MCA 2020 Vision Full Report

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
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
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
iii
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
iv
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

v
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
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
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
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
Figure 1 Regional development regions, Western Australia
Source: Department of Local Government and Regional Development 2009

Western Australia 5
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
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
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
Western Australia 8
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
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
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
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
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.
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.
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
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.
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
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
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
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
Figure 5 Queensland mineral, petroleum and energy resources
Source: Department of Mines and Energy
Queensland 17
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
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
Queensland 18
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.
Queensland 19
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
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
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
Queensland 20
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
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.
Queensland 21
Table 9 Key infrastructure gaps and needs for the Northern Bowen Basin-Mackay growth region
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
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
infrastructure for sustainable communities community infrastructure (eg health, education, family services) in
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
Queensland 22
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.
Queensland 23
Table 10 Key infrastructure gaps and needs for the Fitzroy growth region
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
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
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
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
• Land for housing
infrastructure for sustainable communities community infrastructure (eg health, education, family services) in
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
Queensland 24
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
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
Queensland 25
Water • Comprehensive water planning for • Undertake integrated planning for water
mining growth is yet to be undertaken
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
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.
Queensland 26
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

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

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
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

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

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

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
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
• 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
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
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
Table 15 Key infrastructure gaps and needs for the Gippsland growth region
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
Table 16 Key infrastructure gaps and needs for the Western Victoria growth region
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
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
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
Table 17 Key infrastructure gaps and needs for the Cradle Coast growth region
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
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
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
Figure 13 South Australia’s major operating mines and mineral development projects
Source: Department of Primary Industries and Resources South Australia
South Australia 43
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
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
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
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
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
Table 19 Key infrastructure gaps and needs for the SA Eyre Peninsula region
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
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
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
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
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 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.

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.

Table 21 Key infrastructure gaps and needs for the Darwin growth region
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

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.

Western Australia

Australian Minerals Industry’s

resources regions
May 2009
© ACIL Tasman Pty Ltd
This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism or
review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgment of
the source is included. Permission for any more extensive reproduction must be obtained from ACIL Tasman on
(03) 9600 3144.
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Tasman accepts no responsibility whatsoever for any loss occasioned by any person acting or refraining from action
as a result of reliance on the report, other than the addressee.
In conducting the analysis in this report ACIL Tasman has endeavoured to use what it considers is the best
information available at the date of publication, including information supplied by the addressee. Unless stated
otherwise, ACIL Tasman does not warrant the accuracy of any forecast or prediction in the report. Although ACIL
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the advantage of the client or to the advantage of the client to the degree suggested or assumed in any advice or
forecast given by ACIL Tasman.
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Please contact:
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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
iii

4.4 Proposed developments 45
4.5 Resources-related demographic characteristics 46
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
4.8 Growth scenario, Pilbara growth region 65
4.8.1 Overview 65
4.8.2 Resources production 67
4.8.3 Population growth 68
5 Mid West growth region 77
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
iv
5.7 Growth scenario, Mid West growth region 104

5.7.1 Overview 104
6 Goldfields-Esperance growth region 112
6.1 Description of growth corridor 112
6.4.1 Recently opened projects 116
6.4.2 Projects under construction 117
6.4.3 Projects under consideration 117
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
6.5.8 Land and corridors 123
6.7 Overview of growth scenarios 125
7 South West growth region 130

7.1.1 South West and Peel regions 130
7.1.2 Peel region 133
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
v
7.5.7 Education 148

7.6.1 Planning processes 149
7.7 Overview of growth scenarios 150
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
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
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
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
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
South West and Peel growth regions 150
vii
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
global growth and demand are already clearly evident, most commentators
Introduction to the 2020 Vision Project 1

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.

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

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

Figure 2 Regional development regions, Western Australia

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
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%
2.2 Infrastructure requirements

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

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

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.

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

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.

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)
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.

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

results (relative to 2007)
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.

Figure 8 Electricity demand growth, WA – severely constrained scenario

(relative to 2007)
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.

Figure 9 Energy resources and infrastructure map, Western Australia
Source: Office of Energy Western Australia 2008

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.

Figure 11 Forecast minerals and energy sector gas demand – severely

constrained scenario (total demand)
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)

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

Figure 14 Forecast minerals and energy sector water demand – severely

constrained scenario (total demand)
Consulting analysis

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.
The Kimberley growth region 18

Figure 15 Map of the Kimberley region

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
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.

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.

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.

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

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.

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.

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.

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

• 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

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.

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
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

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.

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:

• 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,

• 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.

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.

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.

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.
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.

• 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
• Child care: additional child care facilities will be required to meet the needs
of additional families in towns.

4 The Pilbara growth 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.
The Pilbara growth region 38

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

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.

Table 8 Mineral production in the Pilbara region, 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
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

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

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.

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.

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.

− 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.

• 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

• 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.

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.

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

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.

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

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

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

− 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

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.

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

Figure 18 Forecast minerals and energy sector gas demand, Pilbara

(relative to 2007)
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,

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
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.

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.

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.

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

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.

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

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

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.
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.

Figure 21 WA cable network
Source: Department of Industry and Resources, StateWide Broadband Network brochure, 2008

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)

• 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.

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

region
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
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

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

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.

• 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.

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,

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.
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.

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.

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

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.

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

• 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.

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

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.
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.

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.
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.

5 Mid West growth 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.

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).

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.

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

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
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

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.

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.


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.

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

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

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.

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.

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.

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.

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.

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
Accommodation & food services 1,698 6.64
Mining 1,612 6.31
Manufacturing 1,322 5.17
Transport, postal & warehousing 1,280 5.01

Economic activity Employment Percent

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)
16 WA Planning Commission 2005, WA Tomorrow.


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.

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.

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)
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.

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)
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

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

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.

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.

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

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.
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

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.
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

• 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).
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.

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

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).

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.

Table 17 Summary of growth scenarios to 2020 for the Mid West growth
region
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
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

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.


• 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).
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.
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.
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.

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.

Figure 28 Oakajee port and infrastructure
Source: Department for Planning and Infrastructure, Oakajee Port Project 2008

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 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

• 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.

Infrastructure corridors will be required for:

• New and future rail lines
• Slurry pipelines
• Gas pipelines and electricity transmission lines
• Utilities to service urban development.
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
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.

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.

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.

Figure 30 Map of Goldfields-Esperance Region


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
18 WA Planning Commission 2005, Western Australia Tomorrow.


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
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
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.

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.

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

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-

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.

Figure 32 Mining electricity demand, Goldfields – Esperance (incremental

to 2007)
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.

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.

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.

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.
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.

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)

• 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
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

Table 21 Summary of infrastructure requirements under growth scenario to 2020 for the Goldfields-
Esperance growth region
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

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
available.

• 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.

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

• 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.

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.

7 South West growth region

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.
South West growth region 130

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.

Figure 34 Map of South West region

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.

Figure 35 Map of Peel region


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

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.

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

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.

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.

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.

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.

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.

Table 25 Employment by industry – South West region

Mining 3,993 4.39
Other services 3,285 3.61
Professional, scientific & technical services 3,074 3.38
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
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.
7.5.1 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

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

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

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-

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.

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

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.

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
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.

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.

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).
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.

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
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
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

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
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.

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.
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

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.

Queensland


resources regions
May 2009
(03) 9600 3144.
ACIL Tasman Pty Ltd

ABN 68 102 652 148

Darwin
48-50 Smith Street

Please contact:
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
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
4.2.1 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
4.4.1 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
4.5.1 Planning processes and initiatives 39
4.6 Information gaps 46
4.7 Growth scenario, Mount Isa-Townsville growth region 47
4.7.1 Overview 47
5 Newlands-Abbot Point/Bowen growth region 57
iii

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
5.7 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
6 Northern Bowen Basin-Mackay growth region 76
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
6.6 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
7.2 Current community infrastructure 103
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
7.6 Growth scenario, Fitzroy growth region 113
iv
7.6.1 Overview of growth scenario 113

8 Surat Basin region 119

8.7 Growth scenario, Surat Basin growth region 130
8.7.1 Overview of growth scenario 130
9 Moreton Basin growth region 132
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
v
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
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
2020 for the Northern Bowen Basin-Mackay growth region 94
vi
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
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
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
vii
1 2020 Vision Project

This report forms part of the Mineral Council of Australia‟s 2020 Vision
industry.

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

market.
The 2020 Vision Project‟s growth scenarios were prepared prior to the
2020 Vision Project 1


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

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
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

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

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.

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

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
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
Path to Prosperity
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
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
Path to Prosperity
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
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
Path to Prosperity
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
Abbot Point Coal Ports Bowen Expansion, EIS 2012 Terminal capacity $1.8b
Terminal X80 Corporation of submitted increase from 50
11
Expected
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
Path to Prosperity
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
Figure 2 Queensland coal mines and transport system
Source: Department of Infrastructure and Planning, 2008

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

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.

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.

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.

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.

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.

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
4.2.1 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

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.

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.

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.

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.

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.

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.

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.

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.

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
4.4.1 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.

Government, Mount Isa - Townsville Corridor Strategy 2007, June 2007.
16 ibid.

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.

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,

Government, Mount Isa - Townsville Corridor Strategy 2007, June 2007.

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.

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.
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.

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.
Government, Mount Isa-Townsville Corridor Strategy 2007, June 2007.

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

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.

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.

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.

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

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.
4.5.1 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

2012, August 2007, pp. 4, 8.

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.

Figure 8 Strategy 10: Develop the Port of Townsville Eastern Access Corridor
Figure 9 Strategy 11: Protect the integrity of the Port of Townsville as the major gateway to North,
Northwest and Far North Queensland
Figure 10 Strategy 12: Ensure development and efficient operation of Port of Townsville
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.

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
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.

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.

2007.
31 Infrastructure Australia, A Report to the Council of Australian Governments, December 2008. The
publication of this list was delayed.

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

2007.
2012, August 2007.

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
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

2007.
2012, August 2007.
36 ibid.

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.

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
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

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
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

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.
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.

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.

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.

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”.
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

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.

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

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

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.

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

2012, August 2007.
39 ibid.
40 Barrick (Osborne) Pty Limited, Magnetite Project: Initial Advice Statement for Department of
Infrastructure and Planning, 2008.

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 community infrastructure and services

appears to have taken a back seat to planning for „hard‟ industrial-oriented
infrastructure. The Queensland Resources Council‟s submission to
Infrastructure Australia in the second half of 2008 pointed out that growth of
mining and processing and resources communities had been constrained by the
difficulty of attracting and retaining staff concerned about inadequacy of
health, education, and child care services, and pricing and availability of
housing. Also, these concerns increased the likelihood of industrial conflict.
Queensland Resources Council perceived these issues to be obstacles to
realisation of the growth scenario.
An assessment of the adequacy of human capital and other community

infrastructure will require significant additional research.

5 Newlands-Abbot Point/Bowen
growth region
The Newlands-Abbot Point/Bowen growth region comprises:
• coal mines at the far northern end of the Bowen Basin coal province
• the Newlands rail system that transports coal to Abbot Point Coal
Terminal north of Bowen
• the proposed “northern missing rail link” (now called Goonyella – Abbot
Point Expansion [GAPE]) between Newlands and North Goonyella to
connect the Newlands rail system with the Goonyella rail system
• the Port of Abbot Point and the proposed major industrial area near the
port for large scale industry, particularly minerals processing
• the towns of Bowen and Collinsville, which are the hubs for the
horticultural, coal mining, power generation and transport activities of the
area.
The Abbot Point/Bowen area and the Mount Isa-Townsville growth region
comprise the Queensland Government‟s Northern Economic Triangle concept.
The Queensland Government has proposed promotion of development in the
Northern Economic Triangle through planning and provision of infrastructure and
initiatives to promote exploration for both minerals and petroleum.
For the purposes of this infrastructure report, the Newlands-Abbot

Point/Bowen growth region has been examined separately. This is because it
hosts a distinct supply chain for coal and in the future could host a discrete
minerals processing zone and port.
The Newlands-Abbot Point/Bowen growth region has several important

features:
• Current access to far northern Bowen Basin coal resources, together with
likely future access to northern Bowen Basin resources, makes this part of a
world class coal province
• A deep water port site at Abbot Point with current coal export capacity of
21 Mtpa (currently being expanded to 25 Mtpa), and with potential for up
to 150 Mtpa
• A rail system that could be connected to the large Goonyella-Hay Point
supply chain via the GAPE
• Potential access to products of the north-west and Charters Towers-
Chillagoe minerals province products for processing and/or export via a
Newlands-Abbot Point/Bowen growth region 57

new rail link between the Great Northern (Mount Isa-Townsville) Railway
and the North Coast Railway
• Potential for processing of bauxite from Cape York and other minerals in a
new, dedicated industrial zone supplied with cost-competitive energy
• A strong Queensland Government commitment to improve the region‟s
rail, port and other infrastructure and promote the Abbot Point/Bowen
area via the Northern Economic Triangle Infrastructure Plan.
The Queensland Government has established the Abbot Point State
Development Area as a new industrial precinct for large scale industries and a
new multi-user port. The Abbot Point State Development Area is
approximately 16,230 hectares and will provide land, infrastructure corridors
and essential infrastructure. The industrial zone is about 5,300 hectares in area.
As part of the Northern Economic Triangle planning, the Government is

investigating a direct rail link between the Great Northern (Mount Isa-
Townsville) Railway and the North Coast Line north of Abbot Point. This
would be subjected to more detailed scrutiny if CHALCO proceeds with its
Abbot Point refinery, and the new Abbot Point multi-user port was
established.
Abbot Point is one of very few locations along Queensland‟s eastern seaboard
where deep water is close in-shore and is able to accommodate vessels of up to
200,000 tonnes dwt, resulting in coal export potential of 50 Mtpa for the port
in the short term and up to 100 Mtpa by 2020, and beyond then to 150 Mtpa.
Further development of Abbot Point could circumvent current constraints at
the two coal terminals at the Port of Hay Point. Recognising this potential, the
Queensland Government is in the process of undertaking a feasibility study on
the GAPE rail line, connecting the Newlands and Goonyella rail systems.
The locations of the Newlands-Abbot Point coal supply chain is shown in

Figure 13. The lack of a link between Northern Goonyella and Newlands is
apparent. Further, the rail link would traverse some premium coking coal
deposits which are likely to be able to sustain the cost of developing a major
new logistics chain.

Figure 13 The Newlands system
Source: QR Network, Coal Rail Infrastructure Master Plan - 2nd Edition 2008
The Newlands rail system, in its present form, services the coal mines at
Newlands, Sonoma and McNaughton. As well as transporting export coal to
the Port of Abbot Point, the Newlands line carries coal to the Bowen Coke
Works and coal destined for the Yabulu nickel refinery north of Townsville.
The potential of the Newlands-Abbot Point supply chain has been limited by
the magnitude of coal resources in the far northern part of the Bowen Basin.
This has restricted the current expansion of the Abbot Point Coal Terminal
(APCT) to a maximum of 25 million tonnes per annum (Mtpa), with nominal
current capacity of 21 Mtpa. There are further coal resources to the south of
Newlands. Their development has been stymied by lack of a railway line.
Development of the GAPE will enable more mines to be developed and coal
mines on the Goonyella system to be able to access an alternative port.


By far the most prevalent commodity produced in the region is coal. The
majority of coal produced in the region is exported using the APCT. In 2007-
08, Abbot Point had a throughput of 12.5 million tonnes, an 11.9 per cent
increase on the previous year. In the first quarter on 2008-09, the port‟s coal
throughput increased by 41.6 per cent, reflecting recent increases to the port‟s
capacity from 15Mtpa to 21Mtpa.
Small quantities of coal are supplied to the Bowen Coke Works and from
mine-mouth to the Collinsville Power Station.
The Bowen Coke Works produce 44 000 tpa, most of which is railed for
metallurgical use at Mount Isa.
The 180 MW Collinsville Power Station is a major base load generating facility
for North Queensland.
The Cheetham Salt Works produces 29,000 tonnes of salt annually.
5.3.1 Coal production
Queensland Rail is proposing to construct and operate a 69 km rail link

between North Goonyella and Newlands, the Goonyella-Abbot Point
Expansion (GAPE) link, which would connect the Newlands-Abbot Point and
central/northern Basin-Hay Point rail systems. The GAPE would allow
development of coal mines close to its route. It would also allow coal trains
originating in the Goonyella system to be directed to Abbot Point.
The proposed capacity of the line is estimated to be 3.5 Mtpa of coal in the
first year of operation. The envisaged ultimate capacity is 35 Mtpa. The
existing line would be upgraded to accommodate the GAPE tonnages as well
as existing and future tonnages from areas served by the existing Newlands-
Abbot Point rail link.
In tandem with the GAPE rail development is the planned $818 million stage 3
expansion of the Abbot Point Coal Terminal. This will upgrade the capacity of
the terminal in increments from 25 Mtpa to a throughput of up to 50 Mtpa.
High scenarios in supply chain planning have APCT with throughput of 100
Mtpa beyond 2017.
These infrastructure enhancements would allow an expansion of coal

production in the central, northern and far northern parts of the Bowen Basin.

5.3.2 Alumina production
On the resource processing side, in June 2008, the Queensland Government

signed a memorandum of understanding with Chinese aluminium producer
CHALCO for a study into a $2.2 billion 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. Imported inputs would include
caustic soda.
If the project is approved, detailed design will commence in 2010 and

construction will be completed by the end of 2012 with operation commencing
2013.
CHALCO has been granted a development licence for a 40,000 hectare site at
Aurukun on Cape York for bauxite mining. A final decision on the project is
scheduled to be made towards the end of 2009. Construction of the refinery
will require more than 1500 workers. During operation, the refinery will
employ around 500 full-time workers, plus contractors.
Rio Tinto Alcan operates the Weipa bauxite operations on Cape York, which
sends bauxite by sea to two alumina refineries at Gladstone as well as
internationally. Weipa produces more than 18 Mtpa of beneficiated bauxite.
Elements of the Weipa-Gladstone supply chain are discussed in chapter 7.
5.3.3 Other minerals processing
The CHALCO alumina refinery would help to demonstrate the feasibility of

the Abbot Point State Development Area as a site for other minerals
processing.
A sheltered harbour would be established if CHALCO decides to establish an

alumina refinery in this industrial precinct. If further heavy industry is
established, the port would need to be developed as a multi-user, multi-cargo
import/export port.
The provision of such facilities would improve prospects of a rail link between
the Mount Isa-Townsville line and the North Coast Line north of Abbot Point.
This would provide more direct access to Abbot Point for export and import
of bulk commodities (eg, phosphate concentrate and fuel, respectively) and for
processing of mineral commodities.

5.4 Regional demography and economy

The Queensland Government41 reports that the estimated resident population
of the then Bowen Shire was 13,456 persons in mid 2007. In 2006, the
Queensland Government projected the population of the then Bowen Shire to
increase to 15,361 by 2026.
However, port expansion and industrial projects are expected to stimulate

substantial population growth in the future. Under this scenario, Bowen Shire
Council estimated the population of the growth region could be as high as
24,000 by 2026.
Employment by industry in the Bowen Shire (Table 10) shows the importance
of the agriculture industry in the region, employing 21% of the labour force
based on the 2006 census. Retail trade, construction, accommodation and
mining are the other important industries in terms of employment.
Table 10 Employment by industry, Bowen Shire, 2006

No. %
Mining 367 6.84
Construction 394 7.35
Retail trade 564 10.51
Public administration & safety 200 3.73
Education & training 312 5.82
Health care & social assistance 432 8.05
Inadequately described/Not stated 168 3.13
Total 5,364
41Department of Infrastructure and Planning 2007, Bowen Basin Population Report, 2007.

Bowen is predominantly a rural centre which also services the coal industry but
has the potential for establishing mineral processing and related manufacturing
industries. The principal industries of the Bowen region are as follows:
• Agriculture, with the region a nationally significant producer of mangoes,
tomatoes, capsicum and sweet corn. Value of horticultural production is
about $250 million per annum. Beef is also an important product with the
region having around 315,000 head of cattle in 2001
• Coal mining is an important industry both in the Shire, and via the Shire‟s
role in the supply chain
• Bowen Shire has potential for gold, silver and copper, which are currently
the subject of exploration
• The Collinsville Power Station is the major generating facility for North
Queensland
• Cheetham Salt Works and the Bowen Coke Works are the two principal
minerals operations
• Tourism is a small but strongly growing industry in the Shire, with
estimated accommodation turnover of $4.6 million in 2007
• Residential and non-residential construction was valued at $47 million in
2007, with residential construction continuing strong growth.
In December 2008, the Bowen Shire had a labour force of 7,360 with a
relatively high unemployment rate of 6.3 per cent – up from 4.8 per cent in
December 2007.
Mining workers in the region drive-in and drive-out to and from work from
Bowen, Collinsville and other towns in the Whitsunday area.
The rural and agricultural bias of the Bowen shire is also reflected in the
relatively high number of businesses dedicated to agriculture, forestry and
fishing (Table 11), followed by property businesses and retail trade. The
growth in manufacturing is high from 2003 to 2006, showing a potential for
development in manufacturing services associated with upcoming mining
projects.

Table 11 Number of businesses by industry, Bowen Shire, 2006

2003 2004 2005 2006
Agriculture, forestry and fishing 420 390 438 411
Mining 6 6 6 6
Manufacturing 48 57 54 60
Electricity, gas and water supply 0 0 0 0
Construction 87 84 90 99
Wholesale trade 39 36 33 30
Retail trade 114 108 120 126
Accommodation, cafes and restaurants 51 66 60 60
Transport and storage 42 45 48 54
Communication services 6 12 6 3
Finance and insurance 33 30 27 33
Property and business services 123 129 150 162
Education 3 3 3 3
Health and community services 39 36 36 33
Cultural and recreational services 15 6 9 9
Personal and other services 30 21 18 24
Total businesses 1,056 1,029 1,098 1,113
Rail
The far northern part of the Bowen Basin coal industry is currently served by
the Newlands-Abbot Point rail line and the Abbot Point Coal Terminal. This
line is operating at close to capacity and requires major upgrades to cope with
increased coal traffic enabled by the construction of the GAPE.
The North Coast Railway links Bowen to Mackay and through to Brisbane in
the south, and to Townsville and other centres in the north. Industrial and
port development of the Abbot Point State Development Area would
necessitate upgrades to the North Coast Railway and/or a new direct link to
the Great Northern Railway to facilitate transport of mineral products from
the north west minerals province.
Roads
The Bruce Highway is apparently adequate for current traffic, but is unreliable
in extreme wet weather, being closed by flooding at several points north and
south of the region.
New and upgraded roads have been constructed in the past four years to
service mines in the region, notably:

• Bowen Developmental Road (upgrade)

• Collinsville-Elphinstone Road (upgrade) – Newlands Mine access
• Cerito Road, a new, shorter route to link the Newlands Mine.
Ports
The current Abbot Point Coal Terminal is purely a coal export port. There is
no multi-cargo port in the region, with exports and imports being shipped
through the Port of Townsville.
Airports
The Proserpine Airport is the principal regional airport, with jet services to
Brisbane. It is owned by Whitsunday Regional Council. Services have declined
in recent years, with most leisure passenger traffic to and from the region now
utilising Hamilton Island Airport. Proserpine Airport‟s facilities require
upgrading and in March 2009 the Queensland Government committed $4
million for part of this work. A tender process to select a bidder to develop
an international airport in the Whitsunday region was abandoned by the
Government in 2008, when two of three bidders dropped out of the process
for financial reasons.
Industrial land
The proposed industrial precinct at the Abbot Point State Development Area
already has access to the coal port of Abbot Point, rail and road infrastructure.
It is located adjacent to the North Coast Rail Line, the Newlands-Abbot Point
coal railway and the Bruce Highway. The North Coast Rail Line connects with
the Mount Isa-Townsville line at Townsville.
This area is located approximately 13 kilometres north of Bowen and is not

constrained by urban development.
To be successful, the industrial area will have to be adequately serviced with a
full range of infrastructure – serviced land, roads, rail, gas, electricity and water.
Energy
Powerlink has upgraded its lines from Nebo to Collinsville and has constructed
the 132 KVA Collinsville to Bowen power line project to support the Abbot
Point Industrial area. This line will need to be further upgraded to support
major industrial development.
To attract large scale, energy-intensive industry, competitively-priced energy

supply to the precinct is required.

Water
SunWater is currently developing the Water for Bowen Project which could
supply up to 60 000 MLpa of water from the Burdekin River to the Bowen
area to support the local horticulture industry and provide water for industry,
via a new 130 kilometre channel and pipeline system.
Community infrastructure in the smaller towns that characterise the region is

generally of a lower standard than in larger nearby cities such as Mackay and
Townsville.
Housing is generally in short supply, in common with the rest of the Bowen
Basin. The high rate of growth in housing approvals during the past five years
is an indicator of demand trends.42
Schools and health facilities are adequate for current needs, but in general not
up to city standards. All suffer from chronic staffing shortages.
The Department of Infrastructure and Planning (DIP) and the Whitsunday

Regional Council (WRC) commenced the Bowen/Abbot Point region
Accommodation and Community Infrastructure Study in January 2009. The
study will identify the requirements for additional housing, accommodation
and community infrastructure needs as a result of large scale development in
the region.
Northern Economic Triangle Infrastructure Plan 2007-2012
The strategic objective in the Infrastructure Plan for the Abbot Point/Bowen
area was to encourage the necessary infrastructure development to establish
the region as a major new industrial precinct for large-scale industries including
chemicals production, minerals refining and metals smelting. This would
include the expansion of the Abbot Point harbour into a multi-cargo
import/export port, capable of accommodating “Cape-sized” (up to 200,000
dwt) vessels.
42 Former Bowen Shire Council, Bowen economic fact sheet.

The study observed:

“... a key to industry development will be a strengthening of the Bowen community to
support new industry to the region. Housing and community infrastructure will need
to be provided to make the area attractive for future growth. Attention will also need
to be given to skills development and the development of service industries.”
Key regional “strategies” proposed by the infrastructure plan included the

following.
• Establish, facilitate planning, infrastructure provision and development of a
new State Development Area at Bowen/Abbot Point
• Identify, secure and develop infrastructure corridors to connect the
proposed State development area with the Port of Abbot Point
• Progressively expand the capacity of the coal terminal at Abbot Point,
subject to market demand and development of the northern missing rail
link
• Development of the Port of Abbot Point as a multi-cargo trade port to
service the proposed State development area and the broader region
(dependent on market circumstances)
• Develop the road and rail corridors between Bowen and Townsville to
improve efficiency and increase transport capacity
• Facilitate the provision of adequate and competitively-priced electricity and
gas to Abbot Point/Bowen to support industrial development and attract
future investment
• Plan for water supplies to support future urban, industrial and horticultural
development
• Identify and undertake planning to supply the urban infrastructure
necessary to support population growth at Bowen
• Identify and develop mechanisms to supply the skills that will support
growth of Bowen and attract new investment.
One notable, but brief action plan item was the investigation of benefits of
alternative rail and road links between Bowen and Mount Isa.
2006 and 2008 Coal Rail Infrastructure Master Plans
The owner, manager and maintainer of the rail infrastructure used by the
Queensland coal industry, QR Network, developed the Coal Rail Infrastructure
Master Plan in 2006 and revised it in 2008 to present its long term view of the
required rail infrastructure to facilitate growth in the coal supply chains.
The Coal Rail Infrastructure Master Plan identifies rail upgrades required to
mesh with the current expansion at the APCT. The works identified by the
study focussed on relieving congestion arising from increasing the number of
trains in the system to meet increased demand from mines.

The plan identifies the northern missing rail link or GAPE as “the most
favourable for Goonyella system long term expansion”. The report proposed
upgrades to transport a possible volume on the GAPE from the Goonyella
system ranging from:
• 28 Mtpa from the Goonyella system with 22 Mtpa from the Newlands
system (total export via APCT 50 Mtpa), up to:
• 73 Mtpa from the Goonyella system and 27 Mtpa from the Newlands
system (total export via APCT 100 Mtpa).
The Master Plan also summarises the findings of a high level study of the costs
and benefits of electrification of the expanded Newlands system. The study
suggests that there is an effective volume “trigger” for electrification, currently
estimated at approximately 20 Mtpa of GAPE traffic. Since the volume level
over the link will exceed this trigger, QR Network proposes to electrify the
Goonyella to APCT corridor.
A pictorial view of the GAPE project and associated works is shown in Figure
14.
2008 Coal Infrastructure Program of Actions
The Queensland Government‟s Coal Infrastructure Program of Actions (2008)

suggested that the capacity of the Newlands rail system and the Abbot Point
Coal Terminal could be expanded up to 100 Mtpa. It indicated that the earliest
date for achievement of 75 Mtpa would be mid 2012, with 100 Mtpa
achievable by mid 2014.
The estimated cost of expanding the Newlands rail system, including the
GAPE, to carry 75 Mtpa was $1.5 billion. Expansion of the APCT from 25
Mtpa to 75 Mtpa was estimated to cost over $2 billion.
Building Australia Fund application
The Queensland Government has sought $1.75 billion from the Building
Australia Fund to upgrade Abbot Point to a multi-purpose harbour.
consideration. From this activity, Infrastructure Australia was to select and
publish a priority list in the first half of 2009.43 In the event, the Australian
Government announced its first round of funding in the May Budget. Abbot
Point was not funded in this round.
43 Infrastructure Australia, A Report to the Council of Australian Governments, December 2008.

Figure 14 Schematic of Goonyella to APCT Expansion (GAPE) project
Source: QR Network, Coal Rail Infrastructure Master Plan - 2nd Edition 2008
Water for Bowen Project
SunWater, the State Government and the Whitsunday Regional Council are in
the process of the planning for the Water for Bowen Project which will
channel water from the Burdekin River to Bowen via a 150 kilometre channel
and pipeline system that will supply 60,000 mega litres of water per annum for
industrial and horticultural use in the Bowen area.
CHALCO refinery planning
A Social Economic Impact Assessment will be undertaken as part of the

Environmental Impact Statement for the CHALCO refinery. This will consider

social impacts including infrastructure and services. CHALCO Australia says

will evaluate the social economic impacts as part of the project feasibility study.
During the feasibility study, CHALCO says it will engage with education and
training agencies to ensure agencies are prepared to provide the appropriate
learning and training opportunities generated by the development.
The Sustainable Futures Framework for Mining Towns
The Sustainable Futures Framework for Mining Towns was launched in June
2007. The framework supports communities that need to undertake a review
process and develop strategies to address impacts of expansion and contraction
of the mining industry. The Queensland Government‟s Sustainable Resource
Communities Policy has taken up much of the Framework and in large part
superseded it.
Sustainable Resource Communities Policy
The Sustainable Resource Communities Policy was launched by the Premier in

September 2008. The policy is initially focused on resource communities,
where rapid development brought about by the resources boom is having
significant impacts on community infrastructure and services, and the social
structure of local and regional communities that support the new or expanded
mining and petroleum developments. Under this policy, improved social
impact assessments are to be undertaken by proponents of major new and
expanded mining and petroleum developments as an integral element of the
approval process.
The social impact assessment requirements for the CHALCO Australia

refinery appear to be in line with this policy.
Bowen/Abbot Point Region Accommodation and Community Infrastructure

Study
The Department of Infrastructure and Planning (DIP) along with the

Whitsunday Regional Council (WRC) has commenced the Bowen/Abbot
Point Region Accommodation and Community Infrastructure Study. No
details are publicly available.
Due to the current feasibility and planning processes for coal supply chain,
alumina refining and ports, there are few if any firm plans for infrastructure in
the region. However, given expected decisions to construct the CHALCO
alumina refinery, to expand the APCT and to construct the GAPE rail link,

infrastructure plans for water, energy, and community infrastructure are

expected to be put in place rapidly.
5.7 Information gaps

Coal rail transport and coal export infrastructure are being extensively and
intensively studied. Other infrastructure appears to be less well planned. In
particular, information on community infrastructure requirements for the
Bowen region is currently lacking. Action is required to examine these
requirements.
5.8 Growth scenario, Newlands-Abbot Point/Bowen

growth region
5.8.1 Overview
The MCA‟s Vision 2020 strategy seeks to establish a reference point for the
nation to understand what needs to be done to maintain and ultimately
improve its market share. The following growth scenario has been constructed
by ACIL Tasman from quantitative projections by Access Economics and
research from a variety of sources.
The growth scenario for the Newlands-Abbot Point/Bowen growth region

assumes large increases in coal exports from within and though the region,
with APCT shipping 100 Mtpa by 2020. This may include coal from new
Galilee Basin mines and may also substitute for expansion of DBCT beyond its
current 85 Mtpa capacity.
In addition, the CHALCO alumina refining operation will underpin the

development of the Abbot Point State Development Area and associated
multi-cargo port. Under the scenario, the State Development Area this would
host another minerals processing plant fed by base metal concentrate from the
Mount Isa-Townsville growth region. Base metals concentrate and/or
phosphate would also be exported directly.
Table 12 Summary of growth scenario to 2020 for the Newlands-Abbot Point/Bowen growth region
Coal Region produces about 27 Mtpa of coal, with rail haulage of up to 73 Mtpa from the Goonyella system,
and eventual export of 100 Mtpa through APCT (may include Galilee Basin coal)
Alumina CHALCO refinery produce at rate of 2.5 Mtpa after „debottlenecking‟
Base metal processing Base metal processing plant at Abbot Point
Base metals and/or phosphate Direct export of base metals concentrate and /or phosphate from new Abbot Point multi-cargo port
export

Table 13 Summary of infrastructure requirements under the growth scenario to 2020 for the
Newlands-Abbot Point/Bowen growth region
Railways • Rail link missing between Goonyella • Construct the GAPE “northern missing link” and consequential
and Newlands systems, inhibiting upgrades to the Newlands line
mine 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
expansion to facilitate exports Mtpa capacity
• Multi-cargo, multi-user port required • Develop the Abbot Point State Development Area and multi-
for other minerals shipments cargo/user port
Roads • Roads require upgrades to service • Provide access roads to the Abbot Point State Development
minerals industry and larger Area
population • Provide access roads to new mines in the region
• New roads required to service new • Upgrade existing roads to improve pavement width, strength
mines and port and 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 development of a new
for the region‟s current and future Whitsunday airport
needs
Energy • Generation and transmission require • Develop a new base load power station in North Queensland
upgrade and expansion to service to 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
mines, industry and population industry, horticulture and domestic/commercial consumers
broadband, inadequate and costly in mobile telecommunications across the region, and in
many parts of the region broadband backhaul
Land • Serviced land required for light and • Ensure that serviced land in Abbot Point State Development
heavy industry Area is available for industrial development
• Land for housing and light industry will be required in Bowen
and Collinsville
Community infrastructure • Community infrastructure inadequate • Give much greater attention to planning for, and provision of
for larger population community infrastructure (eg health, education, family
services) in the region in order to support the liveability of
resource communities and to help attract and retain
employees and their families
5.8.2 Minerals production
Minerals production in 2020 growth scenario for the Newlands-Abbot

Point/Bowen Region has been constructed as follows:
• Coal: 73 Mtpa from the Goonyella system and 27 Mtpa from the Newlands
system, with total export via Abbot Point Coal Terminal of 100 Mtpa
• Alumina refining at 2.3 Mtpa at Abbot Point

• Another minerals processing and export operation at Abbot Point, utilising

base metals concentrate from the north west minerals region
• Base metals and/or phosphate exports through Abbot Point multi-cargo,
multi-user port
• Continuation of coke and salt production at close to current levels.
Rail
Industry is keen to progress the development of the GAPE “northern missing

link” and makes 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.
The Northern Economic Triangle Infrastructure Plan proposes a direct link between
the Great Northern Railway (Mt Isa-Townsville) and the North Coast Line
near Bowen to provide access for minerals traffic to the proposed multi-cargo,
multi-user port at Abbot Point – if freight volumes justify it. It is likely that
even with proposed upgrades, the Port of Townsville will be capacity
constrained, particularly for bulk minerals such as phosphate and an alternative
export port and rail link from mines to port will be required.
Ports
The Abbot Point Coal Terminal will need to be expanded to 100 Mtpa capacity
under a high production coal scenario, which includes some 73 Mtpa from new
and existing mimes located in the Goonyella system. The Abbot Point
expansion has a number of benefits compared to other port options, including
no issues associated with water depths and land constraints that could be both
costly and sub-optimal due to supply chain congestion.
Development of the Abbot Point State Development Area and the initial stage
of a multi-cargo, multi-user port will be required to support the development
of the CHALCO alumina refinery. Further development of the area and port
will be required for other minerals processing and export of concentrates and
other bulk minerals such as phosphate.
Roads
Access roads to the Abbot Point State Development Area and industrial and
port developments will be required.

Ongoing upgrades to roads in the region and new access roads to new mines in
are required to enable safe and efficient transport of goods and people.
The Bruce Highway and some regional roads require upgrades to improve
pavement width and road reliability, particularly in periods of flooding.
Additional traffic due to development and population growth will require
further upgrades.
Airports
The region requires a new or upgraded airport to support development of

industry, including tourism. This could involve major upgrading of Proserpine
Airport or development of a new Whitsunday airport.
Energy
Energy availability, reliability and cost are critical to attracting mining

development, and in particular, minerals processing. A new power station in
the North Queensland region could deliver greater reliability and at the same
time, reduce transmission costs.
Additional transmission infrastructure will be required to service mines,

railways, ports and industry in the Abbot Point State Development Area.
Water
The Water to Bowen project is needed to supply minerals industry, horticulture

and domestic/commercial consumers into the future. Mining and minerals
processing development will help to make this project feasible by providing
base load demand.
Telecommunications
In common with other regional areas of Australia, telecommunications in

much of the Bowen region are deficient in terms of availability and speed.
Upgrades of both broadband and mobile telephone services are needed. In
particular, the development of competition in broadband backhaul should
lower costs.
Land
Serviced land in Abbot Point State Development Area needs to be developed

and made available for industrial development. In addition, land for housing
and light industry will be required in Bowen and Collinsville to support
population growth and employment.

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

housing and community infrastructure (eg health, education, family services) in
the region. As has been discussed in relation other Queensland minerals
regions, housing and community facilities are critical factors in attracting and
retaining people. The Queensland Government‟s Sustainable Resource
Communities Policy, and associated Partnership Agreement with industry and
local government, provide frameworks for planning.

6 Northern Bowen Basin-Mackay

growth region
The Northern Bowen Basin-Mackay growth region is the nation‟s largest coal
production hub. Mining is the principal economic and growth driver for this
region. Other major industries include agriculture (principally sugar and beef
cattle) and tourism.
The region‟s principal transport infrastructure is the Goonyella rail system and
the Dalrymple Bay (DBCT) and Hay Point (HPSCT) coal terminals. The
Goonyella system is a purpose built railway network used to service coal mines
in the northern and central areas of the Bowen Basin. The system connects
numerous coal mines to the coastal coal terminals. The system boundaries
extend from Blair Athol to the west, south to the Gregory Branch junction,
north to North Goonyella mine and east to the port of Hay Point (see Figure
15).
Figure 15 The Goonyella rail system
Source: QR Network Access, 2006 Coal Rail Infrastructure Master Plan
The towns in the region include the coal mining communities of:
• Nebo, Glenden & Coppabella (former Nebo Shire)
• Moranbah & Clermont (former Belyando Shire)
• Dysart & Middlemount (former Broadsound Shire)
• Capella & Tieri (former Peak Downs Shire).
Northern Bowen Basin-Mackay growth region 76

The former Shires of Nebo, Belyando and Broadsound have been subsumed
into the Isaac Regional Council as of early 2008, with Peak Downs
amalgamated with other shires to form the Central Highlands Regional
Council. On the coast, the principal service centres are Mackay and Sarina,
both of which are in the Mackay Regional Council LGA.
Figure 16 Former Shires in the Northern Bowen Basin-Mackay growth

region
Note: Bowen Shire not included in the growth region for this study
Source: Department of Infrastructure ad Planning, Recent population trends and 2008 projections – Mackay
Estimating regional service populations is difficult due to the mix of resident

population and „drive in /drive out‟ workers. The Queensland Government44
estimated FTE population of the then shires in the region at June 2006 as:
Nebo Shire 5,142
Belyando Shire 12,622
Broadsound Shire 8,324
Peak Downs shire 3,941
Total 30,029
44 Queensland Government 2007, Sustainable Futures Framework for Mining Towns.

This is the equivalent of a small regional city. The region has a high rate of
population growth. For example, between 2001 and 2006, Moranbah grew by
an average 4 per cent per annum and Dysart by 5.2 per cent pa.
The total FTE population of the all Bowen Basin coal towns (in this region
and the Fitzroy region discussed in section 7) was estimated to be around
79,600 people, of which about 10,800 are non-resident workers.
Typically, non-resident workers drive-in and drive-out (or fly in, fly-out) on a
weekly commute from Mackay and other coastal towns.
ABS data reported by the CQUniversity (CQU)45 shows that many Bowen
Basin towns have higher proportions of families comprised of a couple with
children, when compared with the State average. CQU says that this is
particularly true for those (former) LGAs that are categorised as hosting
mining or servicing the mining industry.
Figure 17 Numbers of ‘couples with children’ families as a percentage of the overall resident
population in the Bowen Basin
Note: For pre-amalgamation LGAs. LGAs are coded according to „hosting mining‟ (purple); „mining service centre‟ (green); „agricultural based‟ (orange) and
„tourism/other‟ (brown)
Source: CQU Australia 2008, adapted from ABS census data 2006
CQU reports that at the same time, Bowen Basin towns that support mining
activities have a significantly smaller proportion of community and personal
service workers (approximately 4-5 per cent of the total) compared with the
45 CQU Australia 2008, Sustainable Regional Development in the Bowen Basin: A Strategic Issues Paper
(draft for comment).

