FUTURE DEVELOPMENT
OF THE
PILBARA
June 2013
“The Catalyst for Regional Growth and Development.”
OUR MISSION
COMMISSION’S
ROLE
ROLE
Leader, Advocate, Broker, Innovator
OBJECTIVES Diversity - Economic, Community and Social Development Development - Land Supply, Accommodation and Key Infrastructure
The Pilbara is the economic powerhouse of the nation with an economy dominated by the extraction, processing and export of minerals and hydrocarbons. The 2011/12 value of Pilbara minerals and petroleum exports was AU$84b, increased from AU$4.1b in 1999/2000. The Pilbara accounts for 80% of WA’s mineral and petroleum production value. The Pilbara services the offshore Carnarvon Basin, Australia’s largest known oil and gas reserve that earned AU$23b (22% WA total mineral's and petroleum value) in 2011/12.
RESOURCE
SECTOR
RESOURCE
SECTOR
In 2011/12 the Pilbara (on and off shore) was responsible for AU$84b of minerals and petroleum production, 80% of total WA production value.
80%
5%
2% 2% 9%
2%
Pilbara
Peel
Mid West
Wheatbelt
Goldfields-Esperance
Other
RESOURCE
SECTOR
The value of earnings from the Pilbara can be compared to many Nation State’s Gross Domestic Product. $84b represents: • 5.5% of Australia's total GDP • 50% of New Zealand’s GDP • Greater than the individual GDP of 123 of the worlds 185
nation states. (2012 International Monetary Funds list of GDP )
RESOURCE
SECTOR
Major Australian exports: • Iron ore is Australia’s largest export earner with an estimated
value of AU$62b* in 2011/2012. • Coal is the next most valuable earner at AU$48.b. • Crude oil and LNG are third at AU$25.1b (BREE Resource and Energy Statistics March 2013quarter page 17)
In Australia the Pilbara produces approximately: • 90% of Australia’s iron ore • 85% Australia’s LNG • 80% of Australia’s crude oil and condensate (Western Australian Department for Mineral and Petroleum)
Pi lba ra Por ts
The Pilbara has world class Ports. By tonnage Port Hedland is the largest in Australia and ranked 11thlargest in the world. Dampier Port Authority is ranked second in Australia and ranked 19th in the world.
2011/2012 Total Throughput
(Mass Tonnes)
Imports Exports Total
Port Hedland Port Authority 1,656,203 245,015,856 246,672,059
Dampier Port Authority 910,155 170,933,467 171,843,622
Newcastle Port Corporation 3,616,363 125,666,880 129,283,243
Port Walcott 0 84,000,000 84,000,000
Hay Point (NQBP) 0 82,853,893 82,853,893
Gladstone (Gladstone Ports) 17,545,941 66,243,655 83,789,596
Weipa (NQBP) 102,077 24,989,956 25,092,033
Port Kembla Port Corporation 6,893,451 20,927,227 27,820,678
Port of Brisbane Pty Ltd 17,825,006 19,385,738 37,210,744
Melbourne Port Corporation 19,948,801 15,928,296 35,877,097
Fremantle Ports 13,632,851 14,578,970 28,211,821
www.portsaustralia.com.au
IRON ORE
The demand for iron ore is expected to grow; one of the biggest drivers of demand is the growth of China.
0% 5% 10%
2013
2014
2015
2016
2017
2018
GDP growth estimates
OECD
China
World
( Resources and Energy Quarterly March 2013 p5 BREE)
IRON ORE
The Bureau of Resources and Energy Economics forecasts that iron ore world demand will continue to grow up to nearly 1500 mtpa by 2018.
