shipping facility at Cape Lambert. Current ship loading capacity is
approximately 58 Mtpa, with expansion underway to 80 Mtpa.

4.6.9 Roads

The Pilbara is easily accessible by road from Perth by two major highways –
the Great Northern Highway (National Highway) and the North West Coastal
Highway. Several transport companies provide daily freight deliveries to major
Pilbara centres. Preparations are being made to review the Regional Road
Development Strategy (Roads 2020), which will look at strategies to integrate
road infrastructure with other modes of transport.

A Pilbara Freight Movement study was undertaken in 2004 to develop a


comprehensive understanding of freight movements occurring to, from and
within the region. Little data existed prior to the study. The study found that
between 90 and 95 per cent of truck journeys between the Pilbara and Perth
were via the Great Northern Highway. Only journeys to Onslow and or
Dampier were routinely made via the North West Coastal Highway.

The study concluded that there were very limited opportunities for modal shift
from road to sea and that a rail connection to Perth is not feasible.

4.6.10 Railways

The Pilbara has a rail network totalling 1,264 kilometres in length. The network
is owned and operated by the region‟s major iron ore producers. These

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companies use the rail lines to transport iron ore from their inland operations
to major ports in the region for export.

BHP Billiton Iron ore operates a single integrated rail network that comprises
nearly 1,000 kilometres of railway track and a rail fleet comprising 132
locomotives and 4,500 ore cars.

The 426 kilometre rail line from Newman to Nelson Point is one of Australia‟s
longest privately owned railways, with spur lines to Mt Whaleback, Orebodies
23, 25 and 29, Jimbelbar, Yandi and Area C. A typical train on this line has six
locomotives hauling more than 42,000 tonnes of iron ore in 336 ore cars. In
addition, 208 kilometres of rail links the Yarrie mine with Finucane Island.

The Rio Tinto Iron Ore Rail Division operates a single integrated rail network
on behalf of Hamersley Iron and Robe River. The system services 11 mines via
approximately 1300 kilometres of track.

The BHPB and Rio Tinto rail systems form an integral part of the iron ore
production and export process.

The 260 km Fortescue Metals Group (FMG) rail system comprises 260 km of
track from the Cloudbreak mine to Port Hedland. It is subject to a third party
access regime. The rail and port assets are both owned by The Pilbara
Infrastructure Pty Ltd (TPI) – a subsidiary of FMG.

4.6.11 Airports

The Pilbara is serviced by four public jet airports (Karratha, Port Hedland
[international airport], Newman and Paraburdoo) and three jet airports
associated with resources operations (Barrow Island, Telfer and Cloudbreak).
Karratha and Port Hedland can accept Code 4C (B737/A320) aircraft, while
others accommodate smaller (B717/BAe146) jets. Minor airports are located
near other towns and mining operations.

The Pilbara‟s airports are in general adequate for current activities. Most will
require expansion and upgrading of terminal facilities to cope with expansion
of activity, notably growth of fly-in-fly-out.

Rio Tinto Iron Ore is studying a new airport at Tom Price that is closer to the
centre of gravity of operations so staff can fly into a central airport and then be
bussed out to the various sites.

Chevron is proposing to modify and expand the Barrow Island Airport as part
of the Gorgon gas development.

Perth Airport is also a key airport facility servicing the Pilbara, with the vast
majority of passengers and freight passing through there when travelling to and

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from Pilbara airports. Perth Airport has experienced growth well ahead of
projections during the past 5 years. Intrastate passenger numbers have grown
by 6.7 per cent per annum to 1.9 million in 2008, with the Pilbara being the
dominant region10. Severe congestion has been experienced at Perth Airport as
a result of this growth – both for aircraft operators and passengers.

Perth Airport operator, Westralia Airports Corporation, is undertaking major


investment in new facilities. Phase 1 is a new intrastate terminal and apron
(Terminal WA) which will serve internal Western Australian air services and
some interstate services.

4.6.12 Telecommunications

Telecommunications services for households and SMEs in the Pilbara are


generally of a lower standard than in urban locations due to remoteness and
sparse population. In particular, broadband access is problematic away from
the major towns, with slower and less reliable satellite broadband often the
only alternative.

Resources companies close to the optic fibre cable that passes through the
region have good access to capacity for data and telephony, but at remote sites,
capacity is limited.

A 2008 telecommunications needs assessment for Western Australia


(Department of Industry and Resources 2008 – unpublished draft) found that:
• The main populations centres have good mobile telephone coverage, but
long stretches of main highways have very limited coverage
• ADSL broadband availability is limited to major towns and to within only a
few kilometres of ADSL-enabled exchanges.
As in other rural and remote areas, Telstra is the dominant provider of both
mobile telephony and broadband services. There is limited competition –
limited to major towns.

Telstra has a monopoly on optic fibre cable services to and from the Pilbara
(see Figure 21), although some companies are understood to lease wholesale
capacity to support their data transfer requirements.

The Australian Government‟s recent $43 billion National Broadband Network


announcement includes provision of $250 million to address black spots in
regional Australia. The Pilbara is likely to be a priority region, given its rate of
growth.

10 Bureau of Transport and Regional Economics 2008.

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Figure 21 WA cable network

Source: Department of Industry and Resources, StateWide Broadband Network brochure, 2008

4.7 Infrastructure planning


Recent major planning studies for the Pilbara have included:
• Pilbara Coast Petroleum and Minerals Study, Department of Industry and
Resources (2004)
• Pilbara Freight Movement Study, Department for Planning and
Infrastructure (2004)
• Pilbara Housing and Land Snapshot, Pilbara Development Commission
(ongoing quarterly)
• Country Land Development Program Annual Review – Pilbara, WA
Planning Commission (2006)
• Pilbara Ports Study (full title Port and Related Infrastructure Requirements to Meet
the Expected Increases in Iron Ore Exports from the Pilbara), Department for
Planning and Infrastructure (2007)

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• PICC Pilbara Population Projections (full title Planning for Resources


Growth in the Pilbara: Employment & Population Projections to 2020),
Pilbara Industry‟s Community Council (2008)
• Regional Hotspot Land Supply Reports for Karratha, Newman, Onslow
and Port Hedland, WA Planning Commission (2008).

4.8 Growth scenario, Pilbara growth region

4.8.1 Overview

The Pilbara region of Western Australia is the fastest growing minerals and
energy production centre in the nation.

As outlined in section 4.2, the principal mineral products currently produced in


the Pilbara are iron ore, copper, manganese, gold and salt. World scale natural
gas reserves, in excess of 80 trillion cubic feet11, are contained in the Carnarvon
Basin off the Pilbara coast.

In addition, the Pilbara is prospective for and/or hosts significant deposits of


other mineral resources, including nickel and uranium.

In the medium term, the following minerals development and/or production


activity is likely to occur in the Pilbara:
• Expansion of iron ore production from the current 235 Mtpa by two major
and two smaller producers to more than 600 Mtpa from up to six
producers
• Ongoing gold mining in the East Pilbara at the Telfer mine, with probable
development of an additional mine
• Expansion of salt production at one to three current operations
• Development of a new uranium mine in the East Pilbara
• Development of a two new base metal mines (copper or zinc)
• Development of three new LNG production facilities and other gas-based
industries such as ammonia
• Development of a large scale gas-to-liquid fuel plant.

11 Office of Energy 2006.

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Table 12 Summary of growth scenario to 2020 for the Pilbara growth


region
Mineral product Expanded and new production under growth scenario
Iron ore More than 600 Mtpa production by some six producers
Manganese Two operations producing 1.5 Mtpa
Copper Three operations producing 150,000 tpa
Gold 2 operations producing 700,000 to 1 million oz pa
Salt Two operations producing 10 Mtpa
Uranium One operation producing 2000 tonnes of product per annum

In addition, the growth scenario sees LNG production from the Pilbara rising
from around 16 Mtpa in 2008 to 45 to 50 Mtpa by 2020.

Table 13 Summary of infrastructure requirements under growth scenario to 2020 for the Pilbara
growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Land • Land availability in Pilbara towns is • Expedite planning, land release and approvals need to meet
inadequate to meet current and future the accommodation needs of rapidly growing population,
demand for housing reduce housing costs and improve service worker attraction
and retention
• Possibly establish a single authority to oversee land
planning and development
Community • Education facilities and services • Improvements to education to provide:
infrastructure inadequate to support Pilbara – Adequate schools and education services to meet needs
community profile and meet needs of of increased populations and to be able to attract and
families retain families, particularly those with teenage children.
• Health facilities and services inadequate – Special attention to Indigenous education and training to
to support Pilbara community profile and overcome the major gap in outcomes and workforce
meet needs of residents participation.
• Childcare facilities inadequate to support • Re-engineer the Pilbara health system to redress the lack of
Pilbara community profile and meet relevant and adequate services and align capacity with
needs of families demand.
• Increase the amount, quality and availability of childcare to
support families, broaden employment choices and attract
and retain skilled workers in the region.
Roads • Highways and regional roads require • Upgrade highways and regional roads to accommodate
upgrades and extensions to meet construction traffic, minerals transport and traffic associated
industry and community growth needs with movement of workers and community members.
• Road infrastructure in towns • Upgrades to road infrastructure in towns to service additional
residents and businesses.
Railways • Uncertainty over third party access • Resolve third party access arrangements to existing single-
arrangements for current single user user railways to provide investment certainty to all parties
railways

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Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Ports • Port infrastructure requires major • In order to service gas developments and to export mineral
expansion to support major increases in products, additional port infrastructure will be required,
export tonnage including:
– Expanded iron ore export facilities at existing sites
– Two new ports for iron ore export
– Expanded export facilities for mineral concentrates
– One or two new supply bases for offshore petroleum
operations
– LNG export facilities
Airports • Perth Airport terminal facilities • Upgrade airports in the Pilbara and Perth Airport to deal with
inadequate for current and future passenger and freight growth
passenger traffic
Energy • Lack of an integrated electricity system • Develop business cases for all stakeholders for the
in the Pilbara inhibits efficiency proposed integrated Pilbara electricity network
• Provide gas supplies and infrastructure to new customers
Fuel • Fuel import infrastructure requires • Upgrade the import tankage capacity in both Dampier and
expansion to supply mining demand Port Hedland to service mining growth
growth
Water • Lack of a region-wide, integrated water • Develop a strategic approach to long term water supply
strategy matching sources and supplies to demand - an overarching
water supply strategy is required

4.8.2 Resources production

The growth scenario is constructed as a view of minerals development in the


Pilbara to meet its share of anticipated mineral production for Western
Australia. It is not a “blue sky” view, but is a scenario for mineral
developments based on current plans and proposals, and could occur if
markets remain strong, policy settings are favourable and infrastructure is
available.

The growth scenario assumes:


• expansion of iron ore production
• expansion of production of other mineral products, from both current and
new operations.
Non-minerals resource development under this scenario includes:
• Development of LNG plants based on the Pluto, Greater Gorgon and
Wheatstone fields
• Development of several domestic gas plants as stand-alone operations and
associated with LNG plants
• Development of a large scale GTL plant to produce diesel fuel
• Development of two gas processing plants to produce products such as
ammonia and urea.

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4.8.3 Population growth

The key population measure normally used for service planning in Australia is
based on place of usual residence (termed the estimated resident population ‐
ERP). For rapidly growing areas with large numbers of transient workers on
different employment conditions, such as fly in‐fly out (FIFO), ERP data
needs to be supplemented with other information that better reflects the likely
level of demand for goods and services across the region. Evidence from the
Pilbara, for example, points to the large difference between ERP and the actual
numbers of people using services (e.g. water, waste treatment, transport).
Accurate measurement is, however, a conceptual and practical challenge. PICC
therefore asked Heuris Partners to compile a bottom up picture of major
planned and potential resource projects and model the resulting direct and
multiplier impacts on Pilbara employment and population growth out to 2020.

The study found that:


• Total resource related employment in the Pilbara is projected to grow from
some 15,000 to above 30,000 from 2015
• Residential employment is projected to grow from 10,000 to 15,000 in 2015
• The number of employees participating in fly-in, fly-out is projected to
grow from 5,000 to potentially 17,000 by 2015
• Applying multiplier assumptions to the resident employment numbers, the
Pilbara‟s population could reach over 45,000 in 2010, and exceed 50,000 by
2015, holding at about that level to 2020 (see Figure 22). This compares
with the 2006 estimated resident population of 41,000
• The total population (combined resident, FIFO and construction) drawing
on different levels and types of services across the region could rise from
over 60,000 in 2009 to above 75,000 by 2012.

Figure 22 Pilbara population projections to 2020

Source: Pilbara Industry’s Community Council (2008), Planning for Resources Growth in the Pilbara: Employment &
Population Projections to 2020,

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4.8.4 Infrastructure requirements

Pilbara infrastructure has been given close attention by both governments and
the private sector in recent years. The growth scenario would require an
ongoing high level of infrastructure planning and provision from government
and the private sector. Given the close interaction between the minerals sector
and the energy sector in relation to some infrastructure in the Pilbara, the
requirements set out below take into account developments in both sectors.

Under the growth scenario, the infrastructure requirements are as follows.

Land and housing

The Pilbara Industry‟s Community Council (PICC) has identified land for
accommodation as the critical factor to improving services delivery by
government and business and so help to make Pilbara communities
sustainable.

Planning, land release and approvals need to meet the needs of rapid growth
by being expedited. The multiple approvals by several agencies at both State
and local government levels have led to delays and supply falling well short of
demand.

One option put forward by industry is to establish a single authority to oversee


land planning and development in the region and so overcome the chronic
backlog, improve availability of land and accommodation and mitigate the
current very high prices. Changes to planning laws and regulations are also
required to overcome longstanding inefficiencies.

Community infrastructure

The principal drivers of the need for enhanced community infrastructure are
increased populations in towns as a result of minerals and energy industry
activity.

The standard of community infrastructure and associated services in the


Pilbara is below that required to support diverse, robust communities in a
remote region. The main towns offer facilities and services such as schools,
health care facilities, sporting and recreation facilities, and child and aged care
facilities. However, the range and depth of infrastructure and services fall
below those available in Perth and the South West. Importantly, these
services fall below the needs and expectations of Pilbara residents and aspiring
residents. These shortfalls in education, health and family services are a key
reason for problems in attracting and retaining workers in the Pilbara.

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Education

Improvements to education in the Pilbara fall into two categories:


• Adequate schools and education services to meet needs of increased
populations and to be able to attract and retain families, particularly those
with teenage children.
• Special attention to Indigenous education and training to overcome the
major gap in outcomes and workforce participation.
A study of Indigenous education requirements commissioned by PICC
included the following recommendations:
• Priority 1, Pre-Natal to School: Education incorporating hygiene, health,
nutrition and family care (including play) programs for parents and children
up to commencement at school.
• Priority 2, Programs for Indigenous Girls: While career opportunities for
Indigenous people generally in the Pilbara are limited, adolescent girls are
clearly the most seriously affected. Immediate work needs to be done to
determine attractive programs which provide them with life skills and
preparation for employment.
• Priority 3, Indigenous Teacher Program: Emphasis needs to be placed on
increasing the numbers of fully qualified Indigenous teachers and the
supply of teaching assistants (AIEOs).
• Priority 4, Transition from Primary to Secondary Education School Year 6
to Transition into Year 7: This is a particularly difficult time for many
Indigenous students and many lose contact with education and learning at
this stage as they fail to make the transition from primary to secondary
schooling, mostly due to poor literacy and numeracy skills. Specific (often
individual) attention at this time will provide students with a better chance
for managing secondary education.
• Priority 5, Indigenous Knowledge Hub: To tackle literacy and numeracy
problems in adolescents and young adults within a “Knowledge Hub”
which incorporates a larger picture emphasising pride in their culture,
heritage and knowledge systems and provides incentives for attendance.
This could also become the instrument in which priorities 1 to 4 could be
contained.

Health

In the Pilbara the greatest and growing demand is for modern, non-bed based
health services that cover the full range of needs and are available as and when
people need them. Currently the system is deficient in providing many services
„on demand‟. As well a priority is to modernise the acute-care, bed-based
system, with particular capacity to deal effectively with disaster management.

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The problems being experienced in the Pilbara are due to workforce shortages,
housing shortages, resultant capacity constraints and demand outstripping
current supply levels.

The Pilbara health system needs to be re-engineered to redress the lack of


relevant and adequate services. Any new model needs to have capacity aligned
with demand.

A workshop convened by PICC in 2007 identified implementation of the


following as necessary for the future sustainability of the Pilbara health system:
• Install and maintain an emergency response process capable of meeting
both community and industry needs
• Bring innovative solutions to an industry characterised by traditional
professional boundaries and regulation
• Finding new ways to ensure the sustainability of the health workforce, with
adequate housing a fundamental need
• Significantly improve the Pilbara Public Health Unit‟s capacity to deal with
many community health issues, particularly the growing need for solutions
to the chronic health status of Aboriginal communities
• Develop an effective intra-regional transport system to ensure the
networked health care resources can be readily accessed by patients
• Modernise ageing infrastructure, including physical facilities, ambulatory
care resources and the possible introduction of private hospitals
• Provide appropriate medical technologies and telehealth services to bring
specialists and other clinical services closer to the patient without having to
travel.
PICC proposed a partnership between Pilbara industry and WA and Australian
Governments as the best way of achieving the above.

Childcare

The Pilbara Development Commission (PDC) has identified access to quality


childcare in the Pilbara as critical to the long term sustainability of the region.
PDC says there is a need to increase the amount, quality and availability of
childcare to support families, broaden employment choices and attract and
retain skilled workers in the region. Resources companies facilitate childcare
services in several Pilbara towns. For example, BHP Billiton Iron Ore has
partnerships with the YMCA for two child care centres in Newman and Port
Hedland

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Recreation and community facilities

As stated above, Pilbara towns have a large number of recreation and


community facilities but many of these are ageing and require refurbishment or
replacement. Local and State governments need to ensure that these facilities
remain adequate and relevant to community needs.

Roads

Further upgrades of the Great Northern Highway and North West Coastal
Highway and regional roads are required to accommodate construction traffic,
minerals transport and traffic associated with movement of workers and
community members. These upgrades would continue upgrades undertaken in
recent years.

Beyond the current works to upgrade intersections on the present route of the
Great Northern Highway in Port Hedland/South Hedland, an eventual new
route will be required to facilitate truck movement and improve safety.

Development of a direct link between Tom Price and Karratha is a priority for
local residents and businesses. The second stage of this road was completed in
mid 2008, with the timing of stages 3 and 4 yet to be determined.

In addition, road infrastructure in Pilbara towns will be required to service


additional residents and businesses.

Governments have responsibility for provisions and maintenance of public


roads. Private road infrastructure on minesites would continue to be
constructed and maintained by mine operators.

Railways

Efficient rail infrastructure is key to the success of the Pilbara as one of the
world‟s premier iron ore mining regions. Pilbara railways operated by Rio
Tinto and BHP Billiton are world leaders in technology and efficient operation.
The new producer, Fortescue Metals Group also operates a railway.

Currently the Rio Tinto and BHP Billiton railways are operated by the iron ore
producers for their own operations via their State Agreements with the
Western Australian Government. Third party access arrangements need to be
resolved to provide investment certainty to all parties.

The Fortescue Metals Group rail operation (operated by The Pilbara


Infrastructure) is an „open access‟ railway, available under commercial
arrangements to other producers. So far, no other project is using this railway.

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Ports

In order to service gas developments and to export mineral products,


additional port infrastructure will be required, including:
• Expanded iron ore export facilities at existing sites
• Two new ports for iron ore export
• Expanded export facilities for mineral concentrates
• One or two new supply bases for offshore petroleum operations
• LNG export facilities.
The Ports of Dampier and Port Hedland both have expansion plans in place.
These are discussed in section 4.6. The private sector in cooperation with port
authorities is responsible for provision of single user facilities. The Port
Authorities are responsible for provision of multi-user port facilities such as
channels serving more than one operator and multi-user wharves.

The Fortescue Metals Group port operation (operated by the Pilbara


Infrastructure) is an „open access‟ port, available under commercial
arrangements to other producers. This port facility is designed for expansion.

Ongoing planning for port capacity needs to be undertaken in order to meet


demand for capacity as it grows. In particular, limits on capacity of Port
Hedland inner harbour could constrain growth of production by smaller
companies.

Pilbara Ports Study

The Pilbara Ports Study, conducted by the Department for Planning and
Infrastructure in 2006, considered the port and infrastructure requirements
needed to support the projected growth in the export of minerals, particularly
iron ore, from the Pilbara region. The study resulted in a shortlist of six
potential port sites. Further investigation revealed that there were few sites
capable of supporting a multi-user port with a capacity to handle 300 million
tonnes per annum. All sites had some issues associated with them. The
assessment revealed that Ronsard Island had the greatest potential to satisfy
multi-users at the necessary scale. The study recommended additional
investigation to confirm Ronsard Island‟s suitability and cost.

Industry operators have rejected this location, and industrial land and a new
port are being developed at Cape Preston to support the Citic Pacific iron ore
project.

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Airports

By 2020, intrastate passenger numbers at Perth Airport are forecast to reach


nearly 3 million, out of some 14 million total passengers. The Pilbara is
expected to generate more than 2 million of these passengers.

The growth scenario will generate needs for upgraded airport facilities,
including:
• Upgrade to Karratha and Port Hedland airports to accommodate additional
throughput of passengers
• Upgraded and/or new airport facilities on Barrow Island to service new
and expanded gas and LNG production facilities in the area, notably the
Gorgon Gas project
• Upgraded and new airport facilities in the East Pilbara to service additional
FIFO workforces at iron ore mines, including a new airport near Tom
Price proposed by Rio Tinto
• Major investment in new terminal facilities and associated aircraft parking
at Perth Airport to service intrastate and interstate passenger and freight
needs.
Airport owners have responsibility for upgrades. In the Pilbara, airport owners
variously are local government, mining companies and a petroleum company.
Westralia Airports Corporation operates Perth Airport.

Energy

Each mining, processing and export operation under the Growth scenario
requires electricity. Currently, in the South and East Pilbara, Rio Tinto is
responsible for the generation, transmission and distribution of electricity to its
mines, ports and associated towns. Babcock and Brown operates gas-fired
power stations near Port Hedland and Newman. WA‟s government-owned
regional power company, Horizon, will operate an 86 MW gas fired power
station in Karratha from 2010. Horizon is responsible for some transmission
and for distribution and retail. The network is known as the Pilbara‟s North
West Interconnected System (NWIS).

Mining companies are responsible for generation and supply of electricity to


their own operations where these are remote from the North West
Interconnected System. Where parts of the mining and export operations are
within network areas these operations have the option to have electricity
supplied by the generator and network operator under normal commercial
arrangements.

The current proposal for an integrated Pilbara electricity network based on the
NWIS is broadly supported by government and the private sector. The

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advantages of an expanded and integrated NWIS to all stakeholders need to be


clearly demonstrated given the capital costs that would be incurred by multiple
parties. The proposal requires further study and consultation with major
industrial electricity providers and users, to demonstrate the commercial
benefits to customers and generators and to ensure an optimised NWIS.

Rio Tinto is investing more than US$500 million in power generation and
transmission infrastructure to sustain its operations at 220 million tonnes per
annum.

Additional gas supplies for industry and power generation in the Pilbara and
beyond are likely to be provided from BHP Billiton‟s Macedon field, north of
Exmouth, and from Apache‟s Reindeer/Devil Creek gas project south west of
Karratha. Onshore LNG developments may result in further domestic gas
becoming available for use in power generation and by gas processing and
other industrial operations. Gas customers would negotiate commercial
arrangements for gas supply and transport. The timing and scale of all
domestic gas supplies will depend on market demand.

Government may need to facilitate access to land for infrastructure corridors.

Fuel

The growth scenario will result in large increases in the demand for diesel fuel.
This will require upgrades of the import tankage capacity in both Dampier and
Port Hedland. Pilbara Iron (Rio Tinto) is constructing a new purpose built
facility to import fuel at Parker Point. Shell is understood to be considering
expansion of its tankfarm at Dampier.

In Port Hedland, tankfarm operator, BP is in the process of building new tanks


on new land adjacent to existing tanks. BHP is understood to be considering
construction of its own tankfarm near Port Hedland.

Water and wastewater

While short term water supplies are adequate, sustainable long-term water
supply requires a strategic approach to matching sources and supplies to
demand and at the same time ensuring the best water management outcomes.

Until now, water supply and wastewater management for mining operations
has been exclusively the responsibility of mine operators.

Water supply to towns is both the responsibility of the Water Corporation


(West Pilbara Water Supply Scheme, Newman and Port Hedland) and Rio
Tinto though Hamersley Iron (Dampier, Tom Price and Paraburdoo).
Increased populations may generate increased demand for these services.

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At present, there is no integrated water plan covering the Pilbara and all
sources and uses of water. An overarching water strategy is required for the
Pilbara to resolve serious uncertainties for the State and the minerals and
energy sector in the Pilbara.

A series of studies are being conducted by the State Government that move
towards a more comprehensive approach. The Draft Pilbara Regional Water
Plan12 should result in a region-wide water supply and management strategy.

In particular, a better understanding is required of groundwater resources and


sustainable extraction rates across the Pilbara.

Telecommunications

New mining operations will require efficient telecommunications, which will


need to be procured from providers by minerals companies. In general, the
operations are of sufficient scale to justify dedicated, high speed facilities.
Household and small business telecommunications are the responsibility of
providers, with government providing CSO payment for telecommunications
services in remote regions.

As noted, telecommunications services in the Pilbara are generally of a lower


standard than in urban locations due to remoteness, sparse population and lack
of competition.

As in other rural and remote areas, Telstra is the dominant provider of mobile
telephony, broadband and backhaul services.

Priorities therefore are to improve telephone and broadband service levels and
coverage, and to introduce competition in wholesale provision of backhaul
capacity.

Business infrastructure

The economic activity generated by additional minerals and energy projects will
in turn generate a need for industrial infrastructure such as serviced land that
will require government and the private sector to plan and develop. Adequate
roads are also required. The Government of Western Australia and local
governments are planning for additional land requirements.

12 Department of Water, www.water.wa.gov.au/regionalplanning.

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5 Mid West growth region


5.1 Description of region
The Mid West Region covers approximately 466,766 square kilometres
(including offshore islands) or nearly one-fifth of the area of Western Australia.
The region extends along the coast from Greenhead in the south, where it
borders the Wheatbelt Region, to beyond Kalbarri in the north where it is
bordered by the Gascoyne Region. The region also extends more than 800 km
east into the mineral rich hinterland where it is bordered by the Pilbara Region
(north-east) and the Goldfields-Esperance Region (east and south-east).13

The population of the Mid-West is approximately 61,000, of which about


35,000 live in the City of Geraldton-Greenough14.

Land uses range from the rich fishing and agricultural areas along and near the
coast to the valuable pastoral and mining areas inland. The Mid West
comprises of 19 local government areas. Geraldton is the region‟s major
commercial, administrative and service centre.

The Mid West has a broad economic base dominated by mining but with
major contributions from the agriculture, retail, tourism, fishing and
manufacturing industries. The Department of Local Government and Regional
Development estimated that the Mid West‟s Gross Regional Product was $3.5
billion (indicative only) in 2005/06. This represents 2.5 per cent of Gross State
Product.

13 This section draws from (Department of Local Government and REgional Development,
2006).
14 Western Australian Planning Commission 2008.

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Figure 23 Map of Mid West region

Source: Department of Local Government and Regional Development

The value of production from the mining sector, based on nickel, gold, mineral
sands, crude oil and condensate, zinc and natural gas production, was
estimated at $2.2 billion in 2007/08, or 4 per cent of total WA production. The
region is the second largest producer of gold and base metals in the State. Due
to the unprecedented demand for resources driven largely by China and other
Asian economies, there is strong and growing interest in the Mid West‟s ample
and diverse resources, in particular iron ore and petroleum products.

Commercial activity makes a valuable contribution to the region‟s economy


with retail turnover for 2006/7 estimated at $566 million. In 2001, retail and
wholesale trade employed 19 per cent of the region‟s workforce, while 5.9 per
cent were employed in property and business services (see page 14).

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The total value of agricultural commodities in 2005/06 was $582 million, of


which wheat contributed $449 million while wool and livestock contributed
$88 million.

The Mid West has a significant manufacturing sector based on supplying


products to the agriculture, fishing and mining industries, as well as minerals
and fishing process. In 2001/02, there were 345 manufacturing establishments
in the region. There are a number of regional engineering fabricators that work
for the resources sector right across the nation and overseas

The fishing industry is an integral part of the regional economy, contributing


an estimated $145 million in 2006/07.

5.2 Current resources production


One of the Mid West‟s economic strengths is its diverse range of mineral
resources, which include gold, nickel, mineral sands, iron ore, zinc-copper, talc,
lead, gypsum, lime sands, and garnet. Natural gas and oil reserves are also
important assets to the Region‟s economy. The Goldfields Gas Transmission
pipeline and the Mid West Gas pipeline have stimulated an increase in
exploration and mining activity in the East Murchison.

Table 14 Mineral and petroleum in Mid West region, 2007-08


Product $ Value 2007-08 Location by Shire $ Value 2007-08
Gold 707,873,638 Wiluna and Three Springs 603,053,636
Copper, lead and zinc 522,248,327 Yalgoo 590,092,108
Crude Oil, Conensate 122,038,865 Irwin 152,113,323
Heavy Mineral Sands, Chromite 403,493,370 Carnamah and Coorow 291,961,431
Nickel and Cobalt 226,211,088 Morawa, Mullewa and Mt Magnet 295,195,533
Iron ore 190,302,604 Meekatharra 228,052,808
Natural Gas 31,700,904 Northampton, Perenjori and Sandstone 88,772,061
Silver 30,763,654 Cue 598,518
Construction Materials, Talc and other 15,206,968
Total 2,249,839,418 Total 2,249,839,418
Data source: Department of Mines and Petroleum 2008

The sealing of the Mt Magnet-Leinster Road, coupled with the Southern


Transport Corridor and port enhancement projects, provides companies in the
East Murchison and northern Goldfields with cost-effective transport
infrastructure. New investment in a deepwater port and rail link will facilitate
trade in bulk commodities in the Region. The Region‟s four gas pipelines will
further reinforce the Mid West‟s competitive environment for processing its

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vast mineral resources. Table 4 summarizes the mineral production by


commodities and local division in the region.

Iron ore

Geraldton was the first port in Western Australia to export iron ore in March
1966 from the Geraldton Operations Joint Venture (GOJV) mine at
Koolanooka approximately 200 km east of Geraldton. After a hiatus of nearly
30 years, global demand for mineral resources (Chinese, Indian, Korean and
other Asian economies) has seen world attention strongly focused on the Mid
West‟s iron ore resources.

Mt Gibson began exporting product from its Tallering Peak operation north of
Mullewa in January 2004. Midwest Corporation‟s Koolanooka / Blue Hills
project has been in operation for 2 years (2006-2008) at a rate of 1Mtpa. From
June 2009 to 2012 production is planned to increase to 1.5Mtpa. A rail siding
has been constructed at Tilley, just north of Morawa

A number of other iron ore projects are being proposed. It is estimated that
over 70 million tonnes per annum (Mtpa) of iron ore could be exported from
the Mid West by 2013. This would make it Australia‟s second largest iron ore
province behind the Pilbara.

Gold

The Mid West has an active gold mining industry. Gold production for
2007/08 valued at $708 million, which was 17 per cent of the State‟s total.
Production in recent years has declined after peaking at $851 million in
2000/01, as a consequence of lower production volumes and the appreciation
of the Australian dollar. The eastern part of the region, near Wiluna, is
expected to become a significant gold producing area over the next 10 years,
due to the lower cost of energy offered by the Goldfields Gas Transmission
pipeline.

Mercator has mineral resources of approximately 2.32m ounces Au within


1,932km2 of tenements spread over 200km near Meekatharra. The
Meekatharra operation is in production and mine planning and costings for
underground operations are underway. There is also an exploration program
covering its more advanced prospects.

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Nickel

In 2007/08, the region produced $226 million worth of nickel and cobalt.

Department of Mines and Petroleum records indicates that the value of nickel
production in the Mid West has declined considerably in the past two years
from $1.2 billion 2005/06. Mount Keith, located 70 km south-south-east of
Wiluna, is the Mid West‟s largest nickel mine and the largest sulphide nickel
mine in Australia. Mid West production has been reported with Goldfields
production as product is treated at the Kalgoorlie Nickel Smelter.