Queensland average (approximately 9 per cent). This means that these

communities, which need higher levels of services to support families than the
average, in fact have lower service levels.
While CQU reports that school infrastructure is generally adequate, there are
difficulties in attracting and retaining teachers and para-educational specialists
in the region.
These issues and perceptions about the quality of education are major
impediments to the attraction and retention of skilled workers in the region.
CQU also cites ABS data that show that towns in the Bowen Basin region tend
to have a higher population of male residents, and proportionally lower
population of female residents, than elsewhere in Queensland.
The loss of youth from Bowen Basin towns is also a major challenge, as it is
for many Australian rural communities. ABS data show that many people aged
between 14 and 24 leave these towns, many with their parents, for education
reasons.
Mackay had an estimated resident population in 2006 of 71,198 and grew at a

very high average annual rate of 3.8 per cent since 2001. The ERP of the new
Mackay Regional Council LGA was 107,372 in 2006.
Figure 18 New LGAs in the Northern Bowen Basin-Mackay growth region
Source: Department of Infrastructure ad Planning, Recent population trends and 2008 projections – Mackay


The 2007-08 coal throughput at the ports was 36.9 Mt for HPSCT and 43.5 Mt
for DBCT.
HPSCT has a current throughput capacity of about 44 Mtpa. Mines supplying

HPSCT are Goonyella, Riverside, Peak Downs, Saraji, Gregory, Norwich Park
and South Walker.
DBCT has a rated throughput capacity of about 68 Mtpa (since March 2008)
which will rise to about 85 Mtpa following Babcock and Brown‟s Phase 2 and
3 Expansions. Mines supplying DBCT include Blair Athol, Hail Creek,
Goonyella, Riverside, German Creek, Oaky Creek, North Goonyella, Burton,
Moranbah North, Millenium, Foxleigh, Moorvale and Coppabella.

and infrastructure
Following a return to market growth, a number of coal projects are expected to
be constructed in the Goonyella system. These include the BHP Billiton -
Mitsubishi Alliance Bowen Basin Growth Project consisting of two new mines
at Daunia and Caval Ridge and an expansion of the existing Goonyella
Riverside Mine north of Moranbah. Production from these three projects
would be about 20 Mtpa. Projects by other proponents are expected to follow.
Notwithstanding the current fall-off of demand growth, production within the

Goonyella system can be expected to grow progressively to about 165 Mtpa by
2020.
In addition, coal production from the Galilee Basin to the west could add
another 25 Mtpa by 2020 (see section 6.3.2).
Rail
In line with planned expansions in production and port capacity, industry has
endorsed a number of expansions within the rail system. This works include
works such as a third unloading pit at the DBCT.
Ports
The future sustainable capacities of DBCT and HPSCT are considered by the
port owners/operators to be 85 Mtpa and 55 Mtpa respectively, giving a total
of 140 Mtpa for the whole system. To achieve a sustainable tonnage level of
140 Mtpa, additional upstream rail infrastructure is required. This will enable
increases to the system capacity to 129 Mtpa before end of 2009. Industry is

able to consider expansion projects and the system should incrementally

increase capacity through the master planning processes.
The Central Queensland network is becoming increasingly integrated, with

traffics looking to use various port and rail combinations to meet export
demand. If the terminals at DBCT and HPSCT reach their stated maximum
sustainable capacity levels, alternative haulage will occur via developing cross-
system traffic corridors (GAPE and Goonyella southern corridor) and the new
Wiggins Island Coal Terminal (WICT) under construction at Gladstone. The
development of the WICT could increase the demand within the system in the
future.
Moranbah Water Pipeline projects
In partnership with six foundation users, SunWater is constructing a pipeline

from the Burdekin Falls Dam south west of Townsville to Moranbah in the
northern Bowen Basin. Eastern and Southern pipeline extensions will also be
constructed as part of the Moranbah Pipeline Projects. This project is intended
to supplement existing water supplies drawn from the region‟s Eungella Dam
in the event that this wet season fails to replenish dam levels; and it will also
enable the Queensland coal mining industry to better plan for future
expansion.
6.3.2 Future Galilee Basin development
The Galilee Basin, to the west of the Northern Bowen Basin-Mackay growth
region is likely to be developed as a new coal mining region in the coming
decade. It contains large quantities of high volatile, low rank thermal coal.
Several major projects are being planned, as discussed below.
Galilee Coal Project
Waratah Coal is proposing to develop a coal mine, railway and port facility in
the Galilee Basin to export steaming coal to international markets. The
estimated total development cost is AU$5.3 billion.
The proposed mine is planned to have an initial annual export capacity of 25

million tonnes. The mine will proceed through a staged development process
with first coal production targeted by late 2012, although this could now be
delayed.
A dedicated 500 km standard gauge railway line would bypass existing

congested systems to transport coal to a new port proposed at Port Capricorn
in the Shoalwater Bay military area. Alternative rail routes and ports are shown
in see Figure 19.

Figure 19 Galilee Coal Project rail and port options
Source: Waratah Coal
Waratah Coal says that the rail system will be equipped with dual gauge rail
from the Bowen Basin mining area to the port to accommodate third party
users from the Bowen Basin region.
The port is proposed to have an initial capacity of 50 Mtpa per year and would
accommodate vessels up to the new 350,000 Dwt Chinamax class vessel.
There is high potential for sharing of rail and port infrastructure with the
Alpha Coal Project.
Employment of up to 760 is envisaged for the long term operation of the

mine, rail and port.
Alpha Coal Project
Hancock Prospecting proposes to establish a mine north west of Alpha in the

Galilee Basin. In addition to the mine, the project would involve construction

of a railway, potentially in excess of 400 km depending upon the final option,

to transport processed coal to an expanded facility at Abbot Point or new
export terminal to be established at Dudgeon Point just north of the existing
terminals at Hay Point. There is high potential for sharing of rail and port
infrastructure with the Galilee Coal Project.
New major water and power supply infrastructure would be necessary to

service the mine and port. Initial production is targeted for 2013.
The proposed mine would have an initial export capacity of 30 Mtpa. The coal
port would be developed initially to handle 30 Mtpa and would be designed to
expand capacity to 80 Mtpa in the future.
The project is expected to generate employment for as many as 1600 during

the operational stage.
6.4 Current community infrastructure and services

The mining and service towns in the region are listed on page 65. While these
towns have community infrastructure to varying levels of capacity, the rapid
growth of the coal industry has led to rapid growth of mining towns and
consequent shortfalls in infrastructure and services. Communities benefit from
resource development through the creation of more jobs and strong
economies. New and expanded mining and petroleum developments, however,
can also place significant pressure on social infrastructure, such as housing and
community services, and create quality of life issues, such as choice in
education services and the availability of general and specialist health services,
and childcare services.
In recent years, concerns about the impacts of mining projects on communities

in the Bowen Basin have been expressed in a variety of forums and in the
media. These issues have made it more difficult for both mining companies
and services providers (government and private sector) to attract and retain
workers and their families.
A draft report by CQU46 identifies the main shortfalls in community

infrastructure and services in Bowen Basin towns as:
• Shortfall in community service and infrastructure supply relative to the
needs of families, including childcare, aged care, affordable housing, health
services, youth services
• Adequate education infrastructure, but shortages of teachers and para-
educational specialists
46 CQUniversity 2008, Sustainable Regional Development in the Bowen Basin: A Strategic Issues Paper
(draft for comment).

• Shortages of hospital beds and the acute shortages in general practitioners

(particularly female GPs), specialist medical staff (particularly obstetrics)
and allied health professionals
• Shortages of housing due to lack of information, lack of planning, and
market failure.
Several community infrastructure projects are being put into place in the
region, including:
• Foreshore redevelopment in Mackay
• A sports complex in Dysart
• A convention centre and a sports stadium in Mackay
• A new public hospital in Mackay
• A range of community infrastructure projects funded through the
Queensland Government‟s $100 million fund for resource communities.
Infrastructure issues are discussed in more detail in section 6.5.2.
2006 and 2008 Coal Rail Infrastructure Master Plans
To keep pace with industry growth in this key market, the Goonyella System
will require significant infrastructure upgrades. Industry is able to endorse these
much need rail infrastructure projects that provide the necessary incremental
capacity enhancements matched to the forecast tonnage demand of mines. QR
has examined rail infrastructure capacity enhancements to expand the existing
system from 92 Mtpa to 116 Mtpa and subsequently to 129 Mtpa (by 2009)
and further (dependent on demand) to 140 Mtpa (by 2010) to match planned
expansions.
Goonyella Coal Chain Capacity Review, 2007
The Queensland Resources Council (QRC) commissioned Stephen O‟Donnell

to conduct an independent review of Goonyella Coal Chain capacity in 2007 to
assess the status of the coal chain and to provide recommendations aimed at
enhancing its capacity to meet the needs of industry and to ensure that it was
positioned to satisfy the demands of an expanding export market.

The findings and recommendations were released in July 2007. The review
made three key recommendations aimed at delivering immediate and near-term
gains in system capacity:
1. A central coordination role to be created to oversee activities across the
supply chain
2. QR National to commence a purchasing process for additional locomotives
and carriages to meet projected coal haulage volumes
3. A business improvement program to be commenced across the supply
chain, starting immediately with QR.
A second and final report was released in late 2007.47 It looked at longer term
planning issues with a focus on maximising the effectiveness of the coal chain
from mine to port. This report recommended the appointment of a planning
coordinator and more cooperation between industry and government. The
Dalrymple Bay Coal Chain (DBCC) – see section 6.5.2 – is a key initiative as a
result of these findings.
Coal Infrastructure Taskforce
The Queensland Government established the Coal Infrastructure Coordination

Group (CICG) in October 2004 in response to the massive growth of the
Queensland coal industry. It is now referred to as the Coal Infrastructure
Taskforce (CIT). The CIT is overseeing detailed planning for at least A$2.1
billion worth of coal infrastructure projects for the Queensland‟s expanding
coal export industry. The CIT has developed a Program of Actions to address
issues for which the State Government and Government-owned Corporations
have primary responsibility, in particular major infrastructure provision and a
response to housing impacts.
of the mining industry. The outcome statement for the Sustainable Futures
Framework for Mining Towns is:
Protecting social economic and environmental values and economic growth for the
State for future generations in meeting community and mining industry interests
through State and local governments, the mining industry and communities working
collaboratively to support sustainable and vibrant communities and a productive
mining industry.
47 Department of Transport 2007, Goonyella Coal Chain Capacity Review.

The Framework set out key principles inherent in successful futures planning
for communities with relationships to the mining industry.
The Sustainable Resource Communities Policy, which builds on the

Sustainable Futures Framework, was launched by the Premier in 2008. The
Sustainable Resource Communities Partnership Agreement between the
Government, local government and the mining industry was launched in
August 2008. The agreement recognises the recognises the need for these
parties to cooperate to build and maintain liveable resource communities.
The policy is initially focused on resource communities, where rapid

development brought about by the resources boom is having significant
impacts on community infrastructure and services, and the social structure of
local and regional communities that support the new or expanded mining and
petroleum developments. Under this policy, improved social impact
assessments are to be undertaken by proponents of major new and expanded
mining and petroleum developments as an integral element of the approval
process.
This policy outlines four major initiatives, including

• Strengthening the Government‟s coordination role, particularly in social
impact assessment and management of social issues
• Improved linkages between social impact assessment and regional planning
• Fostering partnerships with local government, industry and community
• Improving social impact assessments undertaken by proponents of major
new and expanded mining and petroleum developments.
In improving social impact assessment processes the Queensland Government
says it is responding to a growing demand for increased consideration of social
impacts, including cumulative, of proposed major new and expanded mining
and petroleum developments, in addition to the broader environmental and
economic impacts, as part of the application and approval process for the grant
of mining and petroleum tenures. It says that this will enable a coordinated
response by the Government to mining and petroleum tenure applications,
enhancing decision making and better informing the planning for future
mining and petroleum development.
Sustainable Regional Development in the Bowen Basin
The Minerals Council of Australia and the Queensland Resources Council

commissioned a study by CQU to undertake a socioeconomic characterisation
of the Bowen Basin and indentify the key strategic issues confronting the

region.48 The information provided by this study is designed to inform debate

and to contribute to pathways that will assist in achieving sustainable
development in mining regions such as the Bowen Basin.
Another project by CQU has developed Clermont‟s Preferred Future –

Community Development Strategy49 for the Isaac Regional Council.
Regional planning
This region is largely covered under the Whitsunday Hinterland and Mackay
Regional Plan, a non-statutory plan currently under implementation. In
addition, studies are currently being undertaken to inform a future statutory
regional planning process, pending approval of development of a plan for the
region.
Coal supply chain
Demand for Queensland coal has increased substantially in the past four years
and the long term outlook is for continued strong growth. The impact of the
recent growth has been the consumption of rolling stock, rail and port
infrastructure capacity which has failed to achieve contracted supply. Also, the
delivery of additional capacity needs to be achieved much more quickly to meet
customer demand. There are also operational issues which need to be
addressed in order for the system to deliver coal to terminals and ships to meet
export demand.
The 2007 Goonyella Coal Chain Capacity Review identified particular issues
with the co-ordination of coal chain capacity – for example, where nameplate
capacity is greater than the current operational capacity of the whole system.
This capacity therefore cannot deliver the required export tonnes or the
desired full revenues to operators.
Mines have the capacity to produce in excess of 140 Mtpa of coal.

Theoretically, the Goonyella System mainline has sufficient track capacity, that
is, sufficient train paths, to carry a sufficient number of trains to export more
than 140 Mtpa. The challenge is to achieve the cycle times and secure the
rolling stock necessary to achieve for these volumes.
48 Institute for Sustainable Regional Development, CQ University 2009, Sustainable Regional

Development in the Bowen Basin.
49 Institute for Sustainable Regional Development, CQUniversity, Clermont Community
Development Strategy, draft report April 2008.

QR Network says that investments in additional signalling on the Connors

Range, coupled with strengthening of the electric overhead system will enable
trains to be scheduled more frequently. Together with expected increases in
payload per train a higher train path utilisation level the capacity of the rail
system can reach 142 Mtpa. Further improvements in payload would enable
throughput of about 145 Mtpa.
The DBCT will shortly have a nameplate capacity of 85 Mtpa and HPSCT 55
Mtpa (total 140 Mtpa).
The issues of system capacity being lower than 140 Mtpa relate to:
• Complexity of the coal supply chain (see Box 1)
• Interface problems between each element of the supply chain (eg QR
Network has identified the constraints in the Goonyella Coal Chain as
being unloading pit capacity at DBCT)
• Coordination of long and short-term planning and of system operation.
Issues with the Goonyella supply chain have been identified by the Dalrymple
Bay Coal Chain (see page 78) as follows:50
• Multi-users contract on an individual basis with rail operators and ports,
which causes fragmentation if attention is not provided to the operational
performance of each of these elements
• Multi-users contracting on name-plate capacity, rather than system capacity,
causes a mismatch between contracts
• Planning is fragmented – multiple plans across multiple businesses
• Information transparency is limited – fragmented systems
• Operations execution delivered and managed from four geographical
locations.
50 Dalrymple Bay Coal Chain presentation October 2008.

Box 1 The Goonyella Coal Chain is complex…
Mines
• 22 Coal Mines
• 8 Mining Companies
• 19 Load Points
• 95 Coal Products
Railways
• 2 Above Rail Operators
• 24 Train Consists/9,500 trips per year
• 1 Track Owner/Manager
• Haulage distances up to 316km
Terminals
• 2 Coal Loading Terminals – HPSCT & DBCT
• 1 Terminal privately Owned (HPSCT - BMA)
• 5 Dump Stations – 3 at DBCT
• 0.6 Mt of Working Stockyard (present DBCT)
• 3 Ship Berths and Loaders (DBCT)
Ships
• Approx. 600 vessels per year (DBCT)
• Average vessel size is 85kt
• Avg 2 Cargoes per Vessel
• Multiple Users per Vessel
Data source: Dalrymple Bay Coal Chain
Dalrymple Bay Coal Chain
One the key recommendations of the review Goonyella Coal Chain by Stephen
O‟Donnell was the establishment of a coordinator, which was formally
established under the Dalrymple Bay Coal Chain (DBCC).
The DBCC is an initiative of the parties in the supply chain that export
primarily through DBCT. It is designed to facilitate integrated planning and
improve performance, capacity and efficiency of the DBCT coal supply chain
and future expansions. It operates under a MoU between government,
government enterprises and the private sector stakeholders.
Co-location of the parties is an essential element of the DBCC. It has a

managing coordinator and operates from a management centre.
The BHP Billiton Mitsubishi Alliance, operator of the HPSCT, cooperates with
the DBCC.

The integrated planning approach of the DBCC is illustrated in Figure 20.

DBCC is aiming for a short term 2 per cent increase in throughput to the
DBCT and onto ships – equivalent to extra revenue of US$210 million at 2008
prices.
DBCC‟s aspirations are for future throughputs of: DBCT more than 123 Mtpa
and APCT 108 Mtpa. HPSCT throughput is forecast to be more than 55
Mtpa.
This would suggest a total throughput capacity of more than 286 Mtpa.
Figure 20 DBCC Integrated Planning Approach
Source: Dalrymple Bay Coal Chain presentation October 2008
The Queensland Government, local government and industry are focussing

closely on community infrastructure and services in mining towns. A series of
“Resource Summits” held in the Surat Basin, Bowen Basin and North West
Queensland Minerals Province in 2008 examined issues relating to
infrastructure and services for business and families in mining towns. The
Bowen Basin summit identified key issues including housing affordability,
maintenance and funding for roads and social impacts of mining.
The discussion paper informing the Queensland Government‟s Sustainable

Futures Framework for Mining Towns and the CQU Sustainable Regional Development
in the Bowen Basin report have identified a wide range of community

infrastructure and associated services issues that need to be addressed. These

included the following:
Government coordination and service provision

• A lack of coordination between agencies within and across levels of
government, particularly in terms of policy development and infrastructure
• The policies of multiple levels of government have caused confusion and
conflict over questions such as the extent to which individual mine
operators should take responsibility for the provision of infrastructure in
nearby communities affected by other mines and other industries.
Housing demand and supply

• The lack of information on housing demand is a barrier to approving and
attracting investment into new housing developments
• Lack of builders and inadequate planning severely constrain the ability of
the market to meet housing demand
• Land availability for residential development is at a premium across many
parts of the Bowen Basin
• High building costs and house prices make housing unaffordable for many
• Both residents and non-resident investors are reluctant to invest because of
the „frontier‟ nature of some towns, transient nature of populations and
uncertainties about the market
• There is no clear State policy on how the housing impacts of major projects
should be addressed.
Employment & skills

• A shortage of skilled workers in health, education and rural industries
• Attracting and retaining skilled and professional workers in health and
education is considered particularly problematic.
Strategic planning & infrastructure

• Multiple concurrent and overlapping proposals for new and expanded
mining development may result in significant cumulative and regional
impacts presenting in resource communities
• Town planning needs to be improved to be better consider land tenure,
single persons‟ accommodation, existing camps, green-field development,
existing pressures, lifespan of infrastructure and the magnitude of
development activity
• For local government, management of contributed assets is an issue with
inherited infrastructure of sometimes low lifespan with high replacement
and operating costs

• Where multiple mining projects rely on a single community there is a

difficulty in companies identifying appropriate relative contributions to
community infrastructure requirements as increased demands on this
infrastructure are not solely caused by a single company.
Education
• Primary schools are present in all towns and secondary schools are present
in most, and education standards are adequate, there is necessarily a limited
curriculum offering in smaller secondary schools
• The attraction and retention of teachers and para-educational specialists is a
chronic difficulty the region.
Healthcare
• There is a shortages of hospital beds and acute shortages in medical
practitioners and allied health professionals in the region
• CQU reports that total public hospital bed availability in the Bowen Basin
is just 78.5 per cent of the State average and only 80 per cent of the
national average; when only the regional areas of the Bowen Basin are
considered, this drops to just 1.61 beds per 1,000 persons, or only 60 per
cent of the Australian average
• CQU also identifies a shortage of general practitioners relative to the
Australian average, with the Bowen Basin having an overall deficit of no
less than 56 GPs.
Aged care
• Some maturing communities in the Bowen Basin have an emerging need
for seniors‟ accommodation.
Child care
• There is a general shortage of childcare places throughout the Bowen Basin
region, attributed in part to the difficulties in attracting and retaining staff.
Transport
• Poor public transport services limits accessibility to, from and within the
region.
Infrastructure and services in major centres

• The discussion paper for the Sustainable Futures Framework for Mining
Towns also found that planners and mining companies often assumed that
cities such as Mackay and Rockhampton were of sufficient scale to cope
with rapid growth without need for intervention. This has been shown not
to be so – these cities (Mackay in particular) have exhibited growth stresses
in form of escalating house prices, labour shortages and local inflation.

6.6 Growth scenario, Northern Bowen Basin-

Mackay growth region
6.6.1 Overview
The MCA‟s Vision 2020 strategy seeks to establish a reference point for the
nation to understand what needs to be done to maintain and ultimately
improve its market share. The following growth scenario has been constructed
by ACIL Tasman from quantitative projections by Access Economics and
research from a variety of sources.
The growth scenario to 2020 for coal from the Northern Bowen Basin-Mackay
growth region is quite bullish, notwithstanding the reduction of current
demand due to global financial conditions. The scenarios assume that
following the slowdown, growth will return to strong levels.
The growth scenario for the Northern Bowen Basin-Mackay growth region has
coal exports through DBCT and HPSCT growing to 85 Mtpa and 55 Mtpa by
somewhere past 2010. These tonnages are the reported future sustainable
capacities of these two terminals, with additional tonnages requiring a major
expansion of DBCT and/or coal to be exported through the Abbot Point Coal
Terminal (APCT) (after expansion of APCT and railed via the GAPE to Abbot
Point) and the proposed Wiggins Island Coal Terminal (WICT) at Gladstone
(via the Blackwater system accessed from the South Goonyella rail corridor).
It is plausible that coal production from the region (including the Newlands
system linked by the GAPE) could top 160 Mtpa by 2020 and 175 Mtpa by
2025. DBCC has aspirations for up to 231 Mtpa through two coal terminals
(DBCT and APCT) at some time in the future. In addition, 55 Mtpa
throughput is assumed for HPSCT.
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 14 Summary of growth scenario to 2020 for the Northern Bowen Basin-Mackay growth region
Coal Coal exports of 160 Mtpa or greater through DBCT, HPSCT and APCT
Coal exports of up to 55 Mtpa from new Galilee Basin mines via APCT, Gladstone terminals or new
port

Table 15 Summary of infrastructure requirements under the growth scenario to 2020 for the Northern
Bowen Basin-Mackay growth region
Coal supply chain • Supply chain does not operate to • Better planning and coordination of supply chain
rated 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
port to 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 • Expand DBCT to in excess of 100 Mtpa capacity
meet coal export needs • Expand APCT to 50 Mtpa
upgrades to meet industry and road reliability. Further upgrades of regional roads needed to
community needs support growth
Airports • Regional airports require upgrades • Upgrade regional airports to support commuter flights
to meet needs
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
broadband, inadequate and costly in mobile telecommunications across the region, and in broadband
many parts of the region backhaul.
Transport • Lack of viable public transport • Develop integrated and viable transport services for the region
system
Land and housing • Land and housing supply • Undertake much more rigorous planning for housing to provide
inadequate to meet needs of more market information to encourage investment and provide
communities, particularly adequate housing for government service workers
accommodation for service workers • Ensure that serviced land is available for light industrial
Community infrastructure • Community infrastructure • Give much greater attention to planning for, and provision of
inadequate for sustainable community infrastructure (eg health, education, family services)
communities in the region in order to provide facilities and services that will
support the liveability of towns and to help to attract and retain
employees and their families
6.6.2 Infrastructure needs
Coal supply chain
Investment in port and rail infrastructure is underway to progressively lift

export tonnages through DBCT and HPSCT. In addition the DBCC is leading
planning and coordination between stakeholders, which are resulting in

significant improvements to operation, efficiency and throughput of the

existing supply chain.
Several options have been identified for achieving coal export tonnages from
the region in excess of the nominal 140 Mtpa maximum capacity of the supply
chain. These are briefly described below.
Brownfield Expansion of DBCT. BBI (DBCT) Management Pty Ltd has

received access requests beyond its stage 7X expansion, that is beyond the
stated 85 Mtpa maximum sustainable terminal capacity. Possible expansion
options for the terminal expansion are being examined. It should be noted
that the current owners are offering the DBCT lease and assets for sale as a
result of business difficulties unrelated to the DBCT.
Greenfield Expansion of Dudgeon Point. Another or additional option

involves the development of a new export terminal at Dudgeon Point, just
north of the existing terminal of DBCT and HPSCT. Dudgeon Point has more
than 850 hectares that is suitable for development for industry or an export
port.
Brownfield Expansion of Mackay Harbour. This option involves

expanding the existing Mackay Harbour to enable smaller (predominately
Handy-sized) coal ships to use Mackay Harbour as a viable alternative to
DBCT and HPSCT. The added benefit this option may provide is that
additional capacity at DBCT and/or HPSCT may be freed up due to the
diversion of these smaller ships to Mackay Harbour. This is considered by the
industry as a low probability option.
Rapid expansion of APCT and GAPE project. This option is for

expansion of APCT from the current 21Mtpa to 50 Mtpa, and connection of
the Goonyella System with the Newlands System via the formerly termed
“Northern Missing Link” (now Goonyella to Abbot Point Expansion project).
Use of Wiggins Island Coal Terminal. The proposed WICT near

Gladstone could be used to export coal from the Goonyella system
transported via the Southern Goonyella corridor. This option involves
significant longer average haul distance as well as the operation of longer
trains. The WICT will also service Surat Basin mines (see section 8).
Greenfields Development of Port Clinton Coal Terminal. This option

involves the creation of an entirely new rail corridor to link proposed Galilee
Basin mines (see section 6.3.2) and potentially Bowen Basin mines to a new
export terminal (Port Clinton) in the Shoalwater Bay area.
Fitzroy River Barging Operation. A proposal involving exporting coal by

barging it along the Fitzroy River from near Rockhampton is currently under

investigation. The concept envisages coal being transferred onto barges near
Rockhampton via a conveyor. The barges are proposed to operate along the
Fitzroy River and transport coal to a transfer barge then into ships positioned
off the coast.
Port Alma. A pre-feasibility study is underway to investigate the development

of the present Port Alma facilities into a coal terminal. The study will be will be
completed by mid 2009 and look into the feasibility enlarging the terminal
facilities as well as the feasibility of additional dredging of the harbour to
provide for the berthing of larger ships that are handled at present.
The 2008 Coal Rail Infrastructure Master Plan identifies the rail investment
requirements for each option. The Master Plan ranks the options against set
criteria including overall costs and benefits.
QR Network says that the solutions need to be considered in the overall

context of other infrastructure works being considered for increasing Central
Queensland‟s coal exports.
The 2008 Master Plan also identifies alternative and supplementary “capacity
solutions” through changes to rail hardware and operating practices.
In addition to the common-user rail infrastructure expansion in the Goonyella

system, QR Network is considering new rail spurs and balloon loops to service
new mines.
QR Network has undertaken a feasibility study on the GAPE and on feasibility

study is being undertaken on the rail capital investment needed for the
proposed WICT.
Water
Industry‟s water supply constraints in the Northern Bowen Basin-Mackay

growth region will be overcome in the medium term though the construction
of the Moranbah Pipeline Project and eastern and southern pipeline
extensions. This water is very expensive, however, and no allocations have
been secured for urban use. The opportunity to secure additional capacity in
that pipeline at marginal cost (of larger pipes and more pump stations) was not
taken up by local or State Governments. This has lead to investigation of the
duplication of the pipeline at greater overall cost than building the original
pipeline at higher capacity.

Town and community infrastructure
If the service population of the towns in the Northern Bowen Basin-Mackay

growth region grow by 30 per cent to around 39,000, then substantial
additional investment in infrastructure will be needed.
The CQU report, Sustainable Regional Development in the Bowen Basin for MCA and
QRC identified shortfalls in current infrastructure and services and made
recommendations for future supply requirements. These include:
• Better measurement of the non-resident population of the Bowen Basin,
and all funding and resource allocation processes to take the total (resident
and non-resident) population into consideration
• Better consideration of the soft infrastructure needs of mining
communities that have a disproportionately high number of families with
children, and a disproportionately high number of males
• Address the shortfall in community and personal services in an attempt to
redress the issue of declining liveability, and the attraction and retention
professionals and skilled workers
• Address the resources shortages to support skilled migrants and their
families
• Industry and government (all tiers) to consider new ways to address the
para-professional and specialist teacher shortages
• Industry and government (all tiers) urgently to consider new ways to
address the shortages of hospital beds and the acute shortages in medical
practitioners and allied health professionals
• Industry and government to evaluate the needs of youth and the level of
services provided
• Industry and government to work with transport companies to develop
integrated and viable transport services
• Industry and government to work together to address the longer term
issues of water demand, supply and reliability in the Bowen Basin.
The Sustainable Futures Framework for Mining Towns recommended a case-
by-case approach for each town, guided by the Framework. The Sustainable
Resource Communities Policy and Partnership Agreement, which have largely
superseded the Framework, continue the approach.
A discussion paper informing the Framework identified several towns that are
likely to experience growth pressures in the short to medium term and are best
supported by a coordinated response from governments, industry and the
community. In this region, these towns are as follows:
• Glenden is currently experiencing a demand for affordable housing.
Although this town has sufficient vacant land available for expansion, in
the medium-term the town‟s economic and social sustainability will need to

be monitored as several nearby mines close due to the exhaustion of

economic reserves
• Dysart is likely to experience growth management issues due to the
workforce accommodation requirements of three potential mining
developments (Vermont, Tay-Glen and Norwich Park East expansion).
This will require the provision of additional housing and services in Dysart.
A number of land dealings, aimed at providing sites for residential,
commercial and industrial uses, are in progress.
The discussion paper found that relative to the above towns, growth
management issues are currently of lesser concern in others. However, further
more detailed investigation is required in Clermont (included in this region for
this study), Capella and Tieri.
In addition, a Regional Housing Issues Report for the Bowen Basin51

recommended focusing social housing provision in identified key regional
centres of Moranbah and Clermont.

2008. The policy is initially focused on resource communities, where rapid
development brought about by the resources boom is having significant
impacts on community infrastructure and services, and the social structure of
local and regional communities that support the new or expanded mining and
petroleum developments. The subsequent Sustainable Resource Communities
Partnership committed government and industry to work in partnership to
address key liveability issues facing resource communities.
The policy includes provisions for social impacts of proposed major new and
expanded mining and petroleum developments to be considered, in addition to
the broader environmental and economic impacts, as part of the application
and approval process for the grant of mining and petroleum tenures. The QRC
and Queensland Government are in discussion on the application of this
policy.
51 Department of Housing, Regional Housing Issues Report for the Bowen Basin, May 2007.

7 Fitzroy growth region

The coal region linked to Gladstone (broadly, the Fitzroy Region) was the first
export coal mining region developed in the Bowen Basin. In terms of
production tonnage, it is second only to the Mackay region. Gladstone is also
a major mineral processing centre and is set to become an LNG export hub as
well, utilising coal-seam gas from the region and the Surat Basin.
The region is served by two rail systems (see Figure 21):

• The Blackwater System services the coal mines of Central Queensland and
carries product to Stanwell Power Station, Gladstone Power Station,
Fisherman‟s Landing and the Port of Gladstone – RG Tanna Coal
Terminal (RGTCT) and Barney Point Coal Terminal (BPCT)
− A third coal terminal is planned: Wiggins Island Coal Terminal (WICT).
• The Moura System services the coal mines of Moura, Baralaba, Boundary
Hill and Callide. Coal is transported to Gladstone Power Station, Comalco
Aluminium Refinery, Queensland Alumina Limited and the Port of
Gladstone.
Figure 21 The Blackwater and Moura Systems
Source: Coal Rail Infrastructure Master Plan - 2nd Edition, 2008
Fitzroy growth region 99

Key towns servicing coal mining in the region are:

• Middlemount (former Broadsound Shire)
• Emerald (former Emerald Shire)
• Blackwater (former Duaringa Shire)
• Springsure & Rolleston (former Bauhinia Shire)
• Biloela, Moura, Theodore and Baralaba (former Banana Shire).
For the purpose of this report, the Peak Downs Shire area is included in the
Northern Bowen Basin-Mackay growth region.
The cities of Rockhampton and Gladstone are the major service centres (with
Emerald the inland service centre). Gladstone is the port and industrial hub
for the region.
Figure 22 Former Shires in the Fitzroy growth region
Source: Department of Infrastructure and Planning, Recent population trends and 2008 projections – Rockhampton
Gladstone hosts a range of major industrial facilities, including:

• The Queensland Alumina Limited Refinery
• Rio Tinto Alcan Boyne Aluminium Smelter
• Gladstone Power Station
• Rio Tinto Alcan Yarwun Alumina Refinery

• Orica plant producing sodium cyanide, ammonium nitrate, caustic soda,

chlorine and nitric acid
• Queensland Energy Resources Limited Oil Shale Pilot Refinery
• Australian Magnesium Corporation Pilot Plant
• Queensland Cement plant.
To facilitate development, two State Development Areas have been established
in the Fitzroy region: Gladstone and Stanwell - Gladstone Infrastructure
Corridor. State Development Areas are designed to promote economic
development and addresses areas of market failure in the development of
industrial land and multi-user infrastructure corridors through enhanced
planning and coordination.
Figure 23 New LGAs in the Fitzroy growth region
Source: Department of Infrastructure and Planning, Recent population trends and 2008 projections – Rockhampton

Estimating regional service populations is difficult due to the mix of resident

population and „drive in /drive out‟ workers. The Queensland Government
estimated FTE population of the then shires in the region at June 2006 as:
Bauhinia Shire 2,262
Duaringa Shire 7,182
Emerald Shire 13,875
Banana 14,570
Total 37,889
This is the equivalent of a small regional city. The region has a high rate of
population growth. For example, between 2001 and 2006, Emerald grew by an
average 3.7 per cent per annum and Capella by 3.1 per cent pa. In contrast, the
mature coal mining towns of Biloela and Moura did not grow during this
period, although the advent of the Dawson Mining Complex is likely to drive
renewed growth.
The population of the whole Fitzroy region was estimated to be around

206,431 people in 2006.
Gladstone had an estimated resident population in 2006 of 30,726 and grew at

a high average annual rate of 2.9 per cent since 2001. The ERP of the new
Gladstone region LGA was 53,974 in 2006.
Rockhampton had an estimated resident population in 2006 of 64,835 and

grew at an average annual rate of 1.6 per cent since 2001. The ERP of the new
Rockhampton region LGA was 107,630 in 2006.
In the Fitzroy region, manufacturing, retail trade and construction are the
highest employment industries (Table 16).

Table 16 Employment by industry. Fitzroy region, 2006

Number %
Mining 5,926 6.76
Electricity, gas, water & waste services 2,063 2.35
Inadequately described/Not stated 2,110 2.41
Total 87,632
Note: Data corresponds to the Fitzroy statistical division which includes the Fitzroy, Rockhampton and Gladstone
regions as classified by ABS
Data source: ABS Census 2006
7.2 Current community infrastructure

The mining and service towns in the region are listed above.
The region contains the following education infrastructure: 17 private schools

(several of which include boarding facilities), 17 preparatory schools, 41
primary and 9 secondary state schools, 2 special education schools, 1 distance
education school, 6 combined primary and secondary non-state schools.
Rockhampton is the base for CQUniversity (CQU) main campus. Other

campuses are located at Gladstone and Mackay, with a study centre at
Emerald.
The region hosts the CQU‟s Institute for Resource Industries and
Sustainability (replacing the Institute for Sustainable Regional Development)
with constituent centres being the Centre for Environment Management,
Centre for Railway Engineering, Centre for Plant and Water Sciences, Centre

for Intelligent and Networked Systems and the Process Engineering, and Light
Metals Centre. CQU has also established the Institute for Social Science and
Health Research.
Four Cooperative Research Centres (CRCs) have a presence in the region:

CRC Cast Metals Manufacturing, CRC Rail Innovation , and CRC Integrated
Engineering Asset Management.
In the VET sector, a strong emphasis is being placed on apprenticeships and

traineeships, ensuring that the skills base matches the needs of industries in the
region.
In recent years, concerns about the impacts of mining projects on communities

in the Bowen Basin have been expressed in a variety of forums and in the
media. These issues have made it more difficult for both mining companies
and services providers (government and private sector) to attract and retain
workers and their families.
The CQU Sustainable Regional Development in the Bowen Basin report identifies the
main shortfalls in community infrastructure and services as:
• Shortfalls in community service and infrastructure supply relative to the
needs of families, including childcare, aged care, affordable housing, health
services, youth services
• There is adequate education infrastructure, but shortages of teachers and
para-educational specialists
• Shortages of hospital beds and the acute shortages in medical practitioners
and allied health professionals
• Shortages of housing due to lack of information, lack of planning, and
market failure.
Infrastructure issues are discussed in section 7.5.2.

The haulage on the Blackwater/Moura System has been steadily increasing in
the last number of years. QR hauled 45 Mt and 10 Mt on the Blackwater and
Moura system respectively in 2004-05. This has increased to 52.1 Mt and 11.3
Mt for the systems in 2007-08.
Current nominal capacities for the coal terminals are:

• RG Tanna Coal Terminal (RGTCT): 69 Mtpa
• Barney Point Coal Terminal (BPCT): 7 Mtpa.
Alumina refining and aluminium smelting generate significant resource exports
as well as imports of raw materials. Gladstone is an alumina production hub

with two alumina refineries – Yarwun and Queensland Alumina Limited

(QAL). Together the refineries processed over 13 Mt of bauxite in 2008, which
was been shipped from Weipa and unloaded at dedicated wharf facilities. Rio
Tinto Alcan operates its own loading facilities at Weipa and utilises dedicated
ships between Weipa and Gladstone.
QAL is one of largest aluminium refineries in the world, with a capacity just
under 4 Mtpa. Yarwun has an annual production capacity of 1.4 Mt. Alumina
is exported via dedicated wharves and loading facilities located near each
refinery. Alumina is transported to the Boyne smelter by truck.
The Boyne Aluminium Smelter (BSL) is Australia‟s largest aluminium smelter.

The smelter produces more than half a million tonnes of aluminium each year.
Production activities at the smelter include manufacturing of carbon anodes,
aluminium production (smelting) in reduction lines, and casting of molten
metal into aluminium products. The region exported 367.7 kt of aluminium in
2008. Aluminium is loaded via a dedicated wharf.

and infrastructure
7.4.1 Coal projects
Forecasts for the Blackwater System for 2016 and beyond predict 80 to 100
Mtpa.
Forecasts for the Moura/Surat System ranges from 70 Mtpa to 90 Mtpa

beyond 2016, depending on market conditions and supply chain constraints,
with growth predominately coming from the Surat Basin.
Therefore a maximum export tonnage scenario of 200 Mtpa has been

considered for the two systems.
After WICT is commissioned, tonnage throughput is expected to increase

significantly. However, until rail infrastructure projects are completed (for
example overcoming constraints at the Callemondah Yard), restrictions on
export capacity will remain – highlighting the necessity of a system-wide
approach.
7.4.2 Infrastructure
Gladstone – Fitzroy Pipeline
Lack of water has been identified as a major inhibitor to Gladstone‟s future

development.

To solve this issue, the planned Gladstone – Fitzroy Pipeline will connect the
Fitzroy River with the existing Gladstone area raw water supply network
through a 115km pipeline, linking two major sources of water for the region.
Once operational, the Gladstone-Fitzroy Pipeline will be capable of delivering
up to 30,000ML of water each year, providing a dual water source Gladstone,
augmenting that from Awoonga Dam which is currently Gladstone‟s sole
source of water.
Wiggins Island Coal Terminal
The Wiggins Island coal terminal is a major greenfields infrastructure project

that will create a step-change in coal export capacity. Once all three stages are
complete in 2020, the Wiggins Island Coal Terminal will have an export
capacity of 70 Mtpa. Work on the 25 Mtpa Stage 1 is at the preparatory stage.
Gas pipelines
There are several proposals for high pressure gas pipelines to feed proposed
LNG plants near Gladstone from coal seam gas production in the Surat and
Bowen Basins.
Electricity infrastructure
Powerlink Queensland is planning a number of major upgrades to transmission

infrastructure to service new industrial developments in the region. Careful co-
ordination is required to ensure that these projects occur within timeframes
commensurate with the needs of industry.
Airports
Rockhampton Airport is jet (B737/A320) capable and adequate to service

expected future needs.
Gladstone Airport will undergo a $65 million upgrade in 2009, focussing on

runway reconstruction and lengthening. Gladstone Airport can accommodate
up to Q400 turboprop aircraft.
Emerald Airport can accommodate Dash 8 size turboprop aircraft.
7.4.3 Minerals and energy projects in the Gladstone region
Table 17 summarises new and expanded minerals projects in the region. Table
18 summarises proposed LNG projects

Table 17 Minerals projects under construction, committed and planned, Fitzroy region
Project Capital Timeline Production Output Status
Expenditure
Stage 2 of Alumina Production A$2.1 billion Work commenced in 2 Mtpa Under construction
Facility at Yarwun with the third quarter 2007. (Stage 1 was 1.4 Mtpa)
inclusion of a gas-fired First shipments
cogeneration facility second half 2010.
Construction of a new baking US$617million Completion 2011 Replacement for existing Under construction
furnace at Boyne Smelter
Gladstone Nickel Project (GPNL) Stage 1 $US3.84 Financial close Stage 1 – ~63,000 tpa Planned
Stage 1 laterite nickel processing billion (including expected early 2009. nickel & ~6,000 tpa
plant using Marlborough nickel mine and Production from late cobalt & ~ 175,000 tpa
/cobalt deposit in CQ and overseas 2012 ammonium sulphate
imported ore from overseas infrastructure)
deposits.
Central Queensland Coke Plant TBA Under investigation 3.2 Mtpa of coke; Under investigation
and Power Station Project 250MW of
(proposed) electricity
ZeroGen Stage One TBA Stage One Stage One 120 MW Planned
demonstration plant to generate commissioning 2012 Stage Two 400 MW
low-emission power whilst Stage Two
capturing and storing CO2 . commissioning 2017
Stage Two full scale plant to
follow
Data source: Gladstone Economic and Industry Development Board, Gladstone Region Project Development Review, February 2009
Table 18 Proposed LNG projects, Gladstone area

Project Capital Expenditure Timeline Production Output
Santos GLNG (Santos Ltd and $7.7 billion (including Final Investment Decision by 10 Mtpa
Petronas) upstream field end of 2009. First cargoes
development, liquefaction expected early 2014
plant and associated
infrastructure)
Queensland Curtis LNG – an Approx $8 billion FEED July 2008 3 to 4 Mtpa
alliance between BG Group plc (development program, First LNG production planned for with potential expansion
with Queensland Gas Company including a 380 kilometre late 2013 up to 12 Mtpa
Limited pipeline and LNG plant)
Southern Cross LNG Project TBA Company announcement May 3 trains; Each train 0.7 to 1.3
(LNG Impel) - open access LNG 2008. Train 1 scheduled for Mtpa
plant and terminal completion 2013
Gladstone LNG Pty Ltd (LNG Ltd Stage 1 - Approx US $500 Financial close targeted for mid Stage 1: Approx 1.5 Mtpa of
with Arrow Energy N.L.) million 2009, with a development LNG
timeline for LNG deliveries in late Stage 2: A further 1.5 Mtpa
2011
Project Sun LNG Plant (Sojitz Stage 1 – Approx $450 Proposing to commence Stage 1: 500,000 tpa
Corp with Sunshine Gas Ltd) million construction 2009 with Stage 2: 1 Mtpa
commercial operation early 2012
Origin and ConocoPhillips $7.7 billion (including Final Investment Decision by Stage 1: 2 trains at 3.5mtpa
upstream field end of 2010. First cargoes each and expected production
development, LNG plant expected early 2014 by 2014
and infrastructure) Stage 2: A further 2 trains
Source: Gladstone Economic and Industry Development Board, Gladstone Region Project Development Review, February 2009 and other sources

The planning processes for the Gladstone-linked region are essentially the
same as for the Northern Bowen Basin-Mackay growth region and are only
summarised here.
Coal Rail Infrastructure Master Plan 2008
QR proposed in its plan to match industry growth by implementing a series of

incremental capacity enhancements corresponding to the forecast tonnage
demands of mines. The planned expansion projects on the Blackwater system
mainly consist of duplicating various sections of the system.
In contrast, the Moura system requires infrastructure investment relating to

accommodating longer (Blackwater sized) trains, including extensions of
existing passing loops. On top of that, a full system upgrade in the wake of the
SML project will have to be undertaken in the future.
The planned WICT is proposed to commence operations with initial coal

export capacity of 25 Mtpa around 2012. The port‟s final proposed capacity is
70 Mtpa, which could be achieved by 2020.
Coal Infrastructure Taskforce
The Coal Infrastructure Taskforce (CIT) is overseeing planning for coal

infrastructure projects. The CIT has developed a Program of Actions to
address issues for which the State Government and Government-owned
Corporations have primary responsibility, in particular major infrastructure
provision and a response to housing impacts.
Gladstone Integrated Regional Transport Plan 2001 - 2030
The Gladstone Integrated Regional Transport Plan was developed to guide the
region‟s transport needs for the future. It is the result of collaboration between
Queensland Transport, the Queensland Department of Main Roads, Gladstone
City Council, Calliope Shire Council, QR, Gladstone Port Authority and the
Gladstone–Calliope Aerodrome Board, in partnership with state and local
government.
The plan sets a comprehensive framework for the future development of the
region‟s transport network up to 2030. It contains eight action plans, which are
being implemented cooperatively and in a coordinated manner by all of the
partners involved.

