How the Mid West was won

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 14 Aug 2013   Posted by admin


RUNNING close behind its big brother region, the Pilbara, WA’s Mid West is a significant minerals and energy province.
While the closure of several Mid West mines and the mothballing of Oakajee dealt blows to local industry, other projects achieved major growth, and in 2011 to 2012 the region contributed $2.4 billion to the Australian economy.
Iron ore sales totalled more than $577 million in the period, and the $2.5 billion Karara iron ore project is set to further bolster the region’s output.
Karara began ramping up production in January and is expected to deliver 8 million tonnes of product by the end of the year. In July, Geraldton Port Authority reported that iron ore mines had caused a record number of tonnes for export: of the total 15mt of cargo shipped from Geraldton, 11mt was iron ore.
Active mining projects of note in the region include MMG’s Golden Grove (copper, zinc), Mount Magnet gold, Sinosteel Midwest (iron ore), Doray (gold), Iluka’s mineral sands operations and Newmount’s Jundee mine (gold).
The Mid West covers a total area of 610,000 square kilometres and includes 22 local government jurisdictions. There is also an emerging onshore gas sector that is currently in proof of concept stage.
Advocating the Mid West
The Chamber of Minerals and Energy of WA (CME) champions the WA resources sector and helps to maintain its growth. CME manager of the Mid West region Katherine Flower said a collaborative approach between industry, government and the community helped to deliver economic, social and environmental benefits.
“As the persuasive voice of the industry, the organisation leads policy development on issues impacting the sector, promotes the value of the sector to the community, represents the views and advocates the needs of its members and provides an avenue through which members and stakeholders are able to collaborate,” she said.
As part of this commitment to the Mid West, CME opened a full-time regional base in Geraldton in April 2012.
CME holds a quarterly council meeting of regional member companies and a bi-annual community relations forum. It also regularly participates on a number of regional strategic groups, in a collaborative effort to tackle the region’s infrastructure, planning and workforce issues.
Ms Flower said the resources sector would play a key role in the future development of the area and would continue to act as a catalyst for regional growth.
“In addition to taxes and royalties paid by the resource sector in this region, resource companies are major employers and significant purchasers of a wide range of goods and services,” she said.
“The Karara mine spent over $220 million in the Mid West and engaged almost 300 local businesses during construction. “Many of the region’s established mines also have community funds, sophisticated community development programs and establish joint ventures for the local community, which generate much more than exports; [these include] Karara’s 600-acre community farm, MMG’s
Bayalgu indigenous pre-employment entry level operator training program; Sinosteel’s ground-breaking ‘green rewind’ environmental conservation program; and Newmont Jundee’s Memorandum of Understanding signed with the Wiluna Martu Rangers.”
Ms Flower said CME was proactive in addressing the Mid West’s major issues. “Miners in the Mid West have not been immune to the issues the resource sector is facing across Australia – namely the increasing cost of doing business, along with duplication in red and green tape,” she said. “CME research into the cost of doing business highlighted the cash cost for producing an ounce of gold has risen 89 per cent in the last five years.
“These issues along with volatile commodity markets have put pressure on many projects across the region. “Locally, regional infrastructure will require upgrades as the resources sector continues to grow.
“These issues are recognised by CME and many of the regions stakeholders.”
Uranium
WA has one of the world’s largest known uranium deposits in the world, with 26 identified sites containing as much as 211,000t.
Uranium mining in WA received a boost with the relaxation of government restrictions.
Toro Energy was the first company to receive Commonwealth approval for uranium mining in the state with its Wiluna mine expected to start producing by 2015.
WA Mines and Petroleum minister Bill Marmion said he gave state approval five months ago and was glad the Federal Government had also endorsed the plan. “Opening up uranium mining in WA was a central plank of the State Government’s 2008 election commitments,” he said.
“This announcement is hugely significant, as it’s the first uranium project to receive state and federal environmental approval in WA and paves the way for a new industry in this state.”
Mr Marmion said the government would ensure that all uranium mining in WA was safe and environmentally responsible. “WA has been mining, processing, transporting and exporting radioactive minerals, including mineral sands, for more than 40 years,” he said.
“All WA uranium mines are required to go through strict legislation and regulation, to ensure the safety of employees and the broader community.
“Uranium mines in WA would also meet all the relevant international safeguards in relation to the safe and peaceful use of uranium resources, and obtain environmental approvals for mining and transport.”
Toro managing director Dr Vanessa Guthrie said she welcomed the progress. “Wiluna is the first new Australian mine since mid-2009 to receive Federal Government approval and the first in WA since the government lifted the ban on uranium mining in 2008,” she said.
“With no appeal lodged, Toro is now able to fully focus on bringing Wiluna – WA’s first uranium mine – to market.
“Toro’s commitment to the approvals process over the past four years has positioned the Wiluna project well against its peers to deliver potential new supply sources in the second half of this decade.
“While the current spot market is soft, there are positive signals of an improvement in prices as the longer term market fundamentals for uranium pricing remain very strong.
“Toro can now focus its full attention on completing all technical and commercial studies required to support an investment decision for the project whilst continuing to seek strategic partner support for the development capital needed.
“Regulatory certainty and the end of any appeal period elevate the company’s commercial engagement with potential project partners and financiers.”
According to Toro, Wiluna is expected to cost $269 million, with a feasibility study set for completion by 2014.
Port Infrastructure
When a state-of-the-art deep port near Geraldton was first proposed 20 years ago, it was exactly what the region needed.
Fast forward to 2012: mining had become the lifeblood of the state, but nothing was yet built. By this year, the cost of the troubled Oakajee port project had blown out to $6 billion and it was put on the backburner. In Brazil, a multitude of ports have been constructed in the same period of time with the jewel in the crown – the Acu Superport – already exporting ore to Australia’s main customer, China.
When it reaches full capacity, the port will be able to handle 350mtpa and service the largest vessels in the world such as the Chinamax, placing it in the top three largest ports in the world.
US$40 billion was invested in ACU and 50,000 jobs created; just the opposite is occurring in Geraldton.
While the mothballing of Oakajee came as a major blow to the industry, Ms Flower said that the announcement was no real surprise.
“A deep-water port is essential for the growth of the Mid West as an internationally competitive resources province,” she said.
“The proposed mines at Tallering Peak, Weld Range and Jack Hills to the north and mines to the south, including Karara stage 3 and Extension Hill stage 2, will require export capacity that currently doesn’t exist.
“At this stage, the [Oakajee] project retains state and federal funding commitments of $678 million and the WA Premier continues his discussions with key trading partners. “CME remains supportive of the State Government’s desire to build projects such as these, but clearly these things do not come along without significant challenge.
“Local businesses have learnt to diversify their operations over the years to remain viable as various iterations of this project have been put forward during that time.
“I don’t think the decision came as a great surprise.”