Mineral sands

The region is a significant producer of mineral sands, with zircon, ilmenite and
rutile being the major commodities. The deposits are located near Eneabba, in
the Shire of Carnamah. In 2007/08 the value of mineral sands production was
$403 million.

Natural gas

Natural gas production is also an important industry in the Mid West Region.
Gas deposits were first developed in the 1960s and 70s. Significant gas fields
and operation facilities include Dongara, Woodada, Xyris, Beharra Springs and
Beharra Springs North. The Parmelia natural gas pipeline transports the
processed gas from these operations, as well as gas from the North West Shelf
area, to Perth and beyond. In 1995/96, the value of natural gas production was
$38.8 million. Since 1996/97, the older fields were depleting and value of
production was in decline. However, successful exploration and development
has identified reserves, which are expected to come on stream in 2006/07. In
2007/08, natural gas production was valued at $32 million, reflecting both
increased production and higher gas prices. In addition, reserves of
commercially recoverable oil have also been developed.

Crude oil and condensate

The Mid West produced crude oil worth $188.6 million and condensate worth
$0.3 million in 2004/05. No regional production figures are available for
2007/08. Major operations include Dongara, Mount Horner, Hovea, Erima,
Jingemia and Cliff Head. The Cliff Head oil field was discovered in the
offshore Perth Basin in 2002. The project commenced oil production in 2006
via an offshore field development linked by a 14 km pipeline to a shore-based
facility.

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5.3 Planned and proposed resources production


Planned and proposed projects are summarised in Table 15and described in
the text below.

Table 15 Summary of Mid West resources projects committed or under consideration


Proponent/project Location Stage Output (Mtpa) and Capital cost Employment
mine life (yrs) ($million)
Projects under Construction Operation
consideration
Asia Iron Extension Hill Extension Hill (330 Environmental 5 Mtpa, 20 yrs $715 1,000 280
magnetite mine km south-east of approval
Geraldton)
Aviva Corporation 20km south of Power 2x200 mW $1,000 600 100
Limited Central West Eneabba base load coal
Coal and Coolimba fired power station
power projects
Gindalbie Metals Mt Karara (70 km Undergoing 8 Mtpa, 60+ yrs $1,000 400 240
Limited/ Ansteel Mt east of Morawa) environmental
Karara magnetite mine assessment of PER
level
Gindalbie Metals Mungarra (85 km Undergoing 3 Mtpa, 6 yrs $75 200 170
Limited/ Ansteel east of Morawa) environmental
Mungarra hematite mine assessment at PER
level
Mid-West Corporation Weld Range (65 km Pre-feasibility study 15-20 Mtpa, 15+ $800 900 220
Limited Weld Range iron south-west of yrs
ore mine Meekatharra)
Mt Gibson Iron Limited Extension Hill (330 Environmental 2 Mtpa, 7+yrs $73 150 100
Extension Hill hematite km south-east of approval and
mine Geraldton) construction
approved by Mt
Gibson board
Murchison Metals Jack Hills (70 km Feasibility study and 10-25 Mtpa $750 450 350
Limited Jack Hills west of Meekatharra) exploration drilling
hermatite mine Stage 2 program
Total workforce 3,700 1,460
Committed projects
Mid-West Corporation Koolanooka (160 km Undergoing 1-2 Mtpa, 5 yrs $26.4 40 60
Limited Koolanooka/ south-east of environmental
Blue Hills hematite iron Geraldton) assessment of PER
ore mine level
Data source: Department of Industry and Resources 2008

Increases in demand for raw materials, notably by China, has led to rapid
development of the Mid-West iron ore industry, as Table 15 shows. The region
is set to play a more significant role as a major mining region. Major proposals
and projects in mining and energy are listed below. 15 While the recent

15 This section draws from Mid West Development Commission, 2008.

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downturn in mineral demand and prices may cause some of these projects to
be delayed, the potential of the Mid West for mineral development is clear.

A caveat on proposed magnetite production is that ore transport by slurry


pipeline may be water intensive. However, most operations will recycle water
with dewatering at the delivery point and return pipelines as part the total
production circuit. Magnetite production is also energy intensive and will
require additional electricity supplies and gas to fuel generation.

Figure 24 Location of resource deposits, Mid West Region, with iron ore projects highlighted

Source: Western Australian Planning Commission 2008

Asia Iron – Extension Hill Magnetite (planned, $715M)

This project has a Joint Ore Reserves Committee (JORC) compliant reserve of
over 200MT at 68% Fe and a mineral resource of 5 billion tonnes. Feasibility
studies completed in 2006 indicated the potential to produce in excess of
10Mtpa of coarse ground magnetite during the project‟s life. For the first 20
years, production is predicted to be 10Mtpa with a concentrate potential of
>20Mtpa beyond that period. The company plans to use a magnetite slurry

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transport system where a slurry pump will be constructed at the mine site; a
280km slurry pipeline will connect the mine to the Geraldton port; filtering and
dewatering will occur at the port and then a return water pipeline will run back
to the mine. Up to 1,000 people will be employed during construction and 280
during the operating period of 20+ years.

Atlas Iron – Weld Range/Mt Gould Hematite (planned)

Atlas is currently working on a Scoping Study and is targeting 30-40MT direct


shipping ore (DSO) at 60-63% Fe. An Initial Resource should be identified by
October 2008. The project is due to commence production in 2012 at a target
rate of 4Mtpa DSO and mine life of 6+ years. Atlas‟ tenements are
approximately 450km from the proposed port at Oakajee so viability is
dependent on port and rail infrastructure being in place.

Crosslands Resources – Jack Hills Stage 2 Hematite (planned, $750M)

In June 2008 JORC compliant mineral resources were increased to 96.6MT of


direct shipping ore (DSO) @ 59.1% Fe and 434.8MT of beneficiation feed ore
(BFO) approximately 35% Fe. The increased mineral resource covers
approximately 40% of the strike length to be tested under the resource
expansion program underway at Jack Hills. Crosslands plans to be producing
25Mtpa beginning operations in 2011 and hopes to be exporting out of the
proposed port at Oakajee in 2011-2012. It is anticipated that the product
would be transported by rail to the Oakajee port. The construction phase of
this project would be expected to employ 450 people with operations requiring
around 350.

Ferrowest – Yalgoo Merchant Pig Iron (planned, $700M)

The resource base for this project is currently 112.5MT. A revised resource
estimate is expected around September 2008. Ferrowest plans to complete
their Definitive Engineering Study by the fourth quarter of 2008; the Bankable
Feasibility Study by the second quarter of 2009; the Financial Close by the
third quarter of 2009 and complete construction by the second quarter of
2011. Operations would commence in mid 2011 when it is expected that
1Mtpa (increasing to 2Mtpa over a number of years) of merchant pig iron at
96% Fe would be produced. At this rate, the project is expected to have a mine
life of 20+ years. Product would be transported from the mine and
beneficiation plant near Yalgoo to the MPI plant at Eradu. From Eradu, the
MPI would be transferred to the Geraldton port for exporting. Ferrowest is
investigating transport options. The Eradu site is in close proximity to various
infrastructure including power, rail and the Dampier to Bunbury natural gas

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pipeline. Establishing the plant at Eradu would be subject to detailed studies,


zoning, environmental & other regulatory approvals.

Gindalbie Metals – Karara Hematite/Magnetite (planned, $1.8B)

An exploration program is underway to increase the resource base from


1.43BT to a targeted 2.2-2.8BT magnetite. Drilling to date has defined a
497MT reserve with a 929MT resource of available magnetite. Gindalbie has a
hematite exploration target of 80-100MT at 59-60% Fe. For hematite, the plan
is to produce 2Mtpa from 2009 and 3Mtpa by 2010. Work has commenced on
a Feasibility Study to expand the magnetite start up production from 8Mtpa
(4Mtpa concentrate and 4Mtpa pellets) to 12 Mtpa and should be completed by
September 2008. The first shipment expected to take place in early 2010. The
hematite component is a 6 year project, commencing 2009, based on current
reserves. Initial magnetite production is expected in 2010 and is projected to be
a 25+ year operation. Gindalbie plans to transport product via rail to the
Geraldton port and to the proposed Oakajee port (under an expanded
production scenario).

Golden West Resources – Wiluna West Hematite (planned, $178M Oakajee or


$203M Esperance)

This project has a JORC compliant Inferred Mineral Resource of 119MT at


58.9% Fe. Golden West expects to further increase resources at Wiluna West
when it completes a resources upgrade of the C4 deposit and additional drilling
information becomes available for the Bowerbird South deposit. The Company
is endeavouring to outline a project of at least 200MT. Two studies have been
completed which evaluate two transport options, one from Wiluna to
Esperance port and the other from Wiluna to the proposed Oakajee port.
Transport costs to Oakajee are expected to be significantly less than the
Esperance option.

Midwest Corporation – Jack Hills Hematite (planned)

This hematite project has an initial JORC compliant mineral resource of


15.4MT at an average grade of 59.7% Fe. Midwest‟s exploration target is up to
36MT of direct shipping ore across the tenements. The potential to
supplement the direct shipping ore with a beneficiable feed ore product is
being evaluated. It is expected that ore will be produced at a rate of 10Mtpa
from 2013-2024. 470km of rail infrastructure is required to link this project to
the proposed port at Oakajee.

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Midwest Corporation – Koolanooka Magnetite (planned, approx $1B)

This project has a magnetite mineral resource of 430MT at 35% Fe,


representing approximately 26% of the mineralised outcrop strike length.
7Mtpa (2015-2020) would be produced at a minimum but could potentially be
up to 14Mtpa (2020-2050). Although the scoping study has been completed,
only 1/3 of the potential resources have been delineated. Rail is the preferred
option to transport product from the mine to the proposed Oakajee port.
Midwest has not progressed through the environmental approvals process for
this project as the focus is on the Weld Range tenements.

Midwest Corporation – Robinson Range Hematite / Manganese (planned)

An exploratory mapping program of hematite deposits has returned average


assay ranges of 59.2 – 63.4% Fe over substantial strike lengths. Resource
definition drilling has commenced and it is expected that an estimated resource
will be available by the end of 2008. The hematite component of this project is
dependent on rail and port infrastructure being in place. Midwest is also
investigating the potential for a small scale manganese operation which is being
targeted for mining in the second half of 2008.

Midwest Corporation – Weld Range Hematite (planned, $800M)

This hematite project has a 149.2MT JORC compliant mineral resource at


54.8% Fe, representing approximately 38% of the mineralised outcrop length.
The exploration target is up to 299MT across the tenements. The expected
production rate is 15Mtpa from mid 2011 to 2026. Midwest plans to crush,
screen and load into trucks to transport product to a rail link. 400km of rail to
the proposed deepwater port at Oakajee is required for this project. This
project is currently at the exploration stage and test mining is expected to
commence in 2009. Construction of this project would see 900 people
employed and 220 would be required for operations.

Mt Gibson – Extension Hill Hematite (planned, $73M)

This project has reserves of 12.8MT at 60.3% Fe and resources of 19.5MT at


60.3% Fe. A feasibility study completed in August 2007 confirmed that a
3Mtpa hematite mining operation would generate strong financial returns. Mt
Gibson has approved commencement of construction and first ore shipments
are expected in the 1st half of 2009. Product will be trucked from Extension
Hill to Perenjori and then railed to the Geraldton Port. Employment:
approximately 150 for the 12 month construction period and 100 for the 5
years of operation.

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Apex Minerals – Wiluna, Gidgee and Youanmi Gold (planned, $62M)

The total resource at Wiluna is 2.9MT at 6g/t gold for a contained 559,000 oz
of gold. At Wilsons, the company has 1.5MT at 6.9g/t gold for 325,000oz.
Gidgee‟s resource stands at 1.46MT at 6.9g/t gold for 325,000oz. Youanmi
includes the Youanmi Deeps refractory gold deposit with an indicated and
inferred resource of 2.4MT at 8.5g/t for 658,000oz of gold. Apex is planning
to produce 100,000oz of gold by 2009. Production will increase to 150,000oz
p.a. when mining begins at Wilsons and will add another 50,000ozpa when
Youanmi comes on line. The company intends to truck ore mined at Wilsons
to the plant at Wiluna for processing in the existing bacterial oxidation plant.
This project has an expected initial mine life of 3 years.

Giralia Resources – Beebyn-Weld Range Iron Ore and Snake Well Gold
(exploration and planned)

Giralia‟s Beebyn-Weld Range project has an initial JORC hematite resource of


7.2MT at 57.2% Fe for half of the prospective zone. Their exploration target is
10-20MT. The Snake Well project has an existing gold resource of 2.84MT at
1.9g/t Au. Giralia is progressing with scoping studies into a low capital cost
start up mining operation for the Snake Well project.

Mount Magnet South – Mt Magnet and Payne’s Find Gold (exploration)

Mount Magnet South is currently analysing data pertaining to the newly


acquired Curara Well to build a prioritised target list. This mine has a JORC
compliant remnant indicated resource of 2.06MT at 2.12g/t gold for
137,700oz. Exploration continues at their South Lease, Caves Well, Foothills
and Amazon tenements. The addition of the Curara Well project has made
Mount Magnet South the largest leaseholder in this highly prospective and
under explored region.

OZ Minerals – Golden Grove Gold/Zinc/Copper/Silver

Golden Grove has been in operation since 1990 with production for 2008
planned to be 135-145,000 tonne of zinc; 20-25,000 tonne of copper; 50-
55,000 ounces gold, 3-3,500,000 ounces silver and 10-13,000 tonne of lead.
This project has current resources of 1.2MT of zinc, 0.6MT of copper, 0.8Moz
of gold and 38.9Moz of silver however significant discoveries in 2007 support
the potential for increases to mine life and capacity (2-2.5Mtpa) beyond 2020.

Gunson Resources – Coburn Mineral Sands (planned $100M)

Although this project is located in the Gascoyne region, it is expected that


mineral sands concentrates would be exported through the Geraldton port.

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Full approvals were obtained in March 2007 and construction is expected to


take 58 weeks. Gunson expect to produce 42,000tpa of zircon; 4,000tpa of
secondary zircon; 84,000tpa of ilmenite; 9,000tpa of rutile and 8,000tpa of
leucoxene. The proposed project has a total heavy mineral ore reserve of
306MT which equates to a 17.5 year mine life. Coburn is currently the third
largest greenfields zircon development project in the world.

Iluka Resources – Narngulu Facility expansion (planned, $60M)

Iluka Resources has gained State Government approval and is seeking


Parliamentary approval for a plan to significantly extend the life of its
Narngulu mineral sands processing facility. Commencing early 2010 Iluka plans
to import 600,000 tpa of heavy mineral concentrate (HMC) from its Jacinth
Ambrosia project in South Australia. The HMC will be shipped to the
Geraldton port and trucked to Narngulu for processing. The current
processing facilities will be expanded to accommodate this plan. The Jacinth
Ambrosia project is expected to extend Mid West operations beyond 2020.
Iluka Resources will use predominantly local contractors and suppliers for the
project.

Reed Resources – Barrambie Vanadium (planned, $256M)

The current total Indicated & Inferred Mineral Resource is estimated at


36.3MT at 0.82% V2O5. This is the highest resource grade of any of the major
vanadiferous magnetite deposits in Australia. Commissioning is expected in
late 2010 with an indicated production rate of 20 million pounds of vanadium
pentoxide per annum. Existing tenements hold the potential for a mine life of
25+ years. The EPA received a draft Environmental Scoping Document in
April 2008 and a final phase of RC drilling has been permitted. This drilling
program will enable a final resource and reserve estimate by the end of
September 2008, after which the company will release the results of its
financial modelling.

Windimurra Vanadium (proposed, $296M)

This project is one of the world‟s largest known vanadium deposits and has
proved and probable ore reserves of 79MT at 0.46% V2O5. The mine, which
could produce approximately 5,700 tonnes of vanadium as ferrovanadium over
its expected 20 year life, was expected to re-open in the last quarter of 2008.
Depressed vanadium process and financial issues have forced postponement of
this project, which may be sold.

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ARC Energy – Perth Basin Oil and Gas (operating and exploration)

ARC has an active drilling program and current onshore exploration is focused
on the Dongara and Wagina Sandstones and the Denison tenements. Both oil
and gas have been discovered at the Frankland and Dunsborough onshore
prospects, complementing the Cliff Head Oilfield. The offshore Cliff Head Oil
Field produces 11,700 barrels of oil per day with the oil trucked to Kwinana.

5.4 Resources-related demographic


characteristics
The Mid West Region had an estimated resident population of 48,545 in 2006
of which about 35,000 live in the City of Geraldton-Greenough. The
population of the Mid West Region makes up 9.2 per cent of the people living
in regional Western Australia and 2.5 per cent of the State‟s population.

The number of employed persons by industry is shown in Table 16. In


1995/96 the workforce totalled 23,992 people, increasing to 24,276 in
1999/00. By 2003/04 employment reached 26,065, decreasing to 25,535 in
2005/06. Employment is trending upwards with mineral development and
growth in associated industries.

Agriculture, retail and education and training are the three most important
industries in employment, taking 30 per cent of the employment by industry.
Mining continues taking the sixth place in employment in the region, preceded
by agriculture, retail trade, education, health care, construction and public
administration. Such the distribution of employment can be traced back to
1996, showing a slow transition between industries employment in the region.

Table 16 Employment by industry – Mid West region, 2006


Economic activity Employment Percent
Agriculture, forestry & fishing 3,230 12.64
Retail trade 2,776 10.87
Education & training 2,207 8.64
Health care & social assistance 2,199 8.61
Construction 2,090 8.18
Public administration & safety 1,855 7.26
Accommodation & food services 1,698 6.64
Mining 1,612 6.31
Manufacturing 1,322 5.17
Transport, postal & warehousing 1,280 5.01
Other services 944 3.69
Wholesale trade 803 3.14
Administrative & support services 689 2.69

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Economic activity Employment Percent


Professional, scientific & technical services 677 2.65
Rental, hiring & real estate services 379 1.48
Financial & insurance services 376 1.47
Electricity, gas, water & waste services 272 1.06
Information media & telecommunications 179 0.70
Arts & recreation services 153 0.59
Total 25,535 100
Data source: Australia Bureau of Statistics, 2006

In 2005, population was projected by the WA Planning Commission16 to


increase to about 57,000 by 2020. CME survey results forecast that the
minerals and energy sector will drive an increase in the resident population in
the Mid West of up to 8,500 by 2020 (see Figure 25). If organic growth is
added, then the WAPC forecast now could be conservative.

Figure 25 Minerals and energy driven population growth, Mid West


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

16 WA Planning Commission 2005, WA Tomorrow.

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5.5 Current infrastructure


The growth of the resources sector in the Mid West is limited by the current
state of the infrastructure in the region. For development plans to come to
fruition, a number of significant infrastructure constraints must be addressed.

The present lack of critical infrastructure in the region presents a significant


barrier to entry for industry. The potential inability of operations in the Mid-
West region to produce and transport material at projected capacity could
present consequences to the economy of the Mid-West, the state and the
nation.

The following sections set out the state of current infrastructure and highlight
constraints to growth.

5.5.1 Water

Lack of water availability will be a significant issue for parts of the future iron
ore industry, in particular for extraction and processing of magnetite ore. As
well, growth of towns will require augmentation of existing water supply.
There are some potential issues between requirements of different water users:
towns, agriculture and mining.

The Water Corporation operates water schemes at Geraldton, Kalbarri,


Northampton, Horrocks, Nabawa, Yuna, Mullewa, Yalgoo, Mt Magnet, Cue,
Meekatharra, Wiluna, Sandstone, Mingenew, Morawa, Perenjori, Carnamah,
Coorow, Three Springs, Eneabba, Leeman, Dongara/Denison and Greenhead.
The area between and including the City of Geraldton and the towns of
Mullewa and Dongara/Denison are serviced by an integrated scheme from the
Allanooka Borefield.

A 44 km pipeline now runs alongside the North West Coastal Highway from
Geraldton to Northampton. Pump stations were completed in 2008 and the
construction of permanent tanks at White Peaks and Hall Road will be finished
by 2010.Water supply to farmlands is generally limited to those properties
adjacent to existing mains. Construction of a significant extension of the
Geraldton scheme to Yuna and surrounding farmlands will be completed in
2006. There is also a stand-alone Mingenew Mullewa Farmlands water supply.
Water supply is drawn from groundwater sources. The Shire of Northampton
operates a limited water scheme at Port Gregory though plans are being
developed to expand this to meet the settlement‟s growing needs. The Water
Corporation also operates waste water systems at Geraldton, Kalbarri,
Horrocks, Three Springs, Eneabba, Leeman, Greenhead and
Dongara/Denison. The Shire of Morawa runs a comprehensive scheme and
the Mullewa Shire operates a limited scheme.

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The CME study found that the minerals and energy sector in the Mid West
sector is expected to continue to source additional demand mostly through self
extracted water resources.

The CME report notes that the groundwater allocation limits in the Mid West
total 429 GL/a, which in total appears to be adequate for minerals
development. Due to fragmented geology, however, water availability varies
across the region. Water availability for proposed mining operations in parts
of the region is therefore limited. Borefield and pipeline infrastructure will
therefore be required to supply a number of mining operations.

5.5.2 Energy

Forecast electricity load is expected to exceed supply by 2009-10 without new


transmission capacity. Uncertainty regarding the timing, scale and energy
requirements of new mining proposals is an impediment to more detailed
planning for supply and distribution of electricity. Power supply for current
requirements has also been identified as inadequate by several local
government authorities.

Gas supply from the Perth Basin has fallen and in the absence of major new
discoveries in the region, new gas supplies will need to come from offshore
fields in the Pilbara. Timing of new supplies is uncertain.

Electricity is provided to the Mid West Region by dual 132 kV lines via the
interconnected grid from Bunbury, Muja and Kwinana power stations.
Geraldton, Chapman Valley, Golden Grove, Three Springs and Eneabba each
have 132 kV zone substations. Power is then distributed by 33 kV lines to
Dongara, Kalbarri, Northampton, Mullewa, Narngulu, and Nabawa and
throughout the Geraldton-Greenough area. Power supplies are supplemented
by a 20 MW and a 105 MW gas powered generation station located at Utakarra
(Geraldton) and Mungarra (60 kilometres south-east of Geraldton)
respectively. Six new power stations were constructed in the Region in
2003/04 at Meekatharra, Cue, Yalgoo, Wiluna, Mount Magnet and Sandstone.
A new substation is currently being built in Geraldton (Rangeway) and is due
for completion in late 2006.

In addition, new lines between Geraldton/Dongara and Northampton/Port


Gregory will be built. Mining customers meet the full cost of providing a
power supply with a non-refundable capital contribution. Construction of the
$210 million Alinta wind farm at Walkaway 25 km south east of Geraldton was
completed in mid 2005. Consisting of 54 turbines producing 90 MW of power
(enough for 60,000 homes), this is currently the largest wind farm in the State.

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The CME study found that incremental electricity demand from the Mid West
minerals and energy sector is forecast to grow moderately for the period 2008-
2012 and then remain static for the period 2013-2014 before resuming steady
growth (Figure 26).The majority of the Mid West incremental electricity
demand from the sector is expected to be met by self generation.

Figure 26 Forecast minerals and energy electricity demand, Mid West


(relative to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

There are two proposals for new power stations in the region:
• Aviva Corporation‟s Coolimba coal-fired power station near Eneabba
(400MW)
• Eneabba Energy‟s Centauri 1 gas fired power station (168MW).
Western Power is planning to construct a new 330,000 volt (330 kV)
transmission line between Perth and Geraldton, starting in 2009. The
transmission line will provide power to existing and proposed energy users in
the Mid West region including new mining and industrial projects.

The Mid West Region is serviced by four natural gas pipelines: the Parmelia
Pipeline (Dongara-Pinjarra); the Dampier-Bunbury Natural Gas Pipeline
(DBNGP); the Goldfields Gas Pipeline (North West Shelf-Kalgoorlie); and the
Mid West Pipeline (DBNGP to Windimurra). A spur line from the DBNGP
services Geraldton and industry in the Narngulu industrial estate. Gas is
supplied from fields in the region and from the Pilbara offshore fields.

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Incremental demand for natural gas from the Mid West minerals and energy
sector is expected grow from 0.7 PJ/a in 2008 to more than 7 PJ/a in 2020
above 2007 consumption levels. A significant step change in demand is
forecast for 2012 where an additional 3.2PJ/a is expected to be required due to
the commencement of several new operations.

Figure 27 Minerals and energy sector gas demand, Mid West


(incremental to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

5.5.3 Transport – Roads

Road transport is vital to the construction and ongoing supply of new mines.
Some road transport of ore is also envisaged, although rail is the preferred
long-distance transport mode. The geographically dispersed nature of the
mineral deposits in the region represent a great challenge, requiring substantial
route-kilometres of new and upgraded roads

Severe pressure on the road network will be experienced during the


construction phase of major projects. Ongoing demands for supply and
servicing of mines (including for transport of workers) will place ongoing
demands on roads.

The Mid West at current demand levels is well serviced with a network of
major sealed roads connecting Geraldton to Perth, the North West and the
hinterland, which provides for extensive use of double and triple road trains.
Major arterial roads include: the Brand Highway linking Perth to Geraldton;
the North West Coastal Highway from Geraldton to the North West via
Northampton, Carnarvon, Karratha and Port Hedland; the Midlands Road

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between Moora and Dongara; and the eastern connection from Geraldton to
Leinster via Mullewa, Yalgoo, Mt Magnet, Sandstone and Agnew. Of the
Region‟s strategically important east-west links, the Mt Magnet-Leinster Road
has now been sealed completing the link from Geraldton through to Leinster.
The upgrade and sealing of the Meekatharra-Wiluna road is a priority for the
region as is the completion of Indian Ocean Drive. These works will play a
vital role in opening up and further developing the mining, pastoral and tourist
sectors, as well as serving the needs of Mid West communities.

Work on the $88 million Southern Transport Corridor (Stage 1) was completed
in late 2005 to provide a new direct transport link to the port of Geraldton for
both road and rail from the Narngulu industrial estate. Stage 2 (2008) has
further improved the road corridor to Narngulu and the Geraldton-Mount
Magnet Road and enhance the separation of light and heavy vehicles.

5.5.4 Transport – Rail

Efficient rail transport is essential to the development of the iron ore industry
in the region. However, there is currently uncertainty over who will ultimately
construct and operate major new rail infrastructure in the Mid West.
Upgrading of the existing rail network is required to accommodate initial iron
ore transport requirements. For further iron ore development, new rail routes
to the future port of Oakajee and connections to Narngulu need to be
identified and steps put in place to secure the corridors.

Babcock & Brown (as Westnet Rail) provides track access to the rail network
in the Mid West and throughout the southern half of the State. Queensland
Rail (operating as ARG) controls the locomotives and wagons for the
movement of freight. Provision of this service (operation of locomotives and
wagons) is open to competition. The haulage task in the Mid West Region is
made up exclusively of bulk products including grain, iron ore, mineral sands
and coal.

The main depot at Narngulu, 13 kilometres from the port of Geraldton, is the
junction of the two railway lines that come from the south. One line travels
through Northam, Wongan Hills, (approximately 25 km of line between
McLevie and Maya south of Perenjori is not used) Perenjori and Mullewa. The
other line passes through Moora, Three Springs and Dongara. In addition, a
dedicated line that branches off at Dongara services the mineral sands deposits
at Eneabba.

The State Government funded a direct rail link between Narngulu and the Port
of Geraldton through the Southern Transport Corridor. Provision has also
been made for a Services Corridor, including a railway, to link the industrial
estate at Narngulu with the proposed estate at Oakajee and the State‟s main rail

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network. Corridors for rail between future mines and Oakajee port have yet to
be reserved.

5.5.5 Transport – Ports

The Port of Geraldton is one of the most diverse regional ports in Western
Australia with six land-backed berths. It can accommodate vessels of up to
55,000 tonnes, but not Cape-size vessels to transport large tonnages of iron
ore.

Grain handling facilities include two wharf gantries with a capacity of 1,000
tonnes per hour (tph) each and a mineral sands gantry with a capacity of 2,000
tph. The $103 million Port Enhancement Project, completed in 2003, has
resulted in a deepening of the harbour to 11.5 metres at zero tide and up to
12.8 metres on a maximum tide of 1.3 metres. Other improvements include
two new tugs and a new mobile shiploader to avoid cargo contamination.

In response to the increasing iron ore trade within the Region, a $35 million
upgrade to Berth 5 was completed in 2007. This upgrade established Berth 5
as a dedicated iron ore berth capable of handling up to 10 million tonnes per
annum (Mtpa). In addition, consideration is being given to the construction of
a Berth 7 ($50+million) as a dedicated berth for Mt Gibson Iron‟s Extension
Hill magnetite project. Imports include petroleum products, phosphate,
fertiliser and urea. Exports include wheat and other grains, mineral sands, talc,
stockfeed, livestock, copper and zinc concentrates and iron ore.

The total trade through the port for 2003/04 was 4.4 million tonnes, which
included imports of 400,451 tonnes and exports of 3,957,557 tonnes. Total
trade in 2004/05 increased to 5.5 million tonnes, reflecting a decrease in
imports to 353,837 tonnes and an increase in exports to 5,148,692 tonnes.

High volume hematite iron ore projects are driving the development of a deep-
water port at Oakajee, 20 km north of Geraldton. The proposed facility will be
connected to mineral deposits via a new heavy haul rail line. The Oakajee port
will have the capacity to accommodate cape-sized vessels (up to 180 000
tonnes). The Oakajee port itself will have a 170 ha footprint over the ocean
seabed.

Plans for land based facilities include a strategic industrial core supported by
general industry and surrounded by a buffer zone.

The port will initially be designed to cater for 60 million tonnes of iron ore to
be transported per annum with flexibility in the design to allow more than 90
million tonnes per annum, in addition to other commodities to be transported
as they come online.

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5.5.6 Transport – Air

The Geraldton Airport is a Civil Aviation Authority licensed aerodrome,


owned and operated by the City of Geraldton-Greenough. Services provided
by the airport include apron parking for four large commercial aircraft, a
helicopter pad, space provisions for two private charter operators, and
maintenance for light aircraft. The City has adopted an airport master plan to
provide guidelines for the future expansion of the Geraldton Airport. In 1999
the main runway was upgraded to accommodate aircraft up to B737-800. RPT
services are provided principally by F 50 aircraft. General aviation hangers have
been built and a new $3.6 million passenger terminal was constructed in 2001.
In recent years, an airport and terminal has been built at Kalbarri and this
compliments the existing network of airports from Perth north along the Mid
West and Gascoyne coast, which includes Geraldton, Shark Bay, Carnarvon
and Exmouth (Learmonth) airports.

Skywest and Skippers provide regular passenger transport services to the Mid
West towns of Geraldton, Kalbarri, Monkey Mia, Meekatharra and Wiluna.
There are also a number of private charter operators based in the Mid West.
Mining companies contribute to the air traffic and facilities in the Region as
they operate fly-in/fly-out (FIFO) air services from mine sites in the Mid West
to Perth or Geraldton.

5.5.7 Land and corridors

Narngulu Industrial Estate near Geraldton is reaching capacity in terms of


noise and air quality, and it is highly likely that land in this estate will only be
available in future to „benign‟ new industries.

Land will be required for infrastructure (services) corridors, rail reserves and
road reserves. Priority forward planning is required to identify and secure
corridors ahead of the time when they will be required.

Strategic land use planning needs to keep pace with developments, including
the identification of industrial and residential land requirements in regional
towns. Without such land, these towns will be severely hampered in their
ability to service, and benefit from mining projects.

5.5.8 Education and training

While education and training services in the region are generally adequate for
current needs, mining industry development as envisaged, together with
increased population will generate higher demand. Planning needs to focus on
education and training improvements in the region, with particular emphasis
on providing training facilities relating to the resources industry.

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The State Government provides a range of education services in the Mid West
region. There is one senior secondary college in the region, eight district high
schools and 22 primary schools. In addition, the Holland Street School
provides education support for children with special needs. The Country
Hostels Authority runs a residential college with facilities for boarders in
Geraldton, which was upgraded into a combined 96-bed hostel in early 2002.
Agriculturally based secondary education is available in Morawa. The State
Government invested some $27 million in new and upgraded education and
training facilities in 2007-08.