The plan helps meet emerging transport needs for the Gladstone area, in
response to regional growth in population, employment and industry.
Central Queensland Regional Water Supply Strategy
The strategy aims to meet the needs of urban, industrial/mining and

agricultural water users and achieve optimum social, environmental and
economic outcomes. The strategy area covers the Fitzroy Basin and nearby
coastal catchments. The major regional centres include Gladstone,
Rockhampton, Yeppoon and Emerald. This strategy provided the impetus for
a number of water infrastructure projects such as new weirs and dams in the
catchment.
Gladstone Regional Vision 2028, August 2008
Hosted by Gladstone Regional Council and supported by the Rio Tinto Alcan
Community Fund, this project developed Gladstone Region 2028 Vision and
the associated Community Action Plan
of the mining industry.

September 2008. The policy is initially focused on resource communities,
where rapid development brought about by the resources boom is having
significant impacts on community infrastructure and services, and the social
structure of local and regional communities that support the new or expanded
mining and petroleum developments.
The policy includes provisions for social impacts of proposed major new and
expanded mining and petroleum developments to be considered, in addition to
the broader environmental and economic impacts, as part of the application
and approval process for the grant of mining and petroleum tenures. The QRC
and Queensland Government are in discussion on the application of this
policy.
Sustainable Regional Development in the Bowen Basin
The Minerals Council of Australia and the Queensland Resources Council have
commissioned a study by CQUniversity (CQU) to undertake a socioeconomic

characterisation of the Bowen Basin and indentify the key strategic issues
confronting the region. The information to be provided by this study is
designed to inform debate and to contribute to pathways that will assist in
achieving sustainable development in mining regions such as the Bowen Basin.
Central Queensland - A New Millennium
Central Queensland - A New Millennium (CQANM) is a locally initiated and

directed regional planning project. CQANM brings together governments at all
levels and the community to create a framework to guide future growth and
development of the Central Queensland region. It aims to create and maintain
a regional growth management framework that capitalises on regional strengths
and focuses on regionally significant issues across environmental, economic
and social dimensions. The project seeks to complement and enhance other
planning processes and strategies, and to provide a vehicle through which the
region‟s vision and aspirations can be articulated.
Central Queensland Regional Growth Management Framework
The Central Queensland Regional Growth Management Framework

(CQRGMF) was endorsed by State Cabinet in July 2002 as the principal, long-
term, broad-based, integrated regional planning strategy to guide the
management, growth and development in the region over the next 20 years.
Supply chain
Demand for Queensland coal has increased substantially in the past four years
and the long term outlook is for continued strong growth. The impact of the
recent growth has been the demands placed on rolling stock, rail and port
infrastructure capacity growing faster than the rate at which additional capacity
can be installed.
QR Network is planning infrastructure upgrades to service the WICT from

about 2012. However, QR Network is also aware of a number of additional
possible port expansions to service the Blackwater and Moura systems that
may become operational under the planning scenario being used for WICT.
These include Fitzroy River Barging, Port Alma development and expansion of
RGTCT together with operational improvements to improve throughput in
Callemondah Yard. These initiatives indicate that there is strong underlying
industry demand to haul additional tonnes on the Blackwater system prior to
WICT being commissioned.

A discussion paper informing the Queensland Government‟s Sustainable Futures

Framework for Mining Towns and the CQU Sustainable Regional Development in the
Bowen Basin report have identified a wide range of community infrastructure
and associated services issues that need to be addressed. These included the
following:
Government coordination and service provision

• A lack of coordination between agencies within and across levels of
government, particularly in terms of policy development and infrastructure
• The policies of multiple levels of government have caused confusion and
conflict over questions such as the extent to which individual mine
operators should take responsibility for the provision of infrastructure in
nearby communities affected by other mines and other industries.
Housing demand and supply

• The lack of information on housing demand is a barrier to approving and
attracting investment into new housing developments
• Lack of builders and inadequate planning severely constrain the ability of
the market to meet housing demand
• Land availability for residential development is at a premium across many
parts of the Bowen Basin
• High building costs and house prices make housing unaffordable for many
• Both residents and non-resident investors are reluctant to invest because of
the „frontier‟ nature of some towns, transient nature of populations and
uncertainties about the market
• There is no clear State policy on how the housing impacts of major projects
should be addressed.
Employment & skills

• A shortage of skilled workers in health, education and rural industries
• Attracting and retaining skilled and professional workers in health and
education is considered particularly problematic.
Strategic planning & infrastructure

• Multiple concurrent and overlapping proposals for new and expanded
mining development may result in significant cumulative and regional
impacts presenting in resource communities
• Town planning needs to be improved to be better consider land tenure,
single persons‟ accommodation, existing camps, green-field development,

existing pressures, lifespan of infrastructure and the magnitude of

development activity
• For local government, management of contributed assets is an issue with
inherited infrastructure of sometimes low lifespan with high replacement
and operating costs
• Where multiple mining projects rely on a single community there is a
difficulty in companies identifying appropriate relative contributions to
community infrastructure requirements as increased demands on this
infrastructure are not solely caused by a single company.
Education
• Primary schools are present in all towns and secondary schools are present
in most, and education standards are adequate, there is necessarily a limited
curriculum offering in smaller secondary schools
• The attraction and retention of teachers and para-educational specialists is a
chronic difficulty the region.
Healthcare
• There is a shortages of hospital beds and acute shortages in medical
practitioners and allied health professionals in the region
• CQU reports that total public hospital bed availability in the Bowen Basin
is just 78.5 per cent of the State average and only 80 per cent of the
national average; when only the regional areas of the Bowen Basin are
considered, this drops to just 1.61 beds per 1,000 persons, or only 60 per
cent of the Australian average
• CQU also identifies a shortage of general practitioners relative to the
Australian average, with the Bowen Basin having an overall deficit of no
less than 56 GPs.
Aged care
• Some maturing communities in the Bowen Basin have an emerging need
for seniors‟ accommodation.
Child care
• There is a general shortage of childcare places throughout the Bowen Basin
region, attributed in part to the difficulties in attracting and retaining staff.
Transport
• Poor public transport services limits accessibility to, from and within the
region.

Infrastructure and services in major centres

• The discussion paper for the Sustainable Futures Framework for Mining
Towns also found that planners and mining companies often assumed that
cities such as Mackay and Rockhampton were of sufficient scale to cope
with rapid growth without need for intervention. This has been shown not
to be so – these cities (Gladstone in particular) have exhibited growth
stresses in form of escalating house prices, labour shortages and local
inflation.
7.6 Growth scenario, Fitzroy growth region
7.6.1 Overview of growth scenario
The growth scenarios to 2020 for coal from the Fitzroy growth region are quite
bullish, notwithstanding the reduction of current demand due to global
financial conditions. The scenarios assume that flowing the slowdown, growth
will return to strong levels.
The growth scenario for coal production in the Fitzroy growth region is in line
with the SBB150 scenario in the Coal Rail Infrastructure Master Plan 2nd
edition 2008. This scenario is based on WICT reaching capacity of 90 Mtpa by
2020.
To support this growth (and general economic growth in towns such as

Emerald), service population of coal towns in the region could rise by 30 per
cent to around 49,000.
If one or both of the Galilee Basin coal projects are developed (see section
6.3.2), coal railings to the coast could reach 50 Mtpa by 2020. Various rail and
port options are being considered by the proponents, with preferred options
being for dedicated railway lines and ports (or possibly shared facilities). Other
options include railing to Gladstone and shipment through the new WICT.
The town of Alpha will become much larger with employment in mines and
nearby rail operations reaching about 1000.
In the Rockhampton-Gladstone region, the growth scenario includes the

following:
• Development of three LNG projects with combined output of 20 Mtpa
• Expansion of alumina refining to total of 9 Mtpa
• Development of coke plant at 5 Mtpa
• Development of nickel plant to 63,000 tpa.

Table 19 Summary of growth scenario to 2020 for the Fitzroy growth region
Product Expansion under growth scenario
Coal Coal exports reach 150 Mtpa though RGTCT and WICT
Galilee Basin coal exports reach 50 Mtpa through new dedicated port and/or WICT
Alumina refining Expansion of alumina refining to total of 9 Mtpa
Nickel Development of nickel plant to 63,000 tpa
Coke Development of coke plant at 5 Mtpa
LNG Development of three LNG projects with combined output of 20 Mtpa
Table 20 Summary of infrastructure requirements under the growth scenario to 2020 for the Fitzroy
growth region
Railways • Rail system requires upgrades and • Major upgrades to QR Network rail system to increase
expansion to service additional production capacity and to supply the new WICT
and new Wiggins Island Coal Terminal • New railway(s) to serve new Galilee Basin mines and
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
service additional production existing terminals (in Fitzroy and/or Northern Bowen Basin) to
• Additional coal terminal required for service Galilee Basin mines at 50 Mtpa
Galilee Basin production
• Roads in region require progressive • Upgrade existing roads to improve pavement width, strength
upgrades to meet industry and community and road reliability, particularly in periods of flooding. Further
needs upgrades regional roads needed to support growth
Airports • Gladstone Airport runway inadequate to • Upgrade Gladstone runway to accommodate larger planes
service air traffic and fully meet standards and meet aviation safety standards
• Regional airports require upgrades to • Upgrade regional airports to service population and industry
meet needs growth
growth
Water • Current water sources and infrastructure • Proceed with planned water projects to supply minerals
inadequate for industry and communities industry and domestic/commercial consumers
and to support growth • Undertake longer-term planning for water
Telecommunications • Telecommunications, notably broadband, • Facilitate the development of competition in broadband and
inadequate and costly in many parts of the mobile telecommunications across the region, and in
region broadband backhaul
meet needs of communities, particularly more market information to encourage investment and provide
accommodation for service workers adequate housing for government service workers
• Land for housing
Community • Community infrastructure inadequate for • Give much greater attention to planning for, and provision of
infrastructure 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 towns and to help to
attract and retain employees and their families

Supply chain - rail
QR Network has identified the following rail infrastructure upgrades under the
SBB150 scenario:
In the Blackwater System

• Full duplication of the Blackwater system
• Quadruplication and triplication of parts of the North Coast Line
• Possible new track infrastructure to support proposed new port facilities
• Grade easing of ruling grades to permit longer trains to operate on the
duplicated system (with the same locomotive power)
• Power system and train control upgrades to allow use of more efficient AC
traction locomotives.
In the Gladstone Area

• Extra rail loops to service additional unloading facilities at WICT, to be
located adjacent to NCL
• Quadruplication and triplication of parts of the North Coast Line
• New links between the Moura and Blackwater Systems to facilitate train
movements to terminals
• A new dedicated rail yard and servicing facilities at Aldoga.
In the Moura System

• Full duplication of Moura System
• New or upgraded link Monto to Moura System.
The 2008 Coal Rail Master Plan also identifies alternative and supplementary
“capacity solutions” through changes to rail hardware and operating practices.
QR Network said that the solutions also need to be considered in the overall
context of other infrastructure works being considered for increasing Central
Queensland‟s coal exports.
Supply chain – ports
Wiggins Island Coal Terminal
Completion of Wiggins Island Coal Terminal to 75 Mtpa current design

capacity and expansion to 90 Mtpa soon after 2020.

Fitzroy River Barging Operation
A proposal involving exporting coal by barging it along the Fitzroy River from
near Rockhampton is currently under investigation. The concept envisages coal
being transferred onto barges near Rockhampton via a conveyor. The barges
are proposed to operate along the Fitzroy River and transport coal to a transfer
barge then into ships positioned off the coast.
Port Alma
A pre-feasibility study is underway to investigate the development of the

present Port Alma facilities into a coal terminal. The study will be will be
completed in 2009 and look into the feasibility enlarging the terminal facilities
as well as the feasibility of additional dredging of the harbour to provide for
the berthing of larger ships that are handled at present.
Town and community infrastructure
If the service population of the towns in the Fitzroy growth region grow by 30
per cent to around 49,000, then substantial additional investment in
infrastructure will be needed.
The CQU study on Sustainable Regional Development in the Bowen Basin for
MCA and QRC identified shortfalls in current infrastructure and services and
made recommendations for future supply requirements. These include:
• Better measurement of the the non-resident population of the Bowen
Basin, and all funding and resource allocation processes to take the total
(resident and non-resident) population into consideration
• Better consideration of the soft infrastructure needs of mining
communities that have a disproportionately high number of families with
children, and a disproportionately high number of males.
• Address the shortfall in community and personal services in an attempt to
redress the issue of declining liveability and the attraction and retention
professionals and skilled workers
• Address the resources shortages to support skilled migrants and their
families
• Industry and government (all tiers) to consider new ways to address the
para professional and specialist teacher shortages
• Industry and government (all tiers) urgently to consider new ways to
address the shortages of hospital beds and the acute shortages in medical
practitioners and allied health professionals
• Industry and government to evaluate the needs of youth and the level of
services provided

• Industry and government to work with transport companies to develop

integrated and viable transport services
• Industry and government to work together to address the longer term
issues of water demand, supply and reliability in the Bowen Basin, and the
influence of regional climate change on water supplies.
The discussion paper informing the Sustainable Futures Framework for Mining
Towns recommended a case-by-case approach for each town, guided by the
Framework. The Sustainable Resource Communities Policy, which has largely
superseded the Framework, largely continues the approach.
The Framework‟s discussion paper identifies several towns that are likely to
experience growth pressures in the short to medium term and are best
supported by a coordinated response from governments, industry and the
community. In this region, these towns are as follows:
• Springsure could experience impacts, in the short-term, on land and
housing supply, and infrastructure, due to workforce accommodation
requirements. Good quality agricultural land could impact on options for
town expansion. Bauhinia Shire Council has been working with the
community and mining companies to address the potential impacts
• Rolleston may experience some impacts, in the short-term, on land and
housing supply, and infrastructure, due to workforce accommodation
requirements. Existing community infrastructure in the town of Rolleston
may need augmentation to support any significant town expansion.
Bauhinia Shire Council has been working with the community and mining
companies to address the potential impacts
• Biloela is likely to experience significant flow-on growth pressures due the
workforce accommodation requirements of proposed expansion of coal
mining. Availability of land for future town expansion, including the
infrastructure required to service expansion, may become an issue due to
the town‟s proximity to good quality agricultural land which adjoins the
town
• Moura is likely to experience significant growth pressures due the
workforce accommodation requirements of proposed expansion of coal
mining. Availability of land for future town expansion, including the
infrastructure required to service expansion, may become an issue due to
the town‟s proximity to major mine resources, and good quality agricultural
land adjoining the town‟s existing boundaries
• Theodore is also expected to experience growth pressures due to
accommodation requirements. There is a shortage of suitable
unconstrained land for town expansion purposes. This is due to an absence
of any significant stock of unallocated State land or reserved lands, and the
town‟s situation within a major flood plain and good quality agricultural
land

• Wandoan is likely to experience, in the medium-term, significant growth

pressures due the large number of coal deposits situated near the town.
Although there are no immediate mining projects planned in the locality,
planning for a future as centre of mining activity needs to be given priority
• Chinchilla (see Surat Basin discussion in section 8) is beginning to
experience growth pressures arising from mining projects. The community
has expressed concerns about a shortage of affordable housing in the town.
Property prices have risen due to mining and energy industry activity in the
Shire. There is virtually no unallocated State land in the town.
The Framework‟s discussion paper found that relative to the above towns,
growth management issues are currently of lesser concern in others. However,
further more detailed investigation is required in other towns.
In addition, a Regional Housing Issues Report for the Bowen Basin

recommended focusing social housing provision in identified key regional
centres of Emerald, Blackwater and Biloela.
The Sustainable Resource Communities Policy for social impact assessment of

new projects in the mining and petroleum industries has implications for the
way in which companies both conduct assessments and respond to the
findings about the needs for community infrastructure and services.

8 Surat Basin region

The Darling Downs is a farming region on the western slopes of the Great
Dividing Range. The coal deposits of the Surat Basin underlie much of the
western and northern parts of the Darling Downs.
Figure 24 Darling Downs - Map (ABS - Statistical Subdivision)
Data source: (ABS, 2006)
The principal city and services centre is Toowoomba about 132 km west of
Brisbane. Other major towns include: Dalby, Warwick, Roma, Oakey, Mitchell,
Pittsworth, Allora, Clifton, Cecil Plains, Drayton, Millmerran, Nobby, and
Chinchilla in the west. On the northern boundaries of the Downs are the
Bunya Mountains and the Bunya Mountains National Park. The region to the
north is the South Burnett and the Maranoa lies to the west. A section of the
western downs lies over coal deposits of the Surat Basin. Towards the coast,
the mountains of the Scenic Rim form the headwaters of the westward flowing
Condamine.
Current and proposed mining operations are shown in Figure 25. The extent of
the Surat Basin and current and future rail and pipeline links are shown in
Figure 26. In addition to coal extraction, 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. Thus the Surat Basin will become a new energy hub, complementing
the role of the petroleum-based gas production further west.
Surat Basin region 119

The Surat Basin region currently has a high reliance on agriculture, education
and health services in terms of job provision, as well as a relatively low per
capita income, compared with the Queensland average. About one quarter of
the value added is generated by the primary industries of agriculture, with a
13.3 per cent contribution to gross regional product (GRP), and mining with a
9.9 per cent contribution to GRP in 2004-05. Thermal coal, coal seam gas and
coal seam gas water are development opportunities, with a limited potential for
oil, natural gas and liquid natural gas. (Schandl & Darbas, 2008)
Figure 25 Current and proposed mines, Surat Basin
Source: Surat Basin Developments www.suratbasindevelopments.com.au

Figure 26 Surat Basin and rail and pipeline links
Source: Surat Basin Developments www.suratbasindevelopments.com.au


The Queensland Government has identified mining and energy production as
priority sectors within the Queensland economy with an outlook for future
growth. The Surat Basin plays an increasing role in this economic development
path because of its large resources of open-cut thermal coal and coal seam gas.
To date, only relatively small volumes of coal has been exported (about 5
Mtpa). Current Surat Basin coal mines are at Macalister and Acland. Distance
to ports and lack of transport infrastructure have been the factors inhibiting
further developments in the Surat Basin.
Production in the Surat Basin is set to increase over the coming years with a
focus on export coal, coal seam gas and electricity production from coal and
gas.
This creates the potential for a number of rural towns, including Taroom,
Wandoan, Miles, Chinchilla and Dalby to grow from purely agricultural towns
into towns with much broader economies and increasing involvement with the
resources sector. Inevitably, this will create needs for enhanced community
infrastructure and services.

There are a number of proposed and potential coal and gas projects in the
Surat Basin.
Wandoan coal project
The major project proposed for the region is a 30 Mtpa thermal coal mine to
be developed by Xstrata at Wandoan. This project would employ between 500
and 600 people during operations.
This and any future projects are dependent on the establishment of the
Southern Missing Link (SML) and the WICT due to constraints within the
Western corridor via Brisbane (see section 9).
Darling Downs Power Station
Origin Energy Power Ltd is proposing to build the Darling Downs Power
Station, a 630 MW gas fired base load combined cycle gas turbine (CCGT)
power station at Braemar. The power station commenced operations in early
2009.

Fuel for the power station will initially be drawn from Origin‟s Spring Gully
coal seam methane gas reserves 80 km north east of Roma and later from its
Talinga coal seam gas fields in the Walloon Coal Measures.
It is understood that in the near future Origin will submit an application with
the Department of Natural Resources and Water for a water allocation in
accordance with the 2006 Water Resources (Great Artesian Basin) Plan .
Origin Energy requires approximately 200 mega litres per year to make up
steam losses in the operation of the power station.
The proposal is in accord with the Queensland Government‟s ClimateSmart

2050 strategy, which includes a commitment to increase the percentage of
Queensland‟s energy generation being produced by gas to 18 per cent by 2020.
Kogan Creek Power Station
CS Energy is a Queensland Government owned electricity generator that

operates a power portfolio of 3,660 MW, including the new Kogan Creek
Power Station near Chinchilla. Opened in late 2007, Kogan Creek has a
capacity of 750 MW, enough to power almost one million homes. The
neighbouring Kogan Creek Mine fuels the power station, delivering up to 2.8
million tonnes of coal per year via a four kilometre overland conveyor.
CS Energy‟s other generating sites are Swanbank Power Station near Ipswich,
Callide Power Station near Biloela and Mica Creek Power Station near Mount
Isa. The Company is also a key player in an important clean coal project in
Australia – the Callide Oxyfuel Project. Together with Australian and
international partners, CS Energy will demonstrate a combination of oxyfuel
and carbon capture and storage technology to achieve near zero greenhouse
emissions from a coal fired power plant.
Spring Gully Power Station
Further west at Roma, Origin Energy proposes to develop a 1000 MW

combined cycle gas fired power station at Spring Gully, 80 kilometres north-
east of Roma. The power station will be constructed in two 500 MW stages.
Fuel for the power station would be provided from the adjacent Spring Gully
Coal Seam Gas (CSG) gas plant. Cooling water would be sourced from the
saline water produced by the CSG process.
Queensland Gas Company (now part of BG Group)
Queensland Gas Company‟s world-class reserves in the Surat Basin are

projected to supply around 20 per cent of the Queensland domestic gas market
in 2009. In February 2008 QGC and BG Group announced a joint
commitment of about $8 billion to enable the annual export of 3-4 million

tonnes of liquefied natural gas (LNG) for 20 years. The LNG project involves
utilising more than 7,000 petajoules (PJ) (approximately 6.6 tcf) of proved and
probable gas reserves, constructing a 380 kilometre pipeline to the city of
Gladstone and developing a LNG terminal. The project will generate several
thousand new jobs.
In February 2009 QGC started supplying gas to QGC‟s new Condamine

Power Station, which produces 140 megawatts of electricity. QGC is investing
in applications for the large volumes of water yielded during the release of coal
seam gas. That water has the potential to help drought-affected communities,
towns and farms in the Surat Basin.
Santos
Santos is behind a $7 billion project that plans to pipe coal seam gas from
Surat and Bowen Basin gas fields to a proposed LNG plant in Gladstone.
Santos says that the project could create up to 3,000 jobs and inject around $1
million into the Queensland economy every year.
Linc Energy
Linc Energy aims to bring together, two proven production processes known
as Underground Coal Gasification (UCG) and Coal to Liquids (CTL). These
processes will convert vast „stranded‟ coal deposits into gas and subsequently
into liquid fuels. Linc Energy also plans to use the Syngas produced from the
UCG clean coal technology as feedstock for gas turbines to generate low
emissions electricity.
Syntech Resources
Fifteen kilometres east of Miles, Syntech Resources has started work on the
Cameby Downs project that will see 1 Mtpa of coal exported through the Port
of Brisbane. Syntech says, however, if the necessary transport infrastructure is
available, that amount could increase significantly.
Northern Energy
Northern Energy Corporation owns and plans to exploit the 320 million tonne
Elimatta coal resource west of Wandoan.
Arrow Energy
Arrow Energy is one of Australia‟s leading producers of coal seam gas. Arrow
has four producing projects which account for around 20 percent of
Queensland‟s overall gas production – one in the Bowen Basin near Moranbah

and three in the Surat Basin near Dalby. Arrow is now working to realise the
potential of its asset portfolio, including by developing LNG opportunities.

geography
The Darling Downs region is the union of three major regional councils:
Toowoomba, Dalby and Roma Regional Council with a land area of 90,246.5
Km2. Population in the 2006 Census was 227,074.
Agriculture currently dominates the regional economy. The number of

business in the region from 2003 to 2006 is shown in Table 21. Agriculture,
forestry and fishing have the highest number of businesses, accordingly with
the historical development of the region. Property and business services,
construction and retail trade are also important industries.
Table 21 Number of businesses by industry, Darling Downs region

2003 2004 2005 2006
Agriculture, forestry and fishing 8,178 8,187 8,202 8,343

Mining 54 48 57 60
Manufacturing 909 921 900 936
Electricity, gas and water supply 12 12 9 6
Construction 2,421 2,517 2,607 2,667
Wholesale trade 690 708 735 759
Retail trade 2,103 2,112 2,163 2,187
Accommodation, cafes and restaurants 465 489 531 570
Transport and storage 1,194 1,257 1,260 1,263
Communication services 231 258 255 240
Finance and insurance 789 873 924 969
Property and business services 2,949 3,042 3,186 3,381
Education 129 120 108 108
Health and community services 714 756 783 795
Cultural and recreational services 411 396 366 354
Personal and other services 405 435 444 480
Total businesses 21,654 22,131 22,530 23,118
Data source: ABS 2006

Agriculture is the most important industry in terms of employment (Table 22).

Notably, manufacturing industry is among the industries with relatively high
employment, along with retail trade, health care and social assistance.
Table 22 Employment by industry, Darling Downs region, 2006

No. %
Mining 799 0.83
Inadequately described/Not stated 2,121 2.19
Total 96,765 100

The infrastructure of the Surat Basin and Darling Downs region is typical of
that found in similarly long-standing rural regions and towns in Australia.
Both industrial and community infrastructure has been developed and
maintained to service rural industries and communities. As such, it is likely to
be inadequate to support the major industrial development and population
growth that the region will experience if planned mining developments
proceed. Additional infrastructure of all kinds (both hard and soft) will be
required.
Table 23 lists „hard‟ infrastructure identified in the Maranoa and Districts Draft
Regional Plan. The plan also identifies community infrastructure issues that
require attention, but does not document what such infrastructure is in place.

Table 23 Key elements of infrastructure in the Surat Basin growth region
Transport Warrego, Leichardt and Carnarvon highways and supporting local routes
East–west rail link and the proposed Surat Basin rail link
Airport facilities accommodating daily passenger services to Roma, connecting
Brisbane and Charleville, and twice weekly passenger services to St George
Electricity transmission and generation Roma gas-fired power station and the distribution network incorporating high-voltage
links to dispersed mining and energy projects and substations associated with
population centres
Proposed Spring Gully gas-fired power station
The adjacent interstate connector near Dalby
Gas and oil transmission An extensive gas pipeline network linking gas fields in the region to Brisbane and
Gladstone
An oil pipeline in the region‟s south connecting South West Queensland oil fields to
Brisbane
Water supply SunWater schemes at Mitchell and St George, centred on the Neil Turner Weir and
Beardmore Dam, respectively, and related water supply infrastructure
Source: Maranoa and Districts Regional Plan

In coming years, it is expected that the Surat Basin becomes one of Australia‟s
largest energy provinces. Thermal coal will be mined at a rate of more than
40Mtpa, and the region will produce large quantities of coal seam gas. This will
fundamentally change the economy of the region. In order to achieve major
development, the following supporting services and infrastructure are being
put in place. However, planning for community infrastructure is so far at an
early stage.
Water
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. It is also understood that Xstrata is in
are also discussion with SunWater to build a pipeline to service the Wandoan
project.
The Nathan Dam should be completed by 2011, in line with other

infrastructure projects.

Rail
The Surat Basin rail project involves an upgrade of the rail line from
Toowoomba to Wandoan, and Banana to Gladstone, along with the new link
between Wandoan and Banana. The Surat Basin rail project is approximately
210 kilometres in length and starts on the Western Railway System near the
township of Wandoan, (located 230 kilometres northwest of Toowoomba) and
joins the Moura Railway System near the township of Banana (located 130
kilometres west of Gladstone). The project is often referred to as the „Southern
Missing Link‟ and once completed in 2011, will open up the Surat Basin to
major coal development.
The exact location of the rail corridor will be refined during the environmental
impact statement (EIS) process. Surat Basin Rail Pty Ltd is the proponent for
the project and acts on behalf of a consortium comprising ATEC (Dawson
Valley Railway) Pty Ltd, QR Surat Basin Pty Ltd, Xstrata Coal Surat Basin Rail
Pty Ltd, and Anglo Coal Australia Pty Ltd. The consortium was formed
specifically to investigate the economic feasibility of developing the railway.
This new $1 billion plus rail connection will enable coal from the Surat Basin
region to be transported for export through the proposed Wiggins Island Coal
Terminal at Gladstone. Construction of the project will require a workforce of
approximately 1,000 personnel over approximately two and a half years.
Inland railway proposal
The Federal Government commissioned the Australian Rail Track Corporation

in March 2008 to study possible routes for an inland railway running from
Melbourne to Brisbane. The ARTC is generally following the „far western sub-
corridor‟ identified by the North-South Rail Corridor Study which was
completed in 2006. After examining more than 50 options, the finding of the
study is that the railway should follow existing rail lines from Melbourne via
Albury to Cootamundra, Parkes, Narromine, Dubbo, Werris Creek and Moree
to North Star near Goondiwindi; with new construction from North Star to
Brisbane via Toowoomba. North of Parkes the railway would require the
upgrading of parts of the existing route, including minor deviations to improve
its alignment. Initial cost estimates suggest the project would cost between $2.8
billion and $3.6 billion. Projections on likely demand for the service suggest
that as a standalone project it is not financially viable at this stage.
The inland route may produce opportunities for Queensland East Surat basin,
improving access to the Port of Brisbane 220 kilometres away (compared with
820 kilometre to Newcastle, or 530 kilometres via a new line to Gladstone). It
could also provide an alternative for the existing Ipswich/Moreton Basin,
where transport options are constrained by the demands of urban rail

networks. An ARTC study suggests that other government and port policies
might still act as a constraint to expanded volumes. The study also notes that
government policy favours a reduction in coal through Brisbane because of
passenger train traffic and objections to noise at night. At present the Port of
Brisbane has capacity for 10Mpta but operates at just over half of that. The
study estimates that with the expansion of production, at least 5Mpta could be
diverted from existing railway to the inland route “with the potential for
more”.
Port
Planning for construction of stage one of the Wiggins Island Coal Terminal
(WICT) is well advanced, and depending on final investment decision, WICT
should be operating some time after 2012, with an initial capacity of 75 Mtpa.
Stage two is proposed to increase its capacity to in excess of 120 Mtpa.
Currently in the region, several government organisations and private

companies are putting in place plans or have started to develop infrastructure
projects around mining industry needs and flow-on impacts. Planning
processes are so far underdeveloped, however. Nevertheless the region is
covered by the Sustainable Resource Communities Policy.
As highlighted in the Bowen Basin growth regions, adequate community

infrastructure and services are vital to support growth and the liveability of
resource communities, and to provide facilities and services that will help to
attract and retain employees and their families.
Maranoa and Districts Regional Plan
The Maranoa and Districts Regional Plan, which is being developed, is the
principal current planning mechanism in the region. However, this plan
covers the western part of the Basin only (ie Roma Regional Council), with no
regional planning in the eastern section, which contains the bulk of the Surat
Basin developments. The plan seeks to for manage change and shape the
future prospects of communities by:
• Seeking to address key economic, social and environmental issues
• Prioritising infrastructure and service needs
• Seeking to maximise benefits and managing the impacts of major projects
• Mobilising and coordinating public, private and community sectors
• Aligning efforts across agencies and levels of government.

The plan includes strategies for:

• Community development
• Urban development
• Economic development
• Infrastructure.
In relation to housing, the plan has the objective “to ensure housing and
accommodation options in the region are diverse, affordable and able to meet
the changing demographic and economic needs of the region”.
8.7 Growth scenario, Surat Basin growth region
8.7.1 Overview of growth scenario
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.
To support this growth, the population of some towns in the region is

expected to rise very substantially.
Table 24 Summary of growth scenario to 2020 for the Surat Basin growth region
Product Expansion under growth scenario
Coal Coal exports reach 40 Mtpa though WICT
Coal seam gas CBM and UCG production to exceed 100 PJ pa by 2020
Electricity generation Much expanded electricity generation (more than 1000 MW) from both coal and coal seam gas
Plans for mining in the Surat Basin growth region are relatively preliminary in
nature. As a consequence, this report is able to report on the resultant
infrastructure needs at a high level only.

Table 25 Summary of infrastructure requirements under the growth scenario to 2020 for the Surat
Basin growth region
Railways • Rail infrastructure inadequate for • Completion of Surat Basin Rail project
major 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 • Upgrade regional airports to service population and industry
to support traffic growth growth
Energy • Mines and expanded towns will • Provide transmission infrastructure to mines
require addition energy supplies
Water • Comprehensive water planning for • Undertake integrated planning for water
mining growth is yet to be undertaken
broadband, inadequate and costly in mobile telecommunications across the region, and in broadband
many parts of the region backhaul
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 • Undertake rigorous planning for housing, encourage investment
adequate to support major growth and provide adequate housing for government service workers
development in towns
Community infrastructure • Community infrastructure inadequate • Give close attention to planning for, and provision of community
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

9 Moreton Basin growth region

The coal export corridor for the Moreton growth region is comprised of the
rail network that connects the coal mines located west of Brisbane – current
mines include Macalister, Acland, as well as Ebenezer – to the Port of Brisbane
coal export terminal at Fisherman Islands.
As part of planning for this growth corridor, industry has been actively
engaging with infrastructure service providers (in particular rail and port) to
ensure that the transportation system is able to accommodate the progressively
increasing the forecast coal traffic. Recent exports from this corridor have
been 4.7 Mt transported in 2006-07, followed by 5.6 Mt in 2007-08. The
forecast capacity of this export growth corridor is subject to a number of
operational and infrastructure matters being resolved.
Expansion of infrastructure and rail capacity for this region is dependent upon
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.
The Western System supply chain also operates within the constraint of the
Brisbane commuter network. This effectively means that trains need to be
scheduled to match identified paths into the Brisbane metropolitan area to
avoid impacting on the suburban passenger timetable. Industry is working with
supply chain participants to investigate operational improvement to increase
the payload and therefore export performance of this system.
The implications of these characteristics are as follows:

• The train paths available through the Brisbane metropolitan area (and on
the Toowoomba Range) need to be maximised for coal traffics in order to
maximise the use of these limited paths
• Increasing payloads is an important operational approach to increasing
exports.

Currently there has only been limited mine development due to the limitations
on the rails system‟s ability to provide sufficient capacity down the
Toowoomba Range and through the Brisbane Suburban area. Capacity
restrictions associated with the operation of the Port of Brisbane are another
limiting factor.
Moreton Basin growth region 132

In addition to the 5.6 Mtpa coal hauled on the rail system, around 0.5 Mt of
coal is trucked down the range into Swanbank power station.

geography
The Ipswich region represents a diverse area, including Ipswich City, the
Scenic Rim, Lockyer Valley and Brisbane Valley. Covering an area of 9,502
square km‟s, this region has a population of approx. 189,000. With significant
population growth currently facing South East Qld (SEQ), the SEQ Regional
Plan has now been developed to provide some clear direction for planning into
the future for this region. The plan has clearly identified the Western Corridor
including the Ipswich region as a significant growth area. The projected
population for the region is expected to grow from 189,000 to approx. 300,000
by 2016 and 392,000 by 2026. The impacts of this growth will have significant
bearing on available infrastructure, transport, water, technology and
employment to service the population.
The Moreton Bay area is one of the fastest growing regions in Queensland
covering the areas of the former Caboolture and Pine Rivers Shires and
Redcliffe City. It extends to 2011 square kilometres, with a population as at 30
June 2007 of 343,553 and a growth rate of 3.3% since 2006. Projected
population by 2026 is expected to be approximately 489,000 persons.
Major business precincts are at Narangba, Burpengary, Caboolture, Morayfield,

Strathpine, Brendale, Lawnton, Kallangur, Petrie, Albany Creek, Arana Hills,
North Lakes, Everton Hills, Kippa-Ring, Clontarf and Redcliffe.
At the time of the 2006 Census, retail trade was the largest industry of
employment in the Moreton Bay region with 18,569 persons or 12.5 per cent
of the region‟s total employed persons. Other industries with relatively large
numbers of employed persons included manufacturing (17,431 or 11.7 per
cent), health care & social assistance (16,167 or 10.9 per cent), construction
(14,785 or 9.9 per cent) and public administration & safety (10,335 or 6.9 per
cent).

Table 26 Number of businesses by industry, Moreton region

Ipswich city West Moreton Total
2005 2006 2005 2006 2005 2006
Agriculture, forestry and fishing 516 552 2,523 2,550 3,039 3,102
Mining 9 12 21 30 30 42
Manufacturing 603 654 297 297 900 951
Electricity, gas and water supply 3 9 6 3 9 12
Construction 1,536 1,599 828 879 2,364 2,478
Wholesale trade 273 273 198 183 471 456
Retail trade 1,044 1,065 591 615 1,635 1,680
Accommodation, cafes and restaurants 114 153 150 162 264 315
Transport and storage 864 861 471 480 1,335 1,341
Communication services 138 150 105 99 243 249
Finance and insurance 273 282 162 135 435 417
Property and business services 1,338 1,407 759 825 2,097 2,232
Education 45 57 24 27 69 84
Health and community services 345 342 144 165 489 507
Cultural and recreational services 123 126 159 153 282 279
Personal and other services 276 300 174 159 450 459
Total businesses 7,500 7,842 6,612 6,762 14,112 14,604
Employment by industry in the region is summarised in Table 27. The most

important industry in terms of employment is manufacturing, followed by
retail trade, healthcare and social assistance; and construction services. This
distribution is not even for both areas. Accordingly to the number of
businesses, employment in agriculture in West Moreton is higher than in
Ipswich City area, while manufacturing has the highest rate of employment in
the Ipswich City area.

Table 27 Employment by industry 2006, Moreton region

West Moreton Ipswich City Total
No. % No. % No. %

Agriculture, forestry & fishing 3,915 13.62 598 0.95 4,513 4.93
Mining 203 0.71 370 0.59 573 0.63
Manufacturing 3,430 11.94 11,077 17.64 14,507 15.85
Electricity, gas, water & waste services 311 1.08 752 1.20 1,063 1.16
Construction 2,306 8.03 4,637 7.39 6,943 7.59
Wholesale trade 1,167 4.06 2,728 4.34 3,895 4.26
Retail trade 3,024 10.52 7,001 11.15 10,025 10.95
Accommodation & food services 1,429 4.97 3,022 4.81 4,451 4.86
Transport, postal & warehousing 1,824 6.35 4,142 6.60 5,966 6.52
Information media & telecommunications 204 0.71 687 1.09 891 0.97
Financial & insurance services 387 1.35 1,466 2.33 1,853 2.02
Rental, hiring & real estate services 391 1.36 959 1.53 1,350 1.48
Professional, scientific & technical services 843 2.93 2,466 3.93 3,309 3.62
Administrative & support services 552 1.92 1,833 2.92 2,385 2.61
Public administration & safety 1,746 6.08 5,306 8.45 7,052 7.71
Education & training 2,312 8.05 4,218 6.72 6,530 7.14
Health care & social assistance 2,550 8.87 7,064 11.25 9,614 10.50
Arts & recreation services 299 1.04 554 0.88 853 0.93
Other services 1,037 3.61 2,327 3.71 3,364 3.68
Inadequately described/Not stated 804 2.80 1,579 2.51 2,383 2.60

The West Moreton system is a non-electrified narrow gauge section of track
west of Brisbane servicing the Surat Basin in Southern Queensland.
Queensland Railroad National Coal trains transport 5.6 million tonnes of coal
each year from the New Oakleigh, New Acland and Wilkie Creek mines to the
Port of Brisbane and Swanbank Power Station. The system is serviced by the
Redbank Rolling stock Depot, located outside Brisbane.
The majority of coal transported on the West Moreton system is destined for
export via the Port of Brisbane‟s unloading facilities at Fisherman Islands,
which receive approximately 60 trains a week. QR National Coal also delivers
500,000 tonnes of coal each year to domestic customers, including Swanbank
Power Station. The amount of coal transported through the West Moreton
system is expected to remain steady in 2008–09 as substantial network
upgrades within the South East Queensland passenger network continue and
limit capacity for coal operations.

The Draft South East Queensland Regional Plan (Queensland Government,

2009) presents the regional strategy for future infrastructure. This regional plan
only presents guidelines and objectives rather than specific and measurable
plans to implement future infrastructure.
Coal Rail Infrastructure Master Plan
The major expansion within the Western corridors is the planned 210 km SML
joining the existing QR lines between Wandoan and Banana. The SML is
designed to join up the Surat Basin with the proposed WICT. The SML and
WICT projects are expected to be commissioned some time after 2012.
South East Queensland Infrastructure Plan and Program
The Queensland government announced a $55 billion blueprint for upgrading

a range of infrastructure in the South East Queensland. The infrastructure plan
allocated $35 billion has been allocated for a roads and transport package for
roads, rail, business, walking and cycling. Nevertheless, despite the planned rail
expansion within SEQ, QR‟s challenge is to manage the coal traffic in addition
to other freight and passenger services.
Ipswich Rail Line Corinda-Darra and Darra-Redbank third rail track
The Queensland Government is implementing the South East Queensland

Infrastructure Plan. The Department of Infrastructure and Planning is
responsible for the delivery of the South East Queensland Infrastructure Plan
and Program projects. Ipswich Rail Line Corinda-Darra and Darra-Redbank
third rail track is one of these projects.
In the next five years, the Ipswich City region is expecting to benefit from
several, public and private, initiatives: Springfield Lakes and Springfield Town
Centre; Ipswich River Heart and Riverlink; Ipswich Regional Centre
Revitalisation; Amberley RAAF Base Expansion; Ipswich Aerospace Park at
Amberley; Bremer Business Park; Swanbank New Chum Enterprise Park;
Ripley Valley Residential Development and Ripley Town Centre; Synergy Park;
and Ipswich Motorsport Precinct.
The Government has committed to secure and enhance the reliability of

energy supply in the West Moreton.