0
200
400
600
800
1000
1200
1400
1600
2012 2013 2014 2015 2016 2017 2018
Projected iron ore imports
other Countries
Korea
China
Japan
EU
mill
ion
to
nn
es p
er a
nn
um
(m
tpa)
( Resources and Energy Quarterly March 2013 p59 BREE)
IRON ORE
In 2011/12 approximately 435 million tonnes of iron ore was exported from the Pilbara at a value of AU$58b, approximately 45% of world iron ore exports. Source: DMP Statistics for 2011/2012
0
200
400
600
800
1000
1200
1400
1600
2012 2013 2014 2015 2016 2017
World Iron Ore Trade
Other Countries
South Africa
Canada
India
Brazil
Australia
( Resources and Energy Quarterly March 2013 p 59 BREE)
IRON ORE
The following Iron ore projects are committed or under construction. Iron ore production capacity from the Pilbara will increase, port export capacity will increase by over 230 million tonnes per annum by 2015. (source BREE major project listing April 2013)
Project Company Location Project Type Estimated Start Up
Estimated New Capacity Resource
Indicative Cost Estimate $m
Construction Employment Estimate
Operating Employment Estimate
Horizon 1 (Phase A) Atlas Iron Pilbara New project 2013 4500 Hematite $ 252
Jimblebar mine and rail (WAIO) BHP Billiton Pilbara New project 2014 35000 Hematite $ 5,180
Marandoo Rio Tinto Pilbara Expansion 2014 n/a Hematite $ 1,070 700
Nammuldi expansion Rio Tinto Pilbara Expansion 2014 26000 Hematite $ 2,140
Sino Iron Project CITIC Pacific Mining Cape Preston New project 2012 28000 Magnetite $ 7,570 4500 800
Solomon Hub (stage I) Fortescue Metals Group Pilbara New project 2013 60000 Hematite $ 3,100 7000 6000
Yandicoogina Rio Tinto/Hammersley Pilbara Expansion 2013 4000 Hematite $ 1,700 800 200
Cape Lambert port and rail expansion Rio Tinto / Robe River 40 km N of Karratha Expansion 2013 53000 Iron Ore $ 5,166 600
Port (55 - 155 Mtpa) Fortescue Metals Group Port Hedland Expansion 2013 100000 Iron Ore $ 2,430 1200 1600
Rail (55 - 155 Mtpa) Fortescue Metals Group Pilbara Expansion 2013 100000 Iron Ore $ 2,330 1500 1600
Utah Point Expansion Atlas Iron Port Hedland Expansion 2013 2000 Iron Ore $ 58
WAIO optimisation (port blending and rail yards) BHP Billiton Port Hedland Expansion 2014 n/a Iron Ore $ 2,500
IRON ORE
There are a number of new proposed iron ore projects currently undertaking feasibility studies or awaiting government approvals. These projects would potentially lift the iron ore export capacity again by 400 Million Tonnes per annum. (source
BREE major project listing and DSD Prospect Magazine)
Project Company Location Project Type Estimated Start Up
Estimated New Capacity Resource
Indicative Cost Estimate $m
Construction Employment Estimate
Operating Employment Estimate
Anketell Point port Fortescue Metals Group / MCC / Aquila Pilbara New project 2015 350000 Iron Ore $ 4,000
Balla Balla project (phase I) Forge Resources 90 km E of Karratha New project 2015 6000 Magnetite $ 1,000
Balla Balla project (phase II) Forge Resources / Todd Capital 90 km E of Karratha New project 2017+ 4000 Magnetite $ 750
Balla Balla slurry pipe and port infrastructure Forge Resources Port Hedland New project na 6000 Iron Ore $ 310
Balmoral South magnetite project (stage 1) Australasian Resources 100 km NE of Onslow New project 2017 12000 Magnetite $ 3,300
Balmoral South magnetite project (stage 2) Australasian Resources 100 km NE of Onslow Expansion 2017+ 12000 Magnetite $ 3,250
Buckland Project Iron Ore Holdings Pilbara New project 2014 8000 Hematite $ 325
Cape Lambert port expansion Rio Tinto / Robe River 40 km N of Karratha Expansion 2015 70000 Iron Ore $ 3,100
Hardey Aquila Resources 180 km SW of Pannawonica New project 2016 10000 Hematite $ 2,000
Horizon 2 Atlas Iron Pilbara New project 2017 31000 Hematite $ 2,000
Iron Valley Project Iron Ore Holdings/FMG Pilbara New project 2014 15000 Hematite $ 375
Jinidi BHP Billiton Pilbara New project 2015 60000 Hematite $ 5,000