There are a number of Catholic education facilities in the Mid West. There are
three Catholic primary schools and a Catholic secondary school located in
Geraldton. Mullewa and Northampton both have Catholic primary schools.
The Christian Brothers operate a Catholic agricultural junior high school at
Tardun, which offers education for boys in years 8 to 10. However, the school
is moving towards Co-Education for years 11 and 12 in 2006/07. There are
two independent Co-Educational Colleges located in Geraldton, the Geraldton
Grammar School (Anglican) and Strathalbyn Christian College (holds
membership in the Christian Parent Controlled Schools Association), both
offering

Central West TAFE is a provider of vocational education and training. As a


registered training organisation (RTO) under the auspices of the Western
Australian Department of Education and Training, Central West TAFE
delivers quality, training products from certificate level courses through to
selected university programs. These include TAFE award qualifications;
selected university programs; new apprenticeships; Vet in Schools Programs;
lifestyle and community courses; and interactive training network (corporate
training and consultancy).

Kurongkurl Katitjin (School of Indigenous Studies) is located at the TAFE


campus, but existing as a separate higher education service provided through
Edith Cowan University. Kurongkurl Katitjin offers Indigenous Orientated
University Courses of study, which can lead to a Bachelor of Social Science in
Indigenous Studies, a Bachelor of Education, a Bachelor of Arts in Aboriginal
Studies and a Master of Arts in Indigenous Sector Management. The school
currently has indigenous and non-indigenous students enrolled in its courses.

Established in 2002, the Geraldton Universities Centre is a consortium of


Curtin University of Technology, Edith Cowan University and the University
of Western Australia. The three participating universities offer a variety of
courses across a range of disciplines. In addition, units are offered in a variety
of modes from full face-to-face delivery to on-line delivery supported by local
tutorials. Students are supported through mentoring programs, study skills
assistance and information literacy sessions and by the Geraldton Universities

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Centre Student Association. It is expected that GUC will grow to cater for
more than 200 students. Courses are expected to diversify to meet local
demand. A purpose built facility was officially opened in February 2006.

Separation Point Marine Precinct is being progressed as a marine education,


training and industry research centre. Construction of two components of the
three stage project, were completed in 2006 at a total cost of $12.5 million.
Components of the Marine Precinct include:
1. The Batavia Coast Marine Centre is being progressed by the Central West
College of TAFE and the Department of Education and Training as a best
practice marine education and training facility.
2. The Abrolhos Islands Research Institute will facilitate research into marine
anthropological/archaeological related studies and coral and marine
ecosystems.
3. The Geraldton Marine Interpretive Centre, being progressed by the Mid
West Development Commission, aims to showcase the Region‟s unique
marine systems.

5.5.9 Health services

The Mid West region has access to good health care facilities and services,
although in some rural communities, medical services fall below community
expectations. The growth of the mining industry and associated growth of
towns will generate needs for upgrades to medical facilities and services.

There are approximately 33 general practitioners (GPs) based in Geraldton,


along with private dental, physiotherapy, occupational therapy, speech
pathology, podiatry, clinical psychology, dietetics and chiropractic services.
There are also resident GPs located in Kalbarri, Northampton, Mullewa,
Morawa, Three Springs, Dongara, Perenjori, Meekatharra and Mt Magnet.

A new purpose-built health centre was opened in 2008 in the Geraldton CBD
by the Geraldton Medical Group. The centre features 14 GP consulting rooms,
full treatment nursing facilities, on-site pathology, pharmacy and allied
professionals.

The Region‟s health services are complemented by the Combined Universities


Centre for Rural Health (CUCRH), a unique academic unit based in Geraldton
and serving the Mid West, Gascoyne, Pilbara and Goldfields Regions.
CUCRH‟s aim is to build the knowledge base and capacity of the rural health
sector through education, innovative and applied research, professional
support and policy analysis.

The Royal Flying Doctor has a base in Meekatharra and provides General
Practitioner services to Wiluna, Sandstone, Cue and Yalgoo. Additionally, the

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Geraldton Regional Aboriginal Medical Service (GRAMS), a community-


controlled health service, offers culturally appropriate medical and health
services from a Geraldton clinic. GRAMS also operate a mobile clinic, which
services communities in Mullewa, Mt Magnet, Murchison, Yalgoo and
Meekatharra. Geraldton is one of two non-metropolitan towns in Western
Australia that has public and private hospitals providing access to a broad
range of specialist health services.

The Geraldton Regional Health Campus (redeveloped in 2005 at a cost of $50


million) is a 66-bed hospital that provides a 24-hour Accident and Emergency
Department and has acute medical, surgical/paediatric and maternity wards.
The hospital also has ten day-bed places, which cater for endoscopy, surgery,
renal and chemotherapy services. The St John of God Hospital is a 60-bed
hospital established in 1935. The hospital facilities include operating theatres,
general medical and surgical, a maternity unit, hospice, medical imaging and a
specialist centre. Other Mid West Health Units are located in Dongara,
Kalbarri, Leeman, Morawa, Mullewa, Northampton, Three Springs, Yalgoo,
Meekatharra, Mt Magnet, Cue and Sandstone.

This new Morawa Health Centre services Morawa, Perenjori, Latham and
surrounding communities. Facilities include a 24 hour emergency department,
aged care accommodation for up to 10 residents, day centre for the elderly,
therapy services and the provision of health promotion programs.

Nursing posts are located at Cue, Mt Magnet and Yalgoo. A number of visiting
specialists travel to Geraldton and Meekatharra on a regular basis. Visiting
services to Geraldton include audiology, endocrinology, geneticists,
immunology, nephrology, ophthalmology, paediatrics, pain management,
plastic surgeons, radiation oncology, rheumatology and urology. Meekatharra
offers occupational therapy and speech pathology on a weekly basis and
physiotherapy and podiatry on a monthly basis.

5.6 Infrastructure planning

5.6.1 Planning initiatives

Recent planning studies for the Mid West that have focussed on or included
infrastructure are:
• Mid West Regional Minerals Study, Department of Resources
Development and Department of industry, Science and Resources (2000)
• Roads 2025 Regional Road Development Strategy, Mid West, Main Roads
Western Australia and Western Australian Local Government Association,
2007 Review
• Mid West Infrastructure Analysis, WA Planning Commission 2008

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• Country Land Development Program Annual Review 2006 – Mid West


• Geraldton Regional Plan, WA Planning Commission 1999
• Oakajee Port Project – State Government (through DPI) co-ordination the
development of a new deep water port at Oakajee, that is capable of
servicing the anticipated needs of miners in the Mid West Region (current)
• Midwest-Goldfields Corridor Strategy, Department for Planning and
Infrastructure (2007).

5.6.2 Planned infrastructure

This section sets out infrastructure projects that are underway, planned or
proposed in the Mid West.

Transport – Road

Indian Ocean Drive Stage 2 (planned, $110M)

Stage One of the Indian Ocean Drive project ($20M project linking into the
Ocean Farms and Seaview Estates) was opened to traffic on 14 March 2008.
Work is scheduled to commence on Stage Two (completion of the 55km link
between Lancelin and Cervantes) in July 2008, with completion expected mid
2011. The project has environmental approvals and a road reserve has been
excised from areas set aside for conservation. Once the road has been
completed it will be a major tourism and recreation route, reducing the amount
of time spent travelling between Perth and the Mid West. It is anticipated that
the Indian Ocean Drive will facilitate regional growth by providing direct
access to centres with different commercial and administrative services.

Southern Transport Corridor Stage 2 (planned, $58M)

Stage 2 will involve the construction of approximately 8.7 km of new roads


from Stage 1 of the corridor just east of the Waverley Street bridge following
the new rail alignment to the Narngulu Industrial Estate and then proceeding
eastwards to the Geraldton Mt Magnet Road (east west link) near the airport.
This will move heavy vehicles from a section of highway with direct access to
residential property, a school, shopping centre, community centre and sporting
facilities. Construction is expected to commence by the end of 2008, and the
new sections of road open to traffic in early 2010.

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Transport – Rail

Mid West Rail Infrastructure (planned $2B)

Concurrent to the Oakajee Port tender process, Oakajee Port and Rail (OPR)
and Yilgarn Infrastructure have been progressing the planning for their
respective heavy freight rail corridors. These will connect Weld Range/Jack
Hills to the proposed Oakajee Port. It is understood that the proposed
corridors will provide for possible future extensions eastwards from Weld
Range to the Wiluna West deposits and southwards (from around Mullewa) to
the deposits at Mt Karara and Koolanooka. Both OPR and Yilgarn will be
given the opportunity to construct an open access freight railway along this
corridor OPR and Yilgarn have been liaising with WestNet Rail to assess the
viability of constructing the proposed Oakajee freight railway along the existing
railway corridor west from Mullewa. OPR and Yilgarn will be submitting their
respective corridor proposals for independent assessment and the final
selection of a preferred corridor by Government. A consultant is being
engaged by the Department for Planning and Infrastructure to undertake a
like-for-like comparison of the proposed rail corridor alignments. Consultation
with the rail proponents and key stakeholders will form an integral part of the
corridor options assessment. It is expected that a recommendation report will
submitted to Government by the end of October 2008. The western section of
the Oakajee rail corridor, selected by Government, will connect to and be
integrated with the planned Narngulu-Oakajee Services corridor. It is
anticipated that this services corridor will include a future Geraldton outer
bypass road; a rail connection from Oakajee to the existing freight rail network
and the Geraldton Port; and for trunk utility services.

Transport – Port

Geraldton Port Train Unloader Upgrade (in progress)

GPA has commenced work to upgrade the iron ore train unloader facility. This
project includes increased iron ore receival rate through the train unloader to
3,000 tphr; extension of the port rail network to accommodate longer trains;
alignment of GPA‟s Berth 5 iron ore shiploading capacity with iron ore receival
capacity and reduced reliance on road transport for delivery of iron ore to port.

Oakajee Deep Water Port and Industrial Estate Planned, $2B)

Oakajee is located approximately 20 km north of Geraldton and the industrial


estate comprises approximately 6,500 hectares of land owned by the WA State
Government. Of this, 1,100 hectares is zoned for heavy industrial and 200
hectares is zoned for support industries. LandCorp has commenced Structure
Planning for the Industrial Estate and will finalise now that Oakajee Port and

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Rail (OPR) has been announced as the preferred developer for the
construction of the port. Detailed negotiations will now occur with the OPR
Oakajee Port and Rail to finalise all the technical, commercial, legal, social and
environment aspects of the port development; prior to the signing of a
Development Agreement with the State Government. This process is expected
to be completed by the end of 2008.

Final go ahead is dependent on OPR securing project finance which will


require confirmation of the project‟s feasibility, including the proving of iron
ore reserves. Feasibility is expected to be finalised by mid 2009. The tender
process called for designs that would allow the export of in excess of 100Mtpa
and accommodate vessels up to 19m draught. Once approvals are granted,
construction can begin and stage one of the port could commence operating as
early as 2012. The federal Budget allocated $339 million towards this project
in May 2009.

Electricity

Aviva Corporation - Coolimba Coal Fired Power Station (planned, $1.3BM).

The company‟s nearby coal deposit has a JORC compliant resource of 85MT.
The plans are to operate a two 200MW base load power station that will
constitute 8% of the installed capacity in the South West Interconnected
System network. Construction is planned to commence in 2009 and will extend
over 3 years with completion in 2012. There is enough coal to support an
operating life of 30 years. Aviva intend to submit Public Environmental
Review documents to the EPA in August 2008, with approvals expected in
March/April 2009. It is anticipated that up to 600 people will be employed for
construction and 100 during operations.

Eneabba gas – Centauri 1 Gas fired power station (planned, $100M).

Eneabba Gas is focused on the development of the 168MW gas-fired Centauri


1 power station. They expect to produce from 28.9 to 42MW per turbine from
4 turbines. On 6 February 2008, Western Power formally advised that its
access application for 170MW to be connected to the SWIS was accepted. A
gas supply agreement with Carbon Energy was announced in April 2009.

Pinjar, Eneabba, Geraldton (Moonyoonooka) Transmission Line (planned,


$450M+)

To improve the quality and reliability of the electricity supply to the rapidly
growing Mid West region, Western Power is working on the construction a
330kV transmission line between Pinjar (north of Wanneroo) and a new
substation to be constructed at Moonyoonooka (15km east of Geraldton).

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Once constructed, this transmission line will enable alternative energy sources
to connect to the network. Line surveys are currently being conducted in
preparation for the submission to the Environmental Protection Authority.
Construction was expected to commence late 2008 and be completed by the
summer of 2010-11, but the State Government has deferred the project.

Water

Walkaway Pumping Station ($15M). In progress. (planned, $15M)

$15 million has been allocated for the Walkaway Pumping Station and pipeline
upgrade which is currently being designed and is expected to be completed in
by the end of 2009.

Wiluna Electro Dialysis Reversal Plant (planned)

The Water Corporation plans to trial a high efficiency, small reject stream
electro dialysis reversal water treatment equipment at Wiluna to improve water
quality in that town. This trial will be compared to the high efficiency reverse
osmosis plant at Yalgoo for operational reliability and cost. The project should
be completed by end Q2 2009.

Yalgoo Town Water Supply Upgrade – Trial Phase (in progress)

An upgrade to the town water supply encompassing a new bore, collector


main, supply main, chlorinator and High Efficiency Reverse Osmosis plant
with upgrades to the town water tanks. The plant is in operation but has
suffered a number of minor failures during its trial phase. Work continues by
the contractor (Osmoflo) and the Water Corporation to address these issues
and improve reliability. This unit is the first of its kind in the world.

5.7 Growth scenario, Mid West growth region

5.7.1 Overview

The Mid West is set to become a new major minerals province in Australia.
Iron ore production will be the driver. Based on proponent proposals, by 2020,
the region could produce up to 80 Mtpa or more of iron ore per year,
exporting through two ports and utilising both upgraded and new railways.
This forecast is dependent on project proponents delineating sufficient
reserves to support such a production level. Gold, nickel and base metal
mining, plus oil and gas production will supplement iron ore production.

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Table 17 Summary of growth scenarios to 2020 for the Mid West growth
region
Mineral product Expanded and new production under growth scenario
Iron ore 80 Mtpa from up to five operations
Gold 3 mines producing
Nickel 2 mines producing
Base metals (copper, cobalt) 2 mines producing

Table 18 Summary of infrastructure requirements under growth scenario to 2020 for the Mid West
growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Regional roads and some highways • Upgrades of highways and regional roads are required to
are inadequate to support major accommodate construction traffic, minerals transport and traffic
minerals growth associated with movement of workers and community members
Rail • Current rail infrastructure is inadequate • Rail infrastructure and rolling stock upgrades required for first
to transport large tonnages of iron ore stage iron ore exports through Geraldton port
and not sufficiently extensive to service • For production over 25Mtpa, new rail lines are required to
more than 25 Mtpa transport ore from north and east minesites to the Oakajee port
Ports • Geraldton Port inadequate to cope with • New rail unloading, shipping berths and loading facilities are
more than about 15 Mtpa required at Geraldton Port to handle increased tonnages (up to
• Maximum capacity of Geraldton after 25Mtpa)
upgrades well below potential • Oakajee Port to be developed as dedicated bulk port
production
Ore pipelines • No slurry pipelines yet exist to • Pipelines for transport of magnetite slurry from minesites to
transport magnetite ore Geraldton port and/or Narngulu
Energy • Electricity supply capacity falls well • Major new capacity in transmission and generation is necessary to
below needs of future mining provide the energy for new minerals projects
• Gas pipeline capacity currently below • Capacity increase for Dampier to Bunbury pipeline, other potential
future demand pipelines and feeder line upgrades to support mining and industry
developments
Water • No comprehensive, integrated plan for • Prepare comprehensive regional water plan to ensure efficient
water supply and use of water for mining and other users

Community • Community infrastructure in smaller • Enhanced community infrastructure to service increased


infrastructure towns inadequate to service populations in towns
populations that mining could attract

Land and • Land use planning not yet adequate to • Developed land will be required for the industrial estate at
infrastructure service needs of communities and Oakajee, new residential subdivisions, new and expanded
corridors mining industry industrial estates
• Infrastructure corridors will be required for new and future rail
lines, slurry pipelines, gas pipelines and electricity transmission
lines, utilities to service urban development

5.7.2 Mineral production

The growth scenario is constructed as a view of minerals development in the


Mid West to expand to meet its potential as the next major mineral province of
Western Australia. It is a scenario for mineral developments based on current
plans and proposals, and could occur if markets remain strong, policy settings
are favourable and infrastructure is available.

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The growth scenario assumes:


• opening of several new mines, resulting in a big expansion of iron ore
production
• expansion of production of other mineral products, from both current and
new operations
• development of the Oakajee Port and new railways to link mines to the
port.
Non-minerals resources development under this scenario includes:
• Development of onshore and offshore oil and gas (gas for use by
customers in WA).

5.7.3 Infrastructure requirements

Mid West infrastructure is being given close attention by the WA Government


and the private sector. The growth scenario would require an ongoing high
level of infrastructure planning and provision from government and the private
sector.

Under the growth scenario, the infrastructure requirements are as follows.

Roads

Further upgrades of highways and regional roads are required to accommodate


construction traffic, minerals transport and traffic associated with movement
of workers and community members. These upgrades would continue
upgrades undertaken in recent years. In particular, the following upgrades are
needed:
• North West Coastal Highway and Brand Highway – bypasses, pavement
upgrades, additional passing lanes and some dual carriageway
• Key regional roads – widen pavements
• Geraldton transport corridor and outer freight bypass
• Access roads to the Oakajee port and industrial estate.
Governments have responsibility for provisions and maintenance of public
roads.

Railways

Heavy rail transport is critical for iron ore and other bulk mining projects, and
the development of a robust rail network will be critical to the future of the
Mid West as a major mining region.

Rail infrastructure and rolling stock upgrades are required to meet projected
tonnages of first stage iron ore projects that export through Geraldton port.

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For subsequent stages taking production over 25Mtpa, new rail lines are
required to transport ore from north and east minesites to the Oakajee port.

It is envisaged to rail upgrades and new facilities will be funded by the private
sector. The WA Government has funded the new rail and road transport
corridor into the port.

Transport pipelines

Iron ore companies will construct special pipelines for transport of magnetite
slurry from minesites to Geraldton port and/or Narngulu. Hematite ore is
transported by road and rail.

Ports

To handle increased ore tonnages, the upgrade to the existing train unloader at
Geraldton Port needs to be completed.

New berths and loading facilities are required at Geraldton Port to handle
increased tonnages (up to 25Mtpa).

The WA Government, through the Geraldton Port Authority, is responsible


for Geraldton port upgrades.

The new Oakajee deepwater port is to be developed to services the needs of


new mines and high tonnages (up to 80 Mtpa). The Oakajee Port Project,
under the management of the Department for Planning and Infrastructure,
seeks to co-ordinate the development of this $3.5 billion infrastructure
development.

The private sector will develop the Oakajee Port, with support from the State
and possibly Australian Governments for common user infrastructure.
Infrastructure Australia placed common user infrastructure at the Oakajee port
and the associated industrial estate on its priority list for further examination,
and $339 million has now been allocated towards the project by the Federal
Government.

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Figure 28 Oakajee port and infrastructure

Source: Department for Planning and Infrastructure, Oakajee Port Project 2008

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Energy – electricity and gas

Each mining, processing and export operation under the growth scenario
requires electricity. The development of major new capacity in transmission
and generation is necessary to provide the energy for new minerals projects.
The following is a summary of requirements:
• Construction of a 330 kV transmission line from Perth (Pinjar) to
Geraldton
• New 132KV transmission lines and substations to service Geraldton and
Oakajee ports and associated industrial activities
• New transmission lines (132kV?) and substations to service mines, other
industry and towns
• Gas capacity increase for Dampier to Bunbury pipeline, other potential
pipelines and feeder line upgrades to support mining and industry
developments
• Power station development near Eneabba (coal or gas).

Fuel

The growth scenario will result in large increases in the demand for diesel fuel.
This may require upgrades of the import tankage capacity at Geraldton and
requires further study.

The Department of Resources, Energy and Tourism is currently examining the


outlook for supply and demand for imported crude oil and petroleum product
and the capacity of Australia‟s existing import infrastructure to meet
foreshadowed petroleum import requirements.

Water and wastewater

Water supply and wastewater management are important for mining


operations. Although CME forecasts predict that groundwater will be
sufficient for minerals and energy growth out to 2020, water supplies in the
Mid West are limited and may constrain mining growth.

Increased populations will also generate increased demand for water and
wastewater services. There is potential for competing demands between users.

Region-wide, cooperative planning of water supply is required. The WA


Government needs to lead this.

Requirements for water and wastewater infrastructure under the growth


scenario are as follows:
• Prepare a regional water plan for the Mid-West

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• Development of potable water supplies to support growth of inland towns


and construction camps
• Water infrastructure to supply water needs for slurry transport of magnetite
ore to Geraldton
• Development of additional borefields to supply groundwater to industry
• Construction of a desalination plant, possibly in the Oakajee estate
• Sewerage and wastewater treatment plants.
Mining companies and the Government need to work together to secure
sustainable water supplies for mining and industry use.

The desalination plant could be built and operated under a public-private


partnership.

In towns, water and wastewater services are the responsibility of government


water utilities – in this case the Water Corporation.

Telecommunications

New mining operations will require efficient telecommunications, which will


need to be procured from providers by minerals companies. In general, the
operations are of sufficient scale to justify dedicated, high speed facilities.
Household and small business telecommunications are the responsibility of
providers, with government providing CSO payment for telecommunications
services in remote regions.

Telecommunications services for households and SMEs in parts of the Mid


West are generally of a lower standard than in urban locations due to
remoteness and sparse population. In particular, broadband access is
problematic away from the major towns.

Principal telecommunications needs are:


• Installing a telephone exchange and mobile base station at the Oakajee
industrial estate
• Mobile phone coverage and ADSL broadband for towns that do not have
these services (eg Yalgoo) to support mining related activity.

Land and infrastructure corridors

Developed land will be required for:


• The major industrial estate at Oakajee
• New residential subdivisions in Geraldton and regional towns
• New and expanded industrial estates in towns in the region.

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Infrastructure corridors will be required for:


• New and future rail lines
• Slurry pipelines
• Gas pipelines and electricity transmission lines
• Utilities to service urban development.

Community infrastructure

The principal drivers of the need for enhanced community infrastructure are
increased populations in towns as a result of minerals and energy industry
activity. The community infrastructure requirements under the growth
scenario are, in summary:
• Schools and TAFEs: adequate education and training facilities are required
to service the needs of the minerals industry and increased population. In
particular, planned high school upgrades should proceed, while the Central
West TAFE requires engineering facilities
• Health care facilities: new and upgraded facilities are required to service
increased populations and community needs
• Sport and recreation: facilities may need to be expanded and upgraded to
service increased populations
• Child care: additional child care facilities will be required to meet the needs
of additional families in towns
• Police: capital investment is required in most police stations in the region
to bring them up to standard and to adequately service community needs.

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6 Goldfields-Esperance growth region


6.1 Description of growth corridor
The Goldfields-Esperance Region is located in the south-eastern corner of
Western Australia (WA) and covers 770,488 square kilometres (including
offshore islands). It is the largest of the State‟s nine regions and over three
times the size of the State of Victoria. Geographically, the Region is bounded
by the Pilbara Region to the north, the Wheatbelt and Mid West Regions to the
west, the Great Southern Region to the south-west, the Southern Ocean and
the State border to the east. The City of Kalgoorlie-Boulder and the Shires of
Coolgardie, Dundas, Esperance, Laverton, Leonora, Menzies, Ngaanyatjarraku
and Ravensthorpe are located within the region (see map). The major
population centres are Kalgoorlie-Boulder, Esperance, Coolgardie, Kambalda
and Leinster, with Ravensthorpe and region growing rapidly as a result of
nickel developments nearby.

The economy of the region is based on the extraction and processing of


mineral resources, principally gold and nickel. The Gross Regional Product of
the Goldfields-Esperance region was estimated at $7,029 million, or just under
5 per cent of Gross State Product17.

Mining is the predominant sector in the central and northern parts of the
region, with a substantial agricultural sector in the south. Esperance is the port
for the regions, importing petroleum and fertiliser and exporting mineral
products.

The relative value of industries and sub-sectors in terms of production is


shown in Figure 29.

17 Department of Local Government and Regional Development 2008.

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Figure 29 Production value, selected industries, Goldfields-Esperance


Region

Source: Goldfields Esperance Development Commission 2007

The economy of the region is based on the extraction and processing of


mineral resources, principal gold and nickel. The value of mining production
was $4.6 billion in 2004/05, of which gold accounted for $2.2 billion and
nickel accounted for $2.3 billion.

The strong manufacturing base in the Goldfields sub-region is driven by


minerals processing, with manufacturing in the Esperance area principally
servicing the fishing and agricultural industries. In 2001/02 (most recent data)
manufacturing sales and service income was estimated at $968.7 million.

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Figure 30 Map of Goldfields-Esperance Region

Source: Department of Local Government and Regional Development 2008

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6.2 Resources-related demographic


characteristics
In 2007, an estimated 55,600 people were living in the Goldfields-Esperance
Region, which was 9.8 per cent of the population of regional Western Australia
and 2.7 per cent of the State‟s total population.

Population in the Region is expected to reach 58,000 in 2009, 62,000 by 2013,


and about 62,000 by 202018. The City of Kalgoorlie-Boulder has an estimated
resident population of about 31,000.

The CME study results forecast that the minerals and energy sector will drive
an increase in the resident population in the Goldfields-Esperance region of
about 3,100 by 2020, with a peak of around 5,300 in 2011 (Figure 31). This
growth is driven by both greenfield and brownfield activity across a range of
commodities, in particular gold, nickel and iron ore.

Figure 31 Minerals and energy driven population growth,


Goldfields/Esperance

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

18 WA Planning Commission 2005, Western Australia Tomorrow.

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6.3 Current resources production


In 2007 – 2008, the Goldfields-Esperance region produced 13 per cent by
value of Western Australia‟s on-shore mineral and petroleum resources, second
only to the Pilbara.

Table 19 Mining and petroleum in the Goldfields-Esperance region 2007-


2008
Product $ Value 2007-08 Location by Shire $ Value 2007-08
Nickel 4,699,237,208 Coolgardie 2,556,950,672
Gold 2,594,779,564 Leonora 2,135,730,251
Cobalt 401,223,462 Kalgoorlie-Boulder 1,688,254,755
Copper and zinc 98,698,757 Laverton 898,511,758
Other 41,712,109 Dundas 263,478,455
Menzies 21,112,890
Ravensthorpe 271,013,386
Esperance 598,933
Total 7,835,651,100 Total 7,835,651,100
Data source: Department of Mines and Petroleum 2008

6.4 Planned and proposed resources production

6.4.1 Recently opened projects

Ravensthorpe Nickel Project

The Ravensthorpe Nickel Project opened in 2008, but operations were


suspended indefinitely in January 2009, due to production difficulties and
sustained low nickel prices. The project involves open pit mining from three
adjacent ore bodies, to produce up to 50,000 tonnes per annum of contained
nickel and 1,400 tonnes of contained cobalt in a mixed product for further
processing at BHP Billiton‟s Yabulu nickel refinery in Queensland.

In 2004, the State Government and BHP Billiton signed a memorandum of


understanding that secured $37.4 million of State, Commonwealth and BHP
Billiton funding for community infrastructure to support the establishment of
a local workforce based in the Shires of Esperance and Ravensthorpe.

The project is on care and maintenance, and a substantial and sustained


increase in nickel price would be required to get the plant recommissioned.

BHP Billiton is studying future options for Ravensthorpe.

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6.4.2 Projects under construction

KCGM Super Pit – Golden Pike Cutback

Kalgoorlie Consolidated Gold Mines is constructing the Golden Pike Cutback


to extend the mine life by 5 years to 2017. This also entails additional tailings
storage facilities and waste rock dumps. It is possible that further life extension
projects will be implemented.

Lynas Corporation Ltd – Mt Weld Rare Earths Mine

The Mt Weld deposit, located about 35 km south of Laverton, contains an


estimated resource of 12.2 Mt at 9.7 per cent grade for 1.18 Mt rare earth
oxides (REO). The development involves an open pit mine and concentration
plant at Mt Weld. The concentrate will be containerised on site then trucked to
Leonora and railed to a container port for export. The first mining campaign
was completed in May 2008 and construction of the concentration plant is
underway, with completion scheduled for early 2009. The ore will be shipped
to a $220 million processing plant in Malaysia, which will have an initial
production capacity of 10,500 t/a REO in late 2009 and is then expected to be
expanded to 21,000 t/a in 2011.

6.4.3 Projects under consideration

AngloGold Ashanti / Independence Group NL joint venture – Tropicana Gold


Mine

AngloGold Ashanti, as joint venture manager, has undertaken an intensive


exploration and resource development program approximately 400 km
northeast of Kalgoorlie. Plans for the project are to develop an open-cut gold
mine and nearby processing plant. So far, a resource estimate of 4 million oz of
gold has been identified, with an initial mine life of 10 years. Mining is planned
to commence in 2010 with production of over 300,000 oz per annum. The
mine will employ 600 in operation.

Heron Resources Ltd / Vale Inco Kalgoorlie Nickel Project

The Kalgoorlie Nickel Project will involve a mine and hydrometallurgical


processing plant at Goongarrie (about 85 km north of Kalgoorlie) producing
up to 50,000 t/a of nickel from laterite resources of 903 Mt grading 0.74 per
cent nickel and 0.05 per cent cobalt. Heron and Vale Inco are undertaking a
pre-feasibility study which is due for completion in January 2009. Further ore
reserve estimation, mine planning and metallurgical testing will be undertaken.
Employment in operation will be about 300.

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6.5 Current infrastructure

6.5.1 Transport - Roads

The Goldfields-Esperance Region has generally good road infrastructure. The


Great Eastern Highway links Kalgoorlie- Boulder with Perth. The Eyre
Highway links the region and the State with the rest of Australia across the
Nullarbor Plain.

The Goldfields Highway runs north from Kalgoorlie-Boulder through


Menzies, Leonora and Leinster, on to Mount Keith, Wiluna and Meekatharra
in the Mid-West Region. The Goldfields Highway connects with the Great
Northern Highway at Meekatharra, and thus provides a link from the
Goldfields to the Pilbara.

In addition, the Mount Magnet-Sandstone-Agnew Road creates a westerly link


to the Mid West Region. The Coolgardie-Esperance Highway links the
Goldfields with Esperance, and the South Coast Highway links the south-east
with the Great Southern Region.

The Goldfields- Esperance Transport Upgrade Program (GETUP) is


identifying transport infrastructure issues and priorities in the region. GETUP
aims to facilitate tri-partite funding opportunities to deliver improved transport
infrastructure in the region.

6.5.2 Transport - Rail

Kalgoorlie-Boulder is the junction of the Trans-Australian east-west rail artery


and the rail line from Leonora in the north eastern Goldfields area to
Esperance on the south coast.

ARTC operates the Trans Australian Railway to Kalgoorlie. WestNet Rail has a
49-year lease on the State Government-owned rail corridor land, track and
infrastructure, and is required to provide „open access‟ to other rail freight
operators under a legislated regime. The lines in the Goldfields are Kalgoorlie
to Leonora, Kalgoorlie to Esperance and Kalgoorlie to Perth. All are used for
minerals traffic.

The West Kalgoorlie freight facility operated by ARG provides spur access for
several industries including fuel, road haulage and cement.

Rail is used to transport iron ore from Koolyanobbing (just outside the
Goldfields in the Wheatbelt region) to the Port of Esperance, and nickel
concentrate from the North East Goldfields and Kalgoorlie area to Esperance.

The railway lines in the region are in fair to poor condition. The line from
Kalgoorlie to Esperance is in very poor condition. Considerable upgrade work

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has been undertaken or is currently in progress. Further upgrades are needed


to be able to improve rail capacity and reliability. Portman Mining has funded
the recent upgrades between Koolyanobbing and Kalgoorlie and the current
upgrades work between Kalgoorlie and Esperance.

A study into the establishment of a major multiple-user intermodal terminal


hub in Kalgoorlie-Boulder was undertaken in 2007.

6.5.3 Transport - Port

Esperance is the Region‟s only port and offers three landbacked berths and
cargo handling facilities for iron ore, nickel concentrates, fuel, bulk grains and
fertiliser.

The Esperance Port Authority is a self-funded agency of the Government of


Western Australia, operating under the Port Authorities Act 1999. The Port
has grown significantly in the last decade. With the completion of a $54
million port upgrade in 2002, Esperance became the deepest port in southern
Australia, capable of handling Cape Class vessels up to 180,000 tonnes, as well
as fully loaded Panamax class vessels up to 75,000 tonnes.