New South Wales


resources regions
May 2009
(03) 9600 3144.
ACIL Tasman Pty Ltd

ABN 68 102 652 148

Darwin
48-50 Smith Street

Please contact:
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
Contents
1 Introduction to the Vision 2020 Project 1
2 New South Wales overview 3
3 Hunter Valley growth region 5
3.5.1 Hunter Valley Rail System 14
3.5.2 Port of Newcastle 14
3.5.3 Roads 15
3.5.4 Energy 15
3.5.5 Water 17
3.5.6 Human capital and community infrastructure 17
3.7.1 Planning processes and initiatives 21
3.7.3 Energy sector 29
3.8 Growth scenario, Hunter Valley region 29
3.8.1 Coal production 30
4 Southern NSW growth region 34
4.2.1 Production by coalfield 38
4.2.2 Southern Section, Western Coalfield 38
4.2.3 Southern Coalfield 40
4.4 Resources-related demography 41
4.5 Current Infrastructure 42
4.5.1 Rail system 42
4.5.2 Road system 43
4.5.3 Port Kembla port 44
4.5.4 Energy 45
4.5.5 Water 45
iii

4.8 Discussion of Southern region growth scenario 51
4.9 Growth scenario, Southern NSW region 53
4.9.1 Minerals production 53
5 Central and Far Western NSW growth region 55
5.2.1 Gold, copper, lead and zinc 57
5.2.2 Mineral sands 58
5.3 Resources related demography 59
5.5.1 Infrastructure impediments 62
List of boxes
Box 1 Inland Railway Study 22
List of charts
Chart 1 Source of saleable production in NSW, 2007 8
Chart 2 Source of saleable production in NSW, 2007 38
Chart 3 Share of value of non-coal minerals production 2006–07 55
List of figures
Figure 1 Estimated value of minerals and metal exports from NSW in 2007-08
($million) 3
Figure 2 Hunter Valley corridor 6
Figure 3 Coal volume forecasts by line sector 11
Figure 4 Five-year investment strategy – Ulan and Gunnedah lines 28
Figure 5 Five-year investment strategy – Hunter Valley 28
Figure 6 Forecast production from proposed Hunter Valley coal mines (Mtpa) 31
Figure 7 Forecast cumulative new Hunter Valley coal production capacity (Mtpa) 31
Figure 8 NSW coalfields, key rail lines and coal ports 35
Figure 9 Eastern section of the Sydney-Dubbo corridor 36
Figure 10 Sydney-Wollongong corridor 36
Figure 11 Northern Section of the Sydney to Melbourne corridor 37
Figure 12 Sydney Catchment Authority dams 46
Figure 13 ARTC investment on the rail corridor south of Sydney 49
Figure 14 Mining in Central and Far Western NSW 56
Figure 15 Electricity transmission networks in NSW 65
iv
List of tables
Table 1 Summary of infrastructure requirements under growth scenario to 2020
for the Hunter Valley growth region 4
Table 2 Planned coal projects - committed or under construction 9
Table 3 Proposed minerals projects in NSW – less advanced 10
Table 4 Coal movement forecasts (million tonnes) 12
Table 5 Coal movement forecasts (million tonnes) 12
Table 6 Education enrolment 17
Table 7 ARTC proposed scope of investment 2008-2023 27
Table 8 Summary of growth scenario to 2020 for the Hunter Valley growth
region 32
for the Hunter Valley growth region 32
Table 10 Summary of growth scenario to 2020 for the NSW Southern growth
region 52
for the NSW Southern growth region 52
Table 12 Proposed new minerals developments – Central and Far Western NSW 61
for the Central and Far Western growth region 62
v
1 Introduction to the Vision 2020

Project
This report forms part of the Mineral Council of Australia‟s Vision 2020
infrastructure, or where their needs are complementary.
Expansion of the nation‟s infrastructure (both hard and soft industrial and
stepped in to fill that gap and as a consequence Australia‟s market share has
fallen.
The ultimate objective of the Vision 2020 Project is to encourage the

market.
The Vision 2020 Project‟s growth scenarios were prepared prior to the
Introduction to the Vision 2020 Project 1


infrastructure studies.

2 New South Wales overview

The estimated value of NSW minerals and metal exports in 2007-08 is shown
in Figure 1. 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.2 Total employment in the NSW mining sector in
the May quarter of 2008 was 31,200.3
Figure 1 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.

infrastructure studies to examine potential growth in minerals production and
potential gaps in infrastructure.
The following three NSW regions are examined:

• The Hunter Valley region
• The Southern region
• The Central and Far Western region
2 NSW Minerals Council Key Industry Statistics 2008.

3 ibid.
New South Wales overview 3

The key infrastructure constraints for NSW growth regions are summarised in
Table 1.
Table 1 Summary of infrastructure requirements under growth scenario to 2020 for the Hunter Valley
growth region
class
Hunter Rail • Rail infrastructure unlikely to • Implement the ARTC’s 2008-2024 Rail Infrastructure Strategy
Valley meet growth in freight task.
Hunter Ports • Lack of sufficient coal • Upgrade the existing coal loaders at the PWCS terminal and the
Valley loading capacity. NGIC terminal. Build additional coal loaders as and when required.
Hunter Water • Lack of water supplies. • Ensure that adequate supplies of water are available; particularly
Valley post 2014 when the current extraction limit is likely to be exceeded.
Southern 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.
Southern Railways • Rail infrastructure unlikely to • Increasing competition between freight and passenger services in
meet 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.
utilisation
• Implementation of the Maldon – Dombarton line pre-feasibility study
findings
Southern Ports • A lack of capacity to service • Upgrades to storage and ship loading facilities to allow for increased
export growth. minerals movements. Although coal loading capacity appears to be
adequate for the near future.
Southern Energy • Generation, transmission • Supply infrastructure will need to be upgraded to deal with increased
and distribution capacity demand from industrial, commercial and domestic customers
inadequate for projected • A replacement for Wallerawang power station may be required.
growth.
• New gas projects (including CSM) may require new pipelines to be
built, this may include pipelines to supply new gas fired power
stations
Central & Water • Access to adequate water Aid the development of well-functioning markets which will both ration
Far supplies. water and provide impetus for investment. This requires the over-
Western allocation of water entitlements for agriculture in the Murray Darling
Basin to be addressed
Central & Energy • Potential shortfalls in • Additional generation capacity
Far generating capacity by • Upgraded energy distribution infrastructure (power and gas)
Western 2013/14.
• Lack of distribution
networks away from the
central basin.
New South Wales overview 4

3 Hunter Valley growth region

The Hunter region of NSW contains a diverse mix of subregions – including
the city of Newcastle at the lower end of the Hunter River, the main coal
mining areas in the South West and the „Upper Hunter Shire‟ sub-region
around Aberdeen, Scone and Murrurundi, which is the source of many of the
major tributaries for the Hunter River.
The Hunter Valley growth region includes the Gunnedah, Hunter and
Newcastle Coalfields, and the northern part of the Western Coalfield. The
region‟s rail network comprises over 650 km of track varying from four lines to
single track with passing loops. This rail network links the region‟s coalfields
with the port of Newcastle and domestic users of coal. The coalfields, the
main railway lines in the region, and some key centres, including Newcastle, are
shown in Figure 2.
Coal dominates traffic across the Hunter Valley rail network. General freight,
grain and passenger services contribute a higher proportion of traffic north of
Muswellbrook on the line serving Gunnedah Basin than elsewhere in the
network.
The Hunter Valley growth region includes numerous mines railing coal to the
port of Newcastle for export via two coal terminals or to power stations and
some other domestic users. Some mines provide coal to nearby power stations
via road transport or conveyor.
Quantities of coal carried by rail for domestic use are small relative to export
coal quantities. However, demand for railing of coal for domestic use is
expected to grow significantly over the next five years, especially on the Ulan
and Upper Hunter Valley lines. Macquarie Generation has recently
commissioned a new balloon loop at Drayton that will receive substantial
volumes of coal originating from mines on the Ulan line.
The declared capacity along the coal supply chain comprising the Hunter
Valley rail system and the port of Newcastle coal terminals was 96.4 million
tonnes per annum (Mtpa) for 2008 and 100 Mtpa for 2009. These quantities
were constrained by 18 per cent and 25 per cent, respectively, below the
aggregate of amounts coal producers had advised they would like to produce.
Currently the busiest and most constrained section of the rail network is
between Muswellbrook and the port of Newcastle (lower Hunter Valley).
Estimates of future growth in coal production in the Western and Gunnedah
Hunter Valley growth region 5

coalfields indicate increased coal volumes along the Ulan line and the line from
Gunnedah to Muswellbrook, respectively.
Australian Rail Track Corporation (ARTC) expecting declared capacity to be

limited to 100Mtpa until additional ship loading capacity at Newcastle has been
commissioned.
Figure 2 Hunter Valley corridor
Source: 2008 NSW Coal Industry Profile


In 2007-08, the value of mining output in New South Wales (NSW) was $13.9
billion. Coal contributed 66 per cent of that value.
Coal produced in NSW for domestic use amounted to 34.5 Mt valued at $2.1
billion in 2007-08. Coal production for export from NSW and the value of
that production in 2007-08 amounted to 100.5 Mt and $8.2 billion,
respectively. In that year, the Port of Newcastle handled 89 Mt of export coal.4
Japan is the main coal export destination, followed by India and Korea for
thermal coal, and Taiwan and Korea for metallurgical coal.
Macquarie Generation‟s Bayswater and Liddell power stations are located near
Muswellbrook in the Hunter coalfield and consume approximately 11.5Mtpa.
Eraring Energy‟s Eraring power station, located approximately 25km south

west of Newcastle, consumes approximately 6.2Mtpa.5
Delta Electricity‟s Central Coast power stations, Vales Point and Munmorah,
are located in the Newcastle Coalfield, and collectively consume around
3.8Mtpa. Delta‟s two western power stations are located and supplied by
mines in the southern part of the Western Coalfield. Their combined coal
consumption is about 6.3Mtpa. We have categorised the southern portion of
the Western Coalfield as part of the Southern corridor because coal from this
area is also railed south to Port Kembla for export.
After coal, the major export earner is aluminium. The region hosts two
aluminium smelters, the Tomago smelter, which is located about 13 km north-
west of Newcastle, and the Kurri Kurri smelter which is about 30 km north-
west of Newcastle. The former produces about 520,000 tonnes of aluminium
per year. The Kurri Kurri smelter, which is small by international standards,
produces around 170,000 tonnes of aluminium each year.
Production by coalfield
The Hunter-Gunnedah region, with output of 84.7 million tonnes in 2007

(largely from the Hunter coalfield), is the largest coal-producing province in
NSW. The Newcastle and Western Coalfields yielded 16.7Mtpa and 20.3Mtpa,
respectively in 2007.
4 New South Wales Minerals Council Ltd, Submission to Infrastructure Australia: Australia’s Future
Infrastructure Requirements, October 2008.

Chart 1 Source of saleable production in NSW, 2007
90
80
70
million tonnes 60
50
40
30
20
10
0
Hunter-Gunnedah Newcastle Western
Underground mines Open cut mines
Data source: Coal Services, December 2007
Hunter & Gunnedah Coalfields
The largest producing mines in the Hunter and Gunnedah Coalfields were the
Hunter Valley Operations, Beltana and Mount Arthur Collieries, producing
10.5Mtpa, 10.4Mtpa and 11Mtpa of saleable coal, respectively, in 2006-07.
In the medium term, the potential development of a few new coal projects and
significant mine expansions are likely to provide continued production
increases.
Existing and future coal mines in these coalfields have access to Newcastle-
oriented rail infrastructure and Newcastle port facilities.
Northern Section, Western Coalfield
The northern section of the Western Coalfield includes the Ulan and
Wilpinjong Mines. Adjacent to these mines is the Moolarben resource,
controlled by Felix Resources, which is planning to develop a large mine to
produce 12Mtpa. About 35 km south-east of Ulan is the Bylong prospect,
controlled by Anglo Coal.
These mines have access to Newcastle oriented rail infrastructure and

Newcastle port facilities enabling participation in export markets and the same
the same domestic regional market as the mines in the Hunter and Newcastle
Coalfields.

Newcastle Coalfield
The Newcastle coalfield yielded 16.7Mt of saleable steaming and soft coking
coal in 2007.
Resources are located in ten seams in Greta, Tomago and Newcastle coal
measures. There are four main coal resource/production areas: the western
segment south of Cessnock, the northern area south of Maitland, the central
section near Teralba and the southern segment near Wyong. The central and
southern areas are the main production sources within the Newcastle Coalfield.
The Central Coast power stations receive coal by conveyor, rail and road. The
rail unloading facilities at these power stations would facilitate access to coal
from lower-cost operations in the Hunter Coalfield. However, in the recent
sellers‟ market, prices for Hunter Coalfield coal were bid-up by buyers in
export markets, rather than bid-down by low cost producers as occurred in
previous buyers‟ markets. Moreover, coal from the Hunter or Western
Coalfields has a transport cost disadvantage in the Central Coast power station
market relative to coal from the Newcastle Coalfield.

Table 2 lists coal projects that are either committed or under construction in
the Hunter Valley region6. Table 3 lists proposed coal mines that are less
advanced in terms of planning.
Table 2 Planned coal projects - committed or under construction

Expected Capital
Project Company Location Field Status Start-up New Capacity Expend. Employment
Blakefield Xstrata/ 16 km SW of Hunter New project, 2010 nil $375m
South Nippon Singleton under (replacement
Steel construction for Beltana)
Mangoola Xstrata 20 km SW of Hunter New project, 2011 10.5 Mt $1.1b 400 C;
(Anvil Hill Coal Muswellbrook committed, thermal 300 O
opencut) subject to
mining lease
Narrabri Coal Whitehaven 20 km SE of Gunnedah New project, mid-2009 1.5 Mt thermal $185m 80 C; 100 O
Project Narrabri under
(stage 1) construction
Note: C – construction employment; O – operating employment
Source: ABARE’s list of major mineral and energy projects, October 2008
6 ABARE list of major minerals and energy projects, October 2008.

Table 3 Proposed minerals projects in NSW – less advanced

Expected Capital
Project Company Location Field Status New Capacity Employment
Start-up Expend.
nil
Austar
Yancoal 6 km SW of Expansion, EIS (continuation
underground Newcastle 2012 $80m 60 C
Australia Cessnock under way of mining
(Stage 3)
operations)
New project,
Winsian
EIS and
Bickham Investments/ 20 km N of
Hunter development 2010 2 Mt thermal na 60 C; 100 O
opencut Bloomfield Scone
application
Collieries
being assessed
New project,
Boggabri Idemitsu 17 km NE of
Gunnedah feasibility study Na 3 Mt thermal na
underground Kosan Boggabri
under way
Expansion,
Drayton mine Anglo Coal 13 km S of 2.5 Mt
Hunter feasibility study Na $35m 59 O
extension Australia Muswellbrook thermal
under way
14 Mt ROM
Hunter Valley Expansion,
24 km N of semi-soft
Operations Rio Tinto Hunter prefeasibility 2011 na
Singleton coking and
Expansion study under way
thermal
Up to 9 Mt $405m
New project,
Moolarben opencut; up (including
Felix development
opencut and near Mudgee Western 2010 to 4 Mt coal 220 C; 320 O
Resources application
underground underground preparation
approved
(thermal) plant)
Mount Arthur New project,

5 km SW of US$700m
North BHP Billiton Hunter feasibility study 2011 5 Mt thermal 250
Muswellbrook (A$824m)
underground under way
Expansion,
Mount Arthur 5 km SW of late 3.7 Mt US$300m
BHP Billiton Hunter feasibility study
opencut Muswellbrook 2010 thermal (A$353m)
under way
New project,
Mount Pleasant 6 km NW of 8.5 Mt
Rio Tinto Hunter feasibility study 2013 $1.3b 700
Project Muswellbrook thermal
completed
Expansion,
Narrabri Coal 20 km SE of 4.5 Mt
Whitehaven Gunnedah feasibility study Na $130m 80
Project (stage 2) Narrabri thermal
under way
Saddler’s Creek New project, 2 Mt

Anglo Coal 15 km SW of
underground Hunter prefeasibility Na thermal, 2 na
Australia Muswellbrook
and opencut study under way Mt coking
nil
Expansion,
(continuation
Ulan Xstrata Mudgee Western feasibility study 2010 $500m 800 C; 435 O
of mining
under way
operations)
Korea
Wallarah New project,
Resources late
underground NW of Wyong Newcastle feasibility study 5 Mt thermal $550m 300 O
Corp/ Sojitz 2011
longwall under way
Corp
Note: C – construction employment; O – operating employment
Source: ABARE’s list of major mineral and energy projects, October 2008

Of the less advanced projects, the Moolarben proposal near Ulan and
Wilpinjong Mines in the northern section of the Western Coalfield is
particularly significant. Approval for the project was granted in September
2007. The $405 million mine is expected to produce up to 12Mtpa of thermal
coal for export and domestic markets. Production is anticipated to commence
in 2010.
Figure 3 Coal volume forecasts by line sector
Data source: Hunter Valley Corridor Capacity Strategy 2007-2012, ARTC, 27 November 2007

Figure 3 shows the Australian Rail Track Corporation‟s (ATRC) forecast coal
transport task by rail section out to 2012. The, ARTC based on consultations
with the coal mining industry, has forecast movement of the following coal
quantities along the Hunter Valley-Newcastle supply chain (see Table 4).
Table 4 Coal movement forecasts (million tonnes)

2009 2014 2019 2024
Upper Hunter 93 128 115 117

Ulan line 29 64 75 102
Gunnedah basin 11 28 54 59
Total export 133 220 244 278
Source: 2008-2024 Interstate and Hunter Valley Rail Infrastructure Strategy,
The Hunter Valley Coal Chain Logistics Team has also examined the demand
for transport infrastructure in the region. The Logistics Team is a cooperative
organisation responsible for planning all coal exports from the Hunter Valley
coal industry. Its members now include all organisations responsible for the
transport of coal from the Hunter Valley mines to the port and onto ships for
export.
Members of the team include:

• Pacific National and QRNational as the train operators
• Australian Rail Track Corporation as the track owner
• Port Waratah Coal Services as the operator of the cargo assembly and ship
loading terminal
• Newcastle Port Corporation who manage all vessel movements in the Port.
Table 5 shows the coal producers April 2008 nominations to the HVCC
Logistics Team forecast of coal movements out to 2014.
Table 5 Coal movement forecasts (million tonnes)

2008 2009 2011 2013 to 2018
Total coal movements 118 125 175 225 to 250

Notes: figure for 2008 is based on producers demand in ARTC 2007-2012 Hunter Valley Corridor Capacity Strategy
Source: Australian Journal of Mining (on-line version, accessed 16 April 2009)
Finally, Austpac Resources has completed a synthetic rutile demonstration

plant in Newcastle. When fully operational (in 2010) the plant is expected to
have a capacity of 60,000 tonnes of rutile and 45,000 tonnes of iron pellets.


geography
The Hunter region covers about 31,000 square kilometres and is home to
about 625,000 people. This region is among the most populous areas of
Australia where mining exists alongside other industries such as tourism, wine
growers, and farming more generally. Growth in these “competing” industries
and the number of people moving to the area for life-style reasons is likely to
increase pressure on the mining industries.
The largest population centre is Newcastle, which is the second largest urban
centre in New South Wales. Newcastle accommodates just under half of the
region‟s population.
Other population centres include Lake Macquarie, Maitland, Cessnock,

Muswellbrook, Scone, Murrundi, Gloucester and Dungong, Mudgee and
Kandos.
Newcastle is the major service centre for the region. The port of Newcastle is
the largest coal export port in the world.
Employment in coal mines in the Hunter-Gunnedah, Western and Newcastle

coalfields was 7,840, 1,670 and 2,140, respectively, a total of 11,650 workers as
at 30 June 2008. Employment in all NSW coal mines was 14,100 workers at
that date.7
Total employment in the NSW mining sector as a whole was 31,200 as at June
2008, with majority of employment (22,100) in the regions along the Hunter
Valley corridor.8

The Hunter Valley coal supply chain consists of 14 coal producers, two above
rail operators (rolling stock), one below rail operator (rail tracks and signalling),
one supply chain coordinating entity, two export terminals at the port of
Newcastle, unloading facilities and conveyors at power stations, and roads and
conveyors from mines to power stations. The infrastructure services roughly
19 coal mines in the Hunter Valley.
7 NSW Minerals Council, Key Industry Statistics, 2008.

8 ibid.

3.5.1 Hunter Valley Rail System
On 5 September 2004, the ARTC commenced a 60-year lease of the interstate

and Hunter Valley rail lines in NSW.
Above-rail operators have agreements with ARTC providing access to rail

capacity through the Hunter Valley Access Undertaking (HVAU). A new
HVAU is currently being negotiated, with proposed changes including, 10-year
take-or-pay contracts, and direct contractual arrangement between ARTC and
coal producers through access holder agreements.
Pacific National is the primary coal rail haulage operator in NSW, delivering
the majority of coal to the Port of Newcastle. QR National (Queensland Rail)
has also commenced operations in NSW, transporting coal from both BHP
Billiton‟s Mt Arthur mine and Resource Pacific‟s Newpac No. 1 colliery to the
port of Newcastle.
ARTC recently advised completion of the following capacity enhancements.

• Antiene to Muswellbrook Duplication Works project – a $35 million
duplication of the tracks between Antiene and Grasstree was completed on
21 November 2008 and will result in a transit time saving of 15 minutes for
Gunnedah trains and 19 minutes for Ulan trains, and increase capacity
between Antiene and Grasstree from 35 Mtpa to 200 Mtpa.
• Hunter Valley Coal Network Capacity Improvement Strategy – the
Mangoola Loop - this $11 million investment is another step in delivering
increases in capacity along the Ulan line that will increase the available daily
coal train return paths from 11 to 26 along the Mangoola section. The
works involved the installation of new signalling and 2 kilometre of new
track incorporation 1800 heavy duty concrete sleepers and 60kg/m head
hardened rail.
3.5.2 Port of Newcastle
Newcastle is the most significant port in NSW, exporting about 89 per cent
(89Mtpa) of total NSW coal exports (100.5Mtpa) in 2007-08.
Port Waratah Coal Service (PWCS) operates two main coal terminals,
Carrington and Kooragang, with capacities of 25Mtpa and 88Mtpa,
respectively. In 2007, PWCS‟s capacity was increased by around 13 million
tonnes per annum.
Further additions to coal loading capacity at the port of Newcastle are under
construction.
An additional 11 million tonnes per annum expansion of the existing PWCS

Kooragang Island terminal is scheduled to be completed late in 2009. Planning

approval has been granted to increase capacity to 120 million tonnes. PWCS is
investigating expansion of the facility to the approved level.
Newcastle Coal Infrastructure Group (NCIG), a consortium of coal producers,

has commenced construction of the first stage of a third coal terminal (also on
Kooragang Island). The terminal will have an initial capacity of 30Mtpa. It is
scheduled to be ready to commence ship loading coal by the end of 2009. A
second stage, which would increase capacity to 66Mtpa, has been approved.
The timing of expansion to this level has not been made public.
3.5.3 Roads
The Sydney-Brisbane Corridor carries passenger and commercial traffic

between major cities and regional centres, including the Hunter region. The
corridor is served by three major land routes - a 940km rail route, an 890km
coastal road route and a 940km inland road route. The rail line comprises the
Sydney-Newcastle rail line, the North Coast line to the NSW/Qld border and
the standard gauge line to Acacia Ridge, Brisbane.
3.5.4 Energy
Electricity
In the Hunter Region there are four main generators supplying the National
Electricity Market (NEM): Macquarie Generation, Eraring Energy, Delta
Electricity and Redbank Power Station. All are State-owned companies, and all
power stations are predominately coal-fired.
Macquarie Generation is Australia‟s largest electricity generator. It owns and

operates the Liddell and Bayswater power stations, located between the towns
of Singleton and Muswellbrook in the Upper Hunter sub-Region. The
corporation generates electricity for the NEM, and in 2007 supplied 12.9 per
cent of the electricity consumed and employed 610 people in the Hunter
Region. Liddell has a generation capacity of approximately 2,000 MW and
produces around 10,000 GWh of electricity each year. Bayswater has a
generation capacity of approximately 2,640 MW and produces approximately
17,000 GWh of electricity a year.
Macquarie Generation is proposing to construct pipelines to supply methane

gas to use as a supplementary fuel in the Liddell Power Station. The gas would
be collected from nearby underground coal mines. The project would have the
twin advantage of providing mines with the means to reduce their emissions of
coal seam methane, thereby reducing the greenhouse gas impact of the coal
mining process, and enabling Macquarie Generation to reduce the emissions
intensity of the electricity produced at the Liddell power station. The project

would be the first known, large scale implementation of supplementary

methane gas fuel in an Australian coal-fired power station.
Eraring Energy owns and operates Eraring Power Station, a 2,640 MW plant
located at the southern end of Lake Macquarie. A total of 17,530 GWh of
electricity was generated for the year ending 30 June 2007. During 2006-07
approval was sought from the Department of Planning for a significant
upgrade of all four Eraring Power Station generating units, to 720 MW each.
Delta Electricity owns and operates the 1,320 MW Vales Point Power Station
located at the southern end of Lake Macquarie and the 600 MW Munmorah
Power Station at the northern end of Lake Munmorah.
Redbank Power Station is owned by Babcock and Brown Power. The station
commenced operations in 2001 and is the first Australian power station
designed and built to use beneficiated, watered coal tailings as the primary fuel.
It is located approximately 20 km from Singleton, with a capacity of 151 MW.
A Power Purchase and Hedge Agreement is in place with EnergyAustralia until
2031.
The Hunter has a number of retail companies which currently supply electricity
to the local consumer market, including: AGL Electricity Limited, Country
Energy, EnergyAustralia, Integral Energy, Jack Green Pty Ltd, Origin Energy,
Power Direct Pty Ltd, TRUenergy. EnergyAustralia and Country Energy are
both distributors and retailers.
EnergyAustralia distributes and sells energy to the Hunter, Central Coast and
Greater Sydney Regions. The company also sells energy throughout New
South Wales, Queensland, Victoria, South Australia and the Australian Capital
Territory.
Within the current deregulated market place, Hunter residents are able to
access gas from three major retailers. All three retailers (AGL Retail Energy,
Country Energy, and EnergyAustralia) are also major electricity suppliers in the
Region.
Natural gas
Sydney Gas Limited is working towards extracting natural gas (methane) from
coal seams in the Hunter. The first two exploration wells were drilled in late
2004. Sydney Gas estimates that the total resource is 673 billion cubic feet
(BCF), with 424 BCF recoverable (a 63 per cent recovery rate) from the
following five coal seams located within an area of over 100 sq. km: Blakefield,
Glen Munro, Woodlands Hill, Mt Arthur, Piercefield.

3.5.5 Water
The Hunter catchment (also known as the Hunter Water Management Area
and which includes the Hunter Regulated River Water Source) contains the
ABS Statistical Local Areas (SLAs) of Cessnock, Dungog, Maitland, Merriwa,
Murrurundi, Muswellbrook, Newcastle, Scone and Singleton.
Water use in the Hunter catchment is dominated by irrigated agriculture. Over

80 per cent of the total regulated water entitlement is used for irrigation
purposes. The second largest regulated entitlement is for the power generation
and minerals sectors with an annual combined total entitlement of 40,940 ML.
3.5.6 Human capital and community infrastructure
Education
Education enrolment in the region is summarized in Table 6.
Table 6 Education enrolment

2001 % 2006 %
Pre-school 9,315 5.66 12,125 6.84

Infants/primary 54,141 32.90 57,028 32.16
Secondary 38,593 23.45 42,888 24.18
Technical 16,854 10.24 16,053 9.05
University 17,853 10.85 19,513 11.00
Type of education not stated 22,509 13.68 24,260 13.68
Total 164,546 100.00 177,339 100.00
Note: Percentage totals do not add due to omission of some categories
Data source: ABS. Census of population and housing.
The Hunter Institute of Technology is the largest provider of nationally-

recognised vocational education and training services in the Region. The
Hunter Institute is compromised of nine faculties: Access and General
Education; Arts and Media; Business; Engineering; Health and Community
Services; Information and Communications Technology; Primary Industries,
Construction and Environment; Tourism and Hospitality; and Transport and
Maritime Training Centre.
A number of group training organisations provide training and apprenticeship

services to a wide range of companies. Their services can be particularly useful
to smaller companies who might otherwise find it difficult to commit to full-
term apprentice employment.

The Australian Government (through the Federal Department of Education,

Employment and Workplace Relations) funds Australian Technical Colleges
(ATCs) across Australia in areas where there are skills needs, a high youth
population and a strong industry base.9
Adult and Community Education (ACE) providers deliver a wide range of

adult learning and training opportunities, from general short courses through
to nationally accredited, competency-based courses leading to a professional
qualification.
The University of Newcastle, originally part of the University of New South

Wales, was established as a University College in 1951 to serve the growing
industrial needs of the Region, particularly in the areas of engineering and
science. It became an autonomous University in 1965. From 1 November 1989
the University of Newcastle was amalgamated with the Hunter Institute of
Higher Education and the Newcastle Branch of the State Conservatorium of
Music.
The University has campuses in Newcastle, Ourimbah (3,325 enrolments), and

the Central Coast, Port Macquarie and Singapore (1,525 enrolments). The
School of Music and Conservatorium, the Newcastle Legal Centre and the
Graduate School of Business are located in the Newcastle central business
district (CBD). The University‟s medical and nursing programs are based on
the Callaghan campus, but they also operate out of major clinical, teaching, and
research facilities at several hospitals and health centres within the CBD and in
a number of other locations in the Hunter and Central Coast Regions.
Health
The Hunter New England Health area has a population of approximately

837,670 people, accounting for about 12 per cent of the State population. The
area covers over 130,000 sq. km and spans 25 local government areas (LGAs)
in eight geographic clusters.
All Hunter New England Health hospitals are open 24 hours a day. Emergency
care is provided by 36 hospitals throughout the Hunter New England Region,
with the John Hunter, Maitland, Belmont and Mater hospitals in the Hunter
providing the majority of this emergency care.
The Hunter New England Health Service runs 56 community health centres
which provide a variety of services such as: Aboriginal health services, Drug
and alcohol counselling, Child and adolescent services, Palliative care, Diabetes
9 The Hunter Trade College is an ATC in the Hunter Valley region. It is run by the Hunter
Valley Training Company and the Maitland/Newcastle Diocesan Catholic Schools Office.

education, Migrant health services, Asthma education, and Sexual assault

clinics.
The main private hospitals in the Hunter include Christo Road, Hunter Valley,
Lake Macquarie, Lingard, Maitland, Newcastle, Toronto and Warners Bay
Private Hospital. The Ambulance Service of NSW provides emergency clinical
care, rescue and patient transport. There are a total of 226 ambulance stations
throughout the State, located within four separate divisions. The Westpac
Rescue Helicopter Service (WRHS) is a community owned and operated aero
medical search and rescue service, serving the Hunter, Mid North Coast, New
England and North West Regions of NSW. It is one of six helicopter services
contracted by NSW Health to perform emergency services in the State
community.
Transport
In the ARTC‟s Hunter Valley Corridor Capacity Strategy, demand for rail and port
services in the Hunter Valley corridor was forecast to be 133Mtpa in 2009,
151Mtpa in 2010, 166Mtpa in 2011 and 177Mtpa in 2012.
These forecasts were based on the ARTC‟s consultations with the coal mining
industry. The forecasts significantly exceeded the port capacity that will be
available.
For 2009, the ARTC is expecting declared capacity to run at 100Mtpa until the
NCIG third loader, or the PWCS capacity upgrade, creates more capacity. At
100Mtpa capacity, 2009 volumes would be constrained to about 25 per cent
below what producers have advised they would like to produce.
ARTC assumed that both NCIG and PWCS capacity would become available
in the fourth quarter of 2009. For that quarter, port capacity would exceed
demand. However, on current forecasts, demand would again exceed port
capacity from the first quarter of 2010. It was forecast that capacity would
constrain demand by 7 per cent in 2010, 15 per cent in 2011, and 20 per cent in
2012.
More recent industry forecasts (producer-based) indicate that in the absence of

capacity constraints at the port, total coal volume on the Hunter Valley
network would have been about 118 million tonnes in 2008, increasing
gradually to 175 million tonnes per annum in 2011.

ACCC interim rationing system
From 2004 to 2009 the Australian Competition and Consumer Commission

(ACCC) granted an “interim authorisation” under competition laws to PWCS
and NCIG to jointly operate a “capacity balancing system” (CBS). The CBS
has been designed to address the imbalance between the demand for coal
loading services at the port of Newcastle and the capacity of the Hunter Valley
coal supply chain. This arrangement is an alternative rationing system to
substantial queuing of ships off Newcastle, with consequent high demurrage
costs.
The CBS was first authorised by ACCC in March 2004. In April 2008, the
ACCC expressed doubt that extension of the system beyond the end of 2008
would continue to be in the public interest in the absence of progress towards
a long term solution to imbalance problem.
An interim authorisation was requested on 19 November 2008. The ACCC

agreed to issue one because of an announcement by the NSW ports minister of
a plan, supported by coal producers, to resolve the capacity problem on a
longer-term basis. However, that interim authorisation was subject to
provision of monthly reports detailing satisfactory progress towards a long-
term solution.10
Recent indications are that progress is being made and that a plan to manage
the capacity of the coal supply chain could be agreed by mid 2009.
Water
New minerals and energy industry projects anticipated in the Hunter

catchment over the period between 2006 and 2015 are expected to increase
annual water demand by 27,973 ML over the period.
In 2007, 170,000 ML/annum was extracted, compared with the extraction limit
of 217,000 ML/annum.
Water consumption is projected to rise to the level of the current extraction

limit by 2013, and by 2015 annual consumption will exceed the extraction limit
by 18,000 ML.11 This suggests that lack of access to adequate supplies of
water may be a potential constraint on minerals development.
Salt occurs naturally in many of the rocks and soils of the Hunter Valley.
Human activities such as agriculture, irrigation, and coal mining can increase
10 Australian Competition and Consumer Commission, ACCC grants interim authorisation to

PWCS and NCIG, 17 December 2008.
11 ACIL Tasman, Water Reform and Industry, April 2007.

the flow of salty water into the Valley‟s rivers and streams. The NSW
Government‟s Hunter River Salinity Trading Scheme was introduced by
regulation in 2003. Under this scheme miners and electricity generators can
make controlled saline discharges at times when there are high river flow rates
and low background salinity levels so that salinity targets are not exceeded.
Saline discharges can only be made in line with holdings of tradeable salinity
credits. Initially 1000 salinity credits were issued. Two hundred credits expire
and new credits are re-issued via a public auction every 2 years. The prices
paid for a credit at the most recent auction (in 2008) varied between $869 and
$1019.
3.7.1 Planning processes and initiatives
Hunter Valley rail capacity
In 2002, ARTC developed a detailed infrastructure investment program for the

NSW network in the context of the proposal to the NSW Government in
respect of the Hunter Valley and interstate rail lines. This program is reviewed
annually in ARTC‟s strategy document.
In the 2008-2024 Rail Infrastructure Strategy, ARTC identified capacity constraints

on the Hunter Valley network. The fundamental approach of ARTC in
developing this Strategy has been to increase capacity to levels sufficient to
meet anticipated demand for export and domestic coal transport (with a
reserve surge capability), while having regard to the constraints imposed by the
capacity of the Newcastle port.
On 12 December 2008, the Commonwealth Government announced a $4.7

billion “national building package to strengthen the economy and create
Australian jobs”. It included an injection of $1.2 billion into the ARTC in 17
projects to improve the reliability and competitiveness of Australia‟s rail freight
network. This capital injection included $580 million to expand the capacity of
the Hunter Valley corridor rail system. Separately, ARTC is to raise an
additional $420 million for the Hunter Valley system upgrade.
The Prime Minister said the $1 billion investment would allow the amount of
coal carried to the port of Newcastle to double to 200Mtpa.12 However, this
implicitly assumed construction of stage 2 of the NCIG terminal and
12 Kevin Rudd, Australian Prime Minister, $4.7 billion nation building package, 12 December
2008.

expansion of PWCS‟ Kooragang Island facilities to their currently approved

capacity of 120Mtpa.
A study by the Australian Rail Track Corporation into a possible inland rail link
between Brisbane and Melbourne is currently underway. Box 1 outlines some
of the initial findings of the working papers that have been released to date. In
summary, the railway could bring some transport benefits for the coal industry
in the Gunnedah basin if the rail line through that region is upgraded as part of
any inland rail link.
While the inland railway would appear to be of limited direct value to the rest
of the minerals sector in NSW, there could be some marginal benefits
associated with removing demand pressure from existing road and rail
networks.
Box 1 Inland Railway Study
The Federal Government commissioned the Australian Rail Track Corporation in

March 2008 to study possible routes for an inland railway running from Melbourne to
Brisbane. The ARTC is generally following the „far western sub-corridor‟ identified by
the North-South Rail Corridor Study which was completed in 2006. After examining
more than 50 options, the finding of the study is that the railway should follow existing
rail lines from Melbourne via Albury to Cootamundra, Parkes, Narromine, Dubbo,
Werris Creek and Moree to North Star near Goondiwindi; with new construction from
North Star to Brisbane via Toowoomba. North of Parkes the railway would require the
upgrading of parts of the existing route, including minor deviations to improve its
alignment. Initial cost estimates suggest the project would cost between $2.8 billion
and $3.6 billion. Projections on likely demand for the service suggest that as a
standalone project it is not financially viable at this stage.
The proposed routes generally would not service existing minerals operations in NSW.
Significant amounts of coal are moved along the Hunter Valley and Central Highlands
rail lines and these are expected to remain the preferred routes. Coal operations are
expected to expand in the Gunnedah basin over the coming decade, immediately
adjacent to the proposed inland railway route. The coal from this region would
ultimately travel approximately 300 kilometres to Newcastle, but some is likely to travel
via the Narrabri to Werris Creek line, which may form part of the inland route. The
Gunnedah basin presently produces 9 Mtpa of coal and is projected to increase to 55
Mtpa by 2021. The ARTC‟s study suggests that only 750,000 tonnes travelling along part
of the 130 kilometre section would be “contestable” at present.
Sources: PriceWaterhouseCoopers, ARTC Melbourne-Brisbane Inland Rail Alignment Study, Stage 1,
Working Paper No.5, Financial and Economic Assessment and Identification of the Route for Further
Analysis, May 2009 and ACIL Tasman, ARTC Melbourne-Brisbane Inland Rail Alignment Study, Working
Paper No.1 – Demand and Volume Analysis, May 2009
.

Port of Newcastle
PWCS‟s current expansion program will increase the terminal‟s capacity to 99

million tonnes by late 2009. Planning approval has been granted to increase
the capacity of the Kooragang Island terminal to 120 million tonnes. PWCS is
currently considering how best to implement the approved expansion of the
facility to this new level.
A second stage of the terminal NCIG is building on Kooragang Island has

been approved. It would lift capacity from the stage 1 capacity of 30 Mtpa
(scheduled to be available from late 2009) to 66 Mtpa. The timing of stage 2
has not been made public.
On 12 December 2008, the NSW ports minister announced a plan to allocate

and increase coal loading capacity in the port of Newcastle. The plan had been
drawn up to help end the deadlock over the allocation of future port capacity in
the Hunter Valley coal supply chain.
The plan included:
• triggers requiring terminals to build new capacity on demand

• long-term contracts to underpin investment in terminal capacity
• an industry levy to help fund new terminal infrastructure where required
• guaranteed access for new entrants and expanding producers
• a fourth terminal with capacity of up to 90Mtpa, based on granting an
opportunity to PWCS to lease additional government land on Kooragang
Island. 13
The plan was agreed to by the industry in April 2009.14
There is still a need for more detail on the nature and implementation of the
“plan”. For example, the details of the triggers to “build new capacity on
demand” and the mechanisms for providing new entrants with “guaranteed
access” will be critical to the economic and commercial viability of terminal
investments and operations.
Orica Resources has plans to expand their ammonium nitrate facility at

Kooragang Island. The project would increase the plant‟s capacity by 250,000
tonnes at a cost of $450 million.
13 Joe Tripodi, Minister for Finance, Infrastructure, Regulatory Reform, Ports and Waterways,
Plan to end coal supply chain deadlock, 12 December 2008.
Industry signs coal export agreement, 8 April 2008.

The New South Wales Infrastructure Strategy
The New South Wales State Infrastructure Strategy 2006-07 to 2015-16 states that it
is “a 10-year plan which charts the infrastructure provision the New South
Wales Government will need to make in each of the State‟s six broad regions –
Sydney, the Central Coast, the Hunter, the Illawarra and the South East, the
North Coast and Inland New South Wales.” The document is split by
portfolio and by region.15
The infrastructure strategy document is essentially a list of projects or

programs (groups of projects) along with estimated capital costs and
timeframes. The level of detail provided varies somewhat. Estimated costs are
not always provided, as they are sometimes deemed to be “commercially
sensitive”. In many cases timeframes for projects and programs are shown to
extend to the final year of the strategy. In such cases, it is not clear when the
project or program is scheduled to be completed. For example, the listing of
Newcastle port redevelopment did not include an outline of proposed works,
excluded the estimated cost and was shown as extending from 2010-2011 to
2015-16, without indicating whether or not the project would be completed in
2015-2016.
Hunter Valley rail system
In 2002, ARTC developed a detailed infrastructure investment program for the

NSW network in the context of the proposal to the NSW Government in
respect of the Hunter Valley and interstate rail lines. This program is reviewed
annually in ARTC‟s strategy document. The fundamental approach has been
to increase capacity to levels sufficient to meet anticipated demand for export
and domestic coal transport (with a reserve surge capability), while having
regard to subject to constraints imposed by the capacity of the Newcastle port.
In the 2008-2024 Rail Infrastructure Strategy, ARTC identified capacity constraints

on the Hunter Valley network and outlined six proposed enhancements to the
Hunter Valley network.16
1. Introduce trains of up to 1350 metres on the line to the Gunnedah Basin.
Currently, trains on this line are limited to 740 metres. Moving to the
longer train configuration would provide significant efficiencies to
15 New South Wales Treasury, New South Wales State Infrastructure Strategy 2006-07 to 2015-16,
2006.
16 ARTC, 2008-2024 Interstate and Hunter Valley Rail Infrastructure Strategy.

producers in this coalfield, as well as providing capacity benefits for both

the rail network and the port.
2. Offer 30 tonne axle loads to Gunnedah Basin traffic. At present, axle loads
are limited to 25 tonnes, while 30 tonnes is the limit in the rest of the
Hunter Valley system. Whether or not to adopt 30 tonne axle loads would
be a matter for the industry, which would ultimately meet the cost.
3. A new alignment of the Gunnedah line over the Liverpool Range would
reduce the current 1 in 40 gradient and thereby eliminate the need to use
“bank” engines.
4. The 1 in 40 gradient also represents a barrier to trains longer than around
1350 metres and the new alignment will create the opportunity to consider
going to longer trains on this line, probably to the current Hunter Valley
standard of 1650 metres.
5. In the longer-term, adopt North American rolling stock outlines. This
would allow increased efficiencies in loading, and the acquisition of “off-
the-shelf” rolling stock. While all new structures are being built to a
suitable outline, it is not anticipated that this outline would be introduced
within the 15 year timeframe of the strategy.
6. Plan roll-out of the Advanced Train Management System (ATMS) from
2011. The large sunk cost in the existing CTC signalling system, and its
relative newness, have raised some questions as to whether ATMS would
be a suitable investment within the 15-year timeframe of the strategy.
However, the significant above-rail benefits and strong demand for
additional capacity suggested that it would be prudent to plan for its roll-
out. This position would be kept under continuing review.
ARTC planning is proceeding on the basis that beyond 2011, the other parts of
the coal logistics chain will deliver sufficient capacity to accommodate the
producer forecasts. For this reason, ARTC‟s planning is based on providing
sufficient rail infrastructure capacity to meet proposed projects.
Table 7 outlines ARTC‟s “scope of investment” for the period 2008-2017. In

summary, the proposed investment for increasing capacity includes:17
• progressive development of a third track the full distance from Maitland to
the foot of Nundah bank (near Newdell)
• loop extensions and, subsequently, double tracking of the corridor between
Muswellbrook and Gunnedah, with additional loops between Gunnedah
and the connection point for the Narrabri Mine
• additional loops on the Ulan line, with double track extending from
Muswellbrook to the junction for the Anvil Hill Mine.
17 ARTC, 2008-2024 Interstate and Hunter Valley Rail Infrastructure Strategy.