Koodaideri Project Rio Tinto Pilbara New project 2016 70000 Hematite $ 7000
Marillana Brockman Resources 100 km NW of Newman New project 2016 18500 Hematite $ 1,900
Mt Webber Atlas Iron Pilbara New project 2014 6000 Hematite $ 420
Nyidinghu Fortescue Metals Group Pilbara New project n/a 30000 Hematite $ 2000
Nyidinghu Rail Spur Fortescue Metals Group Pilbara New Project n/a n/a Hematite $ 750
Pilbara Independent Rail QR National / Atlas Iron Pilbara New project 2015 n/a Iron Ore $ 3,750
Pilbara Project Flinders Mines 70 km NW of Tom Price New project 2015 15000 Hematite $ 1,100
Ridley Magnetite project Atlas Iron 75 km E of Port Hedland New project 2017+ 15000 Magnetite $ 3,750 1100 750
Roy Hill Hancock Prospecting Pilbara New project 2015 55000 Hematite $ 9,500 3600 2000 Solomon Hub (stage II) Fortescue Metals Group Pilbara Expansion na 50000 Hematite $ 3,750 South West Creek Development North West Infrastructure Port Hedland Expansion 2017 50000 Iron Ore $ 3,750
West Pilbara Aquila Resources / AMCI Pilbara New project 2014 30000 Hematite $ 7,400 3500 1000
IRON ORE
Workforce requirements are estimated in terms of construction and operational jobs. Not all projects as yet have accurate predictions of the numbers they will require. Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara before 2020 are: • 25,050 construction jobs • 15,040 operational jobs.
IRON ORE
Primary risks to the growth of the Pilbara iron ore industry are: • Change in the Chinese economic outlook • Cost pressures ie taxes and wage increase • Lack of skilled workers • International competition from Brazil and West Africa
• Infrastructure constraints, ports, roads, housing, power, water
L IQUEFIED NATURAL GAS
Australia’s largest known conventional oil and gas reserve, the
Carnarvon Basin, is located off the Pilbara coast and had a
production value of AU$23.7b in 2011/2012.
These reserves are owned by the Australian Government
although onshore processing and servicing occurs from Pilbara
located facilities and towns.
The Pilbara LNG industry is experiencing major growth
simultaneously with the iron ore industry and looking to expand
to 30 mtpa by 2015 and 60 mtpa by 2020.
(Pilbara Infrastructure and Planning Framework Jan 2012)
L IQUEFIED NATURAL GAS
In 2012 the world LNG production capacity measured 288 million tonnes. Due to location, the growth in
the Asia pacific region is most important to the Pilbara and this trade in 2012 is expected to be 185 million
tonnes annually. Demand for LNG in the region is then expected to grow at a 7% yearly average. (Resource and
Energy Quarterly March 2013 p31 BREE)
Forecast demand for LNG in million tonnes per year in the Asia-Pacific
0 100 200 300
2012
2014
2016
2018
(Resource and Energy Quarterly March 2013 p 31 BREE)
L IQUEFIED NATURAL GAS
Forecast world supply of LNG in million tonnes per year
0 100 200 300 400
2011
2013
2015
2017
(Resource and Energy Quarterly March 2012 p 42 BREE)
L IQUEFIED NATURAL GAS
Investment on committed Oil and Gas projects in the Pilbara is approximately AU$90b, these projects will raise LNG production in the Pilbara from 17 million tonnes in 2011/2012, by approximately 30 Mtpa. (source BREE major project listing and DSD Prospect Magazine)
Project Company Location Project Type Estimated Start Up
Estimated New Capacity Resource
Indicative Cost Estimate $m
Construction Employment Estimate
Operating Employment Estimate
Balnaves Development Project Apache Energy / KUFPEC 180 km NW of Dampier new project 2014 30 Oil $ 429
Coniston Oil Field Project Apache Energy / Inpex 50 km N of Exmouth expansion 2014 22 Oil $ 526
Gorgon LNG Chevron / Shell / ExxonMobil Barrow Island new project 2015 15 LNG $ 52,000 10000 3500
Greater Western Flank - Phase 1 Woodside Energy / BHP Billiton / BP / Chevron / Shell / Japan Australia LNG Carnarvon Basin expansion 2016 n/a Gas $ 2,300