Iron ore exports through the port now total more than 8 million tonnes
annually, with Portman Mining targeting 10.5 to 11 Mtpa by 2011. This is close
to the maximum practical capacity of the current railway yard and unloader.
Portman Mining owns the rotary car dumper.

The port is the largest nickel concentrate handling port in the southern
hemisphere. The port is also a major grain-exporting hub and handles bulk
imports such as fuel and fertilisers.

The Esperance Port Authority is planning major capital works in the coming
decade that will further expand port capacity. The Port Expansion Program is
subject to a pre-feasibility study being undertaken in 2008 and 2009.

6.5.4 Transport – Air

Scheduled air services operate from Perth to Leinster, Leonora, Laverton,


Kalgoorlie-Boulder and Esperance. Kalgoorlie-Boulder is the busiest regional
airport in Western Australia, with services provided by Skywest and Qantas.

Skywest also services the Esperance airport. In 2004/05, Kalgoorlie Airport


had a total of 178,257 inbound and outbound passengers.

Many mine employees, especially in the northern Goldfields, operate on fly-


in/fly-out rosters from a Perth base. The larger mining companies have their
own sealed airstrips. A number of charter operators are based at Kalgoorlie-

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Boulder and service the smaller, remote mining operations and exploration
camps.

The new Ravensthorpe Airport was formally opened in March 2005. It was
funded by the State Government as part of its community infrastructure
package.

Kalgoorlie-Boulder Airport has been selected as the preferred alternative


airport to Perth for domestic and international wide-body aircraft.

6.5.5 Electricity

Electricity is provided to commercial, industrial and residential consumers


across the Goldfields-Esperance Region through a variety of arrangements.

The South West Interconnected Grid System (the SWIS) services Coolgardie,
Kalgoorlie-Boulder, Kambalda and Ravensthorpe. The privately owned
TransAlta Power Station at Parkeston (just east of Kalgoorlie-Boulder),
supplies several major mining operations in the Goldfields.

Other towns in the region are supplied by Horizon Power, which sources
wholesale electricity from a series of power stations both privately owned and
owned by Horizon. Mining operations are largely self-supplied by on-site
diesel or gas fired power stations.

Power supply reliability in Kalgoorlie and Esperance is to improve with the


approval of new power network projects scheduled for 2007-08 and 2008-09
under the State Government‟s $60 million Rural Power Improvement Program
(RPIP).

The CME study found that incremental electricity demand from the
Goldfields-Esperance minerals and energy sector is forecast to grow
moderately for the period 2008-2012, decline marginally for the period 2013-
2014 due to several project closures, and then increase to 2020 (Figure 32).

The majority of the incremental electricity demand from the Goldfields-


Esperance sector is expected to be met by self generation.

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Figure 32 Mining electricity demand, Goldfields – Esperance (incremental


to 2007)

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

Gas

The Goldfields-Esperance Region is serviced by a natural gas pipeline system


that originates on the Western Australian Pilbara coast, and runs through the
northern and eastern Goldfields to Esperance. This pipeline system is owned
and managed by various organisations.

The 1,380 km long Goldfields Gas Pipeline (GGP) services communities and
mines from the Pilbara to Kalgoorlie-Boulder at Paraburdoo, Turee Creek,
Newman, Plutonic, Wiluna, Jundee, Mt Keith, Leinster, Murrin Murrin,
Leonora, Cawse and Kalgoorlie-Boulder.

The Goldfields Gas Pipeline has a current output of around 102 terrajoules per
day (TJ/d), but is capable of delivering up to 168 TJ/d with additional
compression.

A 40 km extension to the Goldfields Gas Pipeline supplies Kambalda, with the


nickel smelter being the largest customer.

In 2004, the pipeline system was continued a further 341 kilometres from
Kambalda to Esperance.

Gas reticulation to the domestic, business and industrial customers in the


commenced in early 1998 and since then over 97 per cent of Kalgoorlie-
Boulder has been provided with reticulated gas. The towns of Esperance and
Nulsen have recently had their gas reticulation completed and work is
continuing to extend the service in the area.

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The CME study found that the increase in Goldfields-Esperance minerals and
energy sector demand for natural gas is expected to be small for the period to
2020.

6.5.6 Water

Potable water for the Goldfields sub-region is piped through the Goldfields
and Agricultural Water Supply (GAWS) 600 kilometres from Mundaring Weir
near Perth to Kalgoorlie-Boulder. The pipeline and associated storages has
been upgraded in the past 10 years to meet rising demand. The GAWS
supplies mining, commercial and domestic customers.

The water requirements of other towns in the region are supplied by


combining surface catchment dams and bore field methods. Desalination is
used in Ravensthorpe.

Key projects completed in the recent years include the construction of a $4


million desalination plant at Leonora which became operational in October
2005, and a $3 million water treatment plant at Laverton, which began
operation in June 2006. Construction continued at the Menzies water
treatment plant and is scheduled for completion in 2007. Kambalda,
Coolgardie and Menzies have new, replacement and upgrade works programs
for water supply scheduled over 2007 and 2008. The Water Corporation is
improving and increasing water supply to Hopetoun and is drilling seven new
bores and installing associated pumps and equipment.

Included in the Water Corporation‟s capital investment program in 2006-2007


is a $36.4 million upgrade to Kalgoorlie-Boulder water storage and treatment
facilities. The first stage of the project is scheduled for completion by the end
of 2008. The ultimately $70 million project includes construction of two 200
megalitre roofed storage reservoirs, a new water treatment plant and pump
station.

United Utilities Australia (UUA) is the proponent of the $440 million


Esperance-Goldfields water desalination plant and pipeline. The desalination
plant and pipeline will deliver up to 100 megalitres per day of fresh water to
the region, almost three times the amount of water currently available in the
Goldfields and it will be available to all towns and industry along the 400
kilometre pipeline. The project remains subject to market testing, aggregation
of sufficient demand and receiving relevant government approvals.

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6.5.7 Telecommunications

Telstra provides standard telephony services throughout the Region, with


Optus providing competition in the major centres. Mobile telephony is of
major importance to the Region and critical to regional industries. G3 coverage
is available in most centres. Satellite mobile coverage is also available.

Broadband ADSL is available in Kalgoorlie-Boulder, Esperance, Ravensthorpe


Hopetoun, Leonora, Kambalda West, Norseman, Leinster, Laverton and
Coolgardie. All other areas within the Region have access to dial-up Internet or
satellite services.

6.5.8 Land and corridors

Land use planning in the region is seeking to ensure that adequate industrial
land is provided to service the mining industry and broaden the regional
economy, and adequate residential land is available for expanding populations
in growth centres, principally Kalgoorlie-Boulder, Ravensthorpe-Hopetoun
and Esperance.

There are three main industrial estates available in the Goldfields-Esperance


Region:
• Anzac Drive Industrial Estate in West Kalgoorlie. The site is close to the
Kalgoorlie rail freight yards, Kalgoorlie Business Park and Kalgoorlie-
Boulder Airport.
• Mungari Industrial Estate, located in the Shire of Coolgardie, is a heavy
industry site. It has been located to meet the processing needs of the
Region‟s raw materials, chemical production and other heavy industry.
• Shark Lake Industrial Park is located 14 km north of the Esperance Port.
This site was selected as a collection point for road freight, prior to transfer
to rail, on route to the Port.
Industrial land has also been released at Ravensthorpe and Hopetoun to meet
the needs of the Ravensthorpe Nickel Operation (prior to the indefinite
suspension of Ravensthorpe Nickel Operation).

Planning for residential land requirements is undertaken by the WA Planning


Commission and LandCorp.

Education

There are 44 public schools and nine private schools in the region. There are
pre-primary and primary schools located in most centres in the region, with
district secondary facilities in Leonora, Kambalda, Norseman and
Ravensthorpe. There is a Senior High School in Esperance and two in
Kalgoorlie-Boulder. There are also private schooling options in these centres.

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In 2005, the Eastern Goldfields Senior High School was officially split to
become two separate schools – a middle school and Eastern Goldfields
College, which is located on the campus of Curtin University – Kalgoorlie.

A new $3.1 million post-compulsory learning centre was recently opened on


the Esperance Education Precinct.

TAFE level courses are available though the Esperance Community College
and Curtin University Kalgoorlie.

The Curtin University campus incorporates the West Australian School of


Mines, Curtin Vocation Training and Education Centre, and the Centre for the
Management of Arid Environments. The Centre for Regional Education at
Curtin facilitates student access to degree-level courses from both Curtin and
Edith Cowan Universities through the Esperance and Kalgoorlie campuses.

6.5.9 Health services

Health Services in the Region consist of the Kalgoorlie Regional Hospital,


which is the busiest and largest hospital in regional Western Australia and
district hospitals in Esperance, Laverton, Leonora, Norseman and
Ravensthorpe. There are also two nursing homes in Kalgoorlie-Boulder and
one in Esperance.

General Practitioners are available in all towns, with a number of medical


specialists resident in Kalgoorlie-Boulder. Other specialists make regular visits
to Kalgoorlie-Boulder and Esperance from Perth. Ancillary health services
such as opticians, dentists, chiropractors and child health clinics are also
available in the larger centres.

The State Government is investing $30 million over the five years to 2011to
upgrade the Kalgoorlie Regional Hospital into a Regional Resource centre, in
order to provide more locally accessible care within the region.

6.6 Infrastructure planning


Recent planning studies for the Goldfields-Esperance region that have
focussed on or included infrastructure are:
• North East Goldfields Regional Minerals Study, Department of Resources
Development and Department of Industry, Science and Resources (2000)
• Southern Cross – Esperance Regional Minerals Study, Department of
Resources Development and Department of Industry, Science and
Resources (2000)

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• Roads 2025 Regional Road Development Strategy, Goldfields-Esperance


Main Roads Western Australia and Western Australian Local Government
Association, 2007 Review
• Kalgoorlie-Boulder Regional HotSpots and Land Supply Update, WA
Planning Commission (2008)
• Goldfields Esperance Country Land Development Program Annual
Review 2006
• Midwest-Goldfields Corridor Strategy, Department for Planning and
Infrastructure (2007)
• Esperance Port Access Corridor Alignment Definition Study, Main Rods
Western Australia (2008)
• Port of Esperance Master Plan (in progress).

6.7 Overview of growth scenarios


By 2020, the Goldfields-Esperance region is likely to be the world‟s major
nickel producing region, with up to three large scale laterite nickel mining and
processing operations, plus ongoing sulphide nickel production. Gold will
remain a major product, supplemented by base metals. Coalfields at Salmon
Gums could supply a CTL fuel plant. In addition, the Port of Esperance could
export some 15 Mtpa of iron ore from the adjacent Wheatbelt region.

Table 20 Summary of growth scenario to 2020 for the Goldfields-


Esperance growth region
Mineral product Expanded and new production under growth scenario
Iron ore Export of up to 15 Mtpa through Port of Esperance produced in adjacent
Wheatbelt region
Gold 2 m oz per annum
Nickel Three large laterite nickel mines and ongoing sulphide nickel production
Coal to liquids Coal to gas & liquids production from lignite

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Table 21 Summary of infrastructure requirements under growth scenario to 2020 for the Goldfields-
Esperance growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • Roads require progressive upgrades to • Ongoing road upgrades as planned
cope with increased traffic

Railways • Railways require upgrades to transport • Track upgrades to improve safety, reliability and speeds
greater tonnages of iron ore • Additional and longer passing loops for additional and larger trains
Establishment of a multiple-user intermodal terminal hub in
Kalgoorlie-Boulder
• Possible rail realignment in Kalgoorlie-Boulder to improve
efficiency and community amenity through noise attenuation
Ports • Port of Esperance and associated • Implementation of the Esperance Port Enhancement Program ,
transport corridor inadequate for including:
increased tonnages of iron ore and for – upgrades to the sea port including a new berth
increased imports to service the mining – enhancement of the transport corridor and construction of a
industry
rail balloon loop and additional car dumper for efficient iron
ore unloading
– development of Shark Lake Industrial Park inland port
Energy • Energy infrastructure will require • Ongoing upgrades to electricity infrastructure to match demand
expansion to meet increased demand • Expanded and extended gas supply pipelines as required
Water and • Water supplies to Goldfields will • Ensure water supply of adequate quantity and quality, and at
wastewater require upgrades and diversification of competitive cost
supply to ensure amenity, security and
competitive costs
Land • Land for housing in Kalgoorlie • Ensure sufficient land is developed for housing to accommodate
insufficient to meet growth increased population, in particular in Kalgoorlie-Boulder

6.7.1 Mineral production

The growth scenario is constructed as a view of minerals development in the


Goldfields-Esperance growth region to expand to meet its potential, in
particular as major nickel producing region. It is a scenario for mineral
developments based on current plans and proposals, and could occur if
markets remain strong, policy settings are favourable and infrastructure is
available.

The growth scenario assumes:


• opening of two additional laterite nickel operations, resulting in a big
expansion of production
• ongoing production of gold and sulphide nickel, from both current and
new operations
• development of a coal-to-liquids plant, based on the Salmon Gums
coalfields
• expansion of the Port of Esperance.

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6.7.2 Infrastructure requirements

Transport – Road

Current and planned road upgrades should mean that roads will be adequate to
meet the requirements of the minerals industry and associated economic
activity in 2020. The Roads 2025 Development Strategy provides guidance and
is reviewed periodically. This 2007 review of this strategy identified the
requirements, which are in summary:
• Coolgardie-Esperance Highway – maintenance and some upgrading
(shoulders, minor realignment)
• Reconstruct and seal the Wiluna-Meekatharra section of the Goldfields
Highway or select another suitable route from Wiluna to connect to the
Great Northern Highway
• Maintenance and upgrading of the Great Eastern Highway between
Kalgoorlie and Southern Cross to improve safety and efficiency
• Increase the reliability of the Leonora to Laverton Road by upgrading
waterway crossings
• The Esperance Port Access Corridor Review concluded that the current
corridor, with improvements notably in the last 8 km to the port, would be
able to accommodate potential increases in freight movement arising from
the major projects and greater use of the port
− An Alignment Definition Planning Study conducted in 2008 has
developed a long term configuration for the Esperance Port Access
Corridor that will support the port and general development of the
town and region
• Improve road safety, efficiency and operating conditions of the South
Coast Highway by providing overtaking opportunities and undertaking
geometric improvements
• Upgrade local government roads to provide better transport utility for both
mining and general transport traffic.
In addition, road upgrades will be required in the Menzies region if proposed
laterite nickel projects proceed.

Transport – Rail

Rail transport upgrades required under the growth scenario include:


• Additional and longer passing loops to cope better with iron ore traffic as
well as additional nickel traffic from the Kalgoorlie region
• A balloon loop to allow for more efficient and higher capacity iron ore
unloading at the Port of Esperance if tonnage goes above 9 Mtpa

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• Establishment of a major multiple-user intermodal terminal hub in


Kalgoorlie-Boulder
• Possible rail realignment in Kalgoorlie-Boulder to improve efficiency and
community amenity through noise attenuation.

Transport – Ports

The Esperance Port Enhancement Program Pre-Feasibility Study is focused on


the following three areas:
• The sea port
• Shark Lake Industrial Park – an inland port
• The transport corridor.
The study includes a market demand study through detailed discussions with
potential customers, general macroeconomic research, and independent
evaluation of the prospects of key potential customers, including iron ore
prospects. This study should ensure that the port will meet the needs of the
minerals sector into the future.

Electricity

Western Power (SWIS) and Horizon Power (non-SWIS networks) will


continue to monitor electricity requirements of town and rural customers with
the objectives of meeting demand and improving reliability. They and
independent generators will also work with mining companies to deliver
wholesale energy on commercial terms.

Gas

Gas supply pipelines can be expanded and extended as required. Upstream gas
supply while constrained in the short term, is likely to be much improved in
the longer term as new LNG and domgas projects are developed along the
north west coast.

Water

Water supply of adequate quantity and quality is vital to mining and processing
development. Currently water of differing quality is supplied via the GAWS
and from groundwater. The proposed Esperance-Goldfields water desalination
plant and pipeline, if constructed, would deliver up to 100 megalitres per day of
fresh water to the region (almost three times the amount of water currently
available in the Goldfields) and it will be available to the mining industry
(notably for use in nickel production) as well as towns and industry along the
400 kilometre pipeline.

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Community infrastructure

Education and health infrastructure is being planned in conjunction with


planning for land development. Kalgoorlie-Boulder has been identified as a
„regional hotspot‟ for special attention to land supply and associated
infrastructure requirements in regional centres experiencing land and housing
supply pressures as a result of growth in the resource and/or other industry
sectors.

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7 South West growth region


7.1 Description of growth corridor
For the purposes of this study, the growth region in the south west of Western
Australia encompasses both the South West and Peel regions. Together, these
regions host a substantial population of some 250,000 as well as being a
globally significant minerals region, producing some 15 per cent of the world‟s
alumina, as well as mineral sands, gold and coal.

7.1.1 South West and Peel regions

The South West region of Western Australia occupies the south-west corner of
the State, facing the Indian and Southern Oceans and covers an area of 23,998
square kilometres. The South West region consists of 12 local government
areas, including the City of Bunbury and the Shires of Harvey, Collie,
Dardanup, Capel, Busselton, Augusta-Margaret River, Nannup, Manjimup,
Bridgetown-Greenbushes, Boyup Brook and Donnybrook-Balingup. 19

Current estimated resident population is 146,000. Projected population at


2020 is 173,000 (WAPC).

Figure 33 Western Australia – South West region

Data source: ABS Census 2006

19 This section draws from South West Development Commission.

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The region accounts for about 6.4 per cent of Gross State Product – the largest
contribution of any WA region. The major industry activities in the region are
outlined in Table 22. Mining was the biggest contributor to the region‟s
economy valued at approximately $2,100 million per annum in 2006/07.

Table 22 South West region production ($ million)


1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07

Agriculture 431 467 473 493 516 589 557 501 n.a. n.a.
Building 283 311 372 274 306 356 433 587 698 682
Mining and mineral process 1,052 1,138 1,121 1,702 1,645 1,509 1,430 1,513 1,769 2,086
Retail 786 842 899 920 1,008 1,061 1,160 1,260 1,361 1,489
Timber production 92 89 87 90 70 61 63 61 64 73
Tourism 569 569 569
South west gross regional product 5,269 5,491 5,974 6,510 7,676 9,037
Data source: Department of Minerals and Petroleum 2008

Mineral extraction, processing and associated manufacturing make the largest


contribution to the South West‟s economy. The Region contributes about 4
per cent of the State‟s total mineral production by value. Major mineral
commodities produced in the region are alumina, coal and mineral sands
(including zircon). The manufacturing of titanium dioxide pigment and silicon
are also significant mineral related industries.

Tourism plays an important role in the South West. For the years of 2004 and
2005, an average of 1.7 million overnight visitors came to the Region, with
total visitor expenditure estimated at $591.2 million.

Total agricultural production in the South West Region was estimated at $556.8
million in 2003/04, of which crop production, including fruit and vegetables,
was valued at $295.7 million, livestock disposals contributed $136.8 million and
wool and other livestock products were valued at $124.2 million.

The establishment and growth of plantation timber and the development of


timber products are growing industries in the South West. In 2004/05, timber
valued at $61.3 million was produced. The South West Region‟s hardwood
forests, softwood plantations and tree farms produce a diverse resource
suitable for value adding into a wide range of forest products. The fishing
industry was valued at $21.5 million in 2004/05, with the catch primarily made
up of rock lobster, molluscs and finfish. Aquaculture in the Region was
dominated by the production of marron.

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Figure 34 Map of South West region

Source: Department of Local Government and Regional Development 2008

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7.1.2 Peel region

The Peel region is located immediately south of Perth and lies between the
metropolitan area and the South West region.

It is bordered by the Indian Ocean in the west, with the jarrah forests and the
rolling farmlands of the Darling Range leading east to the Wheatbelt Region.

Five local government areas are incorporated in the Peel region: the City of
Mandurah and the Shires of Boddington, Murray, Serpentine Jarrahdale and
Waroona.

Current estimated resident population is 103,000. Projected population at


2020 is 149,000.

The Peel region has a diverse economy, predominantly based on mining and
manufacturing, although retail, construction, tourism, agriculture, and fishing
also make valuable contributions. Department of Local Government and
Regional Development estimates show that the Peel Region‟s Gross Regional
Product was $5.5 billion (indicative only) in 2006/07. This represents 3.9 per
cent of Gross State Product.

Mining and mineral processing is underpinned by large reserves of bauxite,


which are processed into alumina. The Pinjarra Refinery (capacity 4.2 Mtpa) is
one of the world‟s largest alumina refineries.

Until 2001, when mining at Boddington was suspended, gold was also a major
contributor to the region‟s economy. The much-expanded mine will begin
production in 2009. The mine is expected to produce an average 850,000
ounces of gold and 30,000 tonnes of copper per year for more than 20 years.

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Figure 35 Map of Peel region

Source: Department of Local Government and Regional Development 2008

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7.2 Current resources production


Mineral extraction, processing and associated manufacturing, together make a
large contribution to the region‟s economy. Mining includes the extraction of
coal, mineral sands, spodumene (a lithium containing mineral), tantalum and
tin. Mineral processing is focused towards the production of alumina from
bauxite and synthetic rutile from ilmenite, while mineral manufacturing
includes the production of titanium dioxide pigment and silicon.

Table 23 Mineral and petroleum in South West region, 2007-08


Product $ Value 2007-08 Location by Shire $ Value 2007-08
Alumina 2,000,000,000 (approx)
Heavy Mineral Sands 196,016,686 Bridgetown-Greenbushes and Capel - Collie 594,872,954
Coal 274,924,963
Tin, Tantalum and Spodumene 169,361,586 Bunbury, Dardanup and Manjimup 45,683,601
Other 253,320
Total 640,556,555 Total 640,556,555
Note: Alumina values not available by Shire
Data source: Department of Minerals and Petroleum 2008

Table 24 Value of mining in South West region, 2001-02 to 2006-07


2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Value of mining ($M) 1,645 1,508 1,430 1,512 1,769 2,086
Data source: South West Development Commission 2008

Mineral production in the Peel region in 2007/08 was made up entirely of


alumina and was valued at $2.7 billion.

Coal

Two companies produce coal in Western Australia, Wesfarmers Premier Coal


and Griffin Coal. Mining currently takes place in the Shire of Collie at the
Premier, Muja, and Ewington mine sites, producing all the State‟s coal supplies,
which are then sold on the domestic market, with some exported. The vast
majority of coal is used for power generation, with the remainder used in the
production of synthetic rutile, cement and other minor uses. Coal output over
the last decade has remained relatively stable. In 2007/08, more than 6 million
tonnes were produced at a value of $275 million.

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Mineral sands

The mineral sands industry integrates mining, processing and manufacturing,


and the three principal areas of operation in the South West involve:
• Mining and separation of titaniferous ores
• The secondary processing of minerals to upgrade the titanium content of
low-grade ores to produce synthetic rutile
• Titanium dioxide pigment is then manufactured from synthetic rutile.
In 2007/08, the mining and processing of mineral sands in the South West
Region was valued at $196 million. This was 33 per cent of the State‟s total
production.

Millennium Chemicals, a Lyondell Company, manufactures titanium dioxide


pigment at Kemerton Industrial Park, 17 kilometres north-east of Bunbury. In
2004/05, 85,000 tonnes of pigment were produced at a value of approximately
$300 million.

Alumina

The south west corner of Western Australia is the world‟s leading alumina
producing region, generating 15 per cent of global production and 65 per cent
of Australian production. The South West region hosts the Worsley Alumina
Refinery, situated near Collie, which processes bauxite mined in the Shire of
Boddington (Peel region). It is operated by BHP Billiton. A current expansion
will to lift the capacity of the refinery from 3.5 million tonnes per annum to 4.6
million tonnes per annum from the first half of 2011.

The Wagerup Refinery, operated by Alcoa, is also located in the South West.
The Wagerup Refinery currently has the capacity to produce 2.6 million tonnes
of alumina. The proposed $1.5 billion Wagerup Unit Three refinery expansion
will increase the capacity of the refinery to 4.7 million tonnes per year, and will
improve efficiency. This project is currently on hold due to global economic
conditions.

Alcoa‟s Pinjarra Alumina Refinery is located in the Peel region. It has a


capacity of 4.2 million tonnes per year and is one of the world‟s largest
refineries. The Pinjarra refinery has recently undergone a major upgrade.

Alcoa‟s third refinery, Kwinana, is located outside the Peel region to the north
and draws its bauxite supply from the Huntly Mine in the Peel region.

Spodumene and lithium, tantalum and tin

The Greenbushes mine in the South West has the world‟s largest tantalum
deposit and produces 60 per cent of the world‟s tantalum. Tantalum (usually

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traded as tantalite) is a metal used in the electronics industry. The


Greenbushes mine also produces tin.

Silica sand

Kemerton Silica Sand mines silica sand just north of (and adjoining) the
Kemerton Industrial Park in the South West. The process involves washing,
attrition, de-sliming, screening, removal of heavy minerals and de-watering of
the extracted sand. The bulk of the sand is suitable for the export glass
industry, and the first shipment was despatched in 1997. In 2001/02, 375,619
tonnes of silica sand were exported. The demand for silica sand has fluctuated
over the years and exports amounted to 334,532 tonnes in 2004/05. Almost
100 per cent of the Kemerton Silica Sand company‟s production is exported.

Silicon

Since 1989, Simcoa has manufactured high-grade silicon at the Kemerton


Industrial Park, using a high temperature smelting process. Silicon is used in
the production of aluminium alloys, silicones and solar grade silicon wafers. In
2005, approximately 32,000 tonnes of premium grade silicon was produced at
an estimated value of $75.0 million.

7.3 Planned and proposed resources production


Major current and proposed resource development projects in the South West
and Peel regions are as follows. 20

Worsley Alumina Refinery expansion

BHP Billiton announced in May 2008 the go-ahead for the $2.5 billion
Efficiency and Growth expansion project at its Worsley alumina refinery. The
expansion project will lift capacity of the refinery from 3.5 Mt/a to 4.6 Mt/a
through expanded mining operations, additional refining capacity and
upgraded port facilities. First production is expected in the first half of 2011.

Wagerup Alumina Refinery expansion

Alcoa is investigating the feasibility of a third production train expansion at its


Wagerup alumina refinery to increase capacity up to 4.7 Mt/a. The project has
been put on hold due to current global demand conditions.

20 This section draws on information from the South West Development Commission, 2008.

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Bluewaters Power Station

Griffin Energy is constructing the Bluewaters Power Station project, located


4.5 kilometres north east of Collie at the Coolangatta Industrial Estate. The
first phase of the project comprises two units producing 416 Megawatts (MW)
of base load power. The two units of phase 1 of the project will be completed
in early and late 2009. The additional two units of phase 2 (208 MW each) are
planned for completion in 2012 and 2014 respectively.

Wesfarmers Collie Coal Char plant

At its Premier coal mine near Collie, Wesfarmers Energy has commissioned a
demonstration scale char plant, with a target production capacity at full
operation of 50,000 t/a. The plant is providing sufficient volume to allow
potential customers to fully assess the product. Char has applications in
steelmaking, ferro alloy production, mineral sands processing, smelting and
some chemical plant processes.

Boddington - Gold Mine (Wandoo Expansion) – Peel region

BGM Management Company Pty Ltd, on behalf of Newmont and AngloGold


Ashanti, is developing the Wandoo project, based on mining the extensive
bedrock resource that underlies the mined-out oxide resource. The mine has
been in the construction phase since 2006 and will commence production in
early 2009. Production will be around 800,000 oz/a of gold and about 30,000
t/a copper in concentrates over a 17 to 20 year mine life. The Wandoo project
will result in significant growth in and around the rural community of
Boddington, 120 km southeast of Perth, employing some 650 people.

Griffin Collie Coal Char Plant

The proposed plant, located about 4.5 km east of Collie, will convert up to
800,000 t/a of coal, from the Ewington II mine, to 400,000 t/a of char from
two process units. The plant will produce high value char suitable for
steelmaking as well as generation of 24 MW of power.

Jangardup South Mineral Sands Mine

Bemax Cable Sands has outlined a major titanium mineral ore body adjacent to
D‟Entrecasteaux National Park with estimates that the deposit would provide
1.8Mt of minerals. Feasibility and environmental studies are well advanced. An
environmental impact statement for the project is being prepared.

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Happy Valley - Heavy Mineral Sands Mine

Located adjacent to the Bemax Gwindinup deposits, the proposed project by


Bemax Cable Sands will involve the mining of mineral sands from two deposits
(Happy Valley North and South) located on private land and in State Forest.
Environmental impact studies for the proposed mine development have been
completed. Assessment of the project by the EPA will commenced at the end
of 2008. Happy Valley contains a reserve of around 6 Mt of ore at a heavy
mineral grade of 11.3 per cent.

Keysbrook Heavy Mineral Sands Mine

Olympia Resources Ltd proposes to develop a mineral sands mine located near
the township of Keysbrook, approximately 70 km south of Perth. Olympia has
identified proven and probable reserves of 41 Mt of ore containing 1.2 Mt of
zircon, ilmenite and leucoxene. The concentrate will be processed at Bemax
Cable Sands‟ plant at Bunbury over the mine‟s eight year life. If all approvals
are obtained by 2009, then mining is expected to commence in 2010.

Coal Mine - Ewington 1

Griffin Coal has developed its Ewington I deposit, approximately 2 km east of


Collie, which has estimated recoverable reserves of 75 Mt. The mine will
produce about 2 Mt/a coal for private sector customers, including Griffin
Energy‟s nearby Bluewaters power station.

Collie gas to urea plant

Perdaman Chemicals and Fertilisers is proposing to develop a coal gas to urea


plant to produce about 2 million tonnes of urea per annum. The $3.5 billion
urea manufacturing plant would be located on a new heavy industrial estate
near Collie.

7.4 Resources-related demographic


characteristics
Over the past five years the South West‟s average annual growth rate was 2.3
per cent resulting in an extra 15,641 people living in the region since 2002. This
five-year growth rate is greater than the state and national growth rates for the
same period of 1.8 per cent and 1.4 per cent respectively. The population of
the South West Region was estimated at 146,830 in 2007. Rapid population
growth for the region has continued to occur along the coastal fringe while
inland areas have generally remained stable in terms of population.

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Table 25 Employment by industry – South West region


Economic activity Employment per cent
Manufacturing 11,589 12.75
Construction 11,295 12.42
Retail trade 11,094 12.20
Health care & social assistance 7,693 8.46
Accommodation & food services 6,190 6.81
Education & training 6,125 6.74
Agriculture, forestry & fishing 5,460 6.01
Public administration & safety 4,277 4.70
Mining 3,993 4.39
Other services 3,285 3.61
Professional, scientific & technical services 3,074 3.38
Transport, postal & warehousing 3,052 3.35
Administrative & support services 2,593 2.85
Wholesale trade 2,362 2.59
Rental, hiring & real estate services 1,988 2.18
Financial & insurance services 1,431 1.57
Electricity, gas, water & waste services 1,182 1.30
Arts & recreation services 854 0.93
Information media & telecommunications 756 0.83
Total 90,875
Data source: Australian Bureau of Statistics 2006

Employment distribution is summarised in Table 25. The most important


economic activity in terms of employment is the manufacturing, followed not
far by construction and retail activities. The number of people employed in the
South West for the 10 years to 2004/05 followed the general trend for the
labour force. In 1995/96, there were 53,774 people employed, which
progressively increased to 65,317 by 2004/05, and 90,875 in 2006/07.

7.5 Current infrastructure

7.5.1 Transport - Roads

The South West Region has an extensive road network. Main road links to the
north are via the South Western Highway and Old Coast Road. The South
Western Highway also forms part of National Route 1 traversing the Shire of
Manjimup to the City of Albany in the Great Southern Region. There are a
number of other important roads. The Coalfields Highway runs east from the
South Western Highway at Roelands, through Collie and intersects with the
Albany Highway at West Arthur (Wheatbelt Region). The Bussell Highway

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runs south of Bunbury providing access to the shires of Busselton and


Augusta-Margaret River.

A large proportion of the population in the South West is located within a one-
hour drive of Bunbury and the remainder mostly within two hours. Perth is
only two hours by road from Bunbury and the majority of the regional
population is located within a three-hour drive from Perth. While the road
network is in good condition, the deregulation of the transport industry,
industry development and an increasing population is placing pressure on the
road system. Resource developments, in particular, have resulted in the need to
upgrade some of the road network by creating the need for new alignments,
bypass roads and provision of overtaking lanes. In particular, the large increase
in population along the coast between Perth and Yallingup, together with
increasing volumes of tourists and freight vehicles, has led to increasing traffic
volumes on the north-south roads.