The $520 million Commonwealth Government injection into ARTC for

Hunter Valley works announced by the Prime Minister in December 2008
presumably would allow ARTC to bring forward nearly 30 per cent of the
scheduled investment summarised in Table 7. The Commonwealth‟s funding
is expected to be supplemented by $420 million of borrowing by the ARTC.
The effect of this injection on the timing and amount of the investments
previously scheduled by ARTC has not yet been clarified.
After allowing for works scheduled to be undertaken in 2008, the $1 billion

investment announced by the Prime Minister would fall short of investment
program requirements by nearly $680 million. Presumably, ARTC would raise
additional capital at a later time to complete the program in Table 7.

Table 7 ARTC proposed scope of investment 2008-2023
Source: ARTC, 2008-2024 Interstate and Hunter Valley Rail Infrastructure Strategy

Investments scheduled over the next five years for the Gunnedah line and
lower Hunter Valley are summarised in Figure 4 and Figure 5, respectively.
Figure 4 Five-year investment strategy – Ulan and Gunnedah lines
Data source: ARTC, Interstate and Hunter Valley Rail Infrastructure Strategy 2008-2024
Figure 5 Five-year investment strategy – Hunter Valley
Data source: ARTC, Interstate and Hunter Valley Rail Infrastructure Strategy 2008-2024

3.7.3 Energy sector
Electricity
Major current planned energy development projects include:

• Construction of a $7 million water recycling scheme at Vales Point Power
Station, saving 230 million litres of drinking water a year. Wyong Council
will deliver treated effluent from its Mannering Park Sewerage Treatment
Plant to the Water Reclamation Plant at Vales Point through a new 2 km
long pipeline. Once treated at the power station‟s reverse osmosis
treatment plant, the recycled water will then be used to feed the boilers and
cooling system.
• A pilot carbon capture plant, developed at the Munmorah Power Station
through a $5 million joint initiative with the CSIRO. The Post Combustion
Capture (PCC) pilot facility will capture greenhouse gas emissions from the
plant using ammonia absorption technology.
• The installation of fabric filters (in place of less effective precipitator
technology) on a unit at Vales Point Power Station to virtually eliminate
visible particulate emissions. The $55 million project also incorporated the
refit of another unit to reduce emissions.
• In addition, in May 2007 Delta Electricity announced that Alstom Limited
had been awarded the contract to build a new, gas-fired power station. The
660 MW peaking plant will be located at the existing Munmorah Power
Station and will produce power during peak demand periods.
Natural gas
The Queensland to Hunter Gas Pipeline is to supply gas along the east of
NSW from the Wallumbilla Gas hub in south-east Queensland (about 500 km
west of Brisbane) to Hexham in the Hunter, linking up with the existing
Sydney to Newcastle Pipeline. The proposed pipeline will be 820 km in length,
and is expected to create 800 jobs during construction and 150 permanent
positions after completion. Construction is expected to start in late 2009
(dependent on approvals) and be completed by 2011.
3.8 Growth scenario, Hunter Valley region

The sections that follow essentially examine Hunter Valley minerals projects
that are currently in the pipeline and discuss their impact on existing and
planned infrastructure. To do this we have included those projects that have
been reported in various ABARE and the NSW government documents.
Where necessary we have supplemented that information through our own
research and consultations with industry.

We have not examined the extent to which the regional Hunter Valley growth
scenario discussed below aligns with the national Advance scenario for minerals
production. Nor have we discussed the implications for regional Hunter Valley
growth if actual outcomes align more with the national Holding the Line and
Decline growth scenarios. Obviously, to the extent that some minerals
projects are either delayed or do not proceed and actual growth is therefore
less than that discussed below, the demands on infrastructure will be reduced.
Finally, we would note that a failure to implement (or delays in implementing)

some of the existing infrastructure expansion plans could lead to the
anticipated growth in minerals production being constrained and actual
outcomes being pushed more towards those suggested by the Holding the Line
and Decline growth scenarios.
3.8.1 Coal production
Forecast annual production from proposed new coal mines and expansions of
existing mines in the Hunter Valley region is shown in Figure 6. The estimated
start up year is shown in brackets. The figure does not include new production
where that new production is merely replacing production from an existing
source.
If the planned new mines and expansions come on line as scheduled then
annual coal production from the Hunter Valley region would increase by 72.2
Mt. Most of that increase would occur by the end of 2011 (see Figure 7).

Figure 6 Forecast production from proposed Hunter Valley coal mines

(Mtpa)
Moolarben (2011)
Mangoola (2010)
Mount Pleasant (2011)
Wallarah (2013)
Narrabri Coal Project (part 2) (2011)
Saddlers Creek (2011)
Mount Arthur (2011)
Boggabri (expansion) (2010)
Drayton (expansion) (2010)
Bickham (2010)
Narrabri Coal Project (part 1) (2010)
Metropolitan (longwall) (2009)
0 5 10 15
Note: Year in brackets is announced (or estimated) date of first production.

Data source: ABARE’s list of major mineral and energy projects, October 2008. The graph does not include new
developments that are replacing production from other sources.
Figure 7 Forecast cumulative new Hunter Valley coal production

capacity (Mtpa)
80
70
60
50
40
30
20
10
0
2009 2010 2011 2012 2013
Data source: ABARE’s list of major mineral and energy projects, October 2008. The graph does not include new
developments that are replacing production from other sources.

Table 8 Summary of growth scenario to 2020 for the Hunter Valley growth region
Coal Possibly over 70 Mtpa of additional production by 2011. Production could total 250 Mtpa by 2018
Table 9 Summary of infrastructure requirements under growth scenario to 2020 for the Hunter Valley
growth region
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.
Below we discuss the key areas where infrastructure issues may constrain
growth in minerals production in the Hunter Valley region.
Rail
Access to rail transport infrastructure is one of the keys to the growth of the
coal industry in the Hunter Valley region. The ARTC‟s 2008-2024 Rail
Infrastructure Strategy has identified capacity constraints on the Hunter Valley
network and proposes a plan to address these.
In December 2008 the Commonwealth Government announced that it would

provide ARTC with $580 million to expand the capacity of the Hunter Valley
corridor rail system. The ARTC plans to raise an additional $420 million for
the Hunter Valley system upgrade. That funding would be sufficient to carry
out the upgrades listed in Table 7 up to 2012. ARTC will need to access
additional funding if it is to carry out the proposed upgrades from 2013
onwards.
ARTC‟s planning is based on the assumption that other components of the

coal logistics chain will simultaneously deliver sufficient capacity to
accommodate producer forecasts.

Ports
The coal loading capacity at the port of Newcastle is clearly another important
determinant of the overall capacity of the coal logistics chain in the Hunter
Valley.
The PWCS terminal has been granted approval to increase its loading capacity
to 120 million tonnes and the NCIG terminal will add a further 30 Mtpa by the
end of 2009 and it has got approval to increase that further to 66 Mtpa. There
are also plans for an additional terminal with capacity of up to 90 Mtpa.
The NSW government has announced a plan to increase coal loading capacity
at the port of Newcastle and manage the allocation of that capacity. 18 There is
still not a lot of detail on the plan. The 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. Nonetheless, given the strong
incentives to address the capacity problem, we are relatively optimistic about
the chances for a successful outcome. This is not to downplay the difficulties
associated with coordinating information about coal production, rail capacity
and loading capacity. Uncertainty about levels of overseas demand will not
make that task any easier.
Water
In 2007 the Hunter Valley catchment was operating some 47,000 ML below its
annual extraction limit. The extraction limit is expected to be exceeded by
2014. Given that new coal and energy projects in the Hunter Valley between
2006 and 2015 are expected to increase water demand by just below 30,000
ML, it is clear that access to adequate supplies of water could be a constraint
on minerals development.
Plan to end coal supply chain deadlock, 12 December 2008.

4 Southern NSW growth region

The southern NSW growth region covers the southern part of the Western
Coalfield, and the Central and Southern coalfields and relevant transport
corridors. Figure 8 shows the main railway lines, coalfields and coal basins in
the region, in the context of all of the NSW coalfields and coal transport
corridors.
The southern NSW growth region is served by three National Network land
transport corridors, Sydney-Dubbo, Sydney-Wollongong, and Sydney-
Melbourne. The rail components are as follows.
• Sydney-Dubbo corridor: section of rail network from Lithgow to Sydney
(see Figure 9). The main role of this rail line is to transport coal from the
Western Coalfield to connect in Sydney with southern rail lines linking to
coal export facilities at Port Kembla.
• The Sydney-Wollongong corridor (see Figure 10). This is the primary
transport route from Sydney to Port Kembla. The Moss Vale-Unanderra
rail line, running from the interstate mainline to Port Kembla, provides a
direct link for predominantly coal and grain movements to the Port for
export. The Illawarra rail line from Sydney is not part of the National
Network, being part of the NSW CityRail network, but has a role to play in
both freight and passenger movements between the regions.19
• The Sydney-Melbourne Corridor: section of rail network from the
Southern Coalfield to Port Kembla (see Figure 11). This section of rail
links freight generated in the Southern Highlands and Riverina areas
(including grains, coal and aggregate) with markets and export gateways in
Sydney and Port Kembla. 20

Government, Sydney-Wollongong Corridor Strategy, June 2007.
Government, Sydney-Melbourne Corridor Strategy, June 2007.
Southern NSW growth region 34

Figure 8 NSW coalfields, key rail lines and coal ports
Source: NSW Department of Primary Industries, 2008 NSW Coal Industry Profile

Figure 9 Eastern section of the Sydney-Dubbo corridor
Note: For the purposes of this report, the section of rail corridor of interest is the one from Lithgow that connects to the
Sydney-Wollongong corridor.
Source: Department of Infrastructure, Transport, Regional Development and Local Government, Sydney-Dubbo
Corridor Strategy, June 2007
Figure 10 Sydney-Wollongong corridor
Note: For the purposes of this report, the sections of rail corridor of interest are the Moss Vale – Unanderra line and the rail network between Sydney and Port
Kembla.
Source: Department of Infrastructure, Transport, Regional Development and Local Government, Sydney-Wollongong Corridor Strategy, June 2007

Figure 11 Northern Section of the Sydney to Melbourne corridor
Note: For the purposes of this report, the section of rail corridor of interest is the one north of Goulburn, and includes
the proposed Southern Sydney Freight Line
Source: Department of Infrastructure, Transport, Regional Development and Local Government, Sydney-Melbourne
Corridor Strategy, June 2007

The value of production of the NSW minerals industry in 2007-08 was $13.9
billion. Coal was the dominant commodity, accounting for 66 per cent of
value of output.
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.

4.2.1 Production by coalfield
In 2007, the Southern Coalfield produced around 11 Mt of saleable coal, while

saleable coal production from the Western Coalfield was around 20 Mt. The
northern section of the Western Coalfield is oriented to the Hunter Valley-
Newcastle supply chain. The southern section is oriented to the Lithgow-Port
Kembla supply chain.
The Southern Coalfield produces coking and thermal coal. About 50 per cent
of saleable production is consumed by the domestic steel industry. The
remainder is exported as coking or thermal coal.
The southern part of the Western Coalfield produces coal for Delta
Electricity‟s western power stations and export thermal markets. Some coal is
also supplied to the domestic cement industry.
Chart 2 Source of saleable production in NSW, 2007

25
20
million tonnes
15
10
0
Western Southern
Underground mines Open cut mines
Source : Coal Services, December 2007
4.2.2 Southern Section, Western Coalfield
The southern section of the Western Coalfield could be divided into two sub-
segments, which we will refer to as central and far-southern. Both of these
sub-segments have access to Port Kembla oriented rail infrastructure.

Far-Southern Area
There are several mines clustered in an arc from north-east to south-east of

Delta Electricity‟s Mt Piper and Wallerawang Power Stations, 15km and 25km
west of Lithgow, respectively. The power stations are supplied by nearby
mines via conveyor or road transport. However, Delta is constructing facilities
at Mt Piper to allow supply of coal by rail from more distant mines.
Far-southern Western Coalfield mines also provide coal to other domestic

markets and to export customers.
Coal consumption at Wallerawang and Mt Piper power stations is 2.5 Mtpa

and 3.8 Mtpa, respectively. The largest suppliers to these power stations are
the underground longwall Springvale and Angus Place Mines (owned by
Centennial Coal and its joint venture partners), which together provide about
5.1mtpa under long-term contracts, about 80 per cent of the coal burned.
Springvale coal is transported by conveyor and Angus Place coal is carried by
road to the power stations. Combined proven reserves of marketable coal at
these mines are about 93 Mt.
Delta Electricity is also supplied by road from small open cut (truck and
shovel) mines operated by small companies. These mines are located within a
few kilometres to the north of the Mt Piper and Wallerawang Power Stations.
In total, they account for less than 8 per cent of the stations‟ coal intake.
About 1.9 Mtpa of Springvale and Angus Place coal are exported through Port
Kembla, involving a rail haul of about 255 km.21
Centennial Coal and its Springvale/Angus Place joint venture partners also
have open cut resources of about 29 Mt of thermal coal at Wolgan Road,
Neubecks Creek and Kerosene Vale prospects in the vicinity of the Springvale
and Angus Place Mines and the Mt Piper and Wallerawang Power Stations.
Marketable reserves on a 100 per cent yield basis as raw coal are estimated to
total 18 Mt, including Wolgan Road‟s 12 Mt.22
Centennial Coal operates the underground (continuous miner) Clarence Mine,

located 16 km east of Lithgow. Production capacity is about 2.5 Mt of thermal
coal per annum. About 85 per cent of this coal is exported, involving a 221
km rail haul to Port Kembla. The remainder is supplied to Delta Electricity.
Resources are about 230 Mt, including reserves of 55 Mt.23
21 Centennial Coal, Annual Report 2008, p. 21.

22 Centennial Coal, Annual Report 2008, pp. 26.
23 Centennial Coal, Annual Report 2008, pp, 23, 26.

Xstrata controls the Baal Bone Mine 32 km north of Lithgow and around
20km from Delta Electricity‟s western power stations. The mine is in the
vicinity of the Kandos-Lithgow rail link and has production capacity of around
2.5mtpa. The mine is approximately 227 km by rail to Port Kembla to which
the majority of the product is railed for export.
Central-Southern Area
Centennial Coal operates the Charbon Mine, 2 km south of Kandos in the

central-southern area of the Western Coalfield. The mine produces around 1.2
Mtpa of thermal coal from underground (continuous miner) and open cut
(truck and shovel) operations. Some coal is transported by road to the Kandos
Cement Plant. Most of the coal is railed 325 km to Port Kembla for export.
Remaining marketable reserves as at 30 June 2007 amounted to only 6.5 Mt.24
About 20 km south of Charbon Mine and about 30 km north of Delta‟s Mt

Piper Power Station is the Airly coal prospect controlled by Centennial Coal.
It is in the vicinity of the Kandos-Lithgow rail link. The Airly prospect is
potentially an underground mine. It contains resources of around 119 Mt of
which 21.8 Mt have been categorised as a probable reserve all of which is
considered marketable on a 100 per cent yield basis as raw coal.25
4.2.3 Southern Coalfield
The largest producing mines in the Southern coalfield are BHP Billiton‟s
Appin and West Cliff Mines, located in the Illawarra area, south of
Wollongong.
The Appin Mine is the oldest of Illawarra‟s operating mines. Coal is extracted
using the longwall method26 and is premium quality hard coking coal, used for
coke making by the Australian steel industry and also exported to customers
around the world.
24 Centennial Coal, Annual Report 2008, p. 22, 26.

25 Centennial Coal, Annual Report 2007, p. 18; New South Wales Department of Primary
Industries, 2006 New South Wales Coal Industry Profile, 2007, pp. 146-148.
26 In this method, two tunnels are cut in the coal seam parallel to each other and about 300 m
apart. A connecting tunnel is driven between them and one wall of this becomes the
working coalface. The face is equipped with hydraulic support systems which create a
canopy over the heads of the men and machinery. At the front of these support systems is a
chain conveyor, the sides of which support a mining machine which cuts the coal by means
of a cylindrical drum which rotates against the coal face. The coal falls on to the chain
conveyor, which transports it to the end of the longwall face and subsequently out of the
mine. When the whole length of the face has been cut, the support system is moved
forwards and the mining machine repeats the process in the opposite direction. © 1993-
2009 Microsoft Corporation. All Rights Reserved.

The West Cliff Mine uses the longwall method to extract coal from the Bulli
seam. West Cliff has a washery capable of processing over 4.5 Mt and a
capacity to store over 2.5 Mt of coal on site. West Cliff coal is trucked to
BlueScope‟s Steelworks at Port Kembla, or to the Port Kembla terminal for
export.

Centennial Coal‟s Airly project, located near Lithgow in the Western Coalfield,
has been planned as a 1.6-1.8 Mtpa underground mine with a capital cost of
$100 million. Resources are estimated to be more than 120 Mt of thermal coal.
Board and development approval for the Airly project has been granted.
Development was scheduled to commence in 2009. Production is expected to

commence in 2010. Coal is to be exported through Port Kembla.
A less advanced project is Peabody Pacific‟s proposed Metropolitan

underground longwall mine 30 km north of Wollongong. It is expected to
produce 1.3 Mtpa of run-of-mine hard and semi-hard coking coal. Estimated
capital cost is $50 million.
Sydney Gas and AGL have received planning approval for the Stage 2 of the
Camden Gas Project, a coal seam methane project near Camden. Expected
production is around 12 PJ a year.
Tri Origin Minerals has completed feasibility studies associated with the
retreatment of Woodlawn tailings and further underground development at the
same location. These projects are anticipated to produce 70 kt and 8 kt of
concentrates (Cu, Pb, Zn, and Ag). The projects are currently on hold pending
improved prices for these minerals.
Bluescope is increasing the capacity (by 1.1 Mt) of its Port Kembla sinter plant
and raw material yards at a cost of $135 million.27
4.4 Resources-related demography

Employment in NSW coal mines was 14,100 as at June 2008, with 2,450
employed in coal mines in the Southern Coalfield and 1,670 employed in the
Western Coalfield. The Southern and Western Coalfields together contribute
almost 30 per cent to total coal mining employment in NSW.
Total employment in the NSW mining sector was 32,600 as at November

2008.28 In the Sydney and Illawarra/Southeast regions employment was 4,800
27 ABARE‟s list of major mineral and energy projects, April 2008.

and 3,600 respectively. Together these regions contribute around 27 per cent
of total mining sector employment in NSW.29
The largest population centre in the southern segment of the Western Coalfield
is Lithgow. It has a population of around 20,000 people.
4.5 Current Infrastructure
4.5.1 Rail system
On 5 September 2004, the Australian Rail Track Corporation (ARTC)

commenced a 60 year lease of the NSW interstate and Hunter Valley rail lines.
Pacific National is the primary coal rail haulage operator in NSW, and operates
over 400km of rail track along the Port Kembla and Western coal export rail
lines.
As outlined above, the supply chain in the southern NSW region includes
sections of rail on three National Network corridors – Sydney-Dubbo, Sydney-
Wollongong, and the Sydney-Melbourne.
The Sydney-Wollongong corridor is the key link between Sydney and

Wollongong. It services the Port Kembla port and industrial precinct,
including the BlueScope steelworks, south of Wollongong.
Also along the Sydney-Wollongong corridor, is the Illawarra rail line, which
runs from the Sydney metropolitan region, along the coast and through
Wollongong before terminating at Nowra.30 Although it carries some bulk
export freight (coal) destined for Port Kembla, and rails finished product from
the BlueScope steelworks north to Sydney and beyond, it is not part of the
National Network. It is primarily a part of the Sydney CityRail passenger
network.
The Moss Vale-Unanderra rail line runs from the interstate rail mainline to
Port Kembla, connecting the Sydney-Melbourne and Sydney-Wollongong
corridors. This rail line provides a direct link for predominantly coal,
limestone, and grain movements to the Port for export. Coal and limestone are
hauled by Pacific National.
Coal is moved via rail along the interstate rail mainline and Moss Vale-
Unanderra line from the Tahmoor Colliery in the Southern Coalfield.
28 ABS 6291.0.55.003 - Labour Force, Australia, Detailed, Quarterly, Nov 2008.

29 Key Industry Statistics 2008, NSW Minerals Council Ltd.
30 The rail line from Sydney to Wollongong is the Illawarra line, and the south of Wollongong
to Nowra is known as the South Coast Rail Line.

Coal from the southern part of the Western Coalfield is railed via the Sydney
metropolitan network before travelling down the Illawarra line to Port
Kembla, as road transport is impractical. The dominant passenger focus of the
Illawarra line tends to restrict freight movements.31
The Sydney-Dubbo corridor (the eastern section, that is, from Lithgow to
Sydney) transports coal from the southern segment of the Western Coalfield to
connect with the Illawarra line at Sydney, the final destination being Port
Kembla. The volume of coal transported accounts for about three per cent of
NSW coal production or about one per cent of national coal production32.
Another smaller role is the transport of export containers from Blayney to Port
Botany, including gold and copper concentrate.33
On the Sydney-Melbourne Corridor (the northern section, that is, from the
Southern Coalfield to Sydney), the NSW rail network links freight, such as
grains, coal and aggregate, generated in the Southern Highlands and Riverina
areas with markets and export gateways in Sydney and Port Kembla (over 5
Mtpa gross).34
4.5.2 Road system
The southern section of the Western Coalfield is linked to Sydney by the Great
Western Highway to Glenbrook and the Western Motorway (M4) from
Glenbrook to Eastern Creek where the M4 intersects with Westlink (M7). The
southern part of the Western Coalfield is linked to the Newell Highway
(Brisbane-Melbourne road corridor) by the Great Western Highway at Parkes,
and at Dubbo by the Great Western Highway to Bathurst and the Mitchell
Highway north from Bathurst.
About 40 km of this road corridor at the Sydney end is at or near capacity

during peak times. There is spare capacity on most of the rest of the
corridor.35
The Wallerawang (west of Lithgow) to St Marys section of road carried 5.85

million tonnes of freight in 2005-06, compared to 6.5 million tonnes on rail.

Government, Sydney-Dubbo Corridor Strategy, June 2007.
33 ibid.
Government, Sydney-Melbourne Corridor Strategy, June 2007.
Government, Sydney-Dubbo Corridor Strategy, June 2007.

Road-based coal movements occur from the Appin, West Cliff, and Russell
Vale mines in the Southern Coalfield to Port Kembla via Appin and Picton
Roads and Mount Ousley Road.
Heavy vehicles account for about 16 per cent of traffic on the Mount Ousley
Road section of the Sydney-Wollongong road corridor south of Bulli Tops,
largely because of cartage of coal to Port Kembla for domestic steel making or
export. Traffic volumes on this road segment are of the order of 35,000 to
37,000 vehicles per day. This section of road is congested.36
Patrick Autocare and Sydney Ports Corporation have signed a „letter of intent‟
and are working towards an agreement to transport more cars between Port
Kembla and Sydney by rail. Railing cars from Port Kembla will help reduce
truck movements on the road between Port Kembla and Sydney.
4.5.3 Port Kembla port
In 2007-08, Port Kembla exported 13.3 Mt of coal and coke and 3.16 Mt of
steel products.37
Port Kembla Port Corporation (PKPC) manages the port. Traditionally, the
port has handled bulk commodities such as grain, coal, and iron ore, but an
$86 million redevelopment of the inner harbour scheduled for completion in
2008 will allow increases in general and break bulk cargoes and vehicle
handling. An announcement by the Premier in October 2005 that Port
Kembla was to take over the car vehicle trade from Sydney was the catalyst for
significant change and development for the port of Port Kembla. Some
270,000 new vehicles are expected to be imported through the port in 2008-09,
rising to 295,000 by 2011-12. An additional 400 vessels will visit annually
taking the port total close to 1000 visits per year.
The Port Kembla Coal Terminal in the inner harbour exports coal and coke
with capacity up to 15 Mtpa. The terminal is privately managed by Port
Kembla Coal Terminal Limited under a lease from Port Kembla Port
Corporation.38
The Port Kembla Grain Terminal also located within the inner harbour
exports a variety of grains from south and south-western NSW, with volumes

38 PKCT is operated by five equal partners, all coal producers on the Southern and Western
coalfields.

dependant on seasonal conditions. The Grain Terminal is managed by Grain

Corp. The land is leased from Port Kembla Port Corporation.
The Port Kembla Gateway is a privately leased berth located in the Outer
Harbour. It handles bulk and break bulk cargo including copper concentrate,
fertiliser, cement clinker, pulp/saw logs and steel products.
Port Kembla is served by road and rail corridors that allow efficient cargo
exchange between land and sea for delivery to their destination. The port is
located away from residential areas and incompatible developments, thus
allowing port operations on a 24/7 basis.39
4.5.4 Energy
Fuel for Delta Electricity‟s Mt Piper (1400 MW) and Wallerawang (1000 MW)
Power Stations is supplied by coal mines in the region.
Wallerawang power station played an important part in the development of the

western coalfields of New South Wales and in the provision of power for the
electrification of the western rail network. The plant is now over 50 years old.
Wallerawang‟s electrical output feeds into TransGrid‟s 330 kV transmission
lines running to the Sydney metropolitan region, Wellington in the Central
West, and interconnecting with Mount Piper Power Station.
4.5.5 Water
The Sydney Catchment Authority‟s (SCA) dams are shown in Figure 12.
The SCA advises the NSW Department of Primary Industries on coal mining
applications to ensure that subsidence and environmental management plans
and asset protection plans are developed to ensure that mining operations do
not adversely affect SCA assets.
Conditions with specific requirements to protect infrastructure assets are

attached to mining approvals. These conditions provide the framework for
mining companies to develop mining management plans which aim to ensure
all necessary preventative measures, contingency plans, closure plans, and
ongoing monitoring are undertaken.
The SCA has procedures in place to minimise the likelihood of mining

operations impacting on water catchment assets. The costs of investigative
studies, and prevention and rectification works required as a result of mining
activities are recovered from mining companies.
39 http://www.kemblaport.com.au/

The SCA and mine operators have established a new forum to progress critical
issues on water quality monitoring and cumulative impacts of mining.40
Figure 12 Sydney Catchment Authority dams
Data source: http://www.sca.nsw.gov.au/recreation/dam-locations

The efficiency and productivity of the rail corridor from the southern section
of the Western Coalfield to St Marys is relatively low compared to other
National Network rail corridors. The problems are mountainous topography,
40 Sydney Catchment Authority, Annual Report 2007-08.

steep grades, and tight horizontal curves. These issues have placed limits on
the allowable length and weight of trains.
In the longer term, sharing of track between passenger rail services, which are
given priority, and freight services could affect freight capacity and reliability.
In the short-term, there is adequate off-peak capacity to handle freight services.
The road corridor linking the southern part of the Western Coalfield to Sydney
is at or near capacity for about 40 km west of Eastern Creek. There is spare
capacity on most of the rest of the corridor.
Total freight between Sydney and Wollongong is expected to be in the vicinity

of 27 Mt by 2025, an average growth of 3.3 per cent a year. As a result of
competition from growing commuter passenger traffic on the Illawarra line,
road freight tonnages could grow faster than an average of 3.3 per cent per
year.41
In addition, the increase in coal mining in the region will inevitably lead to
more trucks on the roads around Wollongong, as will the relocation of a
number of import activities from Sydney to Port Kembla. The designation of
Port Kembla as the importation point for over 270,000 motor vehicles a year
will add to the transportation task in the region.
The northern and southern ends of the Sydney-Wollongong/Port Kembla

road corridor are already subject to traffic congestion in peak periods. At the
southern end, the high proportion of heavy vehicles linked to movement of
coal is already a concern for congestion and safety reasons. These problems
are likely to worsen as a result of expansion of coal mining, the growth of
imports into Port Kembla, and commuter traffic to and from Sydney.
Also, at the southern end of the road corridor, geological issues, such as land
slippage, have raised reliability concerns, particularly because there is only one
major road link between Sydney and Wollongong/Port Kembla. As a result
the Roads and Traffic Authority is investigating an alternative Bulli Pass
corridor reserve to provide an alternative to Mount Ousley Road.
The Moss Vale–Unanderra rail line located to the south-west of Wollongong is

a predominantly coal and grain freight line. It is in good condition. However,
it is currently underutilised as it is difficult for trains to pull heavy loads
between the interstate mainline and Port Kembla because of topography and
gradient issues. It is important to improve utilisation of the Moss Vale-


Unanderra-Port Kembla railway to ease demand for freight paths on the

Illawarra line.
Rail
On 12 December 2008, the Federal Government announced its $4.7 billion

building package, which includes an injection of $1.2 billion into the ARTC in
17 projects to improve the reliability and competitiveness of Australia‟s rail
freight network. Of this amount, $45 million is to go towards the $90 million
Advanced Train Management System (ATMS) trial. ATMS is intended to
modernise the train management.
ARTC already has a significant investment program underway that will deliver
a number of significant benefits, as outlined in their 5-year investment plan.
The program includes the following key projects to improve the rail network.42
• Southern Sydney Freight Line is a $245.1 million freight track independent
of the Sydney commuter lines between Chullora and Macarthur. This will
remove the current „curfew‟ on freight trains operating in the metropolitan
area during the morning and afternoon peak periods
• Concrete sleepering of the entire corridor allowing increased train speeds,
reduce the incidence of temporary speed restrictions and delays due to
track work, and eliminate speed restrictions imposed on high temperature
days
• Automatic block signalling – this program will eliminate line sections that
use an old signalling system that requires signallers to manually admit trains
to a section of track. The project will significantly raise capacity and reduce
costs.
The areas of investment on the corridor are shown in Figure 13.
42 ARTC North-South Corridor Investment Outline, September 2007.

Figure 13 ARTC investment on the rail corridor south of Sydney
Note: For the purposes of this report, the Southern Corridor ends approximately at Medway Junction
Data source: ARTC North-South Corridor Investment Outline, September 2007
The further major enhancements that ARTC believes are important for the
corridor over the next 15 years are as follows.43
• NTCS - In common with the rest of the network, the Network-wide Train
Communications System will be rolled-out across the corridor over the
next 12 months
• ATMS - The corridor would need to be upgraded to ATMS from 2011.
ARTC anticipates extensive capacity works will be required on this corridor
and the early introduction of ATMS will allow significant savings on these
works by minimising the signalling scope. ARTC also believes that the
introduction of ATMS into the Sydney and Melbourne metropolitan areas
will strongly support the development of cross-metropolitan container
traffic.
In August 2008 the terms of reference for a pre-feasibility study of the Maldon
– Dombarton line were announced by the federal government. The study will
investigate current and future rail freight transport needs, the extent to which
existing freight networks can meet this demand, and construction requirements
to complete the Maldon-Dombarton rail line to service future demands. The
consultants selected to carry out the study were announced in early 2009. The
study is expected to be completed in April 2009.
Port Kembla
In August 2008, the NSW State Government announced a $600 million

expansion to the port of Port Kembla involving development of the Outer
43 ARTC, Interstate Rail Infrastructure Strategy 2008-2024, June 2008.

Harbour. Due to the rapid take-up of facilities at the Inner Harbour, this
development had been brought forward 15 years.44
Figure 6 Port Kembla development areas
Note: Shaded areas indicate areas ready for further development.

Source: Port Kembla Port Corporation
New South Wales Infrastructure Strategy
The New South Wales State Infrastructure Strategy 2006-07 to 2015-16 describes “a
10-year plan which charts the infrastructure provision the New South Wales
Government will need to make in each of the State‟s six broad regions –
Sydney, the Central Coast, the Hunter, the Illawarra and the South East, the
North Coast and Inland New South Wales.” The document was segmented by
portfolio and by region.45
The strategy document is essentially a list of projects or programs (groups of

projects) along with estimated capital costs (except where these were deemed
to be “commercially sensitive”) and timeframes. In many cases timeframes
for projects and programs are shown to extend to the final year of the strategy.
In such cases, it is not clear when the project or program is scheduled to be
completed. For example, the listing of the Southern Sydney Freight Line and
44 NSW Southern Highlands Intermodal and Logistics Hub, submission to the Inquiry into
Australian Future Infrastructure Requirements by Wingecarribee Shire Council, October
2008.http://infrastructureaustralia.gov.au/public_submissions/published/files/39_wingeca
rribee_shire_council_SUB.pdf.
45 New South Wales Treasury, New South Wales State Infrastructure Strategy 2006-07 to 2015-16,
2006.

associated works did not include any specifics of the project, excluded
estimated cost and was shown as extending from 2006-07 to 2015-16, without
indicating whether or not the project would be completed in 2015-2016.
Energy
Delta Electricity Delta is diversifying its portfolio of generation to include gas

fuelled power plants. It has approval for a combined cycle gas turbine plant on
the Central Coast near Bamarang. The facility could either be built as a 300
MW peaking plant with the option to convert it to a 400 MW base-load plant,
or as a base load plant from the start.
Delta Electricity is seeking development approval to build an open cycle gas

peaking plant on a site near the Marulan high voltage switchyard near Brayton.
EnergyAustralia is also seeking development approval to build a gas peaking
plant at a site nearby. Subject to approvals, construction of EnergyAustralia‟s
gas turbine facility is due to start in early 2009 and it is scheduled to begin
operation in mid 2010.
4.8 Discussion of Southern region growth scenario

The sections that follow essentially examine Southern region minerals projects
been reported in various ABARE and the NSW government documents.
We have not examined the extent to which the regional Southern region
growth scenario discussed below aligns with the national Advance scenario for
minerals production. Nor have we discussed the implications for regional
Southern region growth if actual outcomes align more with the national
Holding the Line and Decline growth scenarios. Obviously, to the extent that
some minerals projects are either delayed or do not proceed and actual growth
is therefore less than that discussed below, the demands on infrastructure will
be reduced. Section 4.9 discusses potential growth in minerals production
under what could be regarded as a scenario that broadly aligns with the
Advance scenario. This discussion is summarised in Table 10. Table 11
summarises the infrastructure requirements under this growth scenario.


Table 10 Summary of growth scenario to 2020 for the NSW Southern growth region
Mineral product Project description
Coal The Metropolitan longwall mine will produce an additional 1.3 Mt of coal a year
Other metals Woodlawn development will produce some 150 kt of Cu, Pb, Zn and Ag concentrates (project currently on
hold)
Natural gas Camden gas project (stage 2) will produce some 12PJ a year
Data source: ABARE’s list of major mineral and energy projects, October 2008
Table 11 Summary of infrastructure requirements under growth scenario to 2020 for the NSW
Southern growth region
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 growth • Increasing competition between freight and passenger
in freight task services in 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
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 distribution • Electricity suppliers will need to upgrade their supply
capacity inadequate for growth. infrastructure to deal with increased demand from industrial,
commercial and 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 pace • The main driver of the need for enhanced community
infrastructure with increase in demand from growing infrastructure will be increasing population in the region. Land
population. for housing, schools, health care facilities, sport and recreation
and child care will all need to be addressed.

4.9 Growth scenario, Southern NSW region

The region will continue to grow in importance as a source of minerals
exports. Minerals export capacity appears to be adequate at present. The main
infrastructure issue for the region is the capacity of the transport infrastructure
(road and rail). The growth in imports through Port Kembla will add to the
pressures on the transport infrastructure in the region.
4.9.1 Minerals production
Coal production in the region are expected to increase by 1.3 Mt in the near to
medium term. The Woodlawn development that was expected to produce
some 150 kt of Cu, Pb, Zn and Ag concentrates by 2011 is currently on hold
and the start of exports is likely to be delayed as a result.
No other minerals projects within the region were identified.
The growth scenario in the NSW Southern region is likely to require a degree
of infrastructure planning and provision from government and the private
sector. The main infrastructure requirements set out below take into account
developments in both the minerals sector and the energy sectors.
Rail
Much of the rail network in the region services a growing demand from
commuters as well as the minerals industry. The competition between freight
and passenger services in the region is in parts considerable and the indications
are that it will increase over time due to increases in demand for both these
services. Particularly if more of the vehicles imported through Port Kembla are
transported to Sydney by rail.
Planned ARTC upgrades and enhancements to the rail network should be

completed on schedule, including improvements to the Moss Vale–Unanderra
rail line to improve utilisation. The findings of the Maldon – Dombarton line
pre-feasibility study currently underway should be implemented in a timely
fashion.
Port
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 it is reasonable to assume that capacity expansions will occur in a
timely manner.

Upgrades to other storage and ship loading facilities will also need to occur
over time to allow for increased minerals movements.
Roads
Many sections of roads in the region are at or near capacity and increases in the
freight task may be hard to accommodate in those areas. Areas where there is
particular pressure include:
• the northern and southern ends of the Sydney-Wollongong/Port Kembla
road corridor
• 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.
There may be a need for a second major road link between Sydney and
Wollongong /Port Kembla. Particularly if the 270,000 or more vehicles
imported via Port Kembla are transported to Sydney by road.
Energy
The age of the Wallerawang power station suggests that a replacement may be
needed before the end of the outlook period. There are already plans to build
gas fired power stations in the region, but these are more likely to be peaking
or intermediate plants rather than base load. Electricity suppliers will need to
upgrade their supply infrastructure to deal with increased demand from
industrial, commercial and domestic customers
New gas projects (including CSM) may require new pipelines to be built,
including pipelines to supply planned new gas fired power stations.

5 Central and Far Western NSW growth

region
The Central and Far Western region covers much of the State, except for the
Hunter Valley/Gunnedah Basin in the north-east and to the north of Sydney
and the coal fields of the Southern region immediately surrounding the
Illawarra. The Western region uses some of the same transport infrastructure
as the Southern region but is otherwise distinct from the coal sector.
The geography of the region is diverse and in most areas the minerals industry
co-exists with agriculture. From the western slopes of the Great Dividing
Range to the dry interior, issues of water management, complementary land
use and, increasingly, access to energy are paramount.

Minerals exploitation in the region is dominated by gold, copper, silver, lead
and zinc mining (see Figure 14). The 2006-07 value of non-coal minerals
production in NSW was around $3.6 billion (see Chart 3). Gold and copper
make up over two-thirds of the production value of metallic minerals in NSW.
Chart 3 Share of value of non-coal minerals production 2006–07
Note: Value at average market prices

Central and Far Western NSW growth region 55

Figure 14 Mining in Central and Far Western NSW
Data source: NSW Department of Primary Industries, Minerals Industry Annual, 2008.
Figure 14 also illustrates that there is considerable prospectivity for growth in

production of these metals and others within the region.

5.2.1 Gold, copper, lead and zinc
Cadia Valley Operations is located in central western New South Wales, 20

kilometres southwest of the City of Orange, and 250 kilometres west of
Sydney. Owned and operated by Newcrest Mining it comprises the large, low
grade Cadia Hill open pit mine and the higher grade Ridgeway and Ridgeway
Deeps underground mines. Cadia Hill is one of the largest open pit gold-
copper mines in Australia. The Cadia Hill ore body, discovered in 1992, is a
large, low grade ore body which lends itself to economies of scale through the
use of bulk mining and treatment techniques. Construction commenced in
October 1996 and operations began in August 1998. The Ridgeway mine lies
approximately 500 metres below the surface and three kilometres northwest of
Cadia Hill. Operations at the Ridgeway mine commenced in 2000 with initial
ore processed through the Cadia Hill treatment plant. In April 2002, the
Ridgeway treatment plant was officially opened with a nameplate capacity of 4
Mtpa. The underground mining rate and concentrator throughput have since
been increased to 5.6mtpa.
Ridgeway Deeps is an extension to the Ridgeway mine and will commence ore
production in July 2009. Ridgeway Deeps will process 6 million tonnes per
year and recover approximately 1.4 million ounces of gold and 191,100 tonnes
of copper over the 8 year life of the mine.46
The gold-copper concentrates from both Cadia Hill and the adjacent Ridgeway
treatment plants are combined and pumped as slurry to a filtration plant in the
nearby town of Blayney. The concentrate is then de-watered before being
transported by rail to Port Kembla for shipment to smelters in the East Asia
region, primarily Japan and South Korea. . Cadia Valley Operations produced
715,000 ounces of gold and 60,000 tonnes of copper in the financial year
ending June 2008
Substantial new deposits have been discovered in the Cadia Valley Province
and development of these will continue production after the existing
operations expire.47
The Northparkes copper-gold mine is located at Goonumbia, 27 km

north/north-west of the central NSW township of Parkes, and is a joint
venture between Rio Tinto (80 per cent) and the Sumitomo Group (20 per
cent). Mining commenced at Northparkes in 1994, initially as an open cut
operation. Underground block caving mining has been undertaken since 1997.
About 43,100 tonnes of copper ore was mined in 2007. The copper
46 Personal communication from Newcrest Mining, April 2009.

47 Newcrest annual report.

concentrate produced, is shipped under long term contracts to smelters in

Japan (67 per cent), Australia (14 per cent) and other countries (19 per cent).48
In the mid-west of the State near West Wyalong, Barrick Gold operates the
Cowal mine, an open cut mine with accompanying process plant that produced
240,000 ounces in 2007. Operating since April 2006, the mine operator has
extensive water management measures, including recycling and reuse, as part of
its processing design.49
The Cobar region in the north-west has been producing non-ferrous metals
such as copper, zinc lead and silver since 1871. The largest, the former CSA
(Cornish, Scottish, Australia) Mine, is now owned by the Glencore subsidiary
Cobar Management Pty Ltd. The mine is an underground one, producing
800,000 tonnes of mostly chalcopyrite (a copper iron sulphide) per annum. The
mine‟s record production of concentrate was in 2006, when it produced
140,000 tonnes of copper concentrate and 350,000 ounces of silver.50
Also near Cobar, Peak Gold Mines operates a gold mine which produces about
120,000 ounces of gold and 14,000 tonnes of copper concentrate.
In other metals, the CBH Resources Endeavour Mine has the largest reserves
of other metals, such as zinc and lead as well as silver deposits. The
underground mine and above ground processing facilities processed 975,000
tonnes of ore in 2007. This produced 102,300 tonnes of zinc concentrate
(52,000 tonnes contained zinc) and 54,200 tonnes of lead (26,000 tonnes
contained lead and 17,400 kilograms contained silver).51
CBH supplies exports through facility in Newcastle and to Port Pirie. Zinc and
lead concentrates from its recently developed Broken Hill deposits, the Rasp
Mine, are also supplied to Port Pirie smelters.
Perilya runs a large operation Broken Hill operation, lifting production by 18.5
per cent in 2007/8 to produce 91,295 tonnes of contained zinc and 52,412
tonnes of contained lead.52
5.2.2 Mineral sands
Other specialised minerals operation are spread out throughout the Murray
Darling Basin around the State, as well as within the major mining provinces,
48 Rio Tinto website.