Julimar Development Project Apache / KUFPEC 180 km NW of Dampier new project 2016 1.65 Gas $ 1,200
NWS North Rankin B Woodside Energy / BHP Billiton / BP / Chevron / Shell / Japan Australia LNG
150 km NW of Dampier expansion 2013 967 Gas $ 5,000
Spar 2 Apache Energy / Santos 120 km N of Onslow new project 2013 18 Gas $ 117
Wheatstone LNG Chevron / Apache / KUFPEK / Shell 145 km NW of Dampier new project 2016 8.9 LNG $ 29,000 5000 400
L IQUEFIED NATURAL GAS
Proposed Pilbara LNG Projects are detailed below; increasing production approximately 5 Mtpa. (source BREE major project listing and DSD Prospect Magazine)
Project Company Location Project Type Estimated Start Up
Estimated New Capacity Resource
Indicative Cost Estimate $m
Construction Employment Estimate
Operating Employment Estimate
Equus Hess 300 km W of Dampier new project 2018+ n/a Gas/LNG $ 2,000
Gorgon (train 4) Chevron / Shell / ExxonMobil Barrow Island expansion 2017+ 5.2 LNG $ 12,000
Scarborough Gas ExxonMobil / BHP Billiton 280 km NW of Onslow new project 2017+ 3+ Gas/LNG $ 12,000
L IQUEFIED NATURAL GAS
Workforce requirements are estimated in terms of construction and operational jobs. Not all projects as yet have accurate predictions of the numbers they will require. Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara before 2020 are: • 15,000 Construction jobs • 750 Operational jobs.
L IQUEFIED NATURAL GAS
Primary risks to the growth of the Pilbara liquefied natural gas industry are: • Demand for skilled labour will outstrip supply
• Increase in capital and labour costs
• Development of alternative fuel sources
• Competition from other suppliers
OTHER MINERALS
The Pilbara also produces a range of other minerals having a
total 2011/12 value of AU$2.3b.
This is led by:
• gold and silver at $1 billion
• copper at $576 million,
• manganese and salt at $487 million and
• other minerals at $167 million.
OTHER MINERALS
Investment committed on new and proposed projects in other minerals in the Pilbara is AU$1.95b, indicating future growth across these commodities. (source BREE major project listing and DSD Prospect Magazine)
Proposed projects
Committed projects
Project Company Location Status Expected Startup
New Capacity Indicative cost
$M
Employment Construction
Employment Operational
Burrup ammonium nitrate plant
Orica / Yarra / Apache Burrup Peninsula New project 2015 330 775 600 65
Project Company Location Status Expected Startup
New Capacity Indicative cost
$M
Employment Construction
Employment Operational
Big Hill Tungsten Project Hazelwood Resources 220 km NW of Newman, WA
New project, feasibility study under way
2013 6 kt W $112m
Butcherbird Manganese Montezuma Mining Company 120km S of Newman New Project n/a 0.75 250
Kintyre Cameco / Mitsuibishi 90 km south of Telfer, WA New project, prefeasibility study under way
na 2.7-3.6 kt U3O8 600 600 250
Nullagine (Blue Spec) Northwest Resources 26 km NE of Nullagine, WA New project, prefeasibility study under way
2013 45 000 - 50 000oz 34 120
Pilbara VMS Province Project Venturex Resources 120 km SW of Port Hedland, WA
New project, feasibility study under way
2014 20 kt of Cu, 40 kt of Zn, 3.5 kt Pb, 700 koz Ag
234
Pilgangoora - lithium Altura Mining 85km SSE of Port Hedland New Project n/a 150kt 96
Sherlock Bay Australasian Resources / Metals Australia
100 km E of Karratha, WA New project, prefeasibility study under way
na 9 kt Ni $250m
Spinifex Ridge molybdenum/copper project
Moly Mines 50 km NE of Marble Bar, WA
New project, on hold na 4.7 kt Mo, 5.9 kt Cu (in concentrates)
375 400 375
OTHER MINERALS
Workforce requirements are estimated in terms of construction and operational jobs. Not all projects as yet have accurate predictions of the numbers they will require. Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara before 2020 are: • 1951 construction jobs • 1000 operational jobs.