As a consequence, a 70 km Peel Deviation is being constructed, with


completion in 2009. This involves the extension of the Kwinana Freeway to
Mandurah and a new road alignment, which will allow traffic to bypass the
Dawesville Peninsula and the majority of the built-up area in the City of
Mandurah, thereby improving access and travel times between Bunbury and
Perth. Planning and environmental approvals are in place for the Peel
Deviation.

The South West Highway is also being progressively upgraded to cope with
increasing traffic. Bypasses around towns that straddle this highway are being
planned.

The Greater Bunbury Region Plan incorporates a Bunbury outer ring road,
which will connect the five major roads that lead into Bunbury - the Australind
Bypass, South Western Highway, Picton-Boyanup Road, North Boyanup Road
and Bussell Highway. The road will cater for increasing volumes of commuter,
tourist and commercial traffic coming to Bunbury, and travelling to areas
further south.

7.5.2 Transport - Rail

The rail network is a significant transport system within the South West.
Bunbury is the centre of the network, which connects to towns and industry
areas in the Region, the Bunbury Port inner harbour and the Perth
Metropolitan Area.

The Australind passenger service operates a regular, seven-day per week service
between Bunbury and Perth. This service is relatively fast and the affordable
fares make it an attractive alternative to road. The service provides a valuable

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social role as well as providing support to the tourist industry. The railroad
depot for the South West Region is centred at Picton near Bunbury and the
narrow gauge rail network radiates out north to Perth via Brunswick Junction
and Harvey; east to Collie via Brunswick Junction; south to Boyanup with lines
to Manjimup and Capel; north-west to the Port of Bunbury; and west to the
Bunbury passenger terminal.

The Australian Railroad Group (ARG) carries bulk commodities such as coal,
alumina, woodchips, caustic soda, mineral sands and fertiliser, from the South
West Region to the Port of Bunbury.

A $24 million upgrade is planned for the Greenbushes freight line, which will
complement the WA Plantation Resources new woodchip mill at the Bunbury
Port. The number of heavy haulage trucks on the South Western Highway
between Bunbury and Greenbushes will be significantly reduced by this
upgrade.

The rail line is in good general condition with centralised train control and 20.5
tonne axle limits and some speed restrictions. The privately leased rail track is
considered near or at capacity (particularly between Brunswick Junction and
Bunbury Port) and the recent addition of 600,000 tonnes per year of alumina
from Pinjarra has significantly affected overall capacity, congestion and time
performance. Passenger services have a fixed schedule, however rail congestion
is increasing with greater numbers and length of freight trains on the same,
mostly single track.

Most crossing loops and loading/unloading sidings south of Pinjarra are less
than 700 metres, which affects the maximum length of trains that can be
accommodated on the track. Proposed development of coal unloading facilities
at Bunbury Port and the coal loading facilities at Collie may require more and
longer passing loops to be incorporated to facilitate dry bulk train movements.

Operational reliability is currently poor with trains routinely unable to


complete (or required to cancel) their timetabled round trip cycle times, due to
delays at passing loops, inefficient loading and unloading practices, and delays
brought about through out-of-course running.

7.5.3 Transport – Port facilities

The South West Region is served by a deep-water port at Bunbury, which


consists of an outer harbour with two breakwater berths and an inner harbour
with four land-backed berths. Industry in the South West region and Peel
region is also served by the Port of Fremantle.

The Port of Bunbury is a key intermodal facility in the South West due to its
focus on commodities handling. Total trade through the Port in 2007/08 was

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13.7 million tonnes, representing a 52 per cent increase over 10 years. The
rapid growth in trade can be largely attributed to the increase in alumina
exports from Worsley Alumina Refinery, near Collie and Alcoa‟s Wagerup
Refinery, near Waroona (Peel Region). Alcoa also exports some Pinjarra
alumina through Bunbury. Both Alcoa and Worsley import caustic soda in
large volumes for use in the alumina refining process.

The inner harbour‟s four berths can handle a variety of cargoes including a
dedicated berth for alumina (outbound) and caustic soda (inbound); one for
silica sand, mineral sands and other bulk cargoes; one for woodchips; and the
last for general purpose cargo. These facilities are capable of handling ships
with a draft of 11.6 metres (Cape-size vessels).

One of the outer harbour berths is equipped with a mechanical ship loader and
has adjacent storage facilities for handling exports of mineral sands. The
remaining outer harbour berth is for general purpose use. The outer harbour is
also used for receiving imports of methanol. Vessels can be loaded to a 9.4
metre draft at these berths (Panamax and partly loaded Cape-size vessels).

The inner harbour is serviced by a narrow gauge rail line as well as having road
transport access, whereas the outer harbour is serviced by road transport only.

Planning is underway for the construction of a new access road for the Port of
Bunbury. The $32 million Bunbury Port Access Road would provide a direct
access route for a significant proportion of the Port‟s freight traffic, thereby
reducing freight movements on local roads. The access road will run across
South Western Highway, linking into the Boyanup-Picton Road, providing a
high standard connection to the Port.

In addition, a casting basin is available at the Port for the construction of


concrete offshore structures for the oil and gas industry.

The Port of Fremantle exports a number of mineral products from the South
West, including coal, silicon and tin/tantalum. Coal is exported through a bulk
facility, while other products are shipped in containers. Inputs to the minerals
industry including sulphur and reagents are imported through Fremantle.

Port constraints

The bulk loading facilities at the Port of Bunbury are constrained by limited
capacity and issues of incompatibility of products. These constraints currently
severely limit the ability of the port to handle coal.

The capacity of the fixed bulk loader and its berth is limited and heavily-
utilised for mineral sands and woodchip loading. Moreover, there are cross-

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contamination issues between coal and woodchips. A portable bulk loader has
insufficient capacity or trimming ability for regular coal loading.

Unloading facilities for coal are rudimentary and suitable for road trucks and
not rail. Only informal stockpile areas have been established.

As noted under Transport-Rail, there are also capacity constraints on the rail
system that affect its ability to service the port.

The Port of Fremantle is located outside the Peel Region to the north. Its bulk
loading facilities are fit for purpose for relatively low tonnages (~3 Mtpa, but
would require major upgrades for higher tonnages).

Port planning

The Bunbury Port Authority has put in place detailed strategies for the future
provision of container and break-bulk cargo handling facilities, and the
construction of additional berths. The Port Authority is also examining
options for a second common user bulk loading facility in the Inner Harbour,
which would facilitate efficient coal exports.

The Port Authority is also undertaking studies to determine the optimum


design for the next major expansion of the Inner Harbour.

7.5.4 Transport – Airports

There is one jet-capable airport in the South West – Busselton Regional


Airport. This is used for FIFO charter operations to the Pilbara using F100
and BaE146 aircraft. A study is being conducted by the Bunbury Shire Council
into upgrading options and feasibility to enable jet RPT services and use of
larger aircraft for both passengers and freight.

7.5.5 Energy

The South West is the centre for electricity generation in Western Australia.
Electricity is generated from the Muja and Collie power stations using Collie
coal as fuel. Griffin Energy is constructing a coal-fired power station with an
capacity of 416 MW at the Coolangatta Industrial Estate, 10 kilometres north-
east of Collie. A proposed second stage would add another 416 MW.
Electricity generated in the South West feeds directly into the State power grid
through high voltage power lines that traverse both the plateau areas and the
coastal plain. Over 50 per cent of the State‟s power supply is generated using
Collie coal from the South West.

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A gas-fired power station at Kemerton Industrial Park became operational in


late 2005 and supplies with 260 MW of peak generating capacity. The plant,
owned and operated by Transfield Services, is an open cycle gas turbine and
capable of using diesel fuel as a back-up.

Cogeneration plants operate at the Worsley and Pinjarra alumina refineries,


supplying steam to the refineries and electricity to the grid. A peak-load gas
fired power station is located at the Wagerup refinery and would be converted
to cogeneration if and when the Wagerup expansion proceeds.

Mining and resources electricity demand in the South West-Great Southern


region is forecast to grow marginally over the period 2008-2020.

Natural gas provided to the South West by the Dampier to Bunbury gas
pipeline, which extends from the North West Shelf in the Pilbara Region, as
far south as Bunbury. Natural gas is supplied via laterals to Capel and
Busselton as well as to the alumina refinery at Worsley and other large
industries providing them with a cost-effective supply of energy.

The Parmelia Gas Pipeline complements the Dampier to Bunbury pipeline,


supplying gas to the Pinjarra refinery from the Dongara basin.

The WA Government is undertaking a study of options for extending this


pipeline through the South West region to Albany in the Great Southern
region.

The CME study found that demand for gas in the South West and Great
Southern is forecast to have modest growth of 2 PJ/a by 2020, although
development of additional alumina refining capacity, plus other industrial
facilities, could result in considerably greater demand growth.

7.5.6 Water supply

The Department of Water is responsible for the management of water and


issues water allocation licences to the South West Region‟s three public water
utilities, Water Corporation, Aqwest (Bunbury Water Board) and the Busselton
Water Board. Water Corporation is the utility responsible for water supply in
the Peel Region. Water Corporation also operated the Integrated Water Supply
System (IWSS) which supplies Perth and much of the south west corner of the
State. Licences are also issued to private water users such as large mining and
horticultural enterprises requiring groundwater from confined aquifers.

South of Bunbury, surface water resources were developed for public water
supplies in a number of towns including Walpole, Pemberton, Manjimup,
Bridgetown, Boyup Brook, Kirup, Balingup and Margaret River. On the coastal
plain, most towns are supplied with groundwater from the Yarragadee or

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Leederville Aquifers. These include Binningup, Bunbury, Eaton, Australind,


Capel, Busselton and Dunsborough. The Harris Dam, 12 kilometres north of
Collie, supplies water to Collie, 31 towns connected to the Great Southern
Towns Water Supply Scheme, and to the State‟s Integrated Water Supply via
the Stirling Dam.

Irrigation is the major use of water in the South West. The Water Corporation
supplies bulk water to Harvey Water (formerly South West Irrigation
Cooperative) from dams in the Darling Scarp, including Waroona, Samson,
Logue Brook, Stirling, Harvey and Wellington. The Glen Mervyn Dam near
Donnybrook supplies the Preston Valley Irrigation Cooperative. A joint State
and Federal government project to decrease salinity and increase Western
Australia‟s supply of drinking water was announced in 2005. The $30 million
Collie River Salinity Recovery Project is designed to reduce salinity levels in the
Wellington Dam with a long-term goal of making the water suitable for
drinking by 2015. Coastal plain groundwater is also used extensively for private
irrigation.

The major groundwater resource of the Collie Basin is used for industrial
purposes associated with coal mining and power generation. Water for
alumina refining is obtained both from surface water (dams) and groundwater
sources.

The Water Corporation provides rural drainage services in defined rural


drainage districts. It also manages all public wastewater (sewerage) schemes in
the South West and operates and maintains 26 wastewater treatment plants.
Each wastewater scheme must be managed to meet health requirements,
environmental conditions, as well as social and community needs.

The Southern Seawater Desalination Project is being constructed from 2009 at


Binningup, north of Bunbury, with operation scheduled to start in 2011. The
plant will supply water for residential, commercial and industrial customers
through the IWSS. The project will produce around 50 gigalitres of drinking
water per year, with the potential to increase to 100 gigalitres.

The CME study found that all industry water demand in the South West-Great
Southern region is forecast to grow at a CAGR of 2.4 per cent to 325 GL/a by
2020 with approximately 95 GL/a of this demand attributable to the minerals
and energy sector (Figure 36). The additional growth is expected to be realised
predominantly in the King and Preston Water Demand Regions and primarily
driven by heavy mineral sands, coal and electricity generation projects.

The South West-Great Southern minerals and energy sector is expected to


continue to source additional demand through self extracted water resources.

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The groundwater allocation limits in the South West-Great Southern region


total 259 GL/a, 18 per cent of which is currently unallocated. Total
groundwater demand for the region is expected to exceed current allocations
from 2012.

Figure 36 Self extracted water outlook, South West and Great Southern

Data source: CME 2009, based on survey data with extrapolated growth and GEM Consulting analysis

Health services

The South West‟s health services are based on 14 hospitals and one nursing
post, backed by a strong contingent of private medical specialists and general
practitioners, and community based health services. The South West Health
Campus in Bunbury is the major medical centre for the Region with 24-hour
emergency care and a wide range of support services. The Campus includes a
public hospital (130 beds) and a private hospital (92 beds), a medical centre and
mental and community health facilities.

In the South West there is a high focus on community health services, which
include maternity support, child health clinics, school-based immunisation and
dental care, and intensive youth education programs. Aged care facilities and
retirement villages are located throughout the Region.

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The Peel region is similarly serviced by medical practitioners and health


facilities. The Peel Health Campus at Mandurah provides a wide range of
acute health services. The campus includes a 200-bed facility with Emergency
and General Care departments together with state-of-the-art oncology and
renal dialysis suites. A dedicated paediatric wing is also planned for the near
future.

Pinjarra has the publicly managed Murray District Hospital; and Boddington
has a small hospital.

There are also two major community health centres in Mandurah and Pinjarra.

Patients in need of specialised care are transferred to metropolitan tertiary


hospitals.

7.5.7 Education

The South West is serviced by both non-government and government pre-


primary, primary and secondary schools, which cater for a student population
of approximately 27,000. In addition to the South West Regional College of
Technical and Further Education (TAFE) at Bunbury, there are also TAFE
campuses located at Busselton, Collie, Harvey, Manjimup and Margaret River,
and nine TAFE centres in smaller towns. There are approximately 6,700 TAFE
students enrolled annually.

The Edith Cowan University South West Campus (Bunbury) provides courses
in business, nursing, education, computing, fine arts, technology, language
studies and humanities. The Margaret River Education Campus, a collaborative
initiative of a number of South West training providers, has as its centrepiece a
state-of-the-art training winery, which provides hands-on experience in
sophisticated viticulture research and teaching facilities. Learning centres and
telecentres also operate throughout the Region.

The Peel Region has 42 government and private schools, including pre-school,
primary schools, secondary schools, education support centres and a
community kindergarten.

The Peel region‟s education and training facilities include the Peel Education
Campus, which is Western Australia‟s first co-located and multi-partnered
campus comprising a secondary school (Mandurah Senior College), Challenger
TAFE (Technical and Further Education) and Murdoch University.

Challenger TAFE Access Centres have been established, in partnership with


community learning centres in Boddington, Waroona and Mundijong.

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7.6 Infrastructure planning

7.6.1 Planning processes

Recent planning studies for the Goldfields-Esperance region that have


focussed on or included infrastructure are:
• Energy for Minerals Development in the South West Coast Region of WA,
Department for Industry and Resources (2004)
• Roads 2025 Regional Road Development Strategy, South West, Main
Roads Western Australia and Western Australian Local Government
Association, 2007 Review
• South West Country Land Development Program Annual Review 2006
• Develop the Perth-Albany and Albany-Bunbury Corridor Strategies,
Department for Planning and Infrastructure (2007)
• Perth –Bunbury Corridor strategy, AusLink, Main Roads WA and DPI
(2007).

7.6.2 Planned infrastructure

Bunbury Outer Ring Road. The Bunbury Outer Ring Road will form a
major part of the future regional road network, providing a direct connection
to the major roads radiating from Bunbury: the Perth-Bunbury Highway, South
Western Highway (north), South Western Highway (south to Manjimup) and
Bussell Highway. Preliminary planning is currently underway.

Southern Seawater Desalination Plant, Binningup. Construction work will


commence in 2009 with the new plant beginning operation by late 2011. The
new plant will provide around 50 gigalitres of drinking water per year, with the
potential to increase to 100 gigalitres.

Bunbury Port Access Road (Stage 1). Construction of a new access road for
the Port of Bunbury will provide a direct access route for a significant
proportion of the port‟s freight traffic. The access road will run across South
Western Highway, linking into the Boyanup-Picton Road, providing a high
standard connection to the port. Construction is to commence in January 2009
with an expected completion date of December 2009.

Perth - Bunbury Highway. Construction of the new Perth-Bunbury Highway


is presently on schedule for its December 2009 completion date. It will
complete the high standard inter-regional road link between Perth and the
South West, bypassing the heavily populated areas in Mandurah and the
Dawesville Peninsula. The 70 kilometres of new road will complete a dual
carriageway link between Perth and Bunbury and will reduce travel time by 20
to 30 minutes.

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Shotts Industrial Park – a new 250 hectare heavy industrial park near Collie,
being developed by the WA Government.

7.7 Overview of growth scenarios


By 2020 the South West and Peel regions should have reinforced their position
as a global alumina hub, though expansion of alumina production elsewhere
would likely hold the regions‟ market share at around 15 per cent. Despite the
opening of new mineral sands operations, mineral sands mining in the region is
likely to decline due to resource depletion, closure of existing operations and
competition from other land uses. The production of coal will have increased
from 2009 levels to supply power stations, industry and export markets. The
growth scenario and infrastructure requirements are summarised in the
following tables.

Table 26 Summary of growth scenarios to 2020 for the South West and
Peel growth regions
Mineral product Expanded and new production under growth scenario
Alumina Alumina production of 11.5 Mtpa from three refineries
Mineral sands Production of 500,000 tpa of heavy mineral sands ore
Coal Production of 8 to 10 Mtpa for power generation; 2 Mtpa for char and industry
consumption; 2.7 Mtpa for CTL production
Silicon 60,000 tpa from 3 furnaces

Table 27 Summary of infrastructure requirements under growth scenario to 2020 for the South West
and Peel growth regions
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Roads • While N-S linkages are generally • Definition of a high wide load corridor
adequate, E-W linkages are • Provision of adequate road infrastructure to cater for the
inadequate for future freight and expansion of communities and industrial facilities
passenger vehicle traffic • Ensuring adequate east-west linkages to the main highways for
• High wide load corridor has not been rapidly growing areas, so that freight can access the road network
adequately defined for over-dimension
loads such as plant modules
Rail • Rail network currently congested at key • Improve capacity of rail network initially in congested areas and
locations and capacity is inadequate to later over whole route
cope with growth in traffic

Ports • No dedicated handling facilities for coal • Rail unloading facilities and dedicated stockpile areas for coal
at Port of Bunbury – all coal shipped • A high capacity bulk loading facility for coal
via Fremantle • Deepening the port’s inner harbour to accommodate fully-loaded
• Water depth at Port of Bunbury is Cape-size vessels
insufficient for fully-loaded Cape-size
vessels
Energy • Electricity transmission capacity needs • Provide adequate transmission capacity to connect generation
to be upgraded between Collie and with customers (underway)
demand centres

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Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Water and • Water planning and current water • Develop integrated regional water plan to overcome future
wastewater sources and supply infrastructure is shortages for industry use
inadequate for future growth of industry
and population
Community • Demand from fast growing population • Continue to develop community infrastructure to provide for fast
infrastructure runs ahead of supply of community growing population, anticipating needs where possible
infrastructure and services

7.7.1 Infrastructure requirements

Transport – Road

Road freight demands associated with meeting the day-to-day needs of


residents, tourists and businesses on or along the corridor are forecast to
increase commensurate with population and economic growth, particularly
from areas adjacent to, around, and to the south of the corridor.

Short term priorities identified by Auslink include:


• Establish defined High Wide Load routes for indivisible loads
• Widen narrow seal and shoulder widths and refurbish deteriorating
pavement surface along some southern sections of the road corridor.
Longer term priorities include:
• Provision of adequate road infrastructure to cater for the expansion of
communities (such as Mandurah, Rockingham, Binningup and Myalup) and
industrial facilities (such as Kemerton Industrial Area) that connect (east-
west) to the corridor
• Ensuring adequate east-west linkages to the main highways for rapidly
growing areas, so that freight can access the road network.

Transport – Rail

The biggest issue in the South West and Peel is likely to arise when the
substantial number of plant upgrades and new export opportunities under
consideration come into operation, causing demand to exceed the capacity of
the existing rail facilities. The rail corridor is already near, or at, capacity and
will be unlikely to provide adequate capacity to meet forecast demand. The
challenge is for the rail system to match demand and avoid possible transfer of
rail freight to road. The current lack of rail capacity is due to the existing
number and length of passing loops that limit the length of freight trains, and
the prioritisation of the passenger service over freight movements.

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Short term priorities for rail are increasing capacity (including to Bunbury Port)
and reduction of congestion (notably in the Brunswick-Picton area) through
greater axle load limits, duplication of the more heavily trafficked sections and
increased train passing opportunities. These improvements will be needed to
provide capacity for the greater volumes of freight transport predicted.

The longer term priority is to continue provision of additional rail capacity


over the length of the corridor to match demand.

As a privately leased and operated rail network, there is opportunity for


planning and investment from industry and the rail operator (supported by
government) to address anticipated needs arising from industry growth.

Transport – Ports

As noted, the current bulk unloading, storage and loading facilities at the Port
of Bunbury have very limited capacity to handle coal. In addition, the port has
insufficient depth to handle fully-loaded Cape-size vessels.

The port infrastructure priorities from the minerals industry perspective are:
• Rail unloading facilities and dedicated stockpile areas for coal
• A high capacity bulk loading facility for coal
• Deepening the port‟s inner harbour to accommodate fully-loaded Cape-size
vessels.

Electricity

The major constraint on efficient production and use of electricity in the South
West and Peel is transmission capacity. The network corporation, Western
Power has plans are in hand for a new 330kV line to Perth via the Peel region
to meet future demand and service the new generation capacity in the South
West. This line is awaiting regulatory and funding approval.

Water

Total groundwater demand for the region is expected to exceed current


allocations from 2012. Other supply sources will be needed, including
recycling. An integrated regional water supply strategy is required, linked to a
strategy for the overall Integrated Water Supply System and self-supplied
groundwater throughout the south west corner of Western Australia.

Community infrastructure

While much community infrastructure in the South West and Peel approaches
metropolitan standards, the rapid growth of the regions is placing strains on
some facilities, notable health and education. Provision of other government

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and private services also tend to lag metropolitan regions and population
growth.

Health facilities are generally of a high standard, but most specialised hospital
care still needs to be provided in Perth.

Primary and secondary school facilities are of high standards, but are having
high demands placed on them. TAFE facilities in the Peel region are of high
standard, but need to continue to be enhanced to meet demand. TAFE
facilities in some parts of the South West need to be enhanced to better meet
current and future demand. University facilities and services in the regions are
available but limited. Population growth could make additional university
services viable.

South West growth region 153


Queensland

Vision 2020 Project: The


Australian Minerals Industry’s
Infrastructure Path to Prosperity

An assessment of industrial and


community infrastructure in major
resources regions

Prepared for the Minerals Council of Australia

May 2009
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For information on this report


Please contact:
Dr John Söderbaum Ian Satchwell
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
Email j.soderbaum@aciltasman.com.au i.satchwell@aciltasman.com.au
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Contents
1 2020 Vision Project 1
2 Queensland overview 3
3 Overview of Queensland mining and infrastructure 4
3.1.1 Queensland coal 5
3.1.2 Coal seam gas 7
3.1.3 Other Queensland mining 7
4 Mt Isa – Townsville growth region 14
4.1 Description of growth region 14
4.1 Current resources production 16
4.2 Planned and proposed resources production 19
4.2.1 Industry and production trends 19
4.2.2 Planned projects: extraction and processing 19
4.2.3 Potential projects: extraction and processing 20
4.3 Resources-related demography and geography 24
4.3.1 Mount Isa 24
4.3.2 Cloncurry 25
4.3.3 Townsville 26
4.3.4 Charters Towers-Chillagoe 27
4.4 Current infrastructure 28
4.4.1 Rail 28
4.4.2 Road 29
4.4.3 Ports 33
4.4.4 Air 34
4.4.5 Energy 34
4.4.6 Water 36
4.4.7 Community infrastructure 36
4.5 Infrastructure planning 39
4.5.1 Planning processes and initiatives 39
4.5.2 Planned infrastructure 45
4.6 Information gaps 46
4.7 Growth scenario, Mount Isa-Townsville growth region 47
4.7.1 Overview 47
4.7.2 Mineral production 48
4.7.3 Infrastructure requirements 49
5 Newlands-Abbot Point/Bowen growth region 57

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

5.1 Description of growth region 57


5.2 Current resources production 60
5.3 Planned and proposed resources production 60
5.3.1 Coal production 60
5.3.2 Alumina production 61
5.3.3 Other minerals processing 61
5.4 Regional demography and economy 62
5.5 Current infrastructure 64
5.6 Infrastructure planning 66
5.6.1 Planning processes 66
5.6.2 Planned infrastructure 70
5.7 Information gaps 71
5.8 Growth scenario, Newlands-Abbot Point/Bowen growth region 71
5.8.1 Overview 71
5.8.2 Minerals production 72
5.8.3 Infrastructure requirements 73
6 Northern Bowen Basin-Mackay growth region 76
6.1 Description of growth region 76
6.2 Current resources production 80
6.3 Planned and proposed resources production and infrastructure 80
6.3.2 Future Galilee Basin development 81
6.4 Current community infrastructure and services 83
6.5 Infrastructure planning 84
6.5.1 Planning processes 84
6.5.2 Infrastructure issues 87
6.6 Growth scenario, Northern Bowen Basin-Mackay growth region 93
6.6.1 Overview 93
6.6.2 Infrastructure needs 94
7 Fitzroy growth region 99
7.1 Description of growth region 99
7.2 Current community infrastructure 103
7.3 Current resources production 104
7.4 Planned and proposed resources production and infrastructure 105
7.4.1 Coal projects 105
7.4.2 Infrastructure 105
7.4.3 Minerals and energy projects in the Gladstone region 106
7.5 Infrastructure planning 108
7.5.1 Planning processes 108
7.5.2 Infrastructure issues 110
7.6 Growth scenario, Fitzroy growth region 113

iv
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

7.6.1 Overview of growth scenario 113


7.6.2 Infrastructure needs 115

8 Surat Basin region 119


8.1 Description of growth corridor 119
8.2 Current resources production 122
8.3 Planned and proposed resources production 122
8.4 Resources-related demography and geography 125
8.5 Current infrastructure 126
8.6 Infrastructure planning 127
8.6.2 Planning processes 129
8.7 Growth scenario, Surat Basin growth region 130
8.7.1 Overview of growth scenario 130
9 Moreton Basin growth region 132
9.1 Description of growth corridor 132
9.2 Current resources production 132
9.3 Resources-related demography and geography 133
9.4 Current infrastructure 135
9.5 Infrastructure planning 136
9.5.1 Planning processes 136
9.5.2 Planned infrastructure 136

List of boxes
Box 1 The Goonyella Coal Chain is complex… 89

List of figures
Figure 1 Coal consumption by power stations in Queensland, 2007 6
Figure 2 Queensland coal mines and transport system 13
Figure 3 Mount Isa to Townsville transportation corridor 15
Figure 4 Significant mines and minerals resources – north-west Queensland 17
Figure 5 Significant mines and minerals resources: Chillagoe-Mt Garnet-Charters
Towers region 19
Figure 6 Strategy 2: Mount Isa - Enhance the road and rail Mt Isa-Townsville
Corridor in accordance with the AusLink Corridor Study 40
Figure 7 Strategy 3: Mount Isa - Investigate transport linkages (air, rail, road and
sea) that facilitate closer interaction between trade and economic centres
of the triangle 40
Figure 8 Strategy 10: Develop the Port of Townsville Eastern Access Corridor 41
Figure 9 Strategy 11: Protect the integrity of the Port of Townsville as the major
gateway to North, Northwest and Far North Queensland 41
Figure 10 Strategy 12: Ensure development and efficient operation of Port of
Townsville 41

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 11 Strategy 14: Enhance the road and rail corridors between the Port of
Townsville and Mount Isa in accordance with the AusLink Corridor
Strategy 41
Figure 12 Strategy 31: Identify and undertake planning to supply the urban and
community infrastructure necessary to support population growth in the
economic centres and meet the needs of new workers and their families 42
Figure 13 The Newlands system 59
Figure 14 Schematic of Goonyella to APCT Expansion (GAPE) project 69
Figure 15 The Goonyella rail system 76
Figure 16 Former Shires in the Northern Bowen Basin-Mackay growth region 77
Figure 17 Numbers of „couples with children‟ families as a percentage of the
overall resident population in the Bowen Basin 78
Figure 18 New LGAs in the Northern Bowen Basin-Mackay growth region 79
Figure 19 Galilee Coal Project rail and port options 82
Figure 20 DBCC Integrated Planning Approach 90
Figure 21 The Blackwater and Moura Systems 99
Figure 22 Former Shires in the Fitzroy growth region 100
Figure 23 New LGAs in the Fitzroy growth region 101
Figure 24 Darling Downs - Map (ABS - Statistical Subdivision) 119
Figure 25 Current and proposed mines, Surat Basin 120
Figure 26 Surat Basin and rail and pipeline links 121

List of tables
Table 1 Coal exports through Queensland coal terminals 2006 – 2008 (tonnes) 5
Table 2 Export coal haulage by rail system 2007-08 (Mtpa) 5
Table 3 Domestic coal haulage by rail system 2007-08 (Mtpa) 5
Table 4 Committed and proposed coal mining projects, Queensland (as at
October 2008) 8
Table 5 Committed and proposed coal infrastructure projects, Queensland (as at
October 2008) 11
Table 6 Planned minerals projects, Mt Isa-Townsville growth region: committed
or under construction 20
Table 7 Potential minerals projects, Mt Isa–Townsville growth region: less
advanced 21
Table 8 Summary of growth scenario to 2020 for the Mount Isa-Townsville
growth region 47
Table 9 Summary of infrastructure requirements under the growth scenario to
2020 for the Mount Isa-Townsville growth region 47
Table 10 Employment by industry, Bowen Shire, 2006 62
Table 11 Number of businesses by industry, Bowen Shire, 2006 64
Table 12 Summary of growth scenario to 2020 for the Newlands-Abbot
Point/Bowen growth region 71
Table 13 Summary of infrastructure requirements under the growth scenario to
2020 for the Newlands-Abbot Point/Bowen growth region 72
Table 14 Summary of growth scenario to 2020 for the Northern Bowen Basin-
Mackay growth region 93
Table 15 Summary of infrastructure requirements under the growth scenario to
2020 for the Northern Bowen Basin-Mackay growth region 94

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Table 16 Employment by industry. Fitzroy region, 2006 103


Table 17 Minerals projects under construction, committed and planned, Fitzroy
region 107
Table 18 Proposed LNG projects, Gladstone area 107
Table 19 Summary of growth scenario to 2020 for the Fitzroy growth region 114
Table 20 Summary of infrastructure requirements under the growth scenario to
2020 for the Fitzroy growth region 114
Table 21 Number of businesses by industry, Darling Downs region 125
Table 22 Employment by industry, Darling Downs region, 2006 126
Table 23 Key elements of infrastructure in the Surat Basin growth region 127
Table 24 Summary of growth scenario to 2020 for the Surat Basin growth region 130
Table 25 Summary of infrastructure requirements under the growth scenario to
2020 for the Surat Basin growth region 131
Table 26 Number of businesses by industry, Moreton region 134
Table 27 Employment by industry 2006, Moreton region 135

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

1 2020 Vision Project


This report forms part of the Mineral Council of Australia‟s 2020 Vision
Project – a long term study into the needs of, and opportunities for, the
Australian minerals industry. The project examines existing and potential
capacity constraints in ports, railways and roads; energy, telecommunications
and water networks; as well as housing, labour and other social needs that
affect the growth of the mining industry and the wellbeing and development of
the communities in which it operates across Australia. It considers the
potential for growth in 20 Australian resources regions under a scenario that
broadly aligns with the Advance scenario outlined in an earlier report prepared
as part of the Vision 2020 Project and assesses the need for infrastructure to
support that growth.1 Separate reports have been prepared for each State and
the Northern Territory.
While the main focus of the work is on the minerals industry, the reports for
individual growth regions have, in some cases, also considered the growth
outlook for other industries. In particular, other industries have been
considered in regions where they are important competitors for access to
infrastructure, or where their needs are complementary to those of the mining
industry.

Expansion of the nation‟s infrastructure (hard and soft industrial and


community infrastructure) has not kept pace with the rapid and sustained
growth in export and domestic demand. Consequently, Australia now has
significant infrastructure constraints. This in turn has reduced Australia‟s
ability to meet the global demand for mineral products. Other nations have
moved to fill that gap and as a consequence Australia‟s market share has fallen.