49 Barrick website.
50 Cobar Shire Council, fact sheet.
51 CBH Annual Report.
52 Perilya company presentation, Bruce Hooper, August 4, 2008.

such as Broken Hill which also hosts the mining of titanium minerals and
zircon, such as Bemax Resources‟ Gingko deposit and its planned Snapper
operation.
5.3 Resources related demography

Mining employment in the non-coal areas makes up one-third of the NSW
industries jobs at 10,300. The employment is predominantly in three regions:
around Orange and Parkes; Cobar and the Far North West; and Broken Hill.53
Health services
The region is part of the NSW Greater Western Area Health Services which
covers 55% of the state and has 46 inpatient facilities ranging in size from
small facilities with eight acute beds to the larger facilities at Orange Base
Hospital and Dubbo Base Hospital as well as more than 60 community health
and primary care services. Dubbo Health Service, which includes Dubbo Base
Hospital and locally managed Primary and Community Health Services, and
Lourdes Health Service are located in the Central Cluster which also includes
Coolah, Dunedoo, Gulgong, Mudgee, Rylstone and Wellington Health
Services.
The NSW Department of Health reports that the GWAHS had a population
of 287,481 people in 2006 with 37% of the population aged between 15-44
years and 26% between 45-64 years. Approximately 23,863 Aboriginal and
Torres Strait Islander People live in GWAHS and make up 8.3% of the Area‟s
total population compared to 2.1% for NSW as a whole. The Area‟s
population is expected to growth by 10% or half a per cent a year between
2006 and 2026 but significant shifts in the age profile and population
distribution are expected. Employment growth, however, is likely to be
stagnant in the short term.
Residents of GWAHS have the poorest health in NSW with the highest age
adjusted death rates overall including the highest death rate from coronary
heart disease and chronic obstructive pulmonary disease and the highest
hospital separation rates for diabetes, injury and poisoning and asthma.
Aboriginal residents have poorer health than the than the rest of the
population.
There was a 7.4% increase in separations in GWAHS hospitals between

2001/02 and 2005/06 with an 18% increase in the workload of the Major
Referral Hospitals at Dubbo and Orange, a 6% increase in Bathurst and
53 NSW Minerals Industry Key Industry Statistics, 2008.

Broken Hill and a decrease in activity in all the smaller community acute and
non acute hospitals in the Area and this trend is expected to continue.
Education
The region has a wide range of government and private schools, an extensive
TAFE network and multi-campus university.
Growth in the working age population will is likely to be stagnant over the
coming two years, and will grow incrementally after then.54 This compares
with stronger growth in other minerals regions in the State, 11 % in the Hunter
Valley and 9 per cent in Illawarra.
The main regional university is Charles Sturt University with campuses in

Dubbo, Orange, Bathurst and Broken Hill. Vocational education is served by
24 colleges within the Western Institute TAFE. IN 2008 there were 34,000
enrolments.
The area is also well served by schools, with 198 government primary and
secondary schools serving 39, 737 students55 and 139 Catholic systemic school
with 34,031 students.56

The NSW Department of Primary Industry reported in December 200857 that
higher commodity prices up to 2007 provided an impetus for a series of new
projects and extensions, with the Central West the main focus for the metallic
minerals sector.
Exploration expenditure on the major base metals copper, silver, lead zinc and
nickel) $48.6 million (or 28 per cent of the NSW industry‟s $175.8 million
spending in 2008) was in similar proportions to coal exploration ($50.2 million
or 29 per cent of spending) and higher as a group than gold ($25.7 million or
15 per cent).58
54 The National Institute of Economic and Industry Research, Employment Projections for
NSW 2005-2010.
55
NSW Department of Education and Training, Statistical Bulletin, 2007.
56
NSW Catholic Education Commission, website, 2007 figures.
57 NSW Minerals Industry Annual 2008.
58 ibid.

Newcrest Mining has lodged a planning application for a proposed $2 billion

Cadia East gold (and copper) mine within its existing Cadia Province. This
expansion is on top of the $114 million extension to the depth of its Ridgeway
underground goal mine (Ridgeway Deeps).
Barrick Gold has also applied for an expansion of the Cowal Open Cut mine,
known as the E42 Expansion, with a cost of about $130 million.
In the south of the States near Goulburn, Tri Origin is planning to proceed
with a gold, zinc and copper project which includes retreatment of tailings
from previous mining operations. The underground project is projected to
produce 70,000 tonnes of concentrate per annum.
Table 12 Proposed new minerals developments – Central and Far Western NSW
Project Commodity Operation Estimated Estimated Location
investment jobs
($M)
Barraba Diatomite Open Cut 5 19 Barraba
Broken Hill North Mine Silver, lead, zinc Underground 100 n/a Broken Hill
Deeps
Broken Hill Rasp Mine Silver, lead, Zinc Underground 110 90 Broken Hill
Broula Magnetite Open Cut 2 19 Cowra
Cadia East Gold (copper) Underground 1500 200 Orange
Copper Hill Copper, gold Open Cut n/a 200 Molong
Cowal E42 Expansion Gold Open Cut 130 115 West Wyalong
Dargues Reef Gold Underground 50 100 Braidwood
Dubbo Zirconia Zirconia, tantalum, Open Cut, processing 120 80 Dubbo
niobium plant
Hera Gold, base metals Underground 40 n/a Cobar
Kingsgate Molybenum Underground 40 n/a Glen Innes
Lewis Pounds Gold, base metals Open Cut / 30 n/a Orange
Underground
NorthParkes E48 Copper (silver, gold) Underground 185 n/a Parkes
Parkers Hill Copper, lead Open Cut 26 70 Condobolin
Pinnacles Base Metals, copper, gold Open Cut 26 70 Broken Hill
Potosi Base Metals Underground 30 n/a Broken Hill
Snapper Mineral Sands Open Cut 114 100 Broken Hill
Syerston Nickel, cobalt Open Cut 500 300 Condobolin
Timor Limestone Open Cut 2 n/a Blanford
Tomingley /Wyoming Gold Open Cut 40 80 Peak Hill
/Underground
Tritton Expansion Copper Underground 20 230 Nyngan
Woodlawn Gold, base metals Underground 150 250 Goulburn
Young Nickel, cobalt Open Cut 45 n/a Young
Total 3748 2334
Source: NSW Minerals Industry Annual 2008


The region is served by three main transport corridors: Dubbo to Sydney and
Port Kembla; Sydney to Melbourne; and a network of regional highways and
airports.
The rail components are:

• Sydney- Dubbo- Broken Hill (Parkes)/North-West corridor: linking to
Orange, through to Blaney and Lithgow
• Sydney-Wollongong: taking the rail stock from Lithgow then down the
main Sydney to Melbourne line to Moss Vale then east to Unanderra and
Port Kembla.
The road network includes:
• The Great Western Highway west from Sydney
• The Hume Highway from Sydney to Melbourne
• Rural road networks.
There are major regional airports at Wagga Wagga, Parkes, Dubbo and
Canberra.
Minerals exports primarily feed through the east-coast road, rail and port
infrastructure described elsewhere in this report, notably the Hunter Valley
transport corridor to Newcastle, and the Southern transport corridor through
Lithgow to the Illawarra and Port Kembla.
5.5.1 Infrastructure impediments
Table 13 lists the key infrastructure impediments for the Central and Far
Western growth region.
Table 13 Summary of infrastructure requirements under growth scenario to 2020 for the Central and
Far Western growth region
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 short • Upgraded distribution infrastructure (power and gas)
fall in generating capacity required to • Additional generation capacity
meet reliability targets by 2013/14.
• Lack of distribution networks away from
the central basin.

Water
With the central West covering the Murray Darling Basin, issues of water
management and infrastructure are a priority. Mining operations are relatively
small consumers of water compared to other sectors in NSW. Out of the 5,922
GL of total water consumed in NSW during 2004-05, mining operations
consumed approximately 63 GL, or just over one per cent of the total. This is
compared to agriculture (70 per cent), the water supply industry – including
distribution losses (11 per cent) and households (10 per cent).59
Water is used throughout the production process, including

• mineral exploration
• ore extraction and processing
• dust suppression
• site amenities e.g. drinking water and toilets
• irrigation of surrounding lands and rehabilitated areas.
Many NSW mines recycle a significant amount of their water for reuse on site,
with some mines recycling up to 80% of all water used. In other cases, mines
source water from external effluent streams, with some mining operations, like
the Cadia mines near Orange, sourcing up to 50% of their water needs from
the local town‟s effluent.
Access to water will be improved by the development of well-functioning

markets which will both ration water and provide impetus to investment.
Over-allocation of water entitlements for agriculture in the Murray Darling
Basin remains an impediment to the development of the market.
Energy
NSW energy demand is rising at a faster rate than supply with the National
Electricity Market Management Corporation predicting a potential short fall in
capacity required to meet its 99.998 per cent reliability target by 2013/14.60
Approximately 60 per cent of the energy generated in NSW is generated west

of the Great Dividing Range and is then sent via transmission lines to the east
coast, where most of the state‟s load demand comes from. This interaction is
primarily around the Newcastle/Sydney Illawarra Basin. Submissions to the
NSW Governments‟ inquiry into electricity supplies by Professor Anthony
Owen in 2007 highlighted the shortage of distribution networks away from the
central basin. The Owen inquiry said the total value of baseload generation
59 NSW Minerals Council.

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

investment required over 10-15 years was estimated at around $7-8 billion. The
Inquiry also estimated the need for around $3-4 billion of investment to
retrofit existing power stations with carbon reduction technologies.61
The majority of the transmission network in NSW was built between the 1950s
and 1980s. Over 40 per cent of transmission lines and 35% of substations and
switching stations were commissioned in the 1960s or earlier.62
Cadia has examined the construction of a gas-fired power station.63
Large scale renewable energy facilities, notably wind farms, will help
supplement supply, but the higher potential cost of such energy will be a
challenge because, in the short term, alternative energy sources are less reliable
than base-load coal- or gas-fired power stations and new distribution networks
will need to be constructed.
Euporon has developments in Goulburn and Yass and, in conjunction with

Macquarie Capital, is developing the Silverton Wind Farm near Broken Hill.
61 NSW Government. Op cit.

62 TransGrid Revenue Proposal – 31 May 2008.
63 Interview with mine manager Tony McPaul September 2008.

Figure 15 Electricity transmission networks in NSW
Data source: TransGrid

Victoria


resources regions
May 2009
(03) 9600 3144.
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Contents
2 Victoria mining overview 3
2.1 Brown coal 4
2.2 Gold 4
2.3 Mineral sands 5
2.4 Base metals 5
2.5 Geothermal energy 5
2.6 Oil and gas 5
2.7 Carbon capture and storage 6
3 Gippsland growth region 7
3.2 Current resources and energy production 8
3.6 Infrastructure initiatives 17
3.7 Overview of growth scenario 17
3.8 Growth scenario, Gippsland 21
4 Western Victoria growth region 28
4.1 Resources and production 28
4.2 Infrastructure needs 28
List of figures
Figure 1 Major Victorian resources projects 4
Figure 2 Map of Gippsland region 8
Figure 3 Gippsland Region major transport infrastructure 13
Figure 4 Projected annual coal consumption in high growth scenario 18
Figure 5 Possible mine development at 2030 (scenario 3) 20
Figure 6 Victorian long term regional HPFV network 29
Figure 7 Victoria’s regional rail network 30
List of tables
Table 1 Summary of growth scenario to 2020 for the Gippsland growth region 21
Table 2 Summary of infrastructure gaps and requirements under growth scenario
to 2020 for the Gippsland region 21
Table 3 Summary of infrastructure gaps and requirements under growth scenario
to 2020 for the Western Victoria region 32
iii

Project
This report forms part of the Mineral Council of Australia’s Vision 2020
industry.
Expansion of the nation’s infrastructure (hard and soft industrial and

significant infrastructure constraints. This in turn has reduced Australia’s
moved to fill that gap and as a consequence Australia’s market share has fallen.

support an increase in Australia’s minerals production capacity. It is hoped
market.


infrastructure studies. Growth scenarios and gaps in infrastructure for the
Gippsland and Western Victoria regions are discussed in this report.

2 Victoria mining overview

Mining is growing in Victoria on the back of new discoveries, new minerals
and new technologies. Victoria’s reserves of brown coal and mineral sands are
world-scale. There is excellent potential for new gold discoveries, while new
geological models identify promise for base metals.
Western Victoria is ramping up to become a major production centre for

mineral sands, while a large discovery in eastern Gippsland holds promise for
another major mine. Gippsland hosts massive brown coal (lignite) deposits,
which could supply new technology energy industries for well over a hundred
years. The region is developing as a future ‘clean coal’ centre, using new
technologies and carbon dioxide sequestration into depleted oil and gas
reservoirs.
Victoria has experienced three distinct growth periods, each underpinned by its
earth resources. The first was the gold rushes of the mid 1800’s. The second
was the growth of manufacturing in the post First World War period fuelled by
the development of the state’s brown coal resources for electricity. The third
period was fuelled by the development of the oil and gas reserves of Bass Strait
in the 1970’s.
Today the minerals and energy industry of Victoria:

• produces more than 65 million tonnes of coal per year
• produces about 4 tonnes of gold per year
• produces 85% of Victoria’s electricity
• has an annual turnover in Victoria of more than $600m and $4B including
oil and gas production. 2
The mining industry alone directly employs more than 5,000 Victorians
primarily in regional and rural Victoria. An additional 5,000 Victorians are
directly employed by industry service organisations such as engineering firms,
consultants etc, primarily in Melbourne. The total number of Victorians
employed directly and indirectly by the minerals industry in Victoria is well in
excess of 10,000 people.
Figure 1 shows the location of major resources projects.
2 Minerals Council of Australia, Victorian Division.
Victoria mining overview 3

Figure 1 Major Victorian resources projects
Source: Department of Primary Industries, Victoria, February 2009
Following is a summary of current mining activity and production.3
2.1 Brown coal

Victoria’s vast brown coal (lignite) resources provide the energy about 85 per
cent of electricity generation. Total estimated in-situ brown coal is 430 billion
tonnes, with potential economically recoverable brown coal in the Latrobe
Valley of 33 billion tonnes. Annual production is about 65 million tonnes.
Several projects are proposed to utilise brown coal for new industries,
including urea, char, gas and liquids. These are discussed further in section 3.3.
2.2 Gold
Victoria is a world recognised gold province hosting a variety of deposit styles.
A total of 80 million ounces of gold worth $68.2 billion has been mined in
Victoria since 1851. In 2006/07 annual production was about 220,000 oz from
3 Information sources: Department of Primary Industries; Fact Sheets and 2007/08 Statistical
Review; Minerals Council of Australia, Victorian Division.

three main mines at Stawell (100,000 oz), Fosterville (100,000 oz) and
Costerfield (20,000 oz). Despite its prospectivity, much of Victoria remains
unexplored using modern techniques. GeoScience Victoria’s assessments
indicate that it is likely that there are multi-million ounce deposits in the state
that remain undiscovered. Most of these are under thin Tertiary cover, which
emerging exploration techniques should be able to penetrate
2.3 Mineral sands

Victoria’s mineral sand endowment includes an estimated 8 million tonnes of
rutile and 6 million tonnes of zircon. Most activity is focused on the Murray
Basin, in the state’s west, including Iluka Resources Ltd Douglas and Murray
Basin Stage 2 projects and the Donald Mineral Sands project. Production in
2008 was about 185,000 tonnes of heavy mineral concentrate, with this
expected to jump to around 850,000 tonnes per annum from 2010.
The Gippsland and Otway Basins are also emerging mineral sands provinces,
with new discoveries in recent years including the Rio Tinto Glenaladale zircon
deposit near Bairnsdale in eastern Victoria.
2.4 Base metals

Strong global base metal prices until late 2008 have attracted applications to
resume exploration for base metal deposits in eastern Victoria. Though
Victoria is regarded as a greenfield area for base metal exploration, geological
links between parts of Victoria and the highly prospective Mt Read Volcanics
in Tasmania, together with geological analogues, provide new incentives for
exploration. Base metal projects that are under investigation in Victoria and
include the reopening of the copper-zinc mine at Benambra and a
redevelopment of the antimony mine at Costerfield.
2.5 Geothermal energy

Geothermal resources and technology have the potential to provide clean,
reliable and renewable energy to Victoria’s energy system. Five companies have
permits to explore for sources of geothermal energy in Victoria. The
companies have work programs underway worth $64 million over five years.
2.6 Oil and gas

Beyond mining, the oil and gas sector in Victoria has had a resurgence in
investment in recent years. Global demand for oil and increasing domestic
demand for gas has led to expansion of production from Bass Strait and the
Otway Basin. Opportunities lie in the more mature Gippsland Basin, the

recently developed Bass and Otway Basins and frontier areas in the western
Otway and Sorrell Basins.
2.7 Carbon capture and storage

Victoria has excellent potential for capture and geosequestration of carbon
dioxide into on-shore and offshore geological formations. Research is
underway into technical and economic feasibility, allied to clean coal research
and the use of oil and gas technology.

3 Gippsland growth region

The Gippsland region is located in the south-east of Victoria. It extends from
the eastern edge of Melbourne’s Metropolitan Region, eastwards to the New
South Wales border, with the northern boundary formed by the edge of alpine
country and with the coastline forming its southern border. Gippsland includes
the municipalities of Bass Coast, Baw Baw, East Gippsland, South Gippsland,
Wellington Shire and Latrobe City.
The export economy of Gippsland is predominantly based on primary and

secondary production, although many tertiary sectors have been growing,
notably retail trade and tourism-related industries.
Energy production is one of Gippsland’s major industries, based in the Latrobe

Valley and Bass Strait oil and gas fields. The region produces around 90 per
cent of Victoria’s electricity and 97 per cent of Victoria’s natural gas, with 46
per cent of Australia’s oil coming from the Bass Strait fields.
The region encompasses a broad range of agribusiness including agriculture,

forestry, fishing and processing. Some 37 per cent of Gippsland’s businesses
are involved in agriculture and fishing and a further 15 per cent involved in
upstream processing operations.
The Gippsland forestry industry encompasses a wide variety of operations,

from Australia’s largest pulp and paper mill to many small hardwood timber
mills. It is estimated that the value of forestry to Gippsland’s economy is
comparable to that of agriculture.
Gippsland growth region 7

Figure 2 Map of Gippsland region
Source: Department of Primary Industries Victoria
Approximately 247,000 people reside in the Gippsland region. Population

forecasts suggest that Gippsland is likely to grow to about 260,000 people by
2021.4 As with trends across Victoria, the proportion of the total population
comprising young adults aged 24 to 34 years is declining, with growth in the
over 55 years group.
In 2006, 66,877 residents were employed in Gippsland, accounting for over 41
per cent of the region’s total population, and 93 per cent of the labour force.
The largest employment sector was retail trade with 8,259 (12.3%), followed by
health care and social assistance with 7,257 (10.8%), construction with 6,723
(10%) and manufacturing with 6,586 (9.8%).5
3.2 Current resources and energy production

The resources sector in Gippsland is dominated by brown coal mining for
electricity generation and by oil and gas production. The lignite (brown coal)
resources of Gippsland are estimated to be more than 20 per cent of the
world’s lignite and at current rates of production would last for almost 500
years.
4 Department of Human Services, Population Projections 2001-2031.

5 Australian Bureau of Statistics, 2006 Census .

Brown coal resources provide the bulk of Victoria’s electricity supply and 21
per cent of Australia’s electricity, and form a foundation of industry in the
region. Coal mining of about 65 million tonnes per annum (Mtpa) at Yallourn,
Hazelwood and Loy Yang mines to supply electricity generation plants make
Latrobe Valley one of the premium energy regions in Australia. A small
amount of lignite is used for conversion to briquettes and char.
Absent major policy intervention, such as the Commonwealth Government’s

Carbon Pollution Reduction Scheme in its present form, these projects have
long life cycles, providing stability for the region, employment and
opportunities for service industries. The vast scale and readily available coal
resources in the Latrobe Valley also provide prospects for future growth,
particularly into new technology and ‘clean coal’ industries that produce a
range of new products while emitting relatively small amounts of CO2.
International market interest has also been expressed in dried coal, which is
attractive to end users because of its high energy value and low ash content.
There is strong synergy between emerging clean coal technologies and CO2
capture and geosequestration potential in the region.
The Gippsland Basin, whilst in decline as an oil and gas province, still produces
17 per cent of Australia’s oil and 42 per cent of its LPG.6 There is excellent
potential for discovery and development of new petroleum resources.
The on-shore Gippsland Basin is also an emerging mineral sands province,

with new discoveries in recent years including the Rio Tinto Glenaladale zircon
deposit near Bairnsdale.
Iron ore is also found in the region, with Gulf Mines in April 2008 announcing
the delineation of 50 to 100 Mt of haematite and magnetite.
Gippsland is also a recognised gold province with a history of mining, if not

any current operations.

The report of Latrobe 2100 Coal Resources Project states:
The Latrobe Valley has the potential to be one of the foremost global sites for the
application of these new technologies (i.e. low emission coal). The combination of an
abundant low cost, high quality (ash, sulphur) energy source adjacent to a large sink
for carbon dioxide (the depleted oil & gas fields and deep saline aquifers in the
offshore Gippsland Basin) create this potential. 7
6 ABARE 2006/07 data.

7 Victorian Department of Primary Industries, Latrobe Valley 2100 Coal Resources Project, 2005.

A number of companies are actively working at developing coal projects for

power generation, gas, urea and diesel production. Advanced projects are cited
below. Several other projects are at conceptual stage. Some of these projects
could commence by 2015 with lifetimes in excess of 40 years. New coal
technology demonstration projects are likely to start earlier.
Future large-scale industries based on the coal resource could include coal
conversion to diesel, methanol, ammonia, urea, coal char, dried coal and
electricity co-generation.
Mining and energy projects
Monash Energy Project
Monash Energy is a collaboration of Shell and Anglo American to jointly

develop a clean coal to liquid project in Australia’s Latrobe Valley, utilising the
latest low-emissions technologies. The pre feasibility stage is currently being
reviewed. The company has a granted coal tenement.
Latrobe Fertilisers – Australian Energy Company
Australian Energy Company is currently in the feasibility phase of a $2 billion

urea fertiliser plant in the Latrobe Valley. The proposed plant will use proven
technology to produce 1.2 million tonnes of urea fertiliser per annum,
providing a greater security of supply to Australia in a world of increasingly
competing demand. This facility will use lignite feedstock. When fully
operational the plant will produce 3200 tonnes of urea per day replacing
approximately $300 million of current urea imports and generate
approximately $150 million of exports per annum.
Clean Coal Power Station – HRL Limited
HRL is moving to develop a $750 million 400MW power station utilising clean
coal technologies. Using integrated drying and gasification combined cycle
(IDGCC) the project can reduce emissions of CO2 from brown coal-fired
power generation by 30 per cent and reduce water consumption by 50 per cent,
compared to current best practice for brown coal power generation in the
Latrobe Valley.
Hazelwood Mine and Power Station – International Power
International Power is undertaking a $400 million extension of Hazelwood

Mine and is retrofitting the power station with coal drying technology to
improve efficiency and reduce emissions at a cost of $369 million.

Latrobe Valley Post Combustion Capture Project
The Latrobe Valley Post Combustion Capture Project is an R&D project using
technology which separates carbon dioxide from power plant flue gas, so it is
then ready to be stored deep underground in sealed formations such as those
where oil and gas is found. CO2 has been captured at the Loy Yang A station
with a small pilot plant capable of capturing up to 1000 tonnes of CO2 per
year. Trials at other stations will follow. The $5.6 million project is a
collaboration between Loy Yang Power, International Power Hazelwood, the
Victorian Government and researchers from the CO2CRC and the CSIRO.
Oil and gas projects
Following is a summary of committed oil and gas projects in the Gippsland

region.
• Longtom Gas Project, Nexus Petroleum: 435 petajoules of gas and 5.2
million barrels of condensate. Capital cost $230m. First gas expected 2009.
• West Seahorse Oil Project, 3D Oil: 5.8 million barrels and contingent
resources of another 4.5 million barrels totalling up to 10.3 million barrels.
Production expected by 2010.
• Basker-Manta-Gummy Gas Project, Anzon Australia: contingent gas and
gas liquids estimates of about 380 petajoules and 19 million barrels,
respectively. First gas expected 2011.
• Kipper Gas Project, Esso Australia: The $1.4 billion Kipper Gas Project
has the potential to be one of the largest gas projects in Victoria in recent
years, with a confirmed resource of about 620 billion cubic feet of
recoverable gas plus 30 million barrels of condensate and LPG. First gas
expected in 2011.
• Turrum Oil and Gas Project, Exxon Mobil / BHP Billiton: The $1.4 billion
Turrum Project was approved for development in 2008. The Turrum field
holds approximately one trillion cubic feet of gas and 110 million barrels of
oil and gas liquids. Oil production is expected in 2011 and first gas sales
expected from 2015.

geography
The Gippsland Region makes up about 17 per cent of Victoria’s geographical
area and is home to over 15 per cent of Victoria’s population. The region is
generates about 80,000 jobs with retail, agriculture, health and manufacturing
the major employment generators.
The region has experienced low rates of population growth relative to

Melbourne and some other Victorian regions. By 2031, the Gippsland

population is expected to grow by more than 18 per cent from about 247,000
in 2006 to 284,000. The mining, electricity production and coal processing
sectors are expected to make only a modest contribution to this growth,
although construction peaks may swell population over short periods.
The major towns and cities in the region are: Warragul (pop 11,498); Traralgon
(21,960); Moe-Newborough (15,582); Morwell (13,399); Bairnsdale (11,282);
and Sale (13,336).
The region has an older population on average compared with the rest of
Victoria and incomes are below the Victorian average.
Overview of transport
The Gippsland region has access to a wide range of courier, container, and
bulk haulage road transport, along with rail transport to the port of Melbourne
(container and bulk consignments) and the Port of Hastings in Western Port
Bay (future bulk). The major routes are the Princes Highway/Monash
Freeway and the railway line linking the region to Melbourne (see Figure 3).
There are several other minor ports at Barry’s Beach, Port Albert and Sale used
primarily to service the offshore oil and gas industry.

Figure 3 Gippsland Region major transport infrastructure
Data source: Gippsland Local Government Network, Gippsland Transport Strategy 2008-2020, 2008
The Gippsland Transport Strategy 2008-2020, prepared by Meyrick and

Associates for the Gippsland Local Government Network, summarises the
region’s transport needs by sector:
• Processed agricultural goods from the region are reliant on effective land
transport supply chains and access to international gateways particularly the
Port of Melbourne. Road infrastructure (eg the Princes Highway/Monash
Freeway and port access) is particularly important.
• For the forestry industry, ensuring that the current rail dominated supply
chain is not impeded as a result of growing passenger rail demand is
paramount to the ongoing sustainability of this sector. Improved inter-
regional road links from forest to production centres and intermodal
transition points are also important to the region’s timber production
competiveness.
• The importance of the minerals sector – including oil, gas, coal, mineral
sands and iron ore – to underpinning the future economic growth of the
region is likely to increase. Bulk products produced by mining and

processing will increase the transport task, particularly for rail. The current
rail infrastructure, connections to ports and rolling stock are inadequate for
this task.
The Gippsland Transport Strategy says that this leads to a number of
considerations:
1. Much of this future export task is best suited to movements by rail to an
export gateway. Ensuring that this export task is not impeded as a result of
inadequate rolling stock or rail path capacity is crucial. There is also a need
to ensure that the Victorian ports and their land transport connections are
capable of meeting the growing demand. Access to the Ports of
Melbourne and Geelong are congested and there is no direct rail
connection to the obvious alternative for a bulk port – Westernport Bay.
Another potential port site, particularly suited to importing equipment, is
Barry Beach in South Gippsland.
2. The development of new operations in minerals and energy will likely be
constructed from pre-assembled modules (PAMs). The carriage of PAMs
usually involves irregular movements of over-dimension and over-weight
units and requires particular consideration of how the project cargoes arrive
in Victoria and move within Gippsland to final location. One solution is to
barge units into the Barry Beach facility and transfer units to heavy vehicles
for transport.
3. The growth in this sector will also require an increased passenger transport
task for workers during construction and operation of these facilities.
Gippsland Resources Infrastructure Development (GRID) has been provided
with a grant from the Victorian Government to examine the infrastructure
requirements for incoming PAMs and outgoing products produced from
brown coal.
The 2009-10 Victorian State Budget allocated an additional $1 million for a

scoping study to identify appropriate road, rail and port infrastructure for the
growth of the Latrobe Valley coalfields.
A new fast train passenger service between Latrobe Valley and Melbourne has
improved passenger services, but as noted could impede future freight
movement.
The Gippsland Intermodal Freight Terminal at Morwell will provide direct

access to the national freight network. It adjoins a site which is being
developed to provide large-scale logistics and distribution services.
Rail transport
A broad gauge line runs from Melbourne to Bairnsdale and is used for both
passenger and freight trains. The line is owned by VicTrack, the Victorian State

Government rail track owner. The track was leased under a 49 year
franchise/lease to Pacific National (PN). In 2007, the Victorian Government
brought back the lease from PN and V/Line now is responsible for
maintenance, upkeep and providing access to the line.
The only freight currently handled by rail is export logs from Bairnsdale and
Morwell to Geelong and paper from the Maryvale Mill (Morwell) to Melbourne
for export and interstate. Logs and paper are loaded at private facilities. There
are no open access loading terminals operating in Gippsland apart from the
intermodal (road-rail) freight terminals located at Bairnsdale and Morwell,
although at present these are not significantly utilised, though there are plans to
refurbish both.
As noted, the current rail infrastructure, connections to ports and rolling stock
are not suitable for efficient shipment of bulk products. There is no direct rail
connection to Hastings on Westernport Bay, which is the closest and least
congested site for a bulk port. Major new rail infrastructure will be required for
transport of bulk mineral products. Infrastructure Australia has nominated the
Port of Hastings as one of the 28 projects on its short list of projects that may
be recommended for government funding in the future.
Road transport
The Gippsland road network comprises state and locally managed roads. The
Princes Highway to sale is also an AusLink network (nationally significant)
road.
The Princes Highway (M1 to Traralgon and A1 east of Traralgon) traverses the
region from east to west and acts as the main transport spine for the region.
The Great Alpine Road (B500) originating at Bairnsdale provides connections
to the north-east of the State. The Monaro Highway originates in Cann River
and provides another route to NSW and the ACT. The South Gippsland
Highway originating in Sale, the Hyland Highway originating in Traralgon and
the Strzelecki Highway originating in Morwell all service the south-east of the
Region.
Upgrading of these roads will be necessary to facilitate construction of major

projects.
Air transport
The Gippsland region has regional airports at Bairnsdale, Lakes Entrance,

Great Lakes, Orbost, Sale, Leongatha and Yarram and Morwell (Latrobe
Regional Airport). None have runways over 1600 metres and apart from East
Sale RAAF Base are not capable of handling medium-sized or larger jets.

The Gippsland region has charter air links to Tullamarine and Essendon
airports as well as some NSW airports.
Water
Southern Rural Water is responsible for managing rural water resources across
southern Victoria. Their main business centre in Gippsland is located in
Maffra.8
Gippsland Water provides reticulated water and wastewater services to a

geographic region from Drouin in the west, to Stratford in the east, and from
Mirboo North in the south, to Rawson and Briagalong in the north.9
East Gippsland Water provides water and wastewater services to the

communities of East Gippsland. 10
Energy
Gippsland is pre-eminent in Australia as a source of both energy and energy

education. Gippsland offers the advantage of reliability of electricity supply as
well as the potential for substantial price benefits via the co-location of
industries with power generators.
Education and training
About 70 secondary and tertiary educational facilities are located across

Gippsland. Monash University has a campus in Churchill, offering a range of
degree courses. TAFE campuses are located at centres throughout Gippsland.
The Latrobe Valley is the educational centre for Gippsland. The Gippsland
Education Precinct is a cross-sectoral partnership of education and training
providers. The recently established Gippsland Education Precinct (Monash
University, Latrobe City Council, Central Gippsland TAFE, Gippsland Group
Training and Kurnai College), based at Churchill, aims to develop all learners
to their full potential.
Health services
Gippsland has good access to health and aged care services. Major regional
hospitals are located in Warragul, Traralgon, Sale and Bairnsdale. District
hospitals exist in several other centres.
8 http://www.srw.com.au
9 www.gippswater.com.au
10 www.egwater.vic.gov.au

Latrobe Regional Hospital is a 257 bed fully integrated public hospital, serving
the Gippsland and Latrobe Valley communities. The Hospital offers elective
surgery, maternity, chemotherapy, dialysis, paediatrics, breast screen services,
rehabilitation, aged care and mental health services. The Maryvale Private
Hospital in Morwell is an acute surgical hospital, with 45 beds.
3.6 Infrastructure initiatives

Recent infrastructure planning initiatives relevant to the Gippsland region
include:
• Gippsland Regional Development Strategy, Gippsland Local Government
Network, 2006
• Gippsland Transport Strategy 2008-2020, Gippsland Local Government
Network, 2008
• Latrobe 2100 Coal Resources Project, Department of Primary Industries,
2005 (under Regional Minerals Program)
• Latrobe 2021: The Vision for Latrobe Valley, 2004 and 2006, and 2007
review
• The Gippsland Energy Challenge, Latrobe City Council 2005.
These studies together provide a comprehensive examination of current
infrastructure and future infrastructure needs under various growth scenarios.
Infrastructure planning to service the minerals industry is hampered by lack of
certainty about the pattern of industry development.
3.7 Overview of growth scenario

The growth scenario for the Gippsland region is based on projections for
brown coal usage under an optimistic assumption. The Latrobe 2100 Coal
Resources Project examined three scenarios:
• Scenario 1: In this scenario existing brown coal power stations are phased
out earlier than currently planned and the majority of new generation is
based on renewables and gas. It assumes that improved technology would
be available for new coal based power generation but no coal demand has
been assumed for conversion to other hydrocarbon products, coal usage
does not decline below about 30 Mtpa.
− Morwell power station would shut down by 2012 (in all scenarios),
while Hazelwood and Yallourn power stations would shut down by
2020, with Loy Yang A and B continuing to 2035 and 2040 respectively.
• Scenario 2: In this scenario existing brown coal fired plants are phased out
5 years later than in Scenario 1, and there would be greater use of coal for
the production of electricity. It assumes that new technology, applied to
new plants, will improve coal conversion efficiency and reduce greenhouse

gas emissions. Coal demand of approximately 40 Mtpa is required to meet

the remaining electricity generation requirement and it the scenario assumes
that a further 15 Mtpa is converted to other products.
− Hazelwood and Yallourn power stations would shut down by 2025,
with Loy Yang A and B continuing for another five years beyond their
Scenario 1 closure dates.
• Scenario 3: In this scenario, existing brown coal generation plants are
assumed to remain in base load service to a plant life of about 60 years or
to the limit of coal reserves. It is assumed that new coal-fired power
generation plant will utilise higher conversion efficiency technologies.
− Hazelwood and Yallourn power stations would shut down by 2030,
with Loy Yang A and B continuing for another five years beyond their
Scenario 2 closure dates.
The growth scenario for this infrastructure study broadly aligns with the
Scenario 3 growth trajectory. Under Scenario 3, coal demand of approximately
50 Mtpa is required to meet electricity generation requirements by 2030. An
additional 40 Mtpa coal is assumed to be used to produce other hydrocarbon
products and total coal demand is expected to exceed 90 Mtpa by 2030.
Figure 4 illustrates projected annual coal consumption in the Latrobe 2100

Coal Resources Project Scenario 3.
Figure 4 Projected annual coal consumption in high growth scenario
Source: Latrobe 2100 Coal Resources Project, Scenario 3
The growth scenario for this study makes the assumption that any emissions
trading scheme does not result in closure of power stations before 2020 and
does not restrict the development of industries using lignite to produce other
hydrocarbon products.

Future brown coal utilisation for both power generation and coal to liquids
technology depends on advances in technology to improve efficiency and
reduce greenhouse gases.
Some modelling of the impact of the CPRS, as currently proposed, on

generation mix shows brown coal power generators being out-competed from
2020 by other energy sources, notably black coal and gas, and therefore
shutting down progressively. This is reflected in Scenario 1. It is possible that
in the future, technology could be available to make it economically feasible for
brown coal generation to compete in a world where carbon is priced.
Coal to liquids (CTL) technologies have the potential to be competitive with

traditional sources of oil in a high oil price environment. New technologies to
dry and convert Gippsland coals offer a range of options for use of the
region’s very substantial lignite resources. The proximity of the Gippsland
Basin, which is highly prospective as a site for geosequestration of CO2, could
support the development various low carbon opportunities.
Figure 5 shows possible mine development at 2030 under Scenario 3 of the

Latrobe Valley 2100 Coal Resources project. It is possible that the large
Yarram-Gelliondale coalfields in South Gippsland also could be developed.

Path to Prosperity
Possible mine development at 2030 (scenario 3)
Source: Latrobe Valley 2100 Coal Resource Project

Figure 5
3.8 Growth scenario, Gippsland

Table 1 provides a summary of the elements of the mining growth scenario for
the Gippsland region.
Table 1 Summary of growth scenario to 2020 for the Gippsland growth region
Coal for electricity generation Production from existing mines and power stations to continue to 2020, with progressive shutdowns
likely due to impact of CPRS in its current form
Coal-based products Large-scale production of a number of coal-based products, including dried coal and coal to liquids
production (potentially with geosequestration of CO2)
Heavy mineral sands Potential major mineral sands mine in East Gippsland
Gold Potential new medium scale mine
Petroleum Several new oil and gas projects 2009 – 2015
Table 2 summarises the infrastructure gaps and requirements under this

growth scenario.
Table 2 Summary of infrastructure gaps and requirements under growth scenario to 2020 for the
Gippsland region
Infrastructure class Gaps Requirements
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
development Barry Beach port
• Over-dimension corridors inadequate
Railways • Railway infrastructure, rolling stock and • Upgrade existing rail infrastructure
port access inadequate for bulk minerals • Construct new rail route to Hastings bulk port when traffic
• No direct route to proposed Hastings bulk justifies
port • Deal with short term bottlenecks at interim ports
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, although • Investigate and implement common-user CCS system in close
storage potential recognised, research being cooperation with the private sector
conducted and some planning underway

The Latrobe Valley 2100 Project found that the major infrastructure services of
road, rail, water, gas, communication and electrical transmission are adequate
for present and future use to service the Valley’s traditional electricity
generation industry.
This study, which was conducted in 2005, did not consider potential
conversion of coal and export of coal products. As new projects emerge, they
will have specific requirements for augmented infrastructure.
Infrastructure corridor planning needs to take account of possible and

probable coal mining and industrial areas. In addition, some existing
infrastructure may need to be moved to allow for future coal field
development.
Land use planning
The Latrobe Valley 2100 Project identifies land use planning as a fundamental
need for the future of the industry, particularly given the close proximity of
other uses, notably for residential, agriculture and infrastructure purposes. The
study reviews the Latrobe City and Wellington Shire Strategic and Statutory
Planning Framework relative to coal, land over coal, surrounding land uses and
buffers, and identifies gaps where likely coal developments are not
accommodated or where current coal related provisions are not required in the
future.
Elements of municipal policies require revision. State Policies and Strategies

also need to be reviewed and revised to accommodate future mining and
industry and to ensure compatibility of land use.
Water
Water is a key resource for future coal use and power generation, as well as for
other uses in agriculture, for domestic commercial and industrial uses and for
maintaining the environment. The Gippsland Basin water resource is currently
over utilised as is evident from declining groundwater levels, unhealthy river
habitat and poor condition of the Gippsland Lakes. Unless corrected, this
situation could lead to severe restrictions on use of water by mining and
customer industries, constraining their growth.
The Latrobe Valley 2100 Project estimates that 20 per cent more water (30 GL
per annum) will be required by all users by 2030. The Project identified an
additional 110 GL per annum of potential additional supply from a variety of
sources.

There is a need for an integrated water plan, utilising a range of sources and
technologies, including greater recycling, desalination, water use efficiency
measures and development of new sources.
Alternative opportunities for mining companies to meet future water

requirement include new allocations from adjoining basins, obtaining
unallocated water in Blue Rock Reservoir and through opportunities from
more efficient use in power stations, coal dewatering (drying) prior to use, and
from recycled water and desalination projects.
Transport – overview
The Latrobe Valley 2100 Project did not identify any major issues associated
with future transport requirements.
However the Gippsland Transport Strategy 2008-2020 identified connectivity

improvements, particularly from Gippsland into Melbourne, to the Victorian
ports and the interstate freight rail network as priorities to be addressed.
The Strategy also identified the need for effective operation of intermodal
connection points, ensuring that the road/rail intermodal connection points at
Morwell and Bairnsdale operate effectively. It said that the role of rail freight
out of Gippsland to export gateways needs to be reprioritised in the context of
increasing export potential for bulk commodities, as well as fuel and carbon
pricing considerations.
If, as expected, mining and processing of bulk commodities expands in the

region, then better rail transport and port connectivity becomes a high priority.
Roads and over-dimension corridors
The Princes Highway is a freeway standard highway linking Gippsland with

Dandenong and Melbourne. It is the main arterial used by traffic associated
with industry.
Latrobe Valley 2100 Project identified no major issues for the Princes Highway
associated with the ongoing operation of extraction of coal in the Latrobe
Valley, given that future employment levels are unlikely to grow markedly.
While an over-dimension (high wide load) route is available for the transport of
large items of plant, studies have identified the need for additional routes for
transport of modular items of plant.
The port development at Barry Beach (near Pt Welshpool), known as Port

Gippsland, offers an alternative entry point to the region for over-dimension
loads and more direct road routes to most sites.

Rail
Rail is important in providing rapid transport access from Latrobe Valley to

towns in other centres and in particular Melbourne. The State Government is
has upgraded rail transport from Melbourne to Traralgon, which has improved
the passenger service.
Other than passenger access, rail is not currently an important freight carrier
for the coal and electricity industries in the Latrobe Valley.
There is potential need for rail transport for any products resulting from new
technology development. These could include char, activated carbon, fertiliser
and liquid products. Rail has been used for briquette transport in the past.
Depending on the volume of these products, some upgrading of the railway
may become necessary as well as new rolling stock and a review of required
routing to suitable ports at Melbourne, Geelong or Hastings. As noted, the
Gippsland Transport Strategy identified connectivity improvements with rail as
a priority and urged the reprioritisation of to the role of rail freight out of
Gippsland to export gateways. Access to the ports of Melbourne and Geelong,
and the Port of Melbourne itself are congested.
The closest port suitable for bulk exports is Hastings. There is currently no
direct rail connection between Gippsland and this port. A direct rail
connection to this port would provide the best solution to bulk transport
needs.
The Victorian Government has proposed such a connection for funding

through the current COAG/Infrastructure Australia process. Costings have
not yet been published. IA has suggested $60 million could be allocated for
planning the development of the corridor in conjunction with an expansion of
the Port of Hastings.
Ports
There are currently very limited facilities in accessible ports for export of bulk
products from Gippsland. As discussed earlier, access to the Ports of
Melbourne and Geelong is congested. The most suitable site for a bulk port is
Hastings on Westernport Bay. The Victorian Government has nominated
development of this port as a priority project for funding under the
COAG/Infrastructure process. IA has included the project in its list of 28 that
may be recommended for partial funding by governments in the future. The
estimated cost of the port development, known as Stage One, is $1.3 billion of
which half is expected to be sourced from the Port of Hastings Corporation.

