Economic and Industry Issues for the Western Australian Resources Sector

Pilbara Pulse Economic Summit

23 July 2014

Reg Howard-Smith

Chief Executive

The Chamber of Minerals and Energy of Western Australia

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In 2013, the resources sector was worth:

ס $113.8 billion in sales value

ס 91% of state, 43% of national merchandise export incomes

In 2014/15, forecast $6.2 billion in state royalties income.

As at May 2014, 103,200 people directly employed.

Western Australia’s Resources Sector

55%

12%

10%

9%

4%4%

6%

WA Resources Sector Value1

Iron ore LNG Crude & condensate Gold

Alumina Nickel Others

1 Department of Mines and Petroleum, 2013. Statistics Digest 2012-13. Perth.

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ס In operation for 113 years

ס Over 200 members representing 95% of production value in WA

ס Membership growth in gold, uranium, iron ore and gas.

About CME

“To champion the WA resources sector and assist it in achieving its vision to lead the world in sustainable practice, through innovation, and

continuing to underpin Australia’s position in the global economy.”

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Productivity

ס With the move from construction to operations, the workforce will decline, but productivity increases

ס Companies also looking at:

– Costs

– Job design

– Leadership and management

– Automation

ס Workplace relations system

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Community Perceptions

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Resources Sector Contributions

ס Over 1000 houses in the Pilbara since 2010

ס Investment in community infrastructure

ס $50.4m financial and $16.2m in-kind to community initiatives in 2013

ס Employment for Aboriginal Australians

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Mineral Royalty Rate Review

ס Royalties revenue:

– 5% of budget in 2003/04

– 22% of budget in 2013/14 (iron ore 90%)

ס Impact of any additional royalties burden on particular minerals

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Investment in Resources Sector Infrastructure

ס Great Northern Highway and North West Coastal Highway upgrades

ס Pilbara Power Project

ס Utah Point

ס Pilbara Fabrication and Services Common Use Facility

ס Regional airports

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Approvals Inefficiencies

ס Environmental approvals typically long and expensive

ס Uranium Gantt Chart (2011) predicts best case timeline for approval of 4½–5 years

ס System must be underpinned by highest environmental integrity, understood by proponents and respected by the community

ס Rehabilitation of disturbed landscapes in the Pilbara

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Resources Sector Outlook

ס CME’s flagship publication

ס Member surveys for supply and demand forecasts:

– people

– energy

– water

– roads

– rail

– ports

– aviation

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The Chamber of Minerals and Energy of Western AustraliaLevel 10, 2 Mill Street

Perth WA 6000T 08 9325 2955F 08 9221 3701

E chamber@cmewa.comW www.cmewa.com.au

Thank you