TOTAL SKILL REQUIREMENTS
Given the current investment detailed across all categories of
minerals and petroleum in the Pilbara it can be estimated that
an additional workforce of approximately:
• 40,000 construction workers and,
• 18,000 operational workers;
will be needed before 2020.
This is a conservative estimate due to incomplete employment
data being available at this time.
PILBARA POPULATION FORECASTS
The Australian Bureau of Statistics estimated the residential population for the Pilbara in 2012 at 62,736 people. The Western Australia Government ‘s Pilbara Cities vision has a goal of increasing the residential population of the Pilbara to 140,000 by 2035. To achieve this Pilbara Cities is embarking on projects that increase the availability of land, affordable housing and renewal of community infrastructure. Employment to support these population targets will have to come from diversification of the economy as well as resource sector demands.
PILBARA POPULATION FORECASTS
Based on nothing more than the additional 18,000 operational staff required for new and proposed resource projects, a percentage for fly in fly out and how many residential workers can be estimated. Using key assumptions (see footnote) it can be forecast that 18,000 operational staff will lead to an additional 21,189 people living in the Pilbara. For every industry job it can be assumed that service jobs will be created in the community, via the multiplier effect. For this example it is assumed one additional local job will be created in the Pilbara per every new industry worker. Using the same assumptions this would then attract another 21,189 people. This leads to a total increase in the residential population of the Pilbara of 40,000 by 2020. Key assumptions 1. Fly in Fly out operational workforce will be 57% (as predicted by PICC for 2015) 2. 65% bring their partner, 2.2 children per family, 69% of couples have children (sourced from Australian Bureau
of Statistic 2011 Census Basic Community Profile - Pilbara)
DEMAND FOR KEY COMMUNITY
SERVICES
Anticipated demand for key community service is primarily dependent upon the number of operational staff who are not fly in fly out. It needs to be recognised that fly in fly out staff are located in and around all Pilbara towns do use community resources and infrastructure such as health, police, water, parks and roads. The calculations below do not include this factor.
Using multipliers provided by Dr Don Burnside, Principal Natural Resource Scientist URS, a resident population increase of 40,000 needs the following additional resources: • 582 child care places • 83 child care workers • 2730 primary school places • 195 primary school staff • 496 secondary school children • 62 secondary school staff • 131 police • 34 doctors • 373 nurses An increase of 40,000 people means that 6,747 houses are needed for families, 12,013 for single and couples equating to 18,760 dwellings in total by 2020.
GDP REVISITED
By 2015, and committed iron ore and LNG projects are completed. Export of iron ore in the Pilbara would now reach 665mtpa and LNG exports reach 30mtpa. At todays prices, value of production would exceed 120b $120b represents: • 7.8% of Australia's total GDP • 70% of New Zealand’s GDP • Greater than the individual GDP of 125 of the worlds 185
nation states. (2012 International Monetary Funds list of GDP )
www.pdc.gov.au : Email [email protected]
KARRATHA OFFICE Head Office
Suite 49 / 5 Sharp Avenue PO Box 294
Karratha, WA, 6714 Tel: (08) 9185 0600 Fax: (08) 9185 0189
PORT HEDLAND OFFICE Shop 2, 6 Wedge Street
PO Box 544 Port Hedland, WA 6721
Tel: (08) 9173 8400 Fax: (08) 9173 1881
As publishers of this presentation the Pilbara Development Commission makes every reasonable effort to ensure the accuracy of all information in the report. Nevertheless, we are unable to guarantee the accuracy of all information contained. We take no responsibility and will not be liable either in contract for negligence or in any other way for any errors, acts or omissions, which may occur in relation
to the report.
PERTH OFFICE Level 2 / 140 William Street, Perth
PO Box 1143, West Perth 6872 Tel: (08) 6552 4476 Fax: (08) 6552 4417