Electricity transmission
The high voltage network is critical to link the 7500 MW + of brown coal
power, several gas peaking plants and Basslink to customers in the NEM
system.
The adequacy of electrical energy transmission via high voltage (HV) overhead
transmission lines between Latrobe Valley, Melbourne and other major users is
regularly reviewed by Vencorp, the Victorian Energy Networks Corporation.
Interconnection to Melbourne has recently been upgraded with new
transmission lines and a new terminal station at Cranbourne.
CO2 sequestration
Gippsland is well placed to become a hub for carbon-intensive industries that

are able to limit their emissions through geosequestration of CO2 (carbon
capture and storage – CCS). The region has massive coal resources that are
able to underpin energy production for well over 100 years and beyond. It also
has suitable geological structures for geosequestration in the nearby Gippsland
Basin.
A coal drying and carbon capture project is underway in Gippsland. A trial of

CCS is being undertaken by the Cooperative Research Centre of Greenhouse
Gas Technologies in the Otway Basin of Western Victoria.
The Victorian Government is undertaking a number of studies in relation to

carbon capture and storage, including identifying potential geosequestration
locations.
Future CO2 sequestration will require supporting infrastructure such as

compression, pumping, pipelines and injection wells. These could be installed
on a project by project basis or designed to be utilised as shared facilities. For
the Gippsland region, which is likely to host a number of projects that require
CCS, a CO2 hub and pipeline network is likely to be the best solution.
In the case of a multi-user facility, government involvement will be required to

establish the rules, similar to other shared-access infrastructure. There may
also be justification for government involvement to facilitate early-stage
sequestration infrastructure.
In relation to multi-user infrastructure, the Minerals Council of Australia

believes that:
• Government has a role to play in whole of system master planning is
required.
• Industry ownership and commercial arrangements are preferable to public
sector ownership and government regulation of operations.

• If regulation is required, access protocols providing certainty of access

rights for existing users and provide the environment that gives appropriate
incentives for infrastructure expansions necessary to create access for new
products in a timely fashion.
The Victorian Government recently developed a Strategic Policy Framework
for Near Zero Emissions from Latrobe Valley brown coal. A number of
additional studies have been completed following this work and the Victorian
Government intends to develop an Energy Statement in the 2009-10 period. A
policy framework to provide planning clarity for the long term use of the
brown coal resource in the Latrobe Valley is required while providing the
framework to deliver deep cuts to Victoria’s greenhouse gas emissions.
The Victorian Government has established Clean Coal Victoria – a new body
dedicated to maximising the value of Victoria’s brown coal resources to
oversee this strategic planning. The 2009/10 Federal Budget also committed
up to $2 billion to help build demonstration plants for CCS.
Communications
The Latrobe Valley is well served with adequate communication systems

currently, which may need to be upgraded to follow demand.
The systems include:

• Mobile phone coverage and capacity
• Broadband access
• Copper wire system, which can also be used with new technology utilising
copper wire or the existing ducts
• Optic fibre cables owned by Telstra, Victrack and Basslink.
Mining, power generation and coal conversion are only some of the factors
which will influence population growth and infrastructure requirements in the
Latrobe Valley. That said, current regional infrastructure is expected cope with
expected growth. However, peaks associated with construction activity need
careful assessment when projects are being proposed.
Schools and health services
The provision of soft infrastructure is dependent on population and

community demand or expectations and in general follows population growth.
Employment for mining and power generation is unlikely to increase but
additional staff could be required for coal gasification plants, although these
are expected to require only small numbers of staff.

During construction periods for new mines and/or new power stations or coal
conversion plants, there are likely to be peaks in job opportunities. A planning
mechanism is required to anticipate and accommodate future infrastructure
demand peaks.

4 Western Victoria growth region

4.1 Resources and production
The Western Victorian region – part of a 320,000 square kilometre section of
the Murray Darling Basin that traverses Victoria, NSW and South Australia –
has emerged as an important source of minerals sands – predominantly rutile,
ilmenite, and zircon.
The Iluka Resources Douglas project in Victoria is based on the resources of

three main deposits, Bondi Main, Bondi West and Bondi East with a single
mining unit plant, a wet concentrator plant and a mineral separation plant
located at Hamilton to produce the final specification rutile and zircon.11
Combined rutile and zircon production of 185,000 tonnes in 2007 was above
the company’s initial forecast. Production is forecast to jump to 850,000
tonnes per annum from 2010. In addition, the company has just commissioned
a new mine near Ouyen in North West Victoria which contains two thirds of
the company’s heavy mineral resources of the Murray Basin.12
Bemax Resources holds and control reserves in the Murray Basin in both
Victoria and NSW. While resources have been depleted at Gingko near Broken
Hill, other deposits have been confirmed at Atlas in NSW and the North
Kulwin deposit in Victoria.
Astron Ltd’s Donald project in the Murray Basin in Victoria comprises the
Donald and Jackson heavy mineral sand deposits. The Donald project is in the
feasibility study stage. It will be capable of an annual output of 98,000 tonnes
of rutile, 200,000 tonnes of ilmenite and 135,000 tonnes of zircon. The
operating company, Donald Minerals Sands, company gained environmental
approvals in 2008.
4.2 Infrastructure needs
Roads
Road is the favoured means for transporting material from minerals processing
plants, with most product being shipped through the Port of Portland in the
south-west of the State. The road network in western Victoria is extensive,
although there is a gap between the north and south of the state at its western
11 GeoScience Australia, Australian Mines Atlas 2008.

12 Iluka also has resources at Euston in NSW and a joint venture agreement with Adelaide
Resources Ltd over the Tripitaka deposit in South Australia.
Western Victoria growth region 28

border in the high productivity freight vehicles (HPFV) network – the

dedicated routes for the large, multiple trailer (B-doubles and in the future B-
Triples) vehicles. The main route south to Portland from Horsham and to the
Iluka Hamilton processing plant is maintained at HPFV standard.13
Figure 6 Victorian long term regional HPFV network
Note: HPFV - high productivity freight vehicles

Source: Freight Futures – Victorian Freight Network Strategy for a more prosperous and liveable Victoria, 2008
Rail
Rail links from Mildura to Portland have are being upgraded although gaps in
the conversion from Victoria’s broad gauge network to the standard gauge on
interstate routes remain. The Victorian Government has earmarked rail
upgrades for the future as part of a $501 million Rail Revitalisation program.
The lack of a rail unloading facility at the Port of Portland for bulk materials
limits the use of the rail network.
13 Freight Futures – Victorian Freight Network Strategy for a more prosperous and liveable Victoria, 2008.

Figure 7 Victoria’s regional rail network
Source: Freight Futures – Victorian Freight Network Strategy for a more prosperous and liveable Victoria, 2008
Ports
The Port of Portland, is a private port which tranships aluminium from

Portland Aluminium – a joint venture between Alcoa, CITIC and Marubeni) –
as well as minerals sands, forestry and agriculture products from western
Victoria and eastern South Australia. Trade through the Port has been
estimated at $1.5 billion a year.14 The throughput could be increased by $800
million a year with an increase in mineral sands and woodchips, with the
potential minerals sands value potentially increasing by between $250 million
and $400 million.
Up to $100m will be invested in infrastructure at the port over the 5 year
period 2005-2010:
• Iluka’s Mineral Sands Facility (completed in 2007)
• Mitsui / GrainCorp Hardwood Chip Facility (completed in 2006)
• ITC / Great Southern Hardwood Chip Facility (commenced in 2008).
To achieve the potential growth, the Port of Portland and to facilitate use of
rail transport will require an upgrade to its rail exchange infrastructure. An
upgrade to allow the port to discharge a 50 wagon train within 2 hours without
14 Port of Portland Economic Impact Study, Meyrick and Associates, March 2006.

the need to break the train is required. The Port, with the support of the
Victorian and South Australian Governments has applied for $20 million of
funding from Infrastructure Australia to upgrade their facilities.
Energy
Access to energy is essential for the expansion of the minerals sands industry in
the region. The Victorian government has increased the supply of energy into
the region but companies report that this has not been matched by upgrades of
distribution networks by retail companies. Regulatory hurdles between
government and electricity providers continue to frustrate mine site developers
with the retailers unable to meet development guidelines.
Aluminium production at the Alcoa Portland Smelter is facilitated by a high

capacity transmission line and forms part of the State’s transmission network
and interconnection between Victoria and South Australia.
Water
Water availability continues to limit mineral developments. Upgrades to water

supply infrastructure have improved the efficiency of the system, however the
volume of water available for use remains depressed due to the ongoing
drought.
Conclusions
Victoria’s infrastructure is not geared to transport of bulk mineral

commodities. Investment in rail, road and port infrastructure is required to
ensure than industry growth is not constrained.
Standards of community infrastructure in regional Victoria are generally high.

Further investment in community infrastructure is needed however to attract
and retain workers both in the mining industry and in the industries that
service it – particularly in the more sparsely populated regions.
To achieve timely infrastructure provision, close coordination is required

between all levels of government and industry in prioritising, planning,
funding, constructing, managing and operating infrastructure.
Table 3 lists the key infrastructure gaps and requirements under this growth
scenario.

Table 3 Summary of infrastructure gaps and requirements under growth scenario to 2020 for the
Western Victoria region
Infrastructure class Gaps Requirements
Roads • Gap in the HPFV network between the • Upgrade to the HPFV network in west of the state
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
not yet converted to the standard gauge gauge on interstate routes
• Lack of a bulk materials unloading facility • Construct a bulk materials unloading facility at Port of Portland
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
inadequate Portland
Energy • Distribution networks failing to keep pace • Address regulatory hurdles creating barriers to the upgrading
with growth of electricity distribution networks
Water • Supplies of water likely to be inadequate • Implement measures to increase water supply, including
for growth recycling, desalination and new sources

Tasmania

Australian Minerals Industry's
resources regions
May 2009
(03) 9600 3144.
ACIL Tasman Pty Ltd

ABN 68 102 652 148

Darwin
48-50 Smith Street

Please contact:
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
Contents
2 Overview of mining in Tasmania 3
3 Description of Cradle Coast growth region 6
4 Planned and proposed resources production 8
4.1 Minerals products 8
4.2 Exploration 8
5 Current infrastructure 9
5.1 Overview of transport infrastructure 9
5.2 Roads 9
5.3 Rail 10
5.4 Ports 10
5.5 Airports 13
5.6 Energy 13
5.7 Telecommunications 14
5.8 Community infrastructure 14
6 Infrastructure initiatives 15
7 Discussion of growth scenario 16
7.1 Growth scenario, Cradle Coast region 17
List of figures
Figure 1 Tasmania: Major mining and mineral processing operations, and
infrastructure 5
Figure 2 Location of the Cradle Coast growth region 6
Figure 3 Cradle Coast region transport infrastructure 12
List of tables
Table 1 Minerals production from Cradle Coast growth region 3
Table 2 Summary of growth scenario to 2020 for the Cradle Coast growth region 16
2020 for the Cradle Coast growth region 17
Table 4 Mineral production at 2020, growth scenario, Cradle Coast region 18
iii

Project
industry.
Expansion of the nation’s infrastructure (hard and soft industrial and

moved to fill that gap and as a consequence Australia’s market share has fallen.

market.


infrastructure studies. The growth scenario and gaps in infrastructure for the
Cradle Coast region in Tasmania’s north west are discussed in this report.

2 Overview of mining in Tasmania

The mining industry is a major contributor to the Tasmanian economy. The
Cradle Coast growth region is the principal minerals producing region in the
State. In recent years, the volume and value of minerals production has
increased. Projections indicate that tonnages of metallic mineral concentrates
from the West Coast of the State could quadruple to 2 million tonnes a year. 2
Iron ore production is expected to increase to a total of almost 3 Mtpa,3 with
production of other mineral products (tungsten, silica flour and cement)
forecast to grow also.
Refined metals and metallic ores contribute more than 50 percent of

Tasmania’s gross export income. In 2007/08, the value of mining and
metallurgical production was $2,657 million, a 6 per cent decrease from
2006/07, but still 22 per cent above 2005/06 production. In 2007/08, industry
value-added production from Tasmanian and Australian ores was $1,726
million. 4
Table 1 shows the level of minerals production in Tasmania in 2007/08.

Nearly all of this production comes from the mines on the West Coast – the
minerals hub of the Cradle Coast growth region. Other production from the
region is also shown. The value of metallic minerals production from the
Cradle Coast growth region in 2007/08 was more than $800 million.
Table 1 Minerals production from Cradle Coast growth region

Commodity Unit Year ended Year ended
30 June 2007 30 June 2008
Total Quantity Total Quantity
Metallic Minerals
Copper (assayed) tonne 29,322 30,483
Gold (assayed) kilogram 3,780 5,532
Iron ore pellets tonne 1,837,985 2,423,240
Iron (in magnetite) tonne 98,507 135,629
Lead (assayed) tonne 28,833 29,285
Scheelite tonne 30 11
Silver (assayed) kilogram 98,881 98,663
Tin (assayed) tonne 5 0
2 Cradle Coast Authority 2006, Cradle Coast Integrated Transport Strategy.

3 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.
4 Mineral Resources Tasmania 2008, Annual Review 2007/2008.
Overview of mining in Tasmania 3

Commodity Unit Year ended Year ended

30 June 2007 30 June 2008
Total Quantity Total Quantity
Zinc (assayed) tonne 96,447 95,541

Other mineral products
Silica (glass and other) tonne 185,036 205,190
Limestone for cement tonne 1,701,075 1,856,125
Note: Minor metallic minerals production from other regions – predominantly gold from Tamar region
Data source: Mineral Resources Tasmania Annual Review 2007/2008
Figure 1 shows the location of major minerals operations and infrastructure.

Tasmania’s mining sector has been experiencing strong, renewed activity, with
major new developments focused on the West Coast. In 2005/06, around
450,000 tonnes of mineral and metallic ores was transported from the West
Coast, the majority by rail (335,000 tonnes). By 2010, this task is forecast to
more than double to nearly 1.1 million tonnes, split between road (600,000
tonnes) and rail (500,000 tonnes). 5
Upgrades of road, rail and port infrastructure in the Cradle Coast region will be
required to cope with this transport task. Improved road infrastructure is also
needed to improve safety.
Mineral exploration expenditure has risen sharply in recent years – up more

than 175 per cent on 2004/05 levels. 6 While expenditure is expected to fall in
the short term, the prospectivity of the region should ensure that exploration
remains strong, leading to further discovery and development.
Energy infrastructure will require upgrading to ensure supplies of electricity

and gas to mining operations are available and competitively priced.
Telecommunications infrastructure and wholesale capacity also require
improvement.
5 Cradle Coast Authority, 2006.

6 Mineral Resources Tasmania, 2008.

Figure 1 Tasmania: Major mining and mineral processing operations, and infrastructure
Data source: Mineral Resources Tasmania Annual Review 2006/2007

3 Description of Cradle Coast growth

region
The north west of Tasmania is the State’s mining hub. The region comprises
the nine local government areas of Burnie City, Central Coast, Circular Head,
Devonport City, Kentish, King Island, Latrobe, Waratah-Wynyard and West
Coast Councils.
The Cradle Coast region, covers approximately one third of the total area of
Tasmania. Around 75 per cent of the population lives along the urban coastal
strip between Devonport and Wynyard, with more remote settlements on the
West Coast and King Island (see Figure 2).
Figure 2 Location of the Cradle Coast growth region
Source: Department of Transport and Regional Services, Cradle Coast Regional Profile, 2003
Description of Cradle Coast growth region 6

The estimated resident population of the region is around 106,000 persons or

22.5 per cent of the total population of Tasmania. 7 The social and
demographic issues confronting the region have changed significantly over the
last 50 years. The region experienced steady population growth after World
War II until the 1990s when, like the rest of Tasmania, it experienced an
overall population decline between 1996 and 2006. The decline in population is
largely attributed to structural changes in the mining, manufacturing and
forestry industries.
The mainstays of the Cradle Coast region’s economy are mining, agriculture,
forestry, manufacturing, retail and tourism. Other important activities in the
region include the manufacture of mining equipment, dairy products, vegetable
processing, textile products, saw-milling and wood products, paper
manufacturing and cement production.
7 Cradle Coast Authority 2006.
Description of Cradle Coast growth region 7

4 Planned and proposed resources

production
4.1 Minerals products
A number of mineral projects have recently been commissioned, are in
development or are being proposed in the Cradle Coast growth region. These
include:
• Redevelopment of the Renison Bell and Mt Bischoff tin mines by Metals
X, together with potential development of the Rentails project (the Renison
Bell tailings are a major tin resource) as an integrated operation and
Australia’s largest tin producing operation
• Possible upgrading of the Savage River iron ore (magnetite) mine and
associated Port Latta pellet plant to a capacity of 2.9 Mtpa (up from 2.3
Mtpa), with potential for mine life extension from 2022 to 2034
• Open pit mining of the Que River polymetallic resource by Bass Metals,
with potential redevelopment of the nearby Hellyer resource and
processing of ore through the newly-acquired Hellyer Mill
• Production of high purity silica flour for high specification glassmaking
increasing by up to fourfold to through two producers
• Reopening of the King Island Scheelite mine to produce some 600,000 tpa
of tungsten concentrate
• Reopening of the Avebury nickel mine when metal prices improve.
In addition, the Cradle Coast region is adjacent to the bulk of the offshore oil
and gas permit areas in Tasmanian adjacent waters.
4.2 Exploration
Expenditure on mineral exploration in Tasmania for the 2007/2008 year was
$32.4 million, up 37 per cent on the $23.7 million recorded in 2006/2007. 8
The bulk of this expenditure was in the highly prospective mineral belts of the
Cradle Coast region.
Mineral Resources Tasmania data record a higher expenditure of $41.54

million, of which $20.47 million or 49 per cent was spent on greenfields
activities on exploration licences rather than on brownfields exploration on
mining leases.
8 Australian Bureau of Statistics 2008.
Planned and proposed resources production 8

5 Current infrastructure
5.1 Overview of transport infrastructure
Key characteristics of the Region’s transport system, as shown in Figure 3 are:
• Major road and rail corridors along the North-West Coast linking major
population centres, ports and industrial areas
• Major sea ports at Burnie and Devonport, with smaller port facilities at
Stanley and Port Latta (for magnetite pellets)
• Highways linking the West Coast to the North-West Coast and Hobart
• Regional airports at Burnie (Wynyard) and Devonport, with minor airports
at Smithton and Strahan.
The difficult terrain, remoteness and dispersed location of mining sites create
major impediments for the movement of mining product out of the West
Coast. Roads are narrow, with highly constrained alignments for freight
vehicles. Measures to improve road safety should also be a priority, with an
increasing amount of minerals and forestry truck traffic mixing with passenger
cars on narrow winding roads. Rail network limitations include too few
passing loops and steep gradients that limit train length and carrying capacity.
As noted, the West Coast transport task is forecast to increase to nearly 1.1
million tonnes by 2010, split between road (600,000 tonnes) and rail (500,000
tonnes).
5.2 Roads
Tasmania’s overall road freight task has grown significantly in recent years, and
is forecast to reach 78 million tonnes by 2023, an increase of 65 percent from
2006.
In the Cradle Coast region, the following usage of major roads is forecast:
• The Bass Highway at Burnie is likely to be approaching capacity by 2023
• Ridgley Highway – forecast freight growth of 2.12 percent per year, largely
based on mining and forestry activity, to 3.2 million tonnes by 2023.
Existing infrastructure constraints and safety risks on sections of the regional
road network will intensify as freight and passenger demand increases. Past
under-funding of maintenance on regional roads has – and will continue to –
create a gap in performance standards.
Regional roads that are deficient in terms of width, horizontal and vertical
alignment include the mining-industry critical Murchison Highway from
Current infrastructure 9
Zeehan to Ridgley Highway, which has major freight constraints between

Zeehan and Anthony Main Road, with sections having poor horizontal and
vertical alignments and unsealed shoulders resulting in medium to high safety
risk.
These roads are also heavily utilised by tourist traffic, with some also used for
forest products transport and aquaculture industry. This traffic mixes with the
minerals traffic, increasing hazard and risk.
The Ridgley Highway will require over $30 million investment to bring it up to
an appropriate standard to meet the region’s growing mining freight task.
5.3 Rail
Rail is important for the movement of bulk freight, including minerals from
the West Coast to Burnie port and cement from Railton to Devonport port.
Rail provides an alternative freight transport mode to road, supporting
competitive transport options for industry. However, infrastructure
deficiencies, a generally short-haul task and volatility in rail ownership and
management since the late 1990s are significant issues affecting the viability
and attractiveness of rail.
Tasmania’s rail network, of which 635 km is currently operational, has received

limited investment compared to road. Over the last three decades, $45 million
was spent on the network for maintenance and minor upgrades compared to
around $798 million on major road upgrades to substantially increase road
productivity. Much of Tasmania’s rail infrastructure and rolling stock is now
considerably aged and inefficient and overall infrastructure condition is poor.
Significant improvement in the efficiency and productivity performance of the

rail network is necessary for rail 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.
Ownership of the majority of the rail network was recently transferred to the
Tasmanian Government. The Melba line from the West Coast remains
privately owned by Pacific National Tasmania (PNT). All rail freight operations
across the State are currently undertaken exclusively by PNT.
5.4 Ports
Tasmania has an export-oriented, bulk commodity economy. Over 99 percent
of all Tasmania’s exports are by sea. During the past decade, total port tonnage
has grown at over 3 percent a year, with the container market growing at over
5.5 percent per year. Bulk freight has grown at a lower annual growth rate of
less than 1 percent, reflecting a significant downturn in bulk movements during
2005/06. However, in the future, this task is forecast to grow at a higher rate
of over 2 percent per year to around 14 million tonnes by 2023.
Exports account for around two-thirds of the total tonnage moving through
Tasmania’s ports. Around 45 percent of Tasmania’s freight is for international
export. International exports are dominated by forest and mineral products.
There are three ports exporting mineral products in the Cradle Coast Region:
Burnie (more than 500,000 tpa of mineral concentrates), Port Latta (iron
pellets by Australian Bulk Minerals) and Devonport (cement). The King Island
Port could again export scheelite if the King Island scheelite mine reopens. All
ports except Port Latta are operated by Tas Ports, a State Government
company. Port Latta is operated by Grange Resources.
Expansion at some ports, including Burnie, is highly constrained by adjacent

land uses. Connecting road and rail networks have known infrastructure
deficiencies affecting freight movement. Infrastructure Australia has included
the Bell Bay port expansion among its list of 28 projects that might receive
government funding in the future.9 The key deficiencies expected to affect
Burnie’s performance over the next 20 years are:
• Inefficient port infrastructure, unable to cater to higher freight volumes:
channel infrastructure, storage and handling areas, wharf infrastructure and
handling equipment
• Constraints on further expansion by adjacent residential and commercial
uses.
9 Note that Bell Bay is just outside the Cradle Coast growth region.
Figure 3 Cradle Coast region transport infrastructure
Data source: Cradle Coast Authority, Cradle Coast Integrated Transport Strategy, 2006
5.5 Airports
Tasmania is highly reliant on air transport for the movement of passengers,
and time sensitive freight. All of Tasmania’s major airports have adequate
infrastructure capacity, although the Burnie can handle only turboprop aircraft
and not B737/A320 class jets, and Devonport is marginal for jets. All current
services are provided by turboprop (Dash 8 and Saab 340) aircraft.
Devonport Airport is owned by Tasports, which is a State owned company.

Burnie Airport is owned by Burnie Airport Corporation Pty Ltd, which is part
owned by Burnie City Council. Strahan and King Island Airports are owned
by local government authorities.
5.6 Energy
Strong growth in demand for energy services is anticipated for Tasmania in the
period to 2020.
There are opportunities to make Tasmania's energy supply more secure by

diversifying supplies, incorporating more gas in applications where it is more
suitable than electricity, and improving infrastructure to enable the
incorporation and export of greater amounts of renewable energy.
Tasmania produces approximately 47 percent of the grid electricity in Australia

that comes from renewable (hydro and some wind) energy sources. Further
development in this area will be limited by constraints in the transmission
network if there is not significant investment in this infrastructure.
The Tasmanian hydro system is energy constrained in that the amount of

energy that can be produced over an extended period is the critical factor.
Additional thermal generation in the form of the new Tamar Valley gas-fired
power station will expand the energy capacity of the system, particularly in
times of drought.
Basslink is a high voltage, direct current (HVDC) electricity interconnector that

links the Tasmanian and Victorian electricity networks across Bass Strait. It
allows Tasmania to participate in the National Electricity Market by enabling
the trading of electricity flows between Tasmania and the NEM. Basslink has a
continuous rating of 480MW, but with system stability considerations is able to
export up to a maximum of 600 MW of power from Tasmania to Victoria, and
import a maximum of 300 MW into Tasmania.
The majority of Tasmania’s electrical transmission and distribution assets have

been in service for more than thirty years.
The Tasmanian gas pipeline network includes the gas transmission pipeline
connecting Tasmania to the Eastern gas grid and also the gas transmission
network within the State.
5.7 Telecommunications
Telstra has a virtual monopoly in relation to wholesale telecommunication
services in Tasmania. The State is connected to Australia's national
telecommunications networks via two undersea optic fibre cables controlled
and operated by Telstra. The only other backhaul paths into and out of the
State are via satellites operated by SingTel Optus Pty Limited (Optus) or a
single optic fibre cable embedded with the Basslink electricity connector.
The Tasmanian Government owns an optic fibre backbone cable spanning 420
kilometres from George Town to Hobart and across to Port Latta on the
North West Coast. The cable is located in the same trench as the gas pipeline.
The high cost of backhaul connectivity between Tasmania and mainland

Australia (well in excess of mainland costs) impacts on the viability of
information intensive industry in the state.
Lack of competition has led to lower service levels for broadband than in
mainland States. For example, roll-out of ADSL2+ services outside Hobart
commenced only in 2008.
Only one operator (Telstra) offers comprehensive 3G mobile telephone

coverage across the State.
The Tasmanian Government has identified addressing competition at all layers

of the state’s telecommunications market as a priority.
5.8 Community infrastructure

Community infrastructure is adequate, although low or even negative
population growth has led to lack of investment in refurbishing or renewing
some infrastructure.
The standard of education and health infrastructure in the Cradle Coast region
is on par with similar-sized communities elsewhere in Tasmania, but below that
of Hobart and Launceston.
Infrastructure and services in smaller West Coast towns (total population about
5500) are limited, with residents needing to travel to Burnie or Hobart for
advanced health care, and education and training.
6 Infrastructure initiatives
Relevant planning studies undertaken in the past decade and referred to for
this study are:
• Tasmanian Government submission to the National Infrastructure Audit,
July 2008
• Cradle Coast Integrated Transport Strategy: a joint project between the
Department of Infrastructure Energy and Resources (DIER) and the
Cradle Coast Authority (CCA), 2006
• Western Tasmanian Regional Development Plan, prepared under the
Western Tasmania Regional Minerals Development Program 1998
• Cradle Coast Regional Profile, DoTARS, September 2003
• Mineral Resources Tasmania Annual Review 2006/2007.
Infrastructure initiatives 15
7 Discussion of growth scenario

The sections that follow examine the Cradle Coast region’s minerals projects
been reported in various ABARE and the Tasmanian government documents.
We have not examined the extent to which the regional Cradle Coast region
growth scenario discussed below aligns with the national Advance scenario for
minerals production. Nor have we discussed the implications for regional
growth if actual outcomes align more with the national Holding the Line and
Decline growth scenarios.10 Obviously, to the extent that some minerals
projects are either delayed or do not proceed and actual growth is therefore
less than that discussed below, the demands on infrastructure will be reduced.
Table 2 summarises potential growth in minerals production under a scenario

that broadly aligns with the Advance scenario. Table 3 summarises the
infrastructure requirements under that growth scenario.

Table 2 Summary of growth scenario to 2020 for the Cradle Coast growth region
Iron ore Expansion of Savage Rover-Port Latta operation to 2.9 Mtpa and extension of mine life to 2022
Tungsten Two mines (Kara and King Island) producing tungsten ore at the rate of 1 Mtpa
Silver, lead, zinc and copper Four mines producing about 4 Mtpa of ore
Tin Two mines and a tailings retreatment operation producing about 1 Mtpa of tin ore
Gold Two gold mines producing about 70,000 ounces a year
Silica Two mines and processing plants producing up to 120,000 tpa
10 For more information of the scenarios please see the Access Economics reports:
Infrastructure 2020 – Can the domestic supply chain match global demand? and Global commodity
demand scenarios.
Discussion of growth scenario 16

Table 3 Summary of infrastructure requirements under the growth scenario to 2020 for the Cradle
Coast growth region
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
7.1 Growth scenario, Cradle Coast region
The Cradle Coast growth region has excellent potential for growth of minerals
production. It has been a mining region for more than 120 years and hosts the
Mt Read Volcanics, which are acknowledged as one of Australia’s most
prospective belts for base metals and gold. In addition, the Arthur Lineament
and other mineral belts contain major deposits of magnetite, tin, tungsten and
high purity silica. The region is acknowledged by the mining industry as one of

the most prospective in Australia, albeit with particular environmental

sensitivities and land access challenges.

Cradle Coast to meet its share of anticipated Australian mineral production
under this scenario. It is an optimistic scenario for mineral developments that
could occur if some new discoveries are made, markets remain strong, policy
settings are favourable and infrastructure is available.
The scenario assumes:

• expansion of mining at several current mineral projects.
• reopening of a currently closed project.
• discovery of significant deposits (base metals and magnetite) supporting
two or three new mine developments.
• growth of minerals processing operations at Port Latta.
Assumed mineral production figures under this scenario are set out in Table 4.
Table 4 Mineral production at 2020, growth scenario, Cradle Coast

region
Mineral 2006 production 2020 production
Iron ore 2.3 Mt pellets 3 Mt pellets
Tungsten Approx 150,000 t tungsten/ 1 Mt ore
magnetite ore (32 t scheelite
concentrate)
Silver, lead, zinc and copper Approx 3 Mt ore 4 Mt ore
Tin Nil 1 Mt ore
Gold Approx 35,000 ounces pa 70,000 ounces pa
Silica 38,000 t 120,000 t
Source: ACIL Tasman
Non-minerals resources development under this scenario includes off-shore oil

and gas production off the West Coast of Tasmania, with projects serviced
from the Port of Burnie.
Under the growth scenario, major infrastructure upgrades will be required to

support the minerals industry and associated business and community activity.
Transport infrastructure requires particular attention.

Roads
Road infrastructure upgrade priorities are:

• Upgrade of the Murchison Highway from Zeehan to Ridgley Highway
• 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.
These upgrades are needed both to facilitate truck traffic and to provide for
acceptable levels of safety for other vehicles of residents, commercial operators
and tourists. Traffic associated with supplying mining operations and in
transporting mineral products will increase, as will logging traffic. This traffic
and steep gradients and curves on some roads will increase hazard and risks.
Most mining employees reside in West Coast towns or close to Burnie and
travel very frequently on the roads. The region is also a tourist icon region,
with most of the estimated 250,000 annual visitors to the Cradle Coast region
travelling by car.
Rail
There is also significant scope for rail infrastructure investment projects aimed
at expanding the market for rail operators and reducing costs to users.
• Upgrades to Melba to Burnie line, including additional spurs to link to mine
sites, longer passing loops to allow for longer trains
• 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
The overall bulk freight task through Tasmania’s ports is forecast to grow to
around 14 million tonnes by 2023. Of this, up to 2 Mtpa of mineral products
could be exported through Burnie – that is, four times the current rate. Port
infrastructure requirements to handle increased freight tasks are:
• Capacity to handle longer trains at ports if rail network infrastructure
improvements support this
• Reclamation of land adjacent to current port areas to provide increased
storage and operational areas and to overcome existing constraints

• Provision of channel infrastructure for navigation purposes (greater depths,

larger turning basins etc)
• New handling equipment such as loading machinery.
At Port Latta, the current port infrastructure (reclaimers, jetty, conveyor and
shiploader) is in good condition and capable of handling considerably
increased throughput from both an expanded iron ore operation and (subject
to commercial arrangements) a new minerals processing operation.
Additional equipment will be required to meet the needs of an additional user.

It is assumed that the capital for this will be provided under the commercial
arrangements between Grange Resources and the new project proponent.
Airports
While current airport capacity exceeds current demand, future airport capacity
requirements need to be monitored and airport upgrades undertaken as
required in order to meet demand growth. Likely needs under the growth
scenario are:
• Upgrading of one of Burnie or Devonport Airports to jet (E170/190 or
B737) standard
• Upgrade of Strahan Airport to develop it as a sub-regional airport.
It is assumed that upgrades of Burnie and Devonport will be undertaken by
airport operators. The State Government may need to facilitate decisions on
any rationalisation between the two. Upgrading of Strahan Airport may be
beyond the resources of the operator, West Coast Council and is likely to
require resourcing by State or Federal Governments.
Energy
There are several opportunities for additional use of gas to fuel minerals
processing in the Cradle Coast region, including at mines on the West Coast.
Greater use of gas by the mining industry will principally be driven by
commercial decisions. However, there is potential for market failure that may
require some government facilitation to overcome. In particular, problems with
alignment of timing and aggregation of demand to underpin a pipeline to
supply West Coast mines may require initial government facilitation or
underwriting to overcome.
Additional wind energy resources are available to help reinforce Tasmania’s

role as Australia’s largest renewable energy producer. Pumped storage facilities
will help to make the system more robust and responsive. The transmission
network will require additions to connect new generation sources and new load
centres.

Telecommunications
As noted, the Tasmanian Government believes that greater competition is

required in all modes of telecommunication. While the Tasmanian
Government is facilitating competition and services to under-serviced areas
using its intra-state fibre network, the monopoly of cable services across Bass
Strait is an impediment to commerce.
A priority of the government is for establishment of an independent open

access fibre optic backhaul link connecting Tasmania and Melbourne.
In addition, the Government wants to attract competitive 3G mobile

telephone networks with similar coverage to the incumbent.
Under the growth scenario, increased mining activity would lead to increased
population in the Cradle Coast region. As towns in the region are mature, with
low rates of growth, community infrastructure is in general adequate in scale to
cope with this, but upgrades may be required to deliver services to expected
standards, and to deliver enhanced services within the current community
infrastructure frameworks. For example, while schools may be of adequate
size, their facilities and curriculum offerings may need to be enhanced.

South Australia


resources regions
May 2009
(03) 9600 3144.
ACIL Tasman Pty Ltd

ABN 68 102 652 148

Darwin
48-50 Smith Street

Please contact:
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
Contents
2 South Australia overview 3
2.1 State royalties revenue. 4
2.2 Exports 4
2.3 Employment 7
2.4 SA Growth regions 7
3 The Northern growth region 10
3.8 Discussion of growth scenario 25
3.9 Growth scenario – Northern region 27
4 Eyre Peninsula region 31
4.8 Discussion of growth scenario 42
4.9 Growth scenario – Eyre Peninsula 44
5 Fleurieu / Mid North / South East / Riverland region 47
iii

5.8 Overview of growth scenario 59
Infrastructure requirements 61
List of figures
Figure 1 Mineral exploration expenditure in South Australia 4
Figure 2 Map of the Northern region 11
Figure 3 Map of the Eyre Peninsula region 31
Figure 4 Murray Lands map 48
Figure 5 Yorke Peninsula 48
Figure 6 Adelaide Hills, Northern Adelaide, Fleurieu Peninsula and Kangaroo
Island 49
Figure 7 South East / Limestone Coast 49
List of tables
Table 1 Operating mines – South Australia 5
Table 2 Potential minerals development projects - South Australia 6
2020 for SA 7
Table 4 Moomba Year End Production 2007 12
Table 5 Summary of growth scenario to 2020 for the Northern growth region 26
for the Northern region 26
Table 7 Employment by industry – Eyre Peninsula region 35
Table 8 Population by Council – Eyre Peninsula 36
Table 9 Summary of growth scenario to 2020 for the Eyre Peninsula growth
region 43
for the Eyre Peninsula region 43
Table 11 Summary of growth scenario to 2020 for the Fleurieu/Mid North/South
East/Riverland growth region 60
for the Fleurieu/Mid North/South East/Riverland region 60
iv

Project
industry.
Expansion of the nation’s infrastructure (both hard and soft industrial and
stepped in to fill that gap and as a consequence Australia’s market share has
fallen.

market.


infrastructure studies. It examines the growth potential for South Australia’s
minerals industry and identifies existing and potential gaps in infrastructure in
three key regions (the Northern region, the Eyre Peninsula region and a
grouping of the Fleurieu, Mid North, South East and Riverland regions).

2 South Australia overview

South Australia is a key minerals supplier, with almost 40% of the world’s
known recoverable uranium reserves and significant volumes of copper, gold
and silver. The State has huge mining potential. It is ranked the 4th most
prospective location in the world by Canada’s Fraser Institute.2 Exploration
expenditure in SA has risen significantly in recent years (see Figure 1).
South Australia currently has approximately $13 billion worth of projects at

various stages of development in the minerals and energy sector, including:
• BHP Billiton’s potential Olympic Dam mine expansion
• Oz Mineral’s Prominent Hill project
• Iluka Resources’ Jacinth/Ambrosia Heavy Mineral Sands project
• Terramin Australia’s Angas Zinc project
• Mitsui’s Honeymoon uranium mine
• Exco Resources’ White Dam gold mine.
The minerals sector continues to generate strong investment opportunities in
services such as mine planning, engineering, procurement and logistics, project
and construction management, maintenance, information and communications
technology (ICT), technical support and environmental management and
rehabilitation.
Mining contributed $2.8 billion (4.6%) to the State’s Gross Value Added in
2006-07. Expenditure on mining exploration was some $355 million in the
year to the June quarter 2008 (see Figure 1).
The value of mine gate production rose moderately by $126m (5.3%) to reach
$2.5b in 2006–07.3 Strong commodity prices led to this net gain despite a
smelter shutdown at Olympic Dam that led to lower volumes of ore hoisted
and lower head grades. The bulk of mine gate production was from metallic
minerals (88%).
2 Primary Industries and Resources SA, MESA Journal, pages 7-41, 2008.
3 SA Government, South Australian Resources Production 2006–07.
South Australia overview 3

Figure 1 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
2.1 State royalties revenue.

Gross state royalties revenue measures royalties tied to production during the
2006–07 period, but not necessarily collected as royalty receipts during that
period. It also includes royalties revenue hypothecated to the Extractive Areas
Rehabilitation Fund. Gross state royalties revenue increased by $7.2m (9.8%)
to $81.3m due to increased production values resulting from increased
commodity prices (primarily copper), along with an increase in the sales
contract price for uranium from the Beverley in situ leach mine and higher
production tonnage of iron ore from OneSteel’s Project Magnet. Changed
royalty rates effective 1 January 2006 may have contributed to an increase. The
new system is based on market values: a base royalty rate of 3.5% for existing
mines and 1.5% for new mines for the first five years.
2.2 Exports
South Australia’s mineral exports increased by $382m (19.4%) to reach $2.35b
in 2006–07. Mineral exports are now the largest single contributor to South
Australia’s exports, accounting for just over a quarter (26%) of total state
merchandise exports. South Australia’s primary mineral exports are copper and
uranium.

• $3.0 billion minerals and mineral manufactures exports in the year to

August 2008, or 28% of the State’s total goods exports
• Key markets for minerals and minerals manufactures include China and
Japan.
Table 1 Operating mines – South Australia

Project Resource Company Location
Angas Zinc Mine Zinc, Lead, Silver, Gold Terramin Australia 2 km from Strathalbyn, 60 km SE of Adelaide
Ltd
Beltana: Flinders Zinc Zinc Perilya Ltd 520 km N of Adelaide in the Flinders Ranges
Project
Beverley Uranium Heathgate Far north of South Australia about 35 km NE from
Resources Pty Ltd Lake Frome, 300 km NE of Port Augusta
Challenger Gold Dominion Mining 750 km NW of Adelaide, 150 km SW of Coober Pedy

Limited
Leigh Creek Coal Flinders Power Leigh Creek, 261 km N of Port Augusta
Middleback Range: Hematite (Fe2O3), OneSteel Middleback Ranges, north western Eyre Peninsula
Project Magnet Magnetite (Fe3O4)
Mindarie Heavy Mineral Sands Australian Zircon NL Approximately 150 km E of Adelaide in the Murray
Basin
Olympic Dam Copper, Uranium (U3O8), BHP Billiton 560 km N of Adelaide
Gold, Silver
Penrice Mine Chemical grade limestone Penrice, Quarry and 2.5 km N of Angaston
Mineral
Prominent Hill Copper, Gold OZ Minerals 130 km NW of Olympic Dam, 130 km SE of Coober
Pedy
Data source: Primary Industries and Resources SA. (2008). Minerals. MESA Journal , 7-41
Levels of private mineral exploration and new capital expenditure, combined

with continued steady increase in production, net off-site refining value, net
mineral industry value and exports, suggest that the industry remains on-track
to achieving South Australia’s Strategic Plan targets of:
• T1.17 - Minerals exploration: exploration expenditure in South Australia to
be maintained in excess of $100 million per annum until 2010
• T1.18 - Minerals production: increase the value of minerals production to
$3 billion by 2014
• T1.19 - Minerals processing: increase the value of minerals processing to $1
billion by 2014. 4
Table 2 lists some of the mining development projects in South Australia that
are either under consideration or already being developed.
4 SA Government, SA Strategic Plan 2007.