The ultimate objective of the 2020 Vision Project is to encourage the


establishment of the policy and regulatory frameworks that will enable the
timely provision of the industrial and community infrastructure needed to
support an increase in Australia‟s minerals production capacity. It is hoped
that this in turn will enable Australia to rebuild its share of the global minerals
market.

The 2020 Vision Project‟s growth scenarios were prepared prior to the
emergence of the global economic crisis. While the strong negative impacts on
global growth and demand are already clearly evident, most commentators
believe that those impacts are likely to largely play out over next 6-18 months.

1 Two reports were produced by Access Economics: Infrastructure 2020 – Can the domestic supply
chain match global demand? and Global commodity demand scenarios.

2020 Vision Project 1


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

ACIL Tasman believes that robust economic conditions will return within that
timeframe, and that growth is likely to return to longer term trend lines. The
Asian markets in particular, with their innate demand driven by large,
aspirational populations, are likely to bounce back quickly and strongly.

This study draws on the results of a range of existing resources and


infrastructure studies. The growth scenarios and gaps in infrastructure for the
following growth regions are discussed in this report:
• North Queensland Minerals Province (Mt Isa – Townsville growth region)
• Central Queensland Coal Regions – including the Bowen and Galilee coal
basins
− Newlands-Abbot Point/Bowen growth region
− Central Bowen Basin-Mackay growth region
− Gladstone-linked (Fitzroy) growth region
• Surat Basin growth region
• Moreton Basin growth region.

2020 Vision Project 2


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

2 Queensland overview
The mining industry is the engine room of the Queensland economy. It has
the potential to be an even larger contributor to employment, business and
revenue in the State.

The industry and the communities it supports – and that support it – depend
on infrastructure of all kinds to be able to operate efficiently and to reach their
potential.

The shortcomings of current infrastructure have been well-publicised and the


need to overcome these inadequacies remains of critical importance to the
growth of Queensland‟s export industries. The principal issues surround:
• Export supply chains for minerals products (coal, base metals and other
minerals) being hamstrung due to legacy issues associated with inadequate
planning, poor co-ordination between infrastructure service providers,
multiple definitions of capacity based on different and at times unrealistic
assumptions, and an absence of performance-based contractual
frameworks
• Shortages of water in mining regions both for industrial and community
use, and uncertainty as to how expected future demand for water will be
met, with the risk is that the infrastructure for new water will lag demand
• Inadequate community infrastructure and services, particularly those
relating to health, education, and housing
• Inadequate road and air transport infrastructure that restricts access and
mobility
• Inadequate telecommunications infrastructure and competition (particularly
in high speed broadband) in parts of Queensland, constraining both small
business and community communications.
In combination, these factors have resulted in lost opportunities for industry to
capitalise on buoyant market conditions and given rise to unnecessary
uncertainty for companies to investment in large mining, including related
infrastructure, projects. In the absence of a high-level of contractual and
operational certainty, it is difficult for industry to make long-term investment
decisions, let alone short-term planning for the reliable sale of commodity
exports.

Further major growth in Queensland mining – and in associated energy


production – will require that these infrastructure issues are addressed. If
infrastructure deficiencies can be overcome, the benefits will flow throughout
the economy in the form of higher growth, revenues and employment.

Queensland overview 3
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

3 Overview of Queensland mining and


infrastructure
Queensland and Western Australia dominate national minerals production.

Queensland‟s coal industry is the largest in Australia, and approximately 85 per


cent of the State‟s coal production is exported. A total of 54 coal mines were
operational in Queensland during 2008, with 44 in the Bowen Basin.

Other minerals activities are centred on Gladstone and the Townsville-Mt Isa
corridor. Mining is a major industry in the Northern Economic Triangle, a
region which the Queensland Government defines as covering the greater
Mount Isa region through to the coast (Townsville and Bowen), with minerals
processing occurring on the coast at Townsville and Gladstone. Gladstone is
also the centre of proposed LNG projects utilising coal seam gas.

The economic contribution of the Queensland mining industry2 can be


summarised as follows:
• The Queensland mining sector contributes more than 8 per cent of
Queensland‟s total factor income, the building block of Gross State
Product (GSP)
• The sector accounts for more 21 per cent of all capital expenditure in
Queensland
• Mining in Queensland has seen 7.1 per cent average annual growth in direct
employment over the ten years to 2007-08
• The mining sector achieved exports of about $11,300 million in the year
2004–05, rising to $17,521 million just four years later in 2007–08
• Processed minerals contributed a further $3,530 million in 2004–05, rising
to $4,304 million in 2007–08
• Exports from mining and mineral processing make up 62 per cent of total
State exports
• Royalties paid by mining companies to the Queensland Government
totalled $1,345 million in 2007–08.

2 This summary draws on ACIL Tasman for the Queensland Department of Minerals and
Energy, 2006, The economic significance of mining and mineral processing to Queensland and
Queensland Treasury 2008, 2007–08 Annual Economic Report.

Overview of Queensland mining and infrastructure 4


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

3.1.1 Queensland coal

Queensland is a key player in global commodity markets. In 2007/08,


Queensland exported 152 Mt or 60 per cent of total Australian coal exports.
Historically, Queensland has been the world‟s largest exporter of metallurgical
coal, exporting more than 112 Mt in 2007/08. The much sought after
attributes of Queensland‟s coal reserves led to a specialisation in exports of
high quality metallurgical coal.

Queensland‟s coal rail infrastructure is comprised of the central Queensland


coal network (which includes four rail systems – Newlands, Goonyella,
Blackwater and Moura – servicing mines in the Bowen coal basin) and a
smaller network servicing mines located west of Brisbane. These are the
critical transportation networks linking mines to Queensland coal export ports.

Recent export growth of coal exports highlights the strong demand for
Queensland‟s coal. Exports by terminal during 2008 are shown in Table 1.

Table 1 Coal exports through Queensland coal terminals 2006 – 2008


(tonnes)
Port 2006 2007 2008
Abbot Point 11,207,701 11,823,938 13,684,282
Brisbane 3,877,048 5,252,836 5,435,576
Dalrymple Bay 50,968,245 44,161,841 48,087,373
Gladstone 49,868,400 53,018,110 55,892,056
Hay Point 32,225,563 39,338,386 36,057,555
Total 148,146,957 153,595,111 159,156,842
Data source: Department of Mines and Energy 2009

Tonnages hauled on each coal rail system in 2007/08 are shown in Table 2 and
Table 3. Until recently, the haulage of this coal was provided solely by QR
National. In early 2009, Pacific National commenced railings in competition
with QR National.

Table 2 Export coal haulage by rail system 2007-08 (Mtpa)


Goonyella Blackwater Moura Newlands West Moreton/
Surat
2007-08 80.5 52.1 11.3 13.0 5.6
Data source: QR 2008

Table 3 Domestic coal haulage by rail system 2007-08 (Mtpa)


Blackwater Moura
2007-08 6.0 3.5
Data source: QR 2008

Overview of Queensland mining and infrastructure 5


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

In the medium term and beyond, demand for thermal coal is expected to be
robust, especially with growth in emerging market economies stemming from
rising domestic demand as a result of industrialisation and urbanisation.

Similarly, the demand for metallurgical coal is expected to again grow steadily
in the medium and long term as the demand growth for steel is expected to
return to its previously strong levels.

Looking at domestic demand, Queensland power plants used 20.3 Mt of coal


in 2007. With 3.4 Mt consumption, Stanwell power station used the most coal
in the year, followed by Gladstone power station with 3.2 Mt (see Figure 1).
Coal for these power stations is transported via the Central Queensland rail
system.

Figure 1 Coal consumption by power stations in Queensland, 2007

Tarong B,
Callide B,
1.2 Mt
2.1 Mt
Tarong A,
2.7 Mt
Callide C,
2.7 Mt
Swanbank B,
1.0 Mt Collinsville,
0.3 Mt

Stanwell, Gladstone,
3.4 Mt 3.2 Mt

Millmerran,
2.9 Mt
Kogan Creek,
0.9 Mt

Data source: Various BJ reports, 2008

The growth in coal production is demonstrated by the number and scale of


coal mining projects in Table 4. Coal-related infrastructure projects are set out
in Table 5. Note that these are based on the ABARE Major Development
Projects listing of October 2008. The next edition was issued on 21 May 2009,
too late for inclusion in this report.

Overview of Queensland mining and infrastructure 6


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

3.1.2 Coal seam gas

Coal seam gas (CSG) is a rapidly developing source of domestic and export
energy. Nationally, CSG demand is growing at around 3.8 per cent per annum
and at 5.3 per cent in Queensland.

The Queensland Department of Minerals and Energy3 predicts that the State
could use as much as 320 petajoules (PJ) per annum of gas for power
generation and industrial processes by 2015. Queensland could also supply
interstate markets at a rate of about 200 PJ pa.

The Department says that proposed liquefied natural gas (LNG) exports have
the potential to add in excess of 500 PJ a year to Queensland‟s production by
2015.

Queensland‟s resources are very large: proved and probable (2P) coal seam gas
reserves currently amount to 12 174 PJ (one PJ is the heat energy content of
about 43,000 tonnes of black coal or 29 million litres of petrol).

3.1.3 Other Queensland mining

While coal dominates mining production in Queensland, the State is also a


major producer of other minerals, including base metals, gold and bauxite, as
well as being a producer of phosphate and magnesite.

After coal, base metals are the most important sector of the State‟s mining
industry, and Queensland leads Australia in the production of all base metals.
The North West minerals province, centred on the Mt Isa Inlier, is a world
class base metals region, with excellent potential for discovery, development
and further growth as a mining region. Production and potential development
in this region is examined in detail in section 4.

Uranium is an energy product that Queensland has produced in the past and
for which it has excellent future production potential.

Queensland also produces oil and petroleum gas and has large resources with
potential for shale oil production.

3 Queensland Department of Minerals and Energy, September 2008, Queensland Coal Seam Gas

Overview of Queensland mining and infrastructure 7


Table 4 Committed and proposed coal mining projects, Queensland (as at October 2008)
Expected
Project Company Location Status Startup New Capacity Capital Expend. Employment
Blackwater Creek Wesfarmers 200 km W of Expansion, 2010 Nil (extension of $130m
Diversion Rockhampton committed Curragh mine life)
Carborough Downs Vale 20 km NE of Expansion, 2009 3 Mt coking US$330m (A$390m)
longwall Moranbah under
Overview of Queensland mining and infrastructure

Path to Prosperity
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure
construction
Clermont opencut Rio Tinto 11 km N of New project, 2010 12 Mt thermal US$1.3b (A$1.5b) 400
Clermont under (replacing Blair Athol
380
construction capacity)
Ensham bord and Ensham 40 km NE of New project, 2010 2 Mt thermal $120m 160
pillar underground Resources Emerald committed
mine
Kestrel Rio Tinto 51 km NE of Expansion, 2012 1.7 Mt coking US$991m (A$1.17b)
Emerald under
construction
Lake Lindsay Anglo Coal near German New project, late 2008 1.9 Mt hard coking, US$726m (A$854m) 900
opencut Australia/ Mitsui Creek – central under 1.8 Mt PCI, 0.3 Mt
270
Qld construction thermal
Vermont Coal QCMM 15 km NE of New project, 2009 4 Mt coking $264m 350
Project Dysart under
280
construction
Alpha Coal Project Hancock 120 km SW of New project, 2012 30 Mt thermal $7.5b (include mine, 2500
Prospecting Clermont prefeasibility port and rail)
1600
study under way
Belvedere Aquila 160 km W of New project, 2013 9 Mt hard coking na 500
underground Resources/ Vale Gladstone prefeasibility
500
study under way
Caval Ridge (Peak BHP Billiton 20 km SW of Expansion, 2011 5.5 Mt coking na 1200
Downs expansion) Mitsubishi Moranbah prefeasibility
340
Alliance (BMA) study under way
Codrilla Macarthur Coal 62 km SE of New project, EIS na 3.2 Mt PCI na
Moranbah under way
Daunia BHP Billiton 25 km SE of New project, 2010 4 Mt coking na 450
Mitsubishi Moranbah feasibility study
300
Alliance (BMA) under way
8
Expected
Project Company Location Status Startup New Capacity Capital Expend. Employment
Dawson South Anglo Coal 15 km NW Expansion, EIS 2010 5–7 Mt thermal na
(stage 2) Australia/ Mitsui Theodore under way (ROM)
Eagle Downs (Peak Aquila 20 km SE of New project, 2012 4-7 Mt coking $892m-$1.3b
Downs East Resources/ Moranbah prefeasibility
underground) Bowen Central study under way
Coal
Management
Overview of Queensland mining and infrastructure

Path to Prosperity
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure
Ellensfield coal Nebo Central 175 km W of New project, EIS na 4.7 Mt thermal and na
mine project Coal/ Vale Mackay under way coking
Ensham Central Ensham 40 km NE of Expansion, 2015 8 Mt thermal $700m 200
longwall Resources Emerald feasibility study
140
underground under way
Ensham Central Ensham 40 km NE of Expansion, na 6 Mt thermal $140m
project Resources Emerald awaiting final
approval
Goonyella BHP Billiton 30 km N of Expansion, 2012 up to 9 Mt hard na 1200
Riverside Mitsubishi Moranbah prefeasibility coking
750
Expansion Alliance (BMA) study under way
Grosvenor Anglo Coal 8 km N of New project, 2012 6.5 Mt hard coking US$700m (A$833m) 800
underground Australia Moranbah feasibility study
300
under way
Hail Creek Rio Tinto 120 km SW of Expansion, 2011 5.5 Mt thermal, 2.5 na
expansion Mackay prefeasibility Mt hard coking
study under way
Integrated Isaac Aquila 180 km SW of Expansion, 2009 2 Mt coking and $118m 40
Plains Project Resources/ Vale Mackay feasibility study thermal
completed
Kunioon Tarong Energy Kingaroy New project, EIS 2012 10 Mt thermal (ROM) $500m 220
under way
260
Monto coal mine Burnett Coal/ 120 km S of New project, na 1 Mt thermal $35m
(stage 1) Macarthur Coal/ Gladstone under review,
China Huaneng mining lease
Group granted
Moranbah South Anglo Coal 4 km S of New project, 2011 6.5 Mt coking US$1b (A$1.19b) 1200
project Australia/ Exxaro Moranbah prefeasibility
study under way
9
Expected
Project Company Location Status Startup New Capacity Capital Expend. Employment
New Acland (stage New Hope Coal 150 km W of Expansion, 2010 6 Mt thermal $500m 360
3) Brisbane feasibility study
360
under way
Olive Downs North Macarthur Coal 30 km S of New project, 2009 1 Mt coking na
Coppabella feasibility study
under way
Red Hill Aquilla 45 km N of New project, 2011 2 Mt PCI and na
Overview of Queensland mining and infrastructure

Path to Prosperity
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure
underground Resources Moranbah prefeasibility thermal
study under way
Togara North Xstrata 45 km SW of New project, na 2.0 Mt thermal na 60
Blackwater feasibility study
under way
Wandoan opencut Xstrata/ Itochu/ 60 km N of Miles New project, 2011 up to 20 Mt thermal US$1.6b (A$1.8b) 1000
Sumisho Coal feasibility study
500
under way
Waratah Galilee Waratah Coal 450 km W of New project, 2012 up to 25 Mt thermal $5.3b 2200
coal project Rockhampton prefeasibility
760
study under way
Washpool coal Aquilla 260 km W of New project, 2012 4 Mt of coking and na
project Resources Rockhampton prefeasibility thermal
study under way
Winchester South Rio Tinto 40 km S of New project, 2013 4 Mt of coking and na
Moranbah prefeasibility thermal
study under way
Wonbindi Cockatoo Coal 180 km W of New project, 2011 4 Mt (PCI and na
Gladstone prefeasibility thermal)
study under way

Note: Projects that are under construction or committed are shown in the blue shaded areas. Less advanced projects are shown in the yellow shaded areas
Data source: ABARE Major minerals and energy projects October 2008. Next edition released 21 May 2009
10
Table 5 Committed and proposed coal infrastructure projects, Queensland (as at October 2008)
Expected
Project Company Location Status Startup New Capacity Capital Expend. Employment
Abbot Point Coal Ports Bowen Expansion, mid 2009 Terminal capacity $95m 120
Terminal X25 Corporation of under increase from 21
expansion Queensland construction Mtpa to 25 Mtpa
Abbot Point Coal Ports Bowen Expansion, mid 2010 Terminal capacity $818m
Terminal X50 Corporation of committed increase from 25
expansion Queensland Mtpa to 50 Mtpa
Overview of Queensland mining and infrastructure

Path to Prosperity
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure
Abbot Point Coal Ports Bowen Refurbishment, late 2008 na $68m
Terminal yard Corporation of committed
refurbishment Queensland
Brisbane Coal Queensland Bulk Brisbane Expansion, 2009 3 Mtpa increase $60m
Terminal expansion Handling under
construction
Dalrymple Bay Coal Babcock & Dalrymple Bay Expansion, early 2009 Port capacity $679m
Terminal 7X Brown under increase from 68 to
expansion project Infrastructure construction 85 Mtpa
Phases 2/3
Grantleigh to Queensland Rail 70 km W of Expansion, late 2009 na $49m
Tunnel Rockhampton under
construction
Jilalan Rail Yard Queensland Rail 35 km S of Expansion, late 2009 System capacity $500m 200
Upgrade Mackay under increase of 38 Mtpa
construction
Stanwell - Queensland Rail 40 km W of Expansion, mid-2009 na $72m
Wycarbah upgrade Rockhampton under
construction
Vermont Rail Spur Queensland Rail 15 km NE of New project, 2009 4 Mtpa increase $70m 300
and Balloon Loop Dysart under
construction
Abbot Point Coal Ports Bowen Expansion, EIS 2014 Terminal capacity $1.8b
Terminal X110 Corporation of submitted increase from 80
expansion Queensland Mtpa to 110 Mtpa
Abbot Point Coal Ports Bowen Expansion, EIS 2012 Terminal capacity $1.8b
Terminal X80 Corporation of submitted increase from 50
expansion Queensland Mtpa to 75 Mtpa
11
Expected
Project Company Location Status Startup New Capacity Capital Expend. Employment
Goonyella to Abbot Queensland Rail North Goonyella Expansion, 2014 nil na
Pt (rail) to Newlands (70 feasibility study
(electrification) km) under way
Goonyella to Abbot Queensland Rail North Goonyella New project, 2010 16 Mtpa haulage na 300
Pt (rail) (stage 1) to Newlands (70 final approval capacity
km) imminent
Goonyella to Abbot Queensland Rail North Goonyella Expansion, 2010 25 Mtpa haulage na
Overview of Queensland mining and infrastructure

Path to Prosperity
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure
Pt (rail) (stage 2) to Newlands (70 feasibility study capacity
km) under way
Goonyella to Abbot Queensland Rail North Goonyella Expansion, 2012 25 Mtpa haulage na
Pt (rail) (stage 3) to Newlands (70 feasibility study capacity
km) under way
Hay Point Coal BHP Billiton 20 km S of Expansion, 2013 Port capacity $500m
Terminal Phase 3 Mitsubishi Mackay feasibility study increase from 44
Alliance (BMA) under way Mtpa to 55 Mtpa
Port Alma coal Central 50 km N of New project, na 30 Mtpa $750m–$1b
terminal Queensland Gladstone concept study
Ports Authority under way
Surat Basin Rail Queensland Wandoan to New project, 2011 30 Mtpa haulage $800m–$1b 400-600
(Southern Missing Rail/ ATECDV/ Theodore (210 feasibility study capacity ultimately
Link) Industry Funds km) under way
Management/
Xstrata Coal
Wiggins Island Coal Central Gladstone New project, EIS 2012 25 Mtpa $1.4b 500
Terminal (stage 1) Queensland under way
130
Ports Authority
Wiggins Island Coal Central Gladstone New project, EIS 2016 Terminal capacity $1.4b 600
Terminal (stage 2) Queensland under way increase from 25
225
Ports Authority mtpa to 50 mtpa
Wiggins Island Coal Central Gladstone New project, EIS 2020 Terminal capacity $1.0b 480
Terminal (stage 3) Queensland under way increase from 50
300
Ports Authority mtpa to 70–84 mtpa

Note: Projects that are under construction or committed are shown in the blue shaded areas. Less advanced projects are shown in the yellow shaded areas.
Data source: ABARE Major minerals and energy projects October 2008. Next edition released 21 May 2009
12
Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

Figure 2 Queensland coal mines and transport system

Source: Department of Infrastructure and Planning, 2008

Overview of Queensland mining and infrastructure 13


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

4 Mt Isa – Townsville growth region


4.1 Description of growth region
The Mount Isa-Townsville growth region comprises:
• the north-western Queensland minerals province based on the geological
features known as the Mount Isa Inlier and the Georgina Basin
• the coastal city of Townsville, which is a major transportation, service,
manufacturing and processing centre
• the transportation corridor linking Mount Isa and Townsville
• other areas serviced by the transportation corridor.
The Mount Isa-Townsville region‟s sub-surface resources base includes:
• the world class, but relatively underexplored north-west Queensland
minerals province in and around the large geological feature known as the
Mount Isa Inlier
• an emerging, relatively unexplored mineralised belt stretching south from
Chillagoe to the Charters Towers and Thalanga area in the eastern part of
the region
• substantial oil shale resources in the Julia Creek area less than 100 km to
the east of the eastern margin of the Mount Isa Inlier.
The Mount Isa-Townsville growth region has several other distinct features:
• a relatively small, highly dispersed population
• a large per capita contribution to state and national economies
• harsh and challenging physical conditions, including seasonal high
temperatures, monsoon conditions and tropical cyclones
• plains with expansive black soils that crack in dry weather, swell rapidly
after rain, and provide an unstable foundation for roads and railway track
• established rail, road port, energy and social infrastructure, but that is
deficient in several respects for current usage levels and for growth.
The region‟s principal population centre is Townsville, which is Queensland
second largest stand-alone city, third largest multi-commodity port by tonnage,
and a significant minerals processing and service centre and transport hub.

The Townsville-Mount Isa transport corridor depicted in Figure 3 is the


principal corridor in the region and is part of the National Network. It
includes a highway and railway. It extends a distance of around 1000km and
incorporates parts of the Barkly Highway, the Flinders Highway
(approximately 905km), a section of urban road through Townsville, and the
Great Northern Railway.

Mt Isa – Townsville growth region 14


Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

This corridor links with the Brisbane-Cairns National Network transport


corridor at Townsville. The Townsville-Mount Isa road link overlaps with the
Brisbane-Darwin road corridor from east of Cloncurry to Mount Isa.

The Mount Isa-Townsville transport corridor performs the following


functions:
• shipment of freight from and to mining and agricultural industries in north-
west Queensland
• a local traffic route for remote communities and regional centres
• a major tourism route.

Figure 3 Mount Isa to Townsville transportation corridor

Source: Commonwealth Department of Infrastructure, Transport, Regional Development and Local Government, Mount Isa - Townsville Corridor Strategy 2007

The Mount Isa-Townsville transport corridor was the subject of a study in


2007 by the Commonwealth Department of Infrastructure, Transport,
Regional Development and Local Government. It resulted in the Mount Isa -
Townsville Corridor Strategy.

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

The Brisbane-Mount Isa-Darwin road corridor performs multiple functions


including:
• linking various National Network corridors
• carriage of inputs to mining and processing operations in and around the
Mount Isa Inlier
• shipment of cattle between pastures and to saleyards, abattoirs, and local
and export markets
• shipment of goods between Brisbane and Darwin and intermediate towns
including Cloncurry and Mount Isa
• carriage of inputs to and products from agricultural and coal mining
activities in the southern part of the corridor
• a major route for tourist and other passenger traffic.
The Mount Isa-Townsville growth region and the Bowen/Abbot Point area
comprise the Queensland Government‟s Northern Economic Triangle concept.
The Government is promoting development in the Northern Economic Triangle
through planning and provision of infrastructure and initiatives to promote
exploration, including exploration for oil and natural gas in the Georgina Basin
south of Mount Isa.

4.1 Current resources production


Queensland‟s north-west minerals province contains Australia‟s largest
deposits of copper, lead-zinc-silver, and phosphate rock, and substantial
deposits of gold, uranium and other minerals. Figure 4 indicates locations of
significant mines and mineral resources in this minerals province.

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Figure 4 Significant mines and minerals resources – north-west


Queensland

Source: Commonwealth Department of Infrastructure, Transport, Regional Development and Local Government,
Mount Isa - Townsville Corridor Strategy 2007

The North West Queensland Minerals Province has numerous operating


mines. They include:
• Mount Isa (copper; lead, zinc, silver)
• George Fisher (lead, zinc, silver)
• Century (zinc, lead, silver)
• Ernest Henry (copper, gold)
• Eloise (copper, gold, silver)
• Cannington (lead, zinc silver)
• Osborne (copper, gold)
• Phosphate Hill (phosphate)
• Trekelano (copper, gold).
Up to 10 potential new mines and expansions had been forecast to commence
operations by 2012. Timing of these operations is now less clear.

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Vision 2020 Project: The Australian Minerals Industry’s Infrastructure Path to Prosperity

In 2004-05, the North West Queensland Minerals Province recorded


production of mineral and mineral products valued at over $6.6 billion.4

Most of the region‟s mineral products are transported along the Mount Isa-
Townsville rail corridor for processing at Townsville and/or export through
the port of Townsville. Transport of concentrates from Century Mine (250 km
north-north-west of Mount Isa) is a notable exception. In this case, the
transport mode is an underground slurry pipeline to Karumba (304 km) on the
Gulf of Carpentaria.

The Townsville area hosts major refineries processing zinc, copper and lateritic
nickel ore. Sun Metals‟ zinc refinery, located in the Townsville State
Development Area (TSDA) to the south-east of the port, produces about
200,000 tonnes of zinc metal per year from around 400,000 tonnes of zinc
concentrate. Xstrata‟s copper refinery, which is also located in the TSDA,
processes blister copper from copper smelting operations in Mount Isa to
produce about 280,000 tonnes of grade-A copper. BHP Billiton‟s recently
completed (early 2008) $731 million expansion and refurbishment of its nickel
refinery at Yabulu has provided capacity to produce about 68,000 tonnes of
nickel and over 2000 tonnes of cobalt from lateritic nickel concentrate
imported through the port of Townsville from overseas.

The Townsville industrial, service and transport hub supports exploration and
mining activity to the north-west and south-west of Townsville, as well as
activity in and around the Mount Isa Inlier. There are zinc, copper and lateritic
nickel resources to the north-west of Townsville and gold, zinc and copper
resources to the south-west of Townsville.

Figure 5 indicates locations of significant mines and mineral resources in the


Chillagoe-Mount Garnet-Charters Towers-Thalanga minerals province.

4 Department of Mines and Energy 2008.

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Figure 5 Significant mines and minerals resources: Chillagoe-Mt Garnet-


Charters Towers region

Source: Commonwealth Department of Infrastructure, Transport, Regional Development and Local Government,
Mount Isa to Townsville Corridor Strategy 2007

4.2 Planned and proposed resources production

4.2.1 Industry and production trends

The 2007 Townsville-Mount Isa transport corridor planning study anticipated


growth of mining activity at both ends of the corridor. Output from mines
(after mine site processing) in the Townsville-Mount Isa growth region was
expected to rise from 4.9 million tonnes in 2004-05 to 6.3 million tonnes in
2010-11, based on existing operations and proved reserves. About 5.1 million
tonnes of the 2010-11 output was expected to be transported to Townsville by
rail. Growth of output was expected until 2017 on the basis of plans in
existence in 2007 for future production from existing and new mines.

4.2.2 Planned projects: extraction and processing

Planned minerals projects in the Mount Isa-Townsville growth region as at


April 2008 are shown in Table 6. These projects are either committed or under

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construction. This information was updated by ABARE and released on 21


May 2009, too late for inclusion in this report.

Table 6 Planned minerals projects, Mt Isa-Townsville growth region: committed or under


construction
Mineral Project Company Location Status Expected New Capital Employment
start-up capacity expend.
Mount Isa
Expansion,
smelter
Copper Xstrata Mount Isa under mid-2008 NA $60m
expansion
construction
project
Ernest
Henry Near Expansion,
Copper Xstrata 2009 NA $26m 35
underground Cloncurry committed
(stage 1)
New project,
Lead zinc Handlebar 22 km N of US$61m
Xstrata under mid-2008 NA 120
silver Hill Mt Isa (A$79m)
construction
Mt Isa zinc-
lead
Expansion, 250 kt Zn,
Lead zinc concentrator
Xstrata Mt Isa under late 2008 165 kt Pb, $160m
silver expansion
construction 7.9 Moz Ag
(Stages 1
and 2)
50 kt Zn, 8
New project,
Lead zinc 16 km NW kt Cu, 6 kt
Mungana Kagara Zinc under early 2009 $80m
silver of Chillagoe Pb, 50 t Ag,
construction
9000 oz Au
Metallica 130 km W of New project,
Nickel Lucky Break late 2008 1.6 kt Ni $20m
Minerals Townsville committed
Key to elements: Zn – zinc; Pb – lead; Ag – silver; Cu – copper; Au – gold; Ni - nickel
Source: ABARE Major minerals and energy projects April 2008

4.2.3 Potential projects: extraction and processing

Less advanced potential minerals projects in the Mount Isa-Townsville growth


region identified ABARE in April 2008 are shown in Table 7. An updated list
of projects was released on 21 May 2009.

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Table 7 Potential minerals projects, Mt Isa–Townsville growth region: less advanced


Expected New Capital
Mineral Project Company Location Status Employment
start-up capacity expend.
CHALCO
alumina
Townsville New project,
refinery
or Bowen feasibility
Alumina (linked to CHALCO 2012 2100 kt $2.2b 1600
or study under
Aurukun
Gladstone way
bauxite
mine)
New project,
Cloncurry
Exco Near prefeasibility 20 kt Cu in
Copper copper 2009 $42m 200
Resources Cloncurry study under concentrate
project
way
Roseby New project,
60 km NW
copper Universal feasibility
Copper of late 2009 20 kt Cu $195m
project Resources study
Cloncurry
(phase 1) completed
Roseby Expansion,
60 km NW
copper Universal scoping
Copper of 2012 20 kt Cu $100m
project Resources study
Cloncurry
(phase 2) completed
New project,
87 km NE 200 kt Zn,
Lead zinc Dugald feasibility
Zinifex of Mount 2011 40 kt Pb, 1.2 $500m 350
silver River study under
Isa, Qld moz Ag
way
Lady Loretta New project, 125 kt Zn,
Lead zinc JV (Xstrata/ 140 km N prefeasibility 50 kt Pb,
Lady Loretta NA $200m
silver Scarborough of Mt Isa study under 850 000 oz
Minerals) way Ag
10 kt Ni,
North
New project, 0.435 kt Co
Queensland 250 km
Metallica feasibility in mixed Ni-
Nickel nickel-cobalt NW of early 2010 $250–300m
Minerals study under Co
project Townsville
way hydroxide
(Nornico)
product
New project,
52 km
Mega prefeasibility
Uranium Ben Lomond WSW of NA NA NA
Uranium study under
Townsville
way
Summit New project, 2.7 kt U3O8
Resources/ 25 km N of prefeasibility initially; 4.1
Uranium Valhalla NA $400m
Paladin Mt Isa study under kt U3O8
Resources way eventually
Key to elements: Zn – zinc; Pb – lead; Ag – silver; Cu – copper; Au – gold; Ni – nickel; Co – cobalt; U – uranium
Source: ABARE Major minerals and energy projects April 2008, plus ACIL Tasman data

This list does not include some potential projects, such as Ivanhoe Australia
Ltd‟s copper-gold and molybdenum-rhenium projects south of Cloncurry,
Legend International Holdings Inc‟s Lady Annie phosphate project, and
Barrick Gold Corporation‟s magnetite project at the company‟s copper-gold
mine at Osborne, south of Ivanhoe‟s projects.

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Ivanhoe Australia Limited has discovered and partly delineated potential


significant copper, gold, molybdenum and rhenium resources at Mount Elliot
(copper-gold), Mount Dore (copper, molybdenum-rhenium) and Starra Line
(copper-gold) about 75-90 km south of Cloncurry. Confirmation by drilling of
a significant zone of high grade molybdenum and rhenium mineralisation was
announced in December 2008.5
The Mount Elliot, Mount Dore and Starra Line deposits have estimated
combined resources of 3.1 million tonnes of copper and 5.1 million ounces of
gold. Estimated resources of molybdenum and rhenium have not yet been
released. Upgraded resource estimates for these deposits are scheduled to be
released early in 2009.
Preliminary estimates of annual production are 75,000 tonnes of copper and
50,000 ounces of gold initially, ramping up to around 130,000 tonnes of copper
and around 200,000 ounces gold. However, a scoping study will commence
early in 2009 following completion of revised resource estimates.
Ivanhoe Mines Australia has expressed an intention to act as consolidators of
copper resources in the Cloncurry region.
The Lady Annie phosphate mine is being proposed by Legend International
Holdings Inc about 125-150 km north-north-west of Mt Isa in the Georgina
Basin. A preliminary feasibility study is nearing completion. It is an updating
of a feasibility study of phosphate rock mining and beneficiation at Lady Annie
undertaken by BH South Ltd in 1974.6
Legend is investigating production of 5 million tonnes per year of concentrate
grading 30-34 per cent P2O5 from rock averaging about 16 per cent P2O5 in the
Lady Annie area. The mine would have a 30-year life. Production would
build-up to 5 million tonnes over a period of 3 years. The principal customer
would be India‟s largest fertiliser producer, IFFCO, which has a long-term off-
take agreement with Legend. IFFCO has an equity stake of nearly 9 per cent
in Legend.
Phosphate rock could be trucked to Mount Isa to be railed to Townsville for
export commencing late in 2010, and ramping up towards 5 Mtpa. Production
of phosphate rock concentrate could commence in 2012. A proposed rail spur

5 Ivanhoe Australia, Quarterly Report, Three Months Ending 30 September 2008; Ivanhoe Australia,
High Grade Molybdenum and Rhenium Discovery Confirmed at Northern End of Mount Dore Project, 8
December 2008; Vaughan, M., “Ivanhoe discoveries bigger than Ben Hur”, The Australian
Financial Review, 19 September 2008.
6 Gutnick, J., The Word’s New Appetite for Phosphate and Its Effect on the Mount Isa Region, Mining
the Isa Conference, 17 November 2008, and The BMO Capital Markets 2009 Global Metals and
Mining Conference Fertiliser Seminar, February 2009.

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from Lady Annie to the Mount Isa-Townsville railway line could be ready to
carry concentrate by late 2012 or early 2013.
The rail spur could link Lady Annie with the Great Northern Railway at Mount
Isa (125 km) or at Cloncurry (210 km). Alternatively, the spur line could link
Lady Annie with the disused Kajabbi-Cloncurry railway line (134 km of new
line).
The capacity of the Great Northern Railway and facilities at the port of
Townsville would have to be expanded to accommodate the proposed Lady
Annie project. At the Port of Townsville, 3.7 hectares of land has been
allocated to Legend to utilise for a storage, loading and materials handling
facility. Additional electricity supply would also be required.
Barrick Gold Corporation has proposed recovery of magnetite (Fe3O4) from
tailings from the production of copper-gold concentrate at a beneficiation
plant adjacent to the Osborne Mine south of Cloncurry and 75 km east-south-
east of Phosphate Hill. The Osborne ore contains about 35-56 per cent
magnetite. About 16 million tonnes of tailings are already available for re-
processing. A pilot plant operation has demonstrated that magnetite can be
effectively recovered from the tailings.7
Barrick would produce 770,000 tonnes of magnetite concentrate annually.
One product could be superfine grade magnetite for enterprises supplying coal
washing plants with magnetite in accordance with particular specifications.
The larger market could be provision of premium priced iron ore for steel
making.
Magnetite concentrate would be trucked to the Phosphate Hill rail siding and
railed to Townsville. Barrick proposes to widen the existing sealed road from
Osborne to Phosphate Hill and increase maintenance activities. Barrick
currently trucks copper-gold concentrate (160,000 tonnes per annum) to the
rail siding and Trekelano ore (700, 000 tonnes per year) the other way to
Osborne for concentration.
Barrick proposes that magnetite be exported BHP Billiton‟s ship loading and
associated conveyor facilities at the Port of Townsville, subject to commercial
negotiations.8 These facilities are used to export lead and zinc concentrates
from Cannington Mine. Barrick would build its own bottom-dump rail facility.
It hopes to make these available on a commercial basis to other entities
considering magnetite production in the North West Queensland Minerals
Province.

7 Barrick (Osborne) Pty Ltd, Magnetite Project: Initial Advice Statement for Department of Infrastructure
and Planning, 2008.
8 ibid.

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4.3 Resources-related demography and


geography
The Mount Isa to Townsville Economic Development Zone (MITEZ) had 205,400
residents in 2006, accounting for 5 per cent of Queensland population.
Average annual population growth for the region was 2 per cent between 2001
and 2006, below the state average of 2.4 per cent. Males slightly outnumbered
females in 2006 however the difference has declined since 2001. The MITEZ
region boasts a younger average age (34 years) then the state average (36.7
years).

The average gross individual weekly income in the MITEZ region was $628 in
2006, 9.6 per cent higher than the State average of $573. Incomes grew on
average by 6.1 per cent annually between 2001 and 2006, outperforming the
state by an average of 0.3 percentage points per annum over the same period.

The proportion of MITEZ residents who have attained a level of schooling to


year 12 or equivalent (39.6%) is lower than the state average (41.3%). In the
five years to 2001 unemployment in the MITEZ region was slightly lower than
the state average, however as of 2006 the unemployment rate was 1.1
percentage points higher than the Queensland average of 4.4 per cent.
Compared to the State, the region boasts a significantly higher proportion of
persons employed in the Government Administration and Defence (4.3
percentage points higher) and Mining (4.0 percentage points) sectors.

The major drivers of MITEZ growth between 2001 and 2006 were the Mining
and Construction sectors. The Mining sector contribution to MITEZ and
employment increased by 6.6 and 0.9 percentage points respectively, while the
Construction sector‟s GRP share increased by 1.3 percentage points and
employment by 1.6 percentage points.9

The Townsville-Mount Isa growth region‟s population is forecast to grow from


about 206,000 to 259,000 during the period 2007 to 2026, at an annual average
rate of 1.2 per cent. The largest population increases are expected in
Townsville, Mount Isa and Cloncurry, particularly Townsville.10

4.3.1 Mount Isa

The estimated resident population of Mt Isa in 2006 was 21,116. By 2021, the
population is forecast to be about 22,800.

9 Mount Isa to Townsville Economic Development Zone, www.mitez.com.au.


10 Commonwealth Department of Infrastructure, Transport, Regional Development and Local
Governments, Mount Isa - Townsville Corridor Strategy 2007, June 2007.

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Mount Isa recorded a negative average annual population growth of 0.1 per
cent between 2001 and 2006. At the same time the proportion of males in
Mount Isa fell from 53.1 per cent to 52.6 per cent. The average age of Mount
Isa residents increased by 0.6 years between 2001 and 2006 to 30.9 years. Both
the proportion of persons aged under 15 and persons aged under 65 fell,
consistent with state trends.

The average gross individual weekly income in Mount Isa increased


significantly from $580 in 2001 to $725 in 2006, $152 greater than the state
average. The higher than average incomes earned can be attributed to the
higher wages paid in the mining industry.

Employment in the Mining sector grew by 5.6 per cent to employ 26.6 per cent
of the labour force in 2006, up from 21.4 per cent in 2001. The next largest
sectors by employment were Retail Trade (11.8%), followed by Health and
Community Services (8.8%), Education (8.1%) and then Manufacturing (6.5%).
Both the Health and Community Services and Education sectors employed a
greater share of the labour force compared to 2001, while the Retail Trade and
Manufacturing sectors decreased in employment share over the same period.

Mount Isa recorded an unemployment rate of 6.0 per cent in 2006, down from
6.6 per cent in 2001. The proportion of people aged 15 years or greater that
had completed schooling to year 12 or equivalent increased by 2.4 percentage
points from 2001 to total 33.9 per cent in 2006. 11

4.3.2 Cloncurry

The estimated resident population of Cloncurry Shire in 2006 was 3,366. By


2021, the population is forecast to be about 3,000.

Cloncurry Shire recorded an average annual population decline of 2.6 per cent
between 2001 and 2006. At the same time the proportion of females increased
significantly from 39.6 per cent to account for 45.8 per cent of the population
in 2006.

The average age of Cloncurry Shire residents increased to 31.8 years old in
2006, up from 30.5 years old in 2001. Interestingly, the proportion of persons
aged younger than 15 years old also increased over the same period from 23.8
per cent to 25.4 per cent.

The average individual weekly income in Cloncurry Shire grew annually by 8.6
per cent from 2001 to 2006 representing the highest growth for any local
government area in the MITEZ region. Incomes in the local government area

11 http://www.mitez.com.au.

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remain well above state averages reflecting the higher wages associated with
mining and related industries.

The Agriculture, Forestry and Fishing sector continued to remain the region‟s
largest sector by employment in 2006, accounting for 16.9 per cent of workers.
The next largest sectors by employment were Mining (13.0%), followed by
Transport and Storage (12.9%), Retail Trade (9.4%) and then Government
Administration and Defence (8.8%). Of note, the Government Administration
and Defence sector experienced the highest growth between 2001 and 2006,
with the proportion of persons employed increasing by 4.5 percentage points.

Unemployment in the Cloncurry Shire was 6.3 per cent in 2006, up from 4.0
per cent in 2001. The proportion of persons aged 15 years or older who
completed schooling to year 12 or equivalent rose by 7.6 percentage points in
the five years since 2001 to reach 32.6 per cent in 2006. 12

Education

Cloncurry has two schools: Cloncurry State School (P-12) and St Joseph‟s
School. The township of Cloncurry has a very transient population which
poses many challenges to the long term objectives of an educational system.

4.3.3 Townsville

Townsville is the most populous centre in north Queensland. It is the state‟s


second largest city. Townsville is the main government administration centre
for the region.

Townsville is the major education centre in north Queensland. The city‟s


education facilities include James Cook University.

Townsville hosts Australia‟s largest army base, army amphibious operations


and a RAAF base.

Key industries include, mineral processing, manufacturing, construction,


agriculture, tourism and defence support.

The estimated resident population of greater Townsville in 2006 was 165,278.


By 2021, the population is forecast to be about 226,400.

In 2005-06, Gross Regional Product (GRP) for the Townsville region included,
9.7 per cent in mineral processing, 8.4 per cent in construction, 11.2 per cent in
government administration and defence, and 15.2 per cent in manufacturing.

12 http://www.mitez.com.au.

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The Townsville City local government area (formerly the cities of Thuringowa
and Townsville) recorded an average annual population increase of 2.6 per cent
between 2001 and 2006, the highest in the MITEZ region. At the same time
the proportion of females increased slightly by 0.2 percentage points to
account for 49.7 per cent of the population.

The average age of Townsville City residents increased by 1.2 years between
2001 and 2006 to 34.2 years old, in line with state trends. The proportion of
persons younger than 15 years fell over the same period, as did the proportion
of persons younger than 65 years old.

The average weekly income in Townsville City grew by 36.6 per cent between
2001 and 2006 to total $624, $50 greater than the state average. The Retail
Trade sector is the largest employer in the region accounting for 14.4 per cent
of employment. The next largest sectors by employment are Health and
Community Services (11.2%), followed by Government Administration and
Defence (10.9%), Construction (9.9%) and Manufacturing (8.5%).

Townsville City recorded an unemployment rate of 5.5 per cent in 2006. The
proportion of persons aged 15 years or older who completed schooling to year
12 or equivalent increased by 2.9 percentage points in the five years since 2001
to 41.6 per cent the highest in the MITEZ region. 13

4.3.4 Charters Towers-Chillagoe

The estimated resident population of the Charters Towers Regional Council


LGA in 2006 was 12,155. By 2021, the population is forecast to be about
12,300.

The Charters Towers local government area (formerly the shires of Dalrymple
and Charters Towers City) recorded an average annual population decline of
0.1 per cent between 2001 and 2006. The proportion of females increased
slightly by 0.5 percentage points over the same period to account for 50.1 per
cent of the population in 2006.

The average age of Charters Towers residents increased by 1.9 years between
2001 and 2006 to 36.6 years, in line with state trends. Furthermore, both the
proportion of persons younger than 15 and persons younger than 65 declined
over the same period.

The average weekly income in the Charters Towers region grew by 27.1 per
cent between 2001 and 2006 to total $523, $47 less than the state average. The
Retail Trade sector is the largest employer in the region accounting for 13.9 per

13 Mount Isa to Townsville Economic Development Zone, www.mitez.com.au.

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cent of employment. The next largest sectors by employment are Mining


(13.1%), followed by Agriculture, Forestry and Fishing (13.1%), Education
(11.2%) and then Health and Community services (10.6%).

Charters Towers recorded an unemployment rate of 6.4 per cent in 2006, the
highest of any local government area in the MITEZ region. The proportion of
persons aged 15 years or older who completed schooling to year 12 or
equivalent increased by 2.3 percentage points in the five years since 2001, to
account for 28.2 per cent of the population in 2006.14

4.4 Current infrastructure

4.4.1 Rail

The rail system dominates the bulk freight movement task on the Mount Isa-
Townsville corridor, accounting for over 90 per cent of such freight.

About 2.8 million tonnes of metal, concentrates and phosphate-based fertilizer


are carried annually by rail to Townsville for further processing or shipment
through the port of Townsville. In addition, about one million tonnes of
sulphuric acid are railed from Mount Isa to Phosphate Hill to produce fertiliser
from phosphate rock.

About one million tonnes of mining and processing inputs are carried
westward by rail annually. These inputs include petroleum products and
cement. An operation-specific input is sulphuric acid from Sun Metals Zinc
Refinery near Townsville for processing of phosphate at Phosphate Hill.15
The Mount Isa-Townsville rail corridor consists of the Great Northern Railway
running from Mount Isa to the North Coast Line at Stuart, and the link to the
port of Townsville via the North Coast Line. A spur line links Phosphate Hill
with the Great Northern Railway at Flynn.

Bulk handling of sugar is a major activity affecting rail movements particularly


from June to November, with 1 – 1.5 million tonnes railed from Burdekin
region to the Port of Townsville each year, utilising approximately train 65
services a week.16

The Great Northern Railway is a narrow gauge, single track line covering 967
km. The rail is supported by a mixture of steel and concrete sleepers with a

14 Mount Isa to Townsville Economic Development Zone.


15 Commonwealth Department of Infrastructure, Transport, Regional Development and Local
Government, Mount Isa - Townsville Corridor Strategy 2007, June 2007.
16 ibid.

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maximum allowable axle loading of 20 tonnes. The rail line‟s capacity is


enhanced by 44 passing loops with lengths ranging from 840 to 1240 metres.

The rail line between Stuart and the port is a twin track, narrow gauge facility.

All trains in the Mount Isa-Townsville corridor are hauled by diesel-electric


locomotives.

Approved rail corridor speeds are 60 km/hr between Mount Isa and
Hughenden (589 km) and 80 km/hr from Hughenden to Stuart (377 km).
High summer temperatures and problems arising from flooding and rail
expansion may result in tighter speed restrictions at times as well as line
closures as a result of extreme flood events, such as in early 2009.

In 2005, Queensland Rail commenced a $232 million 5-year maintenance and


renewal program on the rail corridor. The program included installation of
concrete sleepers in place of steel sleepers, replacement of 41 kg/m rails, 800
km of rail straightening, relaying 170 km of track, ballast undercutting, and
reconfiguration of passing loops. These works were designed to ensure 20-
tonne axle loads could be sustained, impact loads on foundations reduced,
speed efficiencies gained, derailments reduced, and costs cut.17

It appears that additional investment in above and below rail capacity will be
required to rail an anticipated 5.1 million tonnes of product to Townsville by
2010-11.18 If the Lady Annie phosphate project proceeds, an additional 5
million tonnes of product would have to be accommodated annually, with
production ramping up from 2010.

4.4.2 Road

Road transport carries products and inputs between mine sites, processing
facilities and rail terminals and sidings. Road transport also delivers inputs to
mining and processing activities from origins outside the Mount Isa-Townsville
growth region.

Road transport is the dominant mode for freight items that are:
• not shipped in large quantities
• time sensitive
• carted over short distances.

17 Ibid; Queensland Department of Infrastructure, Northern Economic Triangle Progress Report,


August 2007.
18 Compare pages 15 and 18 of Commonwealth Department of Infrastructure, Transport,
Regional Development and Local Government, Mount Isa - Townsville Corridor Strategy 2007,
June 2007.

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Long distance transport of cattle is an interesting case. Increasingly, there has


been a shift to road from rail transport.19 These roads also service significant
tourist and local resident traffic, so growing freight traffic presents an emerging
safety concern.

Townsville-Mount Isa road corridor

The Townsville-Mount Isa road corridor is part of the National Network.


Therefore, it qualifies for at least partial Commonwealth Government funding.

This road corridor comprises the 9 km road link between the port of
Townsville and the Bruce Highway (Stuart in Townsville), 905 km of Flinders
Highway between Stuart and Cloncurry, and the Barkly Highway from to
Cloncurry to Mount Isa and west to Three Ways near Tennant Creek in the
Northern Territory.

The Townsville-Mount Isa road is sealed and has a single carriageway with two
lanes for its entire length. The seal width ranges from less than 6 metres to 10
metres. About 12 per cent of the road corridor has a seal width of less than 8
metres, considered to be the minimum width to avoid hazardous overtaking
and passing, particularly when heavy vehicles are involved.

This road corridor carries about one million tonnes of freight each year. Most
of the freight is carried from Townsville to other population and activity
centres long the road corridor, including mining and processing operations in
Queensland‟s north-west minerals province.

Traffic volumes close to Townsville are more than 12,000 vehicles per day.
Near Mount Isa they exceed 6,000 vehicles per day. Traffic along intervening
sections of the Flinders and Barkly Highways is relatively light. Volumes are
less than 2000 vehicles per day in the Charters Towers-Woodstock section of
the Flinders Highway and Mount Isa-Cloncurry section of the Barkly Highway.
Less than 300 vehicles per day use the Flinders highway between Charters
Towers and Cloncurry.

Traffic volumes are relatively stable along most of the Townsville-Mount Isa
road corridor, except for the Townsville segment where traffic is growing.

Heavy trucks represent about 30 per cent of traffic on the Townsville-Mount


Isa road corridor, with the notable exception of the segments between Charters
Towers and the port of Townsville, particularly between Stuart and the port,

19 Commonwealth Department of Infrastructure, Transport, Regional Development and Local


Government, Mount Isa - Townsville Corridor Strategy 2007, June 2007.

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where more than 90 per cent of vehicles are light. Large multi-combination
vehicles are used extensively on the corridor.

The largest vehicles allowed in urban areas in Townsville are B-doubles (up to
25 metres in length). Vehicles up to 53.5 metres in length are assembled or
broken up to the west of Townsville, because of restrictions on heavy vehicle
movements in Townsville prompted by safety and amenity issues in areas
adjacent to the current road corridor to the port. These restrictions affect
transport efficiency and therefore productivity.

In the medium- to long-term future, traffic congestion in Townsville could be


another cause of road transport inefficiency and productivity losses. This
could be expected to depend on growth of population in and around
Townsville and growth of economic activity in these areas and the wider
Mount Isa-Townsville region.

Parts of the Townsville-Mount Isa road corridor are characterised by poor


pavement condition. Further use of the road by heavy vehicles and the trend
towards heavier vehicles is likely to lead to increasing pavement deterioration.
Narrow pavement and old, low-strength bridges could also limit the road‟s
capacity to handle future demand.

Narrow cuttings on the Barkly Highway between Mount Isa and Cloncurry
also constrain capacity. They add time and cost to transport of wide loads and
delay other traffic due to very slow speeds because of tight clearances.

Flooding during the monsoon season causes closure of the Townsville-Mount


Isa road at various locations. Closures average 6-8 days per year and extend
for several weeks in some years, such as in early 2009. Freight movements can
be affected by flood-caused road damage and weight restrictions, as well as by
segments of road being under water. It will be difficult to eliminate road
flooding because of the region‟s vast flood plains.

High proportions of heavy freight vehicles sharing roads with light vehicles
create potentially hazardous conditions, particularly where pavement widths are
narrow. The highway between Townsville and Cloncurry is in the highest
individual risk category under the Australian Road Assessment Program
(AusRAP). The Cloncurry-Mount Isa road segment is in the second highest
individual risk category. These risk ratings mean average annual casualty
crashes are per vehicle-kilometre are relatively high.20

20 Australian Automobile Association, Australian Road Assessment Program: How Safe Are Our
Roads? Rating Australia’s National Network for Risk, July 2007.

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From an engineering perspective, the segment between Mount Isa and the
intersection of the Flinders and Landsborough Highways east of Cloncurry,
and more than half of the highway between Townsville and Mount Isa, and of
have been rated as three-star standard under AusRAP. This means it is
regarded as „unacceptable‟ for a National Network road.21

Brisbane-Darwin road corridor

The other major road corridor serving the north-west Queensland minerals
province is the Brisbane-Darwin road corridor, another part of the National
Network. This overlaps with the Townsville-Mount Isa road corridor between
the Landsborough-Flinders Highway intersection and Mount Isa.

Much of the plant and equipment used by mining operations in the north-west
Queensland minerals province moves along this road from the port of
Brisbane. The result is movement of relatively high numbers of over-size
vehicles and loads along the Brisbane-Darwin road corridor.22

Nearly all of the 2300 km of the road corridor between Toowoomba and
Three Ways (Barkly-Stuart Highway intersection) in the Northern Territory is
in two-lane, single carriageway configuration.

Most of the Landsborough Highway between its intersection with the Warrego
Highway at Morven and its intersection with the Flinders Highway east of
Cloncurry (1033 km) has inadequate seal width and road formation width to
avoid hazardous overtaking and passing, particularly with heavy vehicles
involved.23

About 34 per cent of the Landsborough Highway has been rated as three star
standard under AusRAP, including about 120 km immediately to the south-
east of the intersection with the Flinders Highway. About 40 per cent of the
Brisbane-Darwin road corridor between Brisbane and the intersection of the
Warrego and Landsborough Highways at Morven is also rated as three-star
standard. This rating is “unacceptable” for a National Network road.24

21 Australian Automobile Association and ARRB Group, Australian Road Assessment Program:
Comparing Risk Maps and Star Ratings, AusRAP Technical Working Paper, April 2008.
22 Commonwealth Department of Infrastructure, Transport, Regional Development and Local
Government, Brisbane-Darwin Corridor Strategy 2007, June 2007.
23 ibid.
24 Australian Automobile Association, Australian Road Assessment Program: Star Ratings
Australia’s National Network of Roads, October 2006; Australian Automobile Association and
ARRB Group, Australian Road Assessment Program: Comparing Risk Maps and Star Ratings,
AusRAP Technical Working Paper, April 2008.

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About 80 per cent of the highway between Brisbane and Mount Isa is in the
highest or second highest individual risk categories under AusRAP.

The Barkly Highway between Mount Isa and Camooweal near the border
between Queensland and the Northern Territory rated as a three star road and
in the highest individual risk category prior to a recent substantial upgrade with
Commonwealth funding.

Seasonal flooding can occur at numerous locations along the Brisbane-Darwin


road corridor from west of Roma to Mount Isa and beyond. Delays arising
from flooding because of water over the road, road damage or weight
restrictions may range from a couple of hours to several days.

4.4.3 Ports

Townsville

Townsville hosts Queensland‟s third largest multi-commodity port by tonnage,


ranking behind Gladstone and Brisbane. The port is located at the mouth of
the Ross River, near the main business district.

The port of Townsville caters for vessels carrying containers and bulk cargos.
It can accommodate vessels up to Panamax size (65,000 tonnes). The port has
a throughput of about 10 million tonnes per annum (Mtpa).

Products derived from mining represent about 70 per cent of export tonnages
through the port. Major exports include minerals (1.94 Mtpa), fertiliser (0.84
Mtpa), and sugar (1.2 Mtpa). Major imports include lateritic nickel ore (3.3
Mtpa), oil products (1 Mtpa), cement (0.47 Mtpa), and zinc concentrates (0.23
Mtpa).25

The design and length of rail loops with the port area have limited train sizes
and caused speed restrictions. The result has been inefficiencies in operation
of the port and transport links to it.26
In July 2007, a 25-year master plan for the port was completed to guide staged
expansion to cater for a significant increase in exports and imports.

The close proximity of the port to the Townsville urban area presents ongoing
challenges for both urban and port planning.

25 Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-


2012, August 2007.
26 Commonwealth Department of Infrastructure, Transport, Regional Development and Local
Government, Mount Isa-Townsville Corridor Strategy 2007, June 2007.

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The Townsville State Development Area (TSDA) is located about 5-10 km to


the south-east of the port. The TSDA incorporates the Stuart industrial area
and hosts the Sun Metals zinc refinery, the Xstrata copper refinery, Australian
Meat Holdings‟ abattoir, Origin Energy‟s Mount Stuart Power Station and
Pacific National‟s intermodal freight terminal.

The Queensland Government hopes to attract more minerals processing to the


TSDA. It is one of the locations that was considered by CHALCO as a site
for an alumina refinery to process Aurukun bauxite.

The Queensland Government has is constructing the $190 million Port


Eastern Access Road, part of a road and rail corridor that would traverse the
western part of the TSDA.

The Queensland Government also hopes to establish the Bowen-Abbot Point


area, about 175 km south-east of Townsville, as a major minerals processing
location, in addition to Abbot Point‟s role as a coal export port. This area is
now being considered as the site for the CHALCO alumina refinery.

The north-west minerals province, the Charters Towers-Chillagoe minerals


province, Townsville, and Bowen/Abbot Point comprise the Queensland
Government‟s Northern Economic Triangle concept.

Karumba

Concentrates from the Century Mine (250 km north-north-west of Mount Isa)


are transported 304 km by underground slurry pipeline to Karumba in the Gulf
of Carpentaria. After de-watering, concentrates are barged to ships about 20
km offshore.

4.4.4 Air

Air transport is important for mine workers who commute to Queensland‟s


north-west minerals province and for business travel.

Regular passenger air transport services link Mount Isa with Brisbane and
Mount Isa and Cloncurry with Townsville.

There is a need for reliable airport infrastructure to assist in the movement of


labour into these and smaller communities such as Karumba.

4.4.5 Energy

The Mount Isa area is handicapped by high energy prices.

The Mount Isa Interconnected System is an isolated network distributing


electricity from CS Energy‟s 325 MW Mica Creek Power Station to various

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mines and communities in and around Mount Isa. The power station is gas-
fired.

Transmission lines (220 kV) extend to Century Mine, 250 km north-north-west


of Mount Isa and to Ernest Henry Mine, about 150 km east-north-east of
Mount Isa.

Electricity costs beyond the Mount Isa Interconnected System are higher than
within it. Most of those outside the system have to rely on diesel generators.

Natural gas is supplied from Ballera gas processing plant in south-west


Queensland via the 840 km, 305 mm Carpentaria Gas Pipeline to Phosphate
Hill Mine and fertiliser plant and Mica Creek Power Station at Mount Isa. The
110-km Cannington Lateral Pipeline runs past Osborne Mine and terminates at
Cannington Mine. The trunk and lateral lines are owned by Australian Pipeline
Trust.

Capacity was expanded in December 2002 through the addition of a one MW


compressor at Morney Tank. A second expansion is scheduled in June 2009
with the addition of a 3 MW compressor at Davenport Downs. After the
imminent expansion, gas to be transported under contracts will increase from
37 to 42 PJ per annum.

An independent review was commissioned in November by industry and the


Queensland Government into the reasons behind high energy prices and to
examine ways to overcome apparent market failure that inhibits provision of
reliable and competitively-priced energy to the region.

Unlike the north-west Queensland minerals province, Townsville participates


in the National Electricity Market. However, it has been disadvantaged relative
to other industrial centres by higher power prices resulting from long
transmission distances and consequent line losses.

Powerlink has been improving its high voltage electricity transmission network
in the Townsville area, involving an investment of $127 million, and has been
undertaking a $350 million, three-stage project to strengthen the transmission
network between central Queensland and Townsville. Reductions in
transmission losses are expected to yield lower wholesale power prices.27
Studies are underway with the objective of further enhancing transmission
efficiency.

27 Queensland Department of Infrastructure, Northern Economic Triangle Progress Report, August


2007.

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4.4.6 Water

The Mount Isa urban area and Mine, George Fisher Mine and Ernest Henry
Mine have access via pipeline to water from two water storages, Lake
Moondarra and Lake Julius.

These sources are adequate for current and anticipated future demand,
according to the Queensland Government‟s Northern Economic Triangle
Infrastructure Plan 2007-2012. However, the plan did not address water supply
issues for mining operations distant from the Mount Isa water storages. It
simply listed a strategy of planning for water supplies to support future
development in Mount Isa and the north-west minerals province.

Townsville‟s water supply comes from the Ross River Dam and the Burdekin
pipeline. The Queensland Government‟s Northern Economic Triangle Infrastructure
Plan 2007-2012 did not comment on the adequacy of these sources of supply.
It simply listed among its strategies for Townsville: “plan for water supplies
that would support future urban and industrial demands”.

The infrastructure plan did not mention supply of water to current and future
mining and processing operations in the mineralised belt from Charters
Towers to Chillagoe. The Queensland Government is the process of
developing a North West Queensland Regional Water Supply Strategy, which
will address many of the demand and supply uncertainty issues facing the
region.

4.4.7 Community infrastructure

The Queensland Government‟s Northern Economic Triangle Infrastructure Plan


2007-2012 acknowledged that human capital (education, health) and other
community infrastructure (eg sport and leisure facilities, childcare) would be
required to support the attraction and retention of skilled workers and their
families to Mount Isa and Bowen (but no mention of Townsville). It did not
discuss the availability or adequacy of such infrastructure other than the lack of
housing stock, however. The Plan includes a Strategy and actions to “identify
and undertake planning to supply the urban and community infrastructure
necessary to support population growth” in the economic centres and meet the
needs of new workers and their families.

The education sector contributed $407.6m (or 3.3 per cent) towards MITEZ
gross regional product in 2006-07, an increase of $26.4m from 2005-06. In
terms of employment, education accounted for 8.1 per cent of total
employment in 2006-07, slightly less than the 8.2 per cent recorded in the
previous year.

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Since 1999–2000, the Queensland Government says it has budgeted for more
than $4 billion across the State in social and community infrastructure in rural
and regional locations across health, education and training, housing, police
and justice, emergency services, disability services, communities and child
safety.

In 2006–07, infrastructure spending across these agencies in rural and regional


Queensland was some $900 million and these communities will also share in a
further $500 million allocated to whole-of-state infrastructure spending.28

In 2008, the Government announced a $100 million funding program over


three years for economic and social infrastructure in regional and rural
communities in key mining areas.

Secondary education

Townsville has a wide range of public and private secondary schools and
actively markets itself as an alternative study destination to capital cities for
international students.

Mt Isa has two secondary schools – one public (Spinifex State College) and one
private (Mount Isa Catholic High School). Both offer a broad curriculum, with
both tertiary entrance and VET streams.

Training

The following training institutions and services are available in the growth
region.

Townsville
• The Barrier Reef Institute of TAFE is the largest provider of vocational
education and training in North Queensland. The Barrier Reef Institute of
TAFE enrols over 13,500 students each year, in a wide range of trades and
occupations. A specialist TAFE trade campus in Townsville (SkillsTech)
has been developed recently.
• The Australian Technical College North Queensland is a new training
facility, located in the city‟s education hub between James Cook University
and the CSIRO. The Australian Technical College NQ provides training
and education in a wide range of trades and occupations, supported by
industry involvement and state of the art facilities. The facility has the
capacity to train 300 students per year over four key trade areas,
construction, engineering, automotive, and electrical.

28 Blueprint for the Bush. Rural Economic Development Infrastructure Plan. Queensland
Government 2006.

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Mt Isa
• The Mount Isa Institute of TAFE provides trade and skills training in the
western area of the region. It operates campuses in Mount Isa, Normanton
and Cloncurry, and aims to address identified skill shortages in the mining,
manufacturing, and building and construction industries.

Tertiary education and research

The region hosts a number of educational and research institutions:


• James Cook University (JCU) is known as Australia‟s leading tropical
research university. JCU offers an extensive range of both undergraduate
and postgraduate courses across a wide range of disciplines relevant to the
region. JCU is one of the largest regional universities in Australia with over
10,900 full time equivalent student enrolments and approximately 1,500
academic and research staff. JCU has two campuses situated within the
MITEZ Region, located at Townsville and Mount Isa.
− JCU recently commenced offering medical degrees. There may be flow-
on effects in terms of attraction and retention of extra health staff in
the Townsville area and wider NQ and FNQ regions.
• The CSIRO Davies Laboratory in Townsville undertakes research aimed at
sustainable management of the tropical and sub-tropical environment of
Northern Australia. The main research divisions of the Davies Laboratory
are land and water plant industry and sustainable ecosystems. Offering the
latest equipment and facilities, the CSIRO Davies Laboratory truly is a state
of the art research and educational facility.
• The Australian Institute of Marine Science (AIMS) also has a modern
research laboratory located just south of Townsville-Thuringowa at Cape
Ferguson. AIMS is recognised for the quality of its research into marine
environments and for their resources including biotechnology and
aquaculture.
• Great Barrier Reef Marine Park Authority (GBRMPA) is the premier
research and management organisation responsible for the Great Barrier
Reef Marine Park. It aims to provide for the protection, wise use,
understanding and enjoyment of the Great Barrier Reef in perpetuity
through the care and development of the Great Barrier Reef Marine Park.
• Reef and Rainforest Research Centre is the organisational body that is
primarily responsible for developing collaborative, public benefit research
between Australia‟s best tropical environmental researchers. The Reef and
Rainforest Research Centre aims to support the conservation and
sustainable use of North Queensland‟s environmental assets - the Wet
Tropics rainforests, the Great Barrier Reef and the connecting coastal
regions.
• CRC Reef Research Centre is a knowledge-based partnership of coral reef
ecosystem managers, researchers and industry. Its mission is to plan, fund

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and manage world-leading science for the sustainable use of the Great
Barrier Reef World Heritage Area. CRC Reef Research Centre provides
research solutions to protect, conserve and restore the world‟s coral reefs
by ensuring that industries and management are sustainable and that
ecosystem quality is maintained.
• The Mount Isa Centre for Rural & Remote Health is an operation of James
Cook University, which aims to be centre of excellence in rural and remote
health through multi-disciplinary education training and research.

Health services
• As a large regional city, Townsville has a wide range of health services,
including a tertiary hospital that offers many of the surgical and medical
services found in Brisbane, plus medical training in conjunction with JCU
and University of Queensland . Townsville also has several private
hospitals. A wide range of specialist and ancillary health services are
available. The Townsville Hospital, however, has been the subject of
considerable public controversy in recent times regarding capacity and
staffing issues.
• Health facilities in the Mt Isa region are typical of remote Australia,
although for Mt Isa‟s size, its hospital offers a wide range of primary,
secondary and community health services. The Mt Isa Hospital is the hub
for a network of health centres and community health services in north
west towns.

4.5 Infrastructure planning

4.5.1 Planning processes and initiatives

NET Infrastructure Plan

The Northern Economic Triangle Infrastructure Plan 2007-2012, which was released
by the Queensland Government in August 2007, is the first step of “a 50-year
commitment” to support development of large scale industry, particularly
mining, minerals processing and related activities. The state government
envisages that this commitment will result in the emergence of Mount Isa,
Townsville and Bowen as economic centres of mining, minerals processing and
industrial development over the course of the next 50 years.29
The Northern Economic Triangle Infrastructure Plan 2007-2012 specifies “strategic
objectives”, “strategies” and “action plans” for Mount Isa, Townsville and
Bowen. The strategic objectives for each centre focussed on encouragement

29 Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-


2012, August 2007, pp. 4, 8.

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of investment in minerals processing activity. The strategies are broad


statements of intent. The action plans provide information regarding the State
Government‟s intentions for particular infrastructure. But in most cases, the
plans did not include commitments to invest in specific projects.

Action plans in respect of transport matters have been reproduced from the
infrastructure plan in Figure 6 to Figure 11. The infrastructure plan‟s action
plans for energy, water, skill development, land acquisition and development,
and industry attraction were described similarly. No funding allocations were
identified for these projects.

Figure 6 Strategy 2: Mount Isa - Enhance the road and rail Mt Isa-Townsville Corridor in accordance
with the AusLink Corridor Study

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012

Figure 7 Strategy 3: Mount Isa - Investigate transport linkages (air, rail, road and sea) that facilitate
closer interaction between trade and economic centres of the triangle

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012.

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Figure 8 Strategy 10: Develop the Port of Townsville Eastern Access Corridor

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012

Figure 9 Strategy 11: Protect the integrity of the Port of Townsville as the major gateway to North,
Northwest and Far North Queensland

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012

Figure 10 Strategy 12: Ensure development and efficient operation of Port of Townsville

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012

Figure 11 Strategy 14: Enhance the road and rail corridors between the Port of Townsville and Mount
Isa in accordance with the AusLink Corridor Strategy

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012.

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Figure 12 Strategy 31: Identify and undertake planning to supply the urban and community
infrastructure necessary to support population growth in the economic centres and meet
the needs of new workers and their families

Source: Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-2012

A progress report, published in August 2007, provided snapshots of activity


that aligns with the Infrastructure Plan.

Transport corridor strategies

The Commonwealth Department of Infrastructure, Transport, Regional


Development and Local Government has undertaken strategy studies for three
National Network land transport corridors of particular importance to the
Mount Isa-Townsville growth region: the Mount Isa-Townsville, Brisbane
Darwin and Brisbane-Cairns corridors. Queensland Departments of Transport
and Main Roads provided input to all three studies. The Northern Territory
Department of Planning and Infrastructure provided input to the Brisbane-
Darwin corridor study.

The Mount Isa-Townsville and relevant aspects of the Brisbane-Darwin land


transport corridor studies have been discussed in earlier sub-sections of this
report.

The land transport corridor studies discussed “short-term” and “longer-term”


deficiencies of land transport infrastructure in these corridors, and strategic
priorities for renewal and improvement of that infrastructure. The short-term
was rather long, extending out to 2015.

No investment commitments were made in the strategy documents.

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These transport corridor studies provided the main basis for transport action
plans in the Northern Economic Triangle Infrastructure Plan 2007-2012.

QR Mt Isa-Townsville master plan

The Queensland Resources Council has secured the support of QR Network


to prepare a master plan for the Mount Isa to Townsville rail link – industry
has been critical of the lack of integrated planning and the absence of industry
participation in processes to map out the future growth and infrastructure
requirements that are essential for long-term commercial business planning,
the necessary precursor to direct investment in major projects. Its purpose is
to identify current and future investment requirements on this rail system and
to determine the best way of meeting these requirements in the context of
commercial considerations of individual projects and the need for certainty in
integrated company planning. Capital projects are identified for various
tonnage scenarios and leading indicators to trigger investment programs are to
be devised.30

The Queensland Government has sought funding of $1 billion from the


Building Australia Fund for upgrades to the Mount Isa-Townsville rail link.
Infrastructure Australia has listed these works for further consideration.31

Some consideration has been given to a new, direct rail link between the Great
Northern Railway and Abbot Point to provide more efficient transport for
mineral products from the North West Queensland Minerals Province. It is
understood that freight tonnages well in excess of current projections would be
required to justify construction of this rail line. Abbot Point could be accessed
via the North Coast Line and the coal line to the port.

Port of Townsville Master Plan

In July 2007, the Port of Townsville Master Plan was completed. Its objective
was to provide a clear direction for development and operation of the port for
25 years. The plan was aligned with the Northern Economic Triangle concept.

The plan for the port identified constraints on port operations, ways of
improving cargo handling and shipping operations to cope with various growth
scenarios, expansion strategies, and linkage with the proposed eastern access
road and rail corridor.

30 Queensland Department of Infrastructure, Northern Economic Triangle Progress Report, August


2007.
31 Infrastructure Australia, A Report to the Council of Australian Governments, December 2008. The
publication of this list was delayed.

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The master plan outlined a staged development framework consistent with a


substantial increase in throughput. It advocated a detailed study of optimal
shipping dimensions and ship traffic capacity to facilitate determination of the
scope and timing of upgrade works.

A complementary Townsville City – Port Strategic Plan was completed in June


2007. Its objective was “to provide a shared vision for an effective and
sustainable interface between Townsville‟s port area and adjacent city area”.32

Mount Isa energy

CS Energy has been investigating an expansion of the power station to cater


for additional electricity demand from current customers and for demand from
other potential mining operations in the area.

The Queensland Government has released eight areas in the Georgina Basin
south of Mount Isa for applications for authorities to prospect for petroleum.
The Georgina Basin has displayed hydrocarbon indications, and has potential
for oil and gas discoveries. This basin is relatively unexplored. A gas discovery
would lower the cost of energy in the north west.33 The issue of energy
availability and cost is also likely to be raised in the draft North West
Queensland Regional Plan, which is due to be released in the second half of
2009.

IsaLink High Voltage Direct Current Transmission

IsaLink Pty Ltd is proposing to construct a high voltage direct current


(HVDC) transmission line to connect Queensland‟s North West Minerals
Province (NWMP) to the competitive National Electricity Market (NEM).

IsaLink Pty Ltd‟s major shareholder is the Cheung Kong Group, which is the
largest publicly listed infrastructure company in Hong Kong. The group
manages over $33 billion in utility and infrastructure assets worldwide,
including Powercor Australia, CitiPower and ETSA, which are companies
managing major electricity distribution networks in Victoria and South
Australia.

Stage 1 of the project involves the construction of 1100 km of transmission


line from Central Queensland to the Ernest Henry Mine near Cloncurry, a
converter station at the connection to the National Grid, a converter station (at

32 Queensland Department of Infrastructure, Northern Economic Triangle Progress Report, August


2007.
33 Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-
2012, August 2007.

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or near the mine) and an upgrade of the existing AC line between Ernest
Henry and Mount Isa. The project has been listed as a project of state
significance under the Coordinator General Act.

The transmission line will also have the potential to be extended to serve key
economic centres in the Northern Territory. Development of Stage 2 of the
project will require a separate impact assessment.

Townsville energy

AGL is considering construction of a 380MW gas-fired base load power


station in southern Townsville.34 In addition, the Queensland Government is
investigating the feasibility of establishing a base-load power station in north
Queensland to support large scale, energy intensive activities.35

The Queensland Government is investigating additional supply of gas to


Townsville for electricity generation.36

4.5.2 Planned infrastructure

Flinders Highway

The Queensland Government has allocated up to $74.3 million for capital and
maintenance work on the Flinders Highway until 2009-10.

Townsville Ring Road and Port Access Road

The Queensland and Commonwealth Governments have committed $39.5


million and $79.5 million respectively to provision of a Townsville Ring Road,
which was completed in early 2009. In addition, $95 million has been
committed by each Government to the Townsville Port Access Road, which is
under construction. The Townsville Port Access Road will directly link the
Flinders and Bruce Highways to the Port of Townsville and is scheduled for
completion in mid 2011.

Gregory Development Road

The Queensland Government‟s 5-year rolling Roads Implementation Program


includes an allocation of $29 million to 2011-12 towards progressive widening

34 Queensland Department of Infrastructure, Northern Economic Triangle Progress Report, August


2007.
35 Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-
2012, August 2007.
36 ibid.

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of the Gregory Development Road both north and south of Charters Towers.
This program will provide two sealed lanes with sealed shoulders.

Land for industrial development

The Queensland Government has identified three locations in Mount Isa for
future industrial development: Nordale Industrial Estate, 5.78 ha; Mica Creek
Industrial Estate, 796 ha; Kalkadoon Industrial Estate, 8.8 ha. These areas are
constrained by Native Title. The State Government is negotiating an
Indigenous Land Use Agreement.

The Townsville State Development Area (TSDA) of 4,900 ha has been


declared to facilitate expansion of large scale industry in Townsville in the
short- to medium-term future. The TSDA includes substantial buffer zones.

The Queensland Government does not currently own any land in the TSDA.
However, it has power to acquire land if necessary.

The Queensland Government has recognised that additional land may be


required in the Townsville area for large scale industrial activity in the longer-
term.

4.6 Information gaps


Government studies regarding the Mount Isa-Townsville growth region have
focussed mainly on long-distance land transport, port, and energy
infrastructure. Air transport and water infrastructure have received much less
attention. There are significant information gaps in all of these areas.

There are particularly large information gaps in respect of telecommunications


infrastructure, human capital (education and health) and other forms of
community infrastructure, with respect to existing facilities, whether or not
these meet current or future demand, and plans and pricings for future
developments. While affordable housing is identified as a priority, there
appears to be little information about the specifics of the need.

Infrastructure capital, maintenance funding and pricing issues have also


received little discussion in publicly available infrastructure studies of the
Mount Isa-Townsville region. These issues are important for distributional
and economic efficiency reasons. They are also important in terms of funding
for expansions and upgrades of infrastructure.

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4.7 Growth scenario, Mount Isa-Townsville growth


region

4.7.1 Overview

The growth scenario for this region assumes very large increases in mining and
processing output in the Mount Isa-Townsville growth region. This will come
from expansion of some existing operations and establishment of new mining
and processing activities.

Table 8 Summary of growth scenario to 2020 for the Mount Isa-Townsville growth region
Mineral product Expansion under growth scenario
Base metals Region produces about 7 Mtpa of concentrates, with rail haulage of some 6 Mtpa to Townsville
Gold Region continues to produce at about current rate
Phosphate Region produces 5 Mtpa, with rail haulage to Townsville
Magnetite Up to 1 Mtpa of magnetite railed to coast and onto coal mine customers, as well as for export
Oil and gas New discoveries of gas in the Georgina Basin and use in electricity generation at several locations
Mining inputs About 1.5 Mtpa tonnes of mining and processing inputs carried westward from Townsville

Table 9 Summary of infrastructure requirements under the growth scenario to 2020 for the Mount
Isa-Townsville growth region
Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Railways • Great Northern Railway inadequate to • Expand the capacity of the Great Northern Railway between
meet mineral tonnage growth Mt Isa and Townsville to cope with a 165 per cent increase in
• New lines required to service mines tonnage by 2013
and provide port access • Build spur lines to new mines (eg Lady Annie phosphate)
• Provide new rail access route to the Port of Townsville in the
Port Eastern Access Corridor
• Upgrade North Coast line to enhance rail access to Abbot
Point State Development Area, including a direct link between
the Great Northern Line and North Coast Line.
• Possible railway built by private sector from Mt Isa to Tennant
Creek to provide alternative, standard gauge link to another
Port (Darwin)
Roads • Roads generally require upgrades to • Complete new Port of Townsville Access Road constructed in
service mineral and supplies haulage the Port Eastern Access Corridor
• Townsville port access road requires • Upgrade road from Chillagoe to Charters Towers; Gregory
re-routing Development Road (north and south of Charters Towers) and
Burke Development Road (Cloncurry to Normanton) to support
transportation of concentrates to railhead and port facilities as
well as services to remote mining communities
• Upgrade roads to improve pavement width, strength and road
reliability, particularly in periods of flooding
Ports • Townsville Port inadequate to services • Accelerated implementation of the Port of Townsville Master
minerals growth Plan
• Additional port required for major • Development of the Abbot Point State Development Area and
expansion multi-user port

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Infrastructure class Current and future gaps Upgraded and additional infrastructure required
Airports • Airports will require upgrades to • Upgrading of Townsville, Mount Isa and Cloncurry airports to
accommodate increased passenger cope with increased passenger and freight traffic
traffic
Energy • Mt Isa electricity supply inadequate to • Expand the capacity of the Mount Isa Interconnected System
support new mines to supply new and expanded minerals projects
• Energy costs are high in the Mt Isa • Continue to facilitate exploration for oil and gas in the
region Georgina Basin that may help to lower energy costs in the
north-west minerals province
• Develop a new base load power station in the region to
support new development and reduce transmission costs
Water • Water resources and infrastructure are • Plan to provide adequate water to support further development
inadequate to support new mines and of mining activities in the region
expanded populations
Telecommunications • Telecommunications, notably • Facilitate the development of competition in broadband and
broadband, inadequate and costly in mobile telecommunications across the region, and in
many parts of the region broadband backhaul.
Land • Serviced land required for industry in • Ensure serviced land is available for future light and heavy
major towns industrial development in Mount Isa, Cloncurry, Townsville and
Bowen
Community infrastructure • Community infrastructure in regional • Give much greater attention to planning for, and provision of
towns is inadequate for current community infrastructure (eg health, education, family
population and for any growth services) in the region in order to provide facilities and
services that will support the liveability of resource
communities and to help attract and retain employees and
their families

4.7.2 Mineral production

ABARE‟s listing of major minerals and energy development projects includes


many planned or potential expansions and new operations. Other potential
mines and associated processing activities may be identified as a result of
resource definition and exploration programs in the north-west Queensland
and Chillagoe-Mount Garnet-Charters Towers minerals provinces.

Realisation of these output increases would require:


• Large increases in, and success of greenfields and brownfields exploration
activity yielding increases in resources and reserves of the magnitude and
quality required to underpin the assumed output increases
• Substantial investments in mining and processing
• Major investments in both industrial and community infrastructure in the
Mount Isa-Townsville region.
Some processing and shipping activity may occur in the Abbot Point-Bowen
area instead of Townsville. If CHALCO establishes an alumina refinery to
process Aurukun bauxite at Abbot Point instead of Townsville or Gladstone,
with substantial infrastructure support from Queensland Government entities,
other processing and service activities may gravitate to the Abbot Point-Bowen

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area, rather than the Townsville area, accompanied by additional infrastructure.


This may include a direct rail link from the Great Northern Railway south of
Townsville to Abbot Point.

4.7.3 Infrastructure requirements

The Queensland Government has described its Northern Economic Triangle


Infrastructure Plan 2007-2012, released in August 2007, as the first step of “a 50-
year commitment” to support development of “large scale industry”,
particularly mining, minerals processing and related activities, in the Mount Isa-
Townsville growth region plus the Bowen-Abbot Point area. The initial 5-year
plan focused on steps to identify infrastructure requirements, assessment of
some infrastructure projects, consideration of options for other infrastructure
initiatives, and early stage planning of implementation of some infrastructure
initiatives.

Other pertinent infrastructure planning exercises that were drawn on or


referred to by the Northern Economic Triangle Infrastructure Plan 2007-2012 and the
2007 progress report included:
• The Port of Townsville Master Plan (completed July 2007)
• The Townsville City-Port Strategic Plan (completed June 2007)
• A master plan of the Townsville-Mount Isa rail link (underway)
• Mount Isa-Townsville, Brisbane-Mount Isa-Darwin, and Brisbane-Cairns
land transport corridor studies (completed June 2007).
Realisation of the growth scenario would greatly increase infrastructure
requirements in the Mount Isa-Townsville growth region. The various
infrastructure planning exercises discussed earlier would need to be accelerated
and expanded to deal with specific deficiencies such as those discussed below.

Rail

The capacity of the Great Northern Railway would need to be expanded very
substantially. The increase could be of the order of 165 per cent or more by
2013 to cater for growth anticipated by the Mount Isa-Townsville Corridor Strategy,
plus Barrick‟s Osborne magnetite concentrate and phosphate rock concentrate
from a mine and beneficiation plant at Lady Annie proposed by Legend
International Holdings Inc.

The master plan of the Mount Isa-Townsville rail link currently being
undertaken by Queensland Rail presumably would cater for an expansion of
this magnitude by 2013, because Barrick and Legend have been discussing their
plans with Queensland Rail and above-rail operators, and because Queensland
Rail has the Mount Isa-Townsville Corridor Strategy.

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The Queensland Government has sought $1 billion from the Building


Australia Fund to upgrade the rail line from Mount Isa to Townsville.
Infrastructure Australia has included this project in a list of projects for further
consideration, from which a priority list is to be selected in 2009.

Legend‟s plans for Lady Annie would also require construction of a new rail
link from Lady Annie to the existing rail system. The options include:
• a new line from Mount Isa to Lady Annie
• a new line from Cloncurry to Lady Annie
• renewal of the Cloncurry-Kajabbi line and a new line from Kajabbi to Lady
Annie.
Provision of one of these rail system extension options and enhancement of
capacity on the existing Great Northern Railway could induce additional
exploration, other assessments, and development investment in areas in which
the rail infrastructure improvements would enhance the economics of mining.
This could facilitate realisation of the growth scenario.

Carriage of additional tonnages to the port of Townsville, particularly large


tonnages of phosphate concentrate, would require acceleration of provision of
a rail access to the port via the Port Eastern Access Corridor, which would
traverse the Townsville State Development Area and by-pass urban areas.

An alternative to upgrading of rail capacity near Townsville and provision of


new eastern rail access to the port could be provision of a new line linking the
Great Northern Railway with the North Coast Line north of Bowen to
facilitate export and import of bulk commodities through Abbot Point. The
growth scenario could involve sufficiently large tonnages to justify
investigation of this option.

This would be consistent with the Queensland Government‟s Northern


Economic Triangle development initiative. Indeed, one of the action plans in
the Northern Economic Triangle Infrastructure Plan 2007-2012 was to “explore
potential economic benefits of alternative transport routes between Mount Isa
and Bowen”.

Roads

The road network within the Mount Isa-Townsville growth region and roads
linking the region with other areas are critically important to mining and
processing activities in the region, and to supporting activities and personnel.

Road transport carries products and inputs between mine sites, processing
facilities and rail terminals and sidings. Also, road transport delivers inputs to
mining and processing activities from sources outside the region.

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The deficiencies of the three National Network road corridors serving the
region have been documented in broad terms by Mount Isa-Townsville,
Brisbane-Darwin and Brisbane-Cairns corridor studies released by the
Commonwealth Department of Infrastructure, Transport, Regional
Development and Local Government in June 2007. While these studies were
labelled “strategies”, deficiencies and priorities identified by the studies lacked
precision, and investment proposals and commitments were not provided.

Since these corridor studies provided the main basis for transport action plans
in the Northern Economic Triangle Infrastructure Plan 2007-2012, this plan was
equally vague on action to correct existing deficiencies of the relevant National
Network road corridors and cope with future traffic growth.

With regard to roads that are not part of the National Network, the Northern
Economic Triangle Infrastructure Plan 2007-2012 was even less informative. The
main focus was on planning for the Port of Townsville Access Road that
would be constructed in the Port Eastern Access Corridor, diverting traffic
from urban areas and through the Townsville State Development Area. The
infrastructure plan did not discuss current or anticipated deficiencies of non-
National Network roads serving the north-west and Chillagoe-Charters Towers
mineral provinces. Future initiatives in respect of such roads were confined to
the following “action plans”:
• “investigate transport solutions for efficient transport of minerals from the
region extending from Chillagoe to Charters Towers for processing at
Townsville and export through the port”
• “program upgrades to the Gregory Development Road (north and south of
Charters Towers) and Burke Development Road (Cloncurry to
Normanton) which support transportation of concentrates to railhead and
port facilities as well as services to remote mining communities”
• “develop a road strategy for the (north-west) minerals province with flood
management measures where appropriate”.
Realisation of the growth scenario would require expansion, acceleration and
provision of precision to road priorities in relevant National Network corridor
studies and road action plans in the infrastructure plan for the Northern
Economic Triangle.

Ports

The growth scenario would require a very large expansion of port facilities in
Townsville. The Lady Annie phosphate and Osborne magnetite projects, just
two of the many mining and processing projects currently under investigation
in the Mount Isa-Townsville growth region, would increase the port‟s
throughput (exports plus imports) by nearly 60 per cent by 2013.

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A Port of Townsville Master Plan was completed in July 2007. It identified


constraints on port operations, ways of improving cargo handling and shipping
operations to cope with various growth scenarios, expansion strategies, and
linkage with the proposed eastern access road and rail corridor. Also, the
master plan outlined a staged development framework to cope with a
substantial increase in throughput.

The growth scenario would require accelerated implementation of the master


plan for the port.

If CHALCO decides to build an alumina refinery at Abbot Point, instead of


Townsville or Gladstone, the Ports Corporation of Queensland would provide
a sheltered harbour. This would be additional to expanded coal shipment
facilities planned at Abbot Point to handle additional railings following
completion of the “northern missing rail link” that would extend the
Newlands-Abbot Point line to connect with the Goonyella rail system, which
currently carries coal to the Port of Hay Point. Such a multifaceted expansion
of the port at Abbot Point would allow export and import of a range of cargos.

The Queensland Government has sought $1.75 billion from the Building
Australia Fund to upgrade Abbot Point to a “multi-purpose harbour”.
Infrastructure Australia has included this project in a list of projects for further
consideration. 37

The proposed developments at Abbot Point could relieve pressure on the


Townsville port. However, this may require construction of a new Abbot
Point oriented link from link from the Great Northern Railway to the North
Coast Line. This concept is under investigation pursuant to the Northern
Economic Triangle Infrastructure Plan 2007-2012.

Air infrastructure

The Queensland Government‟s Northern Economic Triangle Infrastructure Plan


2007-2012 was silent on the matter of air infrastructure, except for inclusion of
a proposal to “investigate the feasibility of commuter passenger services to the
Bowen region including any upgrade required of the airport and terminal to
meet future requirements.”

It is inevitable that development of more mining and processing activities in


Queensland‟s north-west and Chillagoe-Charters Towers minerals provinces
would be accompanied by more short-term trips by air to those areas, and
more air commuting and fly-in-fly-out activity by workers. This would have
implications for community infrastructure needs – both in the mine-hosting

37 Infrastructure Australia, A Report to the Council of Australian Governments, December 2008.

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community, and in the larger servicing centre in which employees have their
principal residences.

Operators of mines remote from Mount Isa, Cloncurry and Townsville could
require or enable fly-in-fly-out or air commuting behaviour by provision of
suitable airstrips at mine sites. A typical fly-in-fly-out arrangement would be
for workers to fly from their residential locations to a hub such as Mount Isa
or Townsville from which they would be flown to a mine site to work for say,
two weeks before reversing the process for a break of say, two weeks.

Increased traffic could be expected at Townsville, Mount Isa and Cloncurry


airports as well as airports of more distant, attractive residential locations.

Energy

The Queensland Government‟s Northern Economic Triangle Infrastructure Plan


2007-2012 identified provision of competitively-priced electricity and gas in the
western and eastern parts of the Mount Isa-Townsville growth region as critical
issues for further exploitation of the region‟s mineral resources and attraction
of major energy-intensive mineral processing activities. The Government is
concerned that the region is currently handicapped by relatively high energy
prices.

Electricity – North West Queensland Minerals Province

As noted, the Mount Isa Interconnected System is a small, isolated network.


Electricity costs beyond this system are higher than within it. Mining and
processing entities outside the system and without access to natural gas have to
rely on diesel generators.

The Queensland Resources Council‟s submission to Infrastructure Australia in


the second half of 2008 observed:
“Continued growth in energy demand in North-West Queensland has reached the
point of exceeding the capacity of existing supply facilities. This is particularly the
case for new mines seeking to execute energy contracts in order to structure
production operations. Presently, some proposed projects have found it difficult or
impossible to secure long term, firm energy supply contracts at current price levels.
This is in the context of a region where electricity costs are on average two to three
times the prevailing national electricity market price. Accordingly, there is increasing
interest in the development of additional capacity in the region to provide
competitively-priced and reliable energy to the community and to industry.”

CS Energy has been investigating redevelopment and expansion of the 325


MW Mica Creek power station. The Queensland Government has advised that
the expansion would be sufficient to cater for additional electricity demand
from current customers and demand from other potential mining operations in

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the Mount Isa area. CS Energy has advised that the configuration of the
upgraded power station would depend on customer support. Presumably, the
expansion would include 65 MW for the Lady Annie phosphate mine and
beneficiation plant.

It is not known if the expansion of Mica Creek power station would be


adequate to allow realisation of the growth scenario. The dependence of the
expansion on customer support does not provide a basis for optimism because
of timing and scale issues noted by Queensland Resources Council:
“The region requires a major investment in capacity, a step change in supply, in order
to service current demand. The difficulty in securing this step change is that in a
purely laissez faire market the marginal costs of energy will be well above the average
energy cost. This price jump is a significant deterrent to investing and these delays
generate real impacts on mineral production. Further, because of the size of the step,
the next increment of capacity is likely to be much larger than the current demand that
triggers the expansion. Again, this will drive up the price. As a result, a significant
step change in capacity is recipe for markets to delay and wait until the entire capacity
increment is largely subscribed. Unless Government‟s are willing to act to pre-empt
and anticipate demand, the failure of the market to bring on timely energy supply will
result in lost economic activity....... There are very real opportunity costs linked to this
investment delay. The costs are simple static costs – in terms of the missed revenue
from the production which didn‟t occur, and also dynamic costs – the encouragement
provided to Queensland‟s mining and mineral processing competitors that expansions
are not happening and the missed opportunities which are not realised because the
energy system is at full capacity.”

An investigation of this electricity issue (the Sims review) has been


commissioned by the Queensland Government and Queensland Resources
Council.

Gas supply – North West Queensland Minerals Province

A natural gas discovery in the Georgina Basin could lower energy costs in the
state‟s north-west minerals province. The Queensland Government has
released eight areas in that sedimentary basin for applications for authorities to
prospect for petroleum. The Georgina Basin has potential for oil and gas
discoveries, but is relatively unexplored.

Townsville energy

As noted, Townsville has been handicapped relative to other industrial centres


by long transmission distances and consequent line losses that add to power
costs. Powerlink has been strengthening the transmission network between
central Queensland and Townsville. Lower transmission losses are expected to
yield lower wholesale power prices.

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AGL is considering construction of a 380MW gas-fired base load power


station in southern Townsville. In addition, the Queensland Government is
investigating the feasibility of establishing a base-load power station in north
Queensland, possibly in the Abbot Point State Development Area, to support
large scale, energy intensive activities.38

The Queensland Government is investigating additional supply of gas to


Townsville for electricity generation. It is also investigating transport of coal
seam gas to the Abbot Point State Development Area.39

All of these energy supply investigations for the Mount Isa-Townsville-Bowen


region are in early stages. They could be consistent with expansion of the
magnitude of the growth scenario. But, it seems unlikely that they could
accommodate the timing implicit in that scenario.

Water

Availability of adequate water is critical to further development of mining in


the region.

Discussion of water issues in the Northern Economic Triangle Infrastructure Plan


2007-2012 was very brief and vague. The action plan for Queensland‟s north-
west minerals province was to “develop a regional water supply strategy that
provides for future water demand in Mount Isa and the north-west minerals
province under the existing water resources planning framework, including the
Gulf and Georgina/Diamantina Water Resource Plan, Carpentaria and North-
West Management Areas of the Great Artesian Basin Water Resource Plan and
Wild Rivers Policy”. The timing proposed for development of the strategy was
imprecise, “1-5 years”.

This “action plan” does not provide a meaningful picture of the practical issues
in accessing water that would faced by an enterprise expanding or new mining
and/or beneficiation activity in the north-west minerals province. Barrick‟s
proposal to produce magnetite concentrate from tailings from mining and
beneficiation of copper-gold ore at Osborne Mine south of Cloncurry makes
an interesting case study. Barrick would require from 2-2.6 times (depending
on recycling technologies) current annual permitted water extraction rate from
bores in the Great Artesian Basin. Without access to substantially more water,
the project could not proceed.40

38 Queensland Department of Infrastructure, Northern Economic Triangle Infrastructure Plan 2007-


2012, August 2007.
39 ibid.
40 Barrick (Osborne) Pty Limited, Magnetite Project: Initial Advice Statement for Department of
Infrastructure and Planning, 2008.

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For the Townsville area, the action plan for water in the Northern Economic
Triangle Infrastructure Plan 2007-2012 was to “develop and manage the North
Queensland Regional Water Supply Strategy under the existing water resource
planning framework, including the Burdekin Water Resource Plan.” The time
frame nominated for strategy development was 1-3 years from mid-2007.

The content and timing of water proposals in respect of the Abbot Point-
Bowen area were similarly vague.

Industrial land

The Queensland Government has plans to ensure serviced land is available for
future light and heavy industrial development in Mount Isa, Townsville and
Bowen. It is also investigating future establishment of an industrial estate in
Cloncurry. These plans have been outlined in the Northern Economic Triangle
Infrastructure Plan 2007-2012 and a subsequent progress report. The Abbot
Point State Development Area is being planned as a major new industrial
precinct.

Government planning appears to be more advanced in respect of this matter


than for provision of infrastructure to support mining activity that would
underpin economic activity in the proposed new or expanded industrial areas.

Human capital and other community infrastructure

As noted, the Northern Economic Triangle Infrastructure Plan 2007-2012 identified


affordable housing as a need in Mt Isa and Bowen, but did not address the
adequacy of human capital infrastructure such as educational facilities and
hospitals, nor the adequacy of other community infrastructure. The plan did
however, include a strategy to “identify and undertake planning to supply the
urban and community infrastructure necessary to support population growth in
the economic centres and meet the needs of new workers and their families”.

Despite this, planning for adequate