Table 2 Potential minerals development projects - South Australia

Project Resource Company Location Stage
Arckaringa Coal seam methane Altona Resources Plc Northern Arckaringa Basin Resource definition
Basin (coal to liquid)
Bird in Hand Gold Maximus Resources Ltd Near Woodside, Adelaide Hills Resource definition
Cairn Hill Magnetite, Copper, IMX Resources NL 55km S of Coober Pedy Feasibility
Gold
Carrapateena Copper, Gold Teck Cominco Ltd - RMG Near western shore of Lake Resource definition
Services Pty Ltd Torrens, 100km SE of Olympic
Dam
Challenger Gold Dominion Mining 750 km NW of Adelaide, 150 km Expansion feasibility

expansion SW of Coober Pedy study under way
Crocker Well Uranium (U3O8) PepinNini Minerals Ltd 160 km W of Broken Hill, 400 km Resource definition
and Mount N of Adelaide
Victoria
Four Mile Uranium (U3O8) Quasar Resources Pty Ltd 550 km N of Adelaide, east of the Resource definition
- Alliance Resources Ltd northern Flinders Ranges
(adjacent to the Beverley uranium
mine)
Hawks Nest Hematite Western Plains Resources South of Coober Pedy Resource definition/
Ltd Feasibility
Honeymoon Uranium (U3O8) Uranium One Inc North of Olary Under construction
Jacinth and Heavy Mineral Iluka Resources Ltd Eucla Basin, approximately 200 Feasibility study/
Ambrosia Sands (HMS) km NW of Ceduna Finalising mineral lease
approvals
Kalkaroo Copper, Gold, Havilah Resources NL North of Olary Feasibility/ Resource
Molybdenum definition
Kanmantoo Copper, Gold, Silver Hillgrove Resources 55 km SE of Adelaide Lease granted
Menninnie Dam Lead, Zinc, Silver OZ Minerals Ltd - Northern Eyre Peninsula, 160 Resource definition
Terramin Australia Ltd WNW of the Port Pirie lead
smelter
Mutooroo Copper, Cobalt Havilah Resources NL Approximately 60 km W of Broken Resource definition
Hill
Oban Uranium (U3O8) Curnamona Energy Ltd - 60 km N of the Honeymoon Resource definition
Havilah Resources NL uranium deposit and 20 km W of
the NSW and SA border
Peculiar Knob Hematite (Fe2O3) Western Plains Resources 90 km SE of Coober Pedy Bankable feasibility study
Ltd completed, finalising
mineral lease approval
Portia Gold Havilah Resources NL 100 km W of Broken Hill Resource definition/
Planning approvals
Tripitaka Heavy Minerals Adelaide Resources Ltd - Approximately 100 km NW Prefeasibility/ Resource
Iluka Resources Ltd of Ceduna definition
Tunkillia Gold, Silver Minotaur Exploration Ltd - 700 km NW of Adelaide Resource definition
Helix Resources Ltd
White Dam Gold Exco Resources NL 80 km W of Broken Hill, about 15 Finalising mineral lease
km N of the Barrier Highway approval
Wilcherry Hill Magnetite (Fe3O4) Ironclad Mining Ltd - Approximately 30 km N of Kimba Resource definition/
Trafford Resources Ltd on northern Eyre Peninsula Prefeasibility
Wilgerup Hematite (Fe2O3) Centrex Metals Ltd 30 km SE of Lock on central Eyre Resource definition/
Peninsula Prefeasibility
Data source: Primary Industries and Resources SA. (2008). Minerals. MESA Journal , 7-41, and ABARE

2.3 Employment
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.
Over one third of employment in the Mining industry occurs in the Northern
Statistical area. While this is contradictory to the general distribution of
population and employment across the state it is in line with the distribution of
mining operations across the state. Employment in the Mining industry has
grown by over 120 per cent between February 1999 and February 2008.
Over one third of the employment in the Mining industry occurs in the
Northern statistical region this is unsurprising given the concentration of
mining operations in the North.
2.4 SA Growth regions

This Report considers three growth regions:
• The Northern region
• The Eyre Peninsula region
• The Fleurieu / Mid North / South East / Riverland regions.
Table 3 Summary of infrastructure requirements under the growth scenario to 2020 for SA
class
Northern Transport • Road, rail and airport • Augment transport services to deal with new and expanded
capacity inadequate to operations, particularly at Olympic Dam. Construct an intermodal
deal with growth in facility to improve the efficiency of freight movement
transport task • While the capacity is currently adequate, the rail connection to 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
• Upgrades 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
Northern Ports • Port infrastructure • Upgrade the export facilities at Whyalla to enable the shipping of
insufficient to service haematite
expected growth in • Develop a common user export facility at Port Bonython
minerals exports

class
Northern Energy • Fuel supplies for power • Upgrade electricity supply infrastructure to deal with increased
sector declining demand from industrial, commercial and domestic customers
• Generation, • If life of Leigh Creek coal mine is not extended then alternative
transmission and sources of fuel will need to be identified
distribution capacity • New gas projects (including CSM) likely to require new pipelines to be
inadequate for growth built, this may include pipelines to supply new gas fired power stations
• Fuel import capacity • Ensure that petroleum product import infrastructure keeps pace with
may not be sufficient to demand growth
service growth in
demand 5
Northern Water and • Process and potable • While responsibility for water supply and wastewater management falls
wastewater water in short supply 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
Eyre Transport • Rail and airport capacity • While rail capacity is currently adequate, the rail infrastructure is
Peninsula inadequate to deal with relatively old and is likely to need to be upgraded as minerals projects
growth in transport task are developed
• Upgrades to regional airport facilities may be needed to deal with a
larger number of FIFO flights servicing new and expanded mining
operations
Eyre Ports • Insufficient port capacity • The existing deep water port at Port Lincoln is not likely to satisfy
Peninsula demand if planned minerals developments proceed as currently
intended
• The proposed port of Sheep Hill would provide an additional deep
water port
Eyre Water and • Existing groundwater • Desalination is likely to be necessary to augment supplies. The
Peninsula wastewater resources are producing potential exists to use wave energy technology to produce desalinated
at (or near) sustainable water
levels
• A lack of potable and
process water
Fleurieu / Transport • Competing demands • There is significant and growing demand for the use of roads and rail
Mid North / from the agricultural for transporting agricultural production. Identifying and upgrading local
South East sector may constrain linking freight routes in order to improve the efficiency of freight
/ Riverland use by minerals sector. handling and transfer is likely to be a priority
• Some parts of the region • The proposed development of a substantial mineral sands deposit
have inadequate near Mindarie, between Karoonda and Loxton, may require an
infrastructure improved transport link to Tailem Bend
Fleurieu / Energy • Generation, • Augmentation of electricity and gas networks may be required to meet
Mid North / transmission and the demands for energy from both the minerals industry and an
South East distribution capacity expanded workforce
/ Riverland inadequate for growth • The Fleurieu Peninsula region electricity system in particular has been
• Fuel import capacity identified as needing major augmentation and upgrading to
may not be sufficient to accommodate increased demand for electricity due to changes to the
service growth in dairy industry, and continued population and industry growth in areas
demand 6 such as Mount Barker, Barossa and Victor Harbour
• Ensure that petroleum product import infrastructure keeps pace with
demand growth


class
Fleurieu / Water and • Water availability and • Salt interception schemes need to be put in place before new
Mid North / wastewater quality is a critical issue developments can proceed
South East throughout the region • Many septic tank effluent disposal schemes (STEDS) across the
/ Riverland 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

3 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. There are a number of major regional
centres consisting of Port Augusta (population 13,257), Port Pirie (13,206) and
Whyalla (21,122) which act as a vital service centres as well as industrial centres
for the region’s widespread and small and diverse communities.7
The northern region supports minerals processing, manufacturing, and energy

generation. The drivers for major infrastructure developments in the region are
likely to result from private-sector investment, particularly in mining and
minerals processing and tourism.
The region population is 75,900.8 Economic activities range from coastal and
marine resources of Upper Spencer Gulf, steel, mining, minerals processing,
manufacturing, agriculture, aquaculture, tourism, defence, transport logistics
and energy generation.
There are three main sea ports at Port Pirie, Whyalla and Port Bonython, and
four commercial airports at Whyalla, Port Augusta, Coober Pedy and Roxby
Downs.
7 Information in this section is drawn from the 2005 Strategic Infrastructure Plan for South
Australia 2005/06 - 2014/15.
8 Australian Bureau of Statistics, 2006 Census.
The Northern growth region 10

Figure 2 Map of the Northern region
Data source: Government of SA, Strategic Infrastructure Plan for South Australia 2005/06 - 2014/15

The mining industry is a major industry in the Northern region which contains
all five priority exploration areas in the State: 9
• Gawler Craton
• Adelaide Geosyncline
• Musgrave Black
• Stuart Shelf
• Curnamona Province.
Some of the existing key mining operations in the Northern growth region are
discussed below.
Olympic Dam, BHP Billiton - Copper/Gold/Uranium/Silver
Located 560 kilometres north of Adelaide, South Australia, Olympic Dam is a

multi-mineral ore body. It is the world’s fourth-largest remaining copper
deposit and the largest uranium deposit. It also contains significant quantities
of gold and silver. The operation comprises a fully-integrated underground
mine and above-ground metallurgical complex. Olympic Dam’s total mineral
resource (underground) is 3,810mt, grading 1.1% copper and 0.4kg/tonne
uranium oxide.
9 This section of the report draws from the Northern Regional Development Board – SA
web site. http://www.nrdb.com.au - retrieved November 2008.

Most of Olympic Dam’s employees live in Roxby Downs township, about 16

km south of the operations. The township has a population of about 4,000.
Moomba, Santos - Natural Gas/Crude Oil/ Ethane
The Cooper Basin remains a major gas producing region and Santos describes
it as Australia’s largest onshore resource project (with total investment of $8
billion) with an active exploration program maintained. Santos has 66.6% of
the equity and is the operator. The other participants are Delhi with 20.2%
and Origin with 13.2%.
Moomba is located close to the original oil and gas discoveries and over time
activity has fanned out from Moomba to the point where there are now fields
more than 100 kilometres away.
The Moomba facility currently accepts production from 115 gas fields and 28
oil fields containing 536 producing gas wells and 177 producing oil wells
through approximately 5,600 kilometres of pipelines and flowlines via 24 oil
and gas satellite facilities.
The Moomba facility also incorporates substantial underground storage for

processed sales gas and ethane. Sales gas is sent from Moomba to Adelaide via
a 790 kilometre pipeline and to Sydney via an 1160 kilometre pipeline. Ethane
is sent to Qenos in Sydney via a dedicated pipeline.
Natural gas liquids are recovered via a refrigeration process in the Moomba
plant and sent together with stabilised crude oil and condensate through a 659
kilometre pipeline to Port Bonython near Whyalla, South Australia.
Table 4 Moomba Year End Production 2007

Product Volume (MMboe)
Condensate 1.33
Crude oil 2.43
LPG 1.34
Sales gas and ethane 13.70
Data source: Santos website, http://www.santos.com
Challenger, Dominion Mining - Gold
Dominion Mining Limited is an independent, publicly listed Australian gold

producer and explorer. The Challenger gold discovery was made by Dominion
in May 1995. In 2001 the decision was made to proceed with construction of a
processing plant and infrastructure.

Open pit mining commenced in mid-2002 and full-scale underground

production began in early 2005. Production has exceeded 100,000 ounces of
gold since production began in 2005/06.
The infrastructure for the project covers an area of approximately 300 hectares
and includes the processing plant, a mine village housing up to 70 personnel
working on a fly-in /fly-out roster, reagent and fuel storage facilities, offices,
workshops, a laboratory, ancillary buildings and haul roads. Water is supplied
from a process water bore field located approximately 2.5 kilometres west of
Challenger. There is a power station adjacent to the processing plant, located
1km from the underground portal.
Beverley, Heathgate Resources - Uranium
Heathgate Resources is the owner and operator of the Beverley Uranium Mine
in northern South Australia. The mine’s 21,000 tonnes uranium deposit is 300
kilometres north east of Port Augusta and just over 600 kilometres from
Adelaide. Beverley is Australia’s only operating in situ leach mine.
Beverley is a $100 million investment with export income of approximately $70

million per annum and rising. The company directly employs over 100 people
with over 350 jobs indirectly created. Royalties to State and Aboriginal
communities are in the order of $3.4 million per annum along with $23 million
per annum to regional and state businesses/suppliers.
Leigh Creek, Flinders Power - Coal
The Leigh Creek coal mine is dedicated to supplying the 540MW Northern and
the 240MW Playford power stations near Port Augusta. The low-grade hard
brown coal produced at the mine is transported to the power plants by a
250km dedicated railway line. Production in 2006-07 amounted to some 3.9
Mt of coal.
The mine is expected to continue to supply the power plants until 2017,
although the feasibility of extending the life of the open-cut mine until 2025 is
being investigated.

The Gawler Craton and Musgrave Block areas are prospective for minerals,
while the Officer Basin in the far west is prospective for oil and gas. There are
a large number of new minerals developments either proposed or underway.
Some examples are discussed below.

Olympic Dam, BHP Billiton - Expansion
BHP Billiton is considering a major expansion of Olympic Dam to more than

double its current production capacity. An Environmental Impact Statement
was released for public comment on 1 May 2009 as part of the Australian and
South Australian Government environmental approvals process for the
expansion. If approved, the expansion will have a significant economic and
social impact on the region and the State. Between 2009 and 2013, an
additional 5,000 personnel may be employed in construction and after 2013, an
additional 2,500 above the current workforce (1,800) will be employed to
operate the expanded mine. If the expansion goes ahead the population of
Roxby Downs’s will rise from 4,500 to 10,000 or more.
If production does double then this would imply additional annual production
of 515,000 tonnes of copper (up from 235,000 tonnes), 14,500 tonnes of
yellowcake (U3O8), 115,000 ounces of silver and 700,000 ounces of gold (a
700% increase).
Prominent Hill, OZ Minerals - Copper/Gold
The Prominent Hill copper-gold deposit was discovered in 2001. The project
has involved the development of an open-pit mine, a conventional grinding
and flotation processing plant with an 8mtpa capacity, construction of a
permanent village to accommodate a steady-state workforce of approximately
400 and construction of a haulage road, power line (from Roxby Downs - grid
power) and bore field (12 - 18 bores drilled in the Arckaringa Basin). The
workforce will be fly-in/fly-out of Adelaide and Port Augusta and drive-
in/drive-out of Coober Pedy.
First commercial production of copper-gold concentrates is expected in the

second half of 2009. Production is expected to be around 95,000 tonnes of
copper, 65,000 ounces of gold and 400,000 ounces of silver per year.10
Prominent Hill has a minimum mine life of 12 years based on the known ore
resource. The full extent of the ore body is still unknown. However, stage two
which involves development of a deeper underground mine could extend mine
life to at least 2030. There are also good prospects for additions to the
reserves from satellite deposits.11
10 South Australia’s Major Operating Mines and Mineral Development Projects, PIRSA,
January 2009 and presentation to SAIREC 2009 by Paul Heithersay, PIRSA, South
Australia’s growing mining sector, May 2009.
11 Presentation to SAIREC 2009 by Paul Heithersay, PIRSA, South Australia’s growing mining
sector, May 2009.

Honeymoon, Uranium One - Uranium
The Honeymoon Uranium project comprises a number of mining tenements

located on the plains between the Olary Ranges and Lake Frome,
approximately 400km north-west of Adelaide and approximately 75km north-
west of Broken Hill. Control of the project was transferred to Mitsui in the
second half of 2008. Production is expected to commence in 2010. Annual
production of yellowcake is expected to be 400 tonnes.
In addition to the Honeymoon mine, Uranium One is proceeding with drilling

in the Goulds Dam region, a 1,900 square kilometre area of South Australia
located some 75 kilometres from Honeymoon, which is under-explored and
considered to be prospective.
Four other Uranium mines are listed in ABARE’s list of major minerals and
energy projects (Crocker Well and Mount Victoria, Four Mile, Mt Gee and
Oban ISR operation). These projects could add around 3,000 tonnes of U3O8
to total production from the region.
Peculiar Knob, Western Plains Resources - Iron Ore
Peculiar Knob is a high grade haematite ore body with very low impurities. The
development of the Peculiar Knob in South Australia has commenced. The
Company has set a strategic goal of commencing production during 2009. A
mining lease has been granted and the Company is well advanced with
infrastructure planning
The company’s nearby Hawks Nest iron ore project area contains the Buzzard
haematite deposit with a total measured and indicated resource of 6.7 million
tonnes at an average grade of 60% iron, together with a number of magnetite
deposits, the largest of which is Kestrel with a total measured, indicated and
inferred resource estimate of 220 million tonnes at an average grade of 36%
iron.
Annual production of iron ore from the mine when operational is expected to
be 2.7 million tonnes.12
Tunkillia, Helix Resources and Minotaur Exploration Ltd - Gold
The 1996 Tunkillia discovery was one of the first gold discoveries in the
Gawler Craton. The current resource consists of a mineralisation inventory of
800,000oz gold and 1,600,000oz silver to a depth of 200m below surface.
12 ibid.

Kalkaroo, Havilah Resources - Copper/Gold
Kalkaroo is a large mineral deposit containing over 100 million tonnes of

copper-gold-molybdenum ore that is known to extend for more than 2.5
kilometres along strike and to depths of greater than 200 metres. Its limits have
not yet been determined by drilling and there is high potential for discovery of
additional ore. Havilah is confident that Kalkaroo will develop into a major
new copper mine in South Australia.
Production is expected to commence in late 2009. The proposed annual

production is 31,000 tonnes of copper, 820 tonnes of molybdenum and 95,000
ounces of gold.13
Kalkaroo’s location is close to the Barrier Highway and rail access to both
Adelaide and Broken Hill.
Havilah Resources has also identified a copper/cobalt resource at Mutooroo.

However, work on the project is currently suspended while Havilah seeks a
strategic partner to assist with financing completion of the project feasibility
study.
Kanmantoo, Hillgrove Resources – Copper/Gold
The Mining Licence for the Kanmantoo Copper Project was awarded in
October 2008 and the MARP is expected to be completed shortly which will
allow the financing to progress. In January 2009 an agreement was with the
Mount Barker Council for the use of treated waste water at the mine. The
water will be piped from Mount Barker and used for mine operations.
Once operational the mine is expected to produce 17,000 tonnes of copper,

8,000 ounces of gold and 125,000 ounces of silver.14
White Dam, Exco Resources/Polymetals - Gold
The White Dam Gold Project is located in South Australia, approximately 80

kilometres west of Broken Hill and is an advanced development project with
total resources of 9.1Mt containing 330,400 ounces of gold.
A revised Mining and Rehabilitation Plan (MARP) was prepared and lodged in
June 2008. It is anticipated that the MARP will be approved in 2008. Subject
to final approvals being obtained, the parties anticipate that the project can
commence construction in late 2008, with first gold production scheduled by
mid 2009.
13 ibid.
14 ibid.

Cairn Hill, IMX Resources - Magnetite/Copper/Gold
IMX’s Cairn Hill Magnetite-Copper-Gold project is 55 km south of Coober

Pedy, 16 km from the Stuart Highway and 90 km from the Wirrda Siding on
the Tarcoola to Alice Springs Railway. The Cairn Hill project has progressed
significantly in the past year. IMX is currently finalising feasibility studies and
government approvals.
• The Mining and Rehabilitation Plan (MARP) for the mining activities has
been approved.
• Construction has commenced on the rail siding and haul road.
• The contract with the chosen road haulage contractor is expected to be
finalised shortly.
• IMX Resources has commenced negotiations for a lease and operating
agreement with the Darwin Port Corporation.
Anticipated production from the mine is 1.4 million tonnes of magnetite, 4,500
tonnes of copper and 5,500 ounces of gold a year.15
Altona Energy, Arckaringa, coal
Altona holds through its wholly owned subsidiary Arckaringa Energy Pty Ltd,
a 100% interest in three exploration licences covering 2,500 square kilometres
in the northern portion of the Permian Arckaringa Basin in South Australia
and including three coal deposits – Westfield, Wintinna and Murloocoppie. All
three deposits lie close to the Adelaide to Darwin railroad and the Stuart
Highway.
Altona’s primary focus is the completion of a bankable feasibility study for an

integrated 10 million barrel per year Coal to Liquid (CTL) plant with a 560
MW co-generation power facility.

characteristics
The northern region of South Australia comprises over 80 per cent of the
state’s land area with less than 5 per cent of the population. The major regional
centres include Port Augusta, Port Pirie and Whyalla. These act as a vital
service centres as well as industrial centres for the region’s widespread and
small and diverse communities.
15 ibid.

While many of the remote mining operations operate on a FIFO basis the
Olympic Dam expansion is being based on the expansion of housing and
social infrastructure at Roxby Downs to attract and retain staff.
The 2006 ABS Census found that 2,107 people were employed in mining (just
under 6.9% of the region’s population).16
Energy
The two NRG Flinders coal-fired power stations at Port Augusta produce
more than 40% of the state’s power. ETSA Utilities and ElectraNet are
undertaking upgrades to substations at Bungama and Port Pirie to improve
network stability. The ElectraNet sub-station at Playford is also due for
replacement.
Additional transformer capacity is proposed for installation at the ElectraNet

sub-station at Baroota in November 2008.
The Moomba to Adelaide natural gas pipeline links to Port Pirie and Whyalla
via a lateral. Its capacity within these areas is at present fully committed,
constraining any major increase in gas consumption by industry at either of
those two locations.
Planned changes to Whyalla’s OneSteel operations could decrease gas usage,

potentially providing future opportunities for other industries. There is
potential for development of a gas-fired power station in the north of the state
as part of any expansion of the Olympic Dam operations. Most Outback
communities rely on diesel generators to provide power.
The potential for small-scale hybrid plants using diesel or gas, solar or wind in
areas remote from the distribution network is being explored, particularly for
small remote communities or businesses. Hot rock geothermal power is being
investigated in the far north of the state near Moomba, with further proposals
emerging near Olympic Dam.
Water
The major water supply to the Upper Spencer Gulf region is via the Morgan–
Whyalla pipeline, with a pipeline owned by the Australian Government
distributing the water to Woomera.
16 Australian Bureau of Statistics, 2006 Census.

SA Water has responsibility for water and wastewater systems at Port Pirie,
Port Augusta and Whyalla, and for water systems at Marree, Parachilna,
Blinman, Hawker, Quorn, Oodnadatta and Marla.
Coober Pedy and Roxby Downs have their own water supplies via reverse
osmosis desalination drawn from the Great Artesian Basin. The Beetaloo and
Baroota reservoirs are located to the east of Port Pirie just outside the region.
They have a total capacity of 9,000 ML, are currently isolated from the SA
Water system and retained for emergency use only. There is some use of
Baroota water for irrigation with limited potential for expansion.
In the Outback, sporadic rainfall and high evaporation rates limit the quantity
of surface water. Much of the surface water and local underground water is
saline and has limited use. Quantity and quality of water is an issue in most
Outback and Aboriginal communities.
Roads
The Stuart Highway is the major road route to the Northern Territory and the
Eyre Highway connects eastern and western Australia.
The Lincoln Highway connects Whyalla to the rest of the Eyre Peninsula.
Highway One is the primary connection between Adelaide and Upper Spencer
Gulf, while Main North Road is an important tourism route, connecting the
region via the Clare Valley and southern Flinders Ranges. The Birdsville and
Strzelecki tracks are major interstate tourist and road train routes. Numerous
other roads in the Outback serve mining operations, pastoralists, the
community and tourists.
The Adelaide to Port Augusta corridor forms part of the major road and rail
freight network carrying freight between the Eyre Peninsula, Far North,
eastern and western states and the Northern Territory.
It is estimated that 15.3 million tons of freight are carried on this route each
year. Mining at Olympic Dam and in the Gawler Craton could see production
more than double in five to 10 years, which may result in an additional 2.8
million tons per annum of gold, copper and associated products being
transported through the region. Intersection treatments for the major access
roads into Port Pirie need to be improved, as well as the access to the port area
for heavy commercial vehicles. Yorkeys Crossing is important for the freight
industry in the region.
Rail
The standard-gauge rail line servicing the region is part of the national
network. The region is at the intersection of the Sydney–Perth and Adelaide–

Darwin transcontinental rail lines. The extension of the standard-gauge railway

from Alice Springs to Darwin has created new opportunities linked to trade
through the Port of Darwin.
Approximately 80 rail services per week move through Upper Spencer Gulf.
Increases in freight haulage of 50% could be accommodated. Major rail
maintenance facilities located in Port Augusta create opportunities for further
investment in rail servicing and freight enterprises.
A separate standard-gauge rail line links the Leigh Creek coal mines with the
Northern and Playford power stations at Port Augusta. OneSteel owns (and
Australian Southern Railway, ASR, operates) a private narrow-gauge rail system
from its iron ore mines in the Iron Knob area to its steelmaking facility in
Whyalla. In addition, the steel works is connected to Port Augusta by a public
railway.
Ports
The port at Whyalla is an indentured port giving OneSteel exclusive use.
Port Bonython currently handles the export of petroleum products (LPG and
crude oil from the Cooper Basin). The Port Bonython Bulk Users Group
(consisting of Centrex Metals, IMX Resources, Ironclad Mining, and Western
Plains Resources) are promoting the development of a common user export
facility, including an iron ore loader and storage sheds, at Port Bonython.
According to the Group, there could be demand for up to 8-10 Mtpa of
loading capacity by 2010 and up to 20 Mtpa by 2015.
The Bulk Users Group plans to work with the South Australian Chamber of
Mines and Energy Inc, the Resources and Energy Sectors Infrastructure
Council (RESIC), local and state government authorities, port operators,
infrastructure developers, other current and potential users of the port, and
other stakeholders, to expedite the development of the infrastructure.17
Infrastructure Australia has included Port Bonython in its list of 28 projects
that might receive government funding in the future.
Port Pirie handles grain, fertiliser, metal ores and concentrates, and has some
capacity to handle containerized cargo. Indications from the grain industry are
that grain storage will be reduced at Port Pirie due to the limitations of the port
for handling larger vessels.
17 In October 2008 the Infrastructure Minister, Patrick Conlon, announced that the Spencer
Gulf Port Link Consortium (SGPLC) had been selected to undertake a feasibility study for
the development and operation of an export facility at Port Bonython.

Airports
Airports receiving scheduled airline services are located at Port Augusta,

Whyalla, Roxby Downs and Coober Pedy. Flights between Coober Pedy and
Alice Springs/Uluru are being investigated to bolster tourism to both regions.
Port Augusta is a smaller regional airport with a sealed runway and is the
operational base for the Royal Flying Doctor Service (RFDS). The upgrade of
the Port Augusta airport is being considered by local government. Port Pirie
has a sealed runway and is a base for recreational and charter services. Port
Pirie does not support a regular commercial service.
With the potential for expanded defence activity in the region, consideration
may need to be given to upgrade local airport facilities (at either Whyalla or
Port Augusta) to accommodate the larger defence aircraft. This will be
dependent upon decisions of the Australian Government. The Outback has
numerous airstrips that are suitable for tourism and charter services as well as
emergency strips used by the RFDS.
Health
Port Pirie has a Regional Hospital, serving Port Pirie and the Mid North of
South Australia. Port Augusta Hospital and Whyalla Hospital service their
communities and the northern and far western regions of the state. There are
also health services at Coober Pedy, Oodnadatta, Mintabie/Marla,
Andamooka, Marree, Roxby Downs, Woomera, Leigh Creek and Hawker, with
Nganampa Health Council being the major provider of health services in the
APY Lands.
The RFDS is located in Port Augusta and services South Australia and the
Northern Territory. The region’s population overall is declining, although
growing in some clusters, and consists of an ageing population, a high
proportion of Aboriginal people, people with low socioeconomic status and
remote from services. Facilities need to be refurbished in response to changing
local demographic profiles to deliver more primary health care services that are
focused on early intervention and prevention, health promotion and chronic
disease management.
Investment is required in transport services and mobile health facilities to

improve access by patients and their families to both primary and acute health
care services, and meet the needs of Aboriginal people moving between
communities. There is a need to support the development of increased
telemedicine supporting rural clinical networks, and to provide improved
communications with and between tertiary health sites in Adelaide, both for
clinical decision-making and professional development and support.


The Northern region suffers from the usual constraints of a large, relatively
remote region with climatic extremes. However, in general, infrastructure is
adequate for the current level of economic activity.
In order to be able to increase the level of economic activity, in particular

through resources development, major investment in infrastructure will be
needed.
Planning initiatives
The South Australian Government Strategic Infrastructure Plan has identified

key projects to underpin the continued development of the Northern region in
South Australia. The importance of this development in underpinning the
economic performance of the South Australian economy suggest that the SA
government will maintain a comprehensive approach to infrastructure
planning.
Planned infrastructure
Projects listed in South Australia’s Strategic Infrastructure Plan are listed

below.18
Energy
• Reliability of electricity supply in the southern Flinders Ranges.
Redevelop Bungama power sub-station to improve electricity supply to
southern Flinders region Install two new transformers at Davenport sub-
station. Install additional transformer capacity at Baroota sub-station
• Increased energy supply to support industry expansion. Evaluate
options for augmentation of energy supplies for expanded operations at
Olympic Dam and other mining developments. If sufficient demand can be
identified, increase the capacity of the gas supplies to Port Pirie and
Whyalla.
Water
• Improved environmental outcomes and water supplies at Whyalla.
Improve the quality of water from the Whyalla wastewater treatment plant
so that it can be used beneficially in the vicinity
18 SA government, Strategic Infrastructure Plan for South Australia 2005/06 - 2014/15, 2005.

• Water for Olympic Dam and other mineral developments. Evaluate

options to augment the water supply to support expanded mining
developments and implement preferred options
• Quality and quantity of outback water supplies. Identify and
implement cost-effective improvements to the water supply for
Andamooka, Hawker, Glendambo, Yunta and Mintabie
• Capacity of Oodnadatta and Hawker STEDS19. Upgrade the STED
scheme servicing the Oodnadatta and Hawker townships.
Transport
• Transport services to support Olympic Dam expansion. Evaluate
options to augment transport services for expanded operations at Olympic
Dam
• Export facilities to support OneSteel’s Project Magnet. Facilitate the
upgrading of the export facilities at Whyalla to enable the shipping of
haematite
• Upgrade of Yorkeys Crossing. Consider the upgrade of Yorkeys
Crossing bypass
• Airport capacity to service needs in the Upper Spencer Gulf. Assess
the need for an upgrade to the airport facilities at Whyalla and Port
Augusta
• Growth in freight movement through Port Augusta. Consider an
intermodal facility as part of a state-wide intermodal strategy to improve
efficiency of freight movement
• Expansion of transport infrastructure to support mining
developments in the Gawler Craton. Facilitate provision of
infrastructure to support mining developments in the region on a case-by-
case basis.
Land
• Industrial land. Develop industrial estates at Whyalla, Port Pirie and Port
Augusta.
Health
• Provision of aged care facilities. Redevelop the aged care facility at Port
Pirie Hospital
• Primary health care centres. Continue to upgrade hospital facilities to
support the co-located delivery of primary health care services including
general practice, allied health, mental health and Aboriginal health
programs
19 Septic Tank Effluent Disposal Scheme.

• Health network connectivity. Expand the capacity of the wide area

network. Increase use of telemedicine facilities.
Infrastructure issues
The drivers for major infrastructure developments in the region are likely to
result from private-sector investment, particularly in mining and minerals
processing and tourism. The South Australian Government Strategic
Infrastructure Plan identifies a number of projects particularly in energy and
water and transport that will be led by the SA government.
These issues need to be seen in the light of a declining population in the region
despite the population increases anticipated with major developments around
Roxby Downs and Coober Pedy. While the long history of resource
development in the state means there is a significant amount of infrastructure
(especially transport related infrastructure) in place, some of it will require
upgrades or expansion to deal with anticipated increases in demand.
• The amount and quality of water remains an issue in remote areas although
Coober Pedy and Roxby Downs have their own water supplies drawn from
the Great Artesian Basin.
• The capacity of the natural gas pipeline between Moomba and Adelaide,
which links into the major centres of Port Pirie and Whyalla is fully
committed. This limits the potential for any major increase in gas
consumption by industry at these major regional centres. The expansion of
the Olympic Dam operations may provide for a gas fired power station
with excess supply to service other operations.
• The region is well serviced by the Adelaide to Port Augusta road and rail
corridor. This is part of a national network that links the rest of SA and
the eastern and western states and the Northern Territory. Significant
increases in minerals production in the next 5 to 10 years would increase
the minerals transport task. At this stage, the transport network seems to
be capable of accommodating the increased demand. The rail connection
with Darwin now provides another port outlet that is already being used by
the Oz Minerals operation at Prominent Hill and is being considered by
Olympic Dam
• However, port facilities remain an important infrastructure deficit with
limitations in handling larger vessels as well as the lack of serviced
industrial parks and intermodal transport hubs.
Social infrastructure demands include increased housing in the major regional

centres to support industrial development. This issue is amplified in more
remote locations where it is integral to development in attracting and retaining
staff, especially professional staff. This need for social infrastructure extends to

education and childcare facilities in growing centres at Roxby Downs to service

young families. In tandem, broadband access outside of major centres is
essential to deliver distance learning.
3.8 Discussion of growth scenario

The sections that follow essentially examine Northern region minerals projects
been reported in various ABARE and the SA government documents. Where
We have not examined the extent to which the Northern region growth
scenario discussed below aligns with the national Advance scenario for
minerals production. Nor have we discussed the implications for Northern
region growth if actual outcomes align more with the national Holding the
Line and Decline growth scenarios.20 Obviously, to the extent that some
minerals projects are either delayed or do not proceed and actual growth is
therefore less than that discussed below, the demands on infrastructure will be
reduced.
Section 3.3 discussed potential growth in minerals production under what

could be regarded as a scenario that broadly aligns with the Advance scenario.
This discussion is summarised in Table 5. Table 6 summarises the
infrastructure requirements under this growth scenario.

20 For more information of the scenarios please see the Access Economics reports:
demand scenarios.

Table 5 Summary of growth scenario to 2020 for the Northern growth region
Coal • Production from Leigh Creek is maintained to beyond 2020
• Altona’s tenements in the Arckaringa basin are developed as a coal to liquids project. Proposed
production is 10 million barrel per year
Gold / Copper • Prominent Hill development proceeds. Production of about 95,000 tonnes of copper, 65,000 ounces
of gold and 400,000 ounces of silver per year
• Tunkilla and Kalkaroo deposits developed. The proposed annual production from Kalkaroo is 31,000
tonnes of copper, 820 tonnes of molybdenum and 95,000 ounces of gold
• Kanmantoo project proceeds. Once operational the mine is expected to produce 17,000 tonnes of
copper, 8,000 ounces of gold and 125,000 ounces of silver
• Cairn Hill project begins production. Anticipated production from the mine is 4,500 tonnes of copper
and 5,500 ounces of gold a year (see also entry under iron ore)
• White Dam begins production in 2009
Uranium • Honeymoon project starts up by 2010. Estimated annual production of 400 tonnes of yellow cake
• Goulds Dam production begins
• Crocker Well and Mount Victoria, Four Mile, Mt Gee and Oban ISR operations all on line by 2020
• These mines might add a further 3,000 tonnes of yellowcake production a year
Iron ore • Peculiar Knob, Hawks Nest, Buzzard and Kestrel projects commence production of around 2.7
million tonnes a year in 2009
• Cairn Hill project begins production. Anticipated production from the mine is 1 million tonnes of
magnetite a year (see also entry under copper/gold)
Multiple metals • The expansion of Olympic Dam more than doubles production. Current projections suggest an
additional 515,000 tonnes of copper, some 14,500 tonnes of yellowcake (U3O8), 115,000 ounces of
silver and 700,000 ounces of gold per year
• Mutooroo development proceeds
Natural gas • Current production from Moomba increases to match growing demand
• The potential for coal seam methane (CSM) is being investigated in several areas in SA, including
the Arckaringa Basin in the Northern region
Data sources: ABARE’s list of major mineral and energy projects, October 2008; South Australia’s Major Operating Mines and Mineral Development Projects,
PIRSA, January 2009; and presentation to SAIREC 2009 by Paul Heithersay, PIRSA, South Australia’s growing mining sector, May 2009
Table 6 Summary of infrastructure requirements under growth scenario to 2020 for the Northern
region
Roads • Roads inadequate to deal • Augment transport services to deal with new and expanded
with growth in freight task operations, particularly at Olympic Dam. Construct an intermodal
facility to improve the efficiency of freight movement
Railways • Rail capacity insufficient for • While the capacity is currently adequate, the rail connection to Darwin
growth in minerals traffic 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 • An upgrade to airport facilities at Whyalla and Port Augusta may be
adequate for growth in FIFO needed to deal with a larger number of FIFO flights servicing new and
expanded mining operations
Ports • Port infrastructure not • Upgrade the export facilities at Whyalla to enable the shipping of
sufficient to service haematite
expected growth in minerals • Develop a common user export facility at Port Bonython
exports

Energy • Fuel supplies for power • Electricity suppliers will need to upgrade their supply infrastructure to
sector declining deal with increased demand from industrial, commercial and domestic
• Generation, transmission customers
and distribution capacity • If life of Leigh Creek mine is not extended then alternative sources of
inadequate for growth fuel will need to be identified
• Fuel import capacity may • New gas projects (including CSM) may require new pipelines to be
not be sufficient to service built, this may include pipelines to supply new gas fired power stations
growth 21 • SA is an area where imports of petroleum products have been
import infrastructure
Water and wastewater • Process and potable water • While responsibility for water supply and wastewater management falls
in short supply 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 • Increasing population in the region the main driver for enhanced
infrastructure match needs of growing community infrastructure
population • 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
3.9 Growth scenario – Northern region
The Northern region is a highly prospective region for minerals 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.
Potential non-minerals resources developments under the growth scenario

include:
• Construction of one or more geothermal power plants

• One or more solar thermal power plants built

• Development of one or more coal seam methane deposits.
Realising the above growth scenario for the Northern region 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 region in the future, the infrastructure requirements set out
below take into account developments in both sectors. The Northern region’s
infrastructure requirements are likely to include:
Roads
A need for augmented transport services to deal with expanded operations at

Olympic Dam. Other new or upgraded roads are likely to be needed to
support proposed mines.
More generally the construction of an intermodal facility would improve the

efficiency of freight movement between the road and rail transport sectors.
Ports
The export facilities at Whyalla are likely to require upgrading to enable the
shipping of haematite.22 The construction of a common user facility at Port
Bonython is a high priority for several mining firms. Infrastructure Australia
has included Port Bonython in its list of 28 projects that might receive
government funding in the future.
Airports
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.
Energy
Each mining operation under the 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
22 Haematite is the most abundant ore of iron, composed of ferric oxide, Fe 2O3. It is widely
distributed over the world, occurring in rocks of all ages.

these operations have the option to have electricity supplied by the generator
and network operator under normal commercial arrangements.
If the production life of the Leigh Creek coal mine is not extended then it will
have 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.
Mining operators would need to negotiate commercial arrangements for gas

supply and transport. Government may need to facilitate access to land for
infrastructure corridors.
The issue of transmission line connections for proposed geothermal and solar
power plants in remote areas will also need to be addressed if those energy
sources are to be brought into the system. It is possible that those
transmission lines may also improve access to grid power for some minerals
developments.
Fuel
The growth 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.
The Olympic Dam expansion will require a significant increase in water

supplies. Water supply and wastewater management for mining operations is
the responsibility of mine operators.
Water supplies and wastewater treatment for regional towns is a State

responsibility.
Telecommunications

telecommunications are the responsibility of providers, with government
providing mandated Community Service Obligation (CSO) payments for
telecommunications services in remote regions.
Telecommunications services in the northern region of SA 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.
expanded and upgraded to service increased populations.

4 Eyre Peninsula region

The Eyre Peninsula region incorporates the councils of Ceduna, Cleve,
Elliston, Franklin Harbour, Kimba, Le Hunte, Lower Eyre Peninsula, Port
Lincoln, Streaky Bay and Tumby Bay.
The population of the region is over 34,000. Key industries are agriculture,
tourism, fishing, aquaculture, and mining. The two mayor ports for exports are
Thevenard and Port Lincoln. Commercial airports are located in Port Lincoln
and Ceduna.
Mining is a smaller industry sector compared to the Northern region. The

current mining operations are largely for materials that are not the primary
focus of this project. They include sand, gypsum, graphite, jade and granite.
Exploration has identified prospective deposits of gold, diamonds, iron ore
and coal.
Figure 3 Map of the Eyre Peninsula region
Source: SA Office for Infrastructure Development, Strategic Infrastructure Plan for South Australia, 2005
Eyre Peninsula region 31


The Eyre Peninsula is located in the mineral regions known as the Gawler
Craton and the Eucla Basin. This region is widely recognised as an important
new frontier for mineral development in Australia. Exploration activity in the
region has revealed deposits of heavy mineral sands to the northwest and east
of Ceduna, gold and copper to the north of Kimba and Wudinna and to the
north east of Ceduna, as well as coal and iron ore near Lock on central Eyre
Gypsum and salt are the two largest established commodities being mined in
the region. The Kevin mine on the far west coast of Eyre Peninsula holds the
largest deposit of gypsum in the Southern Hemisphere. Some 1.68 million
tonnes of Gypsum were exported through the port of Thevenard in 2006. In
addition 124,468 tonnes of salt were shipped from that port.
Exploration expenditure within the geological province of the Gawler Craton

was $72.3 million in 2005-06, a 50% increase on the previous year. Activity in
this region continued to focus on the search for copper and gold with
increased levels of exploration for other commodities including heavy mineral
sands (HMS), uranium, zinc, nickel, diamonds, iron ore and coal.
Eyre Peninsula is a preferred location for processing mineral resources mainly

because of its close proximity to the deposits and accessibility to key
infrastructure. Regional towns such as Ceduna will continue to be utilised as a
main resource centre for companies undertaking exploration and mine
development in the region.

Iluka Resources Ltd, Jacinth - Ambrosia project
The Jacinth-Ambrosia deposit is the most significant new zircon discovery in

recent decades. A pre-feasibility study of the Iluka Resources Jacinth and
Ambrosia mineral sands deposits estimated they contained 9.5Mt of in situ
heavy mineral sands, equating to 4.4Mt of zircon.
The Jacinth-Ambrosia project recently received Board development approval.
Cost of development is expected to be $420 million. First production, subject
to Board approval, is expected mid 2010, with production expected to move to
approximately 300,000 tonnes per annum of zircon in 2011. There is expected
to be an associated production stream of rutile (3,050 tonnes a year) and
ilmenite (175,000 tonnes a year).23 The economic mine life of the mine is
23 South Australia’s Major Operating Mines and Mineral Development Projects, PIRSA,
January 2009.

estimated to be at least ten years, although further exploration could extend

this.
It is expected that employment created by the $400 million project will consist
of some 120 permanent positions at the site, 50 in the transport sector and 250
during the construction phase.
The heavy mineral sand concentrate will be transported to the port of

Thevenard and then shipped to the company’s Narngulu mineral separation
plant in Western Australia for processing.
The Iluka Resources Tripitaka prospect
The Tripitaka prospect is estimated to contain 1Mt of heavy mineral sands,

with the zircon component being approximately 650,000 tonnes of the inferred
resource. Together with the Jacinth-Ambrosia project it has the potential to
form part of a broader regional development plan for the region. Iluka
Resources has also continued to undertake significant exploration activity on
the far west coast of the region. To date results from this work has revealed
further potential resources with the discovery of the Gulliver and Typhoon
prospects near Ceduna.
Ironclad Mining, Wilcherry Hill Magnetite
Ironclad Mining Limited was established to accelerate the development of the

Wilcherry Hill iron ore deposits located 40 kilometres north of Kimba on
South Australia’s Eyre Peninsula. The Wilcherry deposits contain coarse
crystalline magnetite and low silica contents which enable low cost and
efficient production of concentrates containing over 70% Fe with very low
impurity levels.
Anticipated annual production once the mine is operational is expected to be

around 2 million tonnes.
Centrex Metals, Wilgerup hematite prospect
Centrex aims to become South Australia’s second iron ore producer by

developing the Wilgerup (13.2 Mt) hematite deposit near Lock on central Eyre
Peninsula. The mined ore (2 million tonnes a year) will be transported by road
to a new rail siding near Tooligie. From there the current plans are for the ore
to be transported by rail to Port Lincoln for direct loading onto Panamax
vessels.
Centrex anticipates this project will provide between 120-150 direct full time
jobs and several hundred indirect jobs. Centrex are also exploring magnetite
projects at Bungalow and Carrow.

In the longer term Centrex argues that the level of likely resource exploitation
in the Eyre Peninsula region warrants the construction of a second export port.
Centrex is proposing that a port at Sheep Hill has the potential to be a multi-
user facility servicing the export needs of a range of industries in the region.24
They have estimated that a port at Sheep Hill could be exporting almost 27 Mt
of products by 2014.25
Adelaide Resources, uranium
Adelaide Resources has been conducting uranium exploration on its tenements

on Eyre Peninsula. Some very prospective results have emerged to date from
the recent drilling of 3 basement targets in the region, particularly with the
Ulysses and KO11 South prospects, which are located to the north and east of
Wudinna and the Ethiopia prospect, which is south of Kimba. The company
also has a number of joint venture tenements with Quasar Resources.
Diatreme Resources Limited, Uranium, gold and mineral sands
Diatreme Resources Limited is exploring in the Eucla and Arckaringa Basins.

Some encouraging results have been obtained although further work is likely to
need to be done before any developments occur.
Toro Energy has a number of joint tenements with Mithril Resources and
Minotaur Exploration on the northern and western parts of Eyre Peninsula.
The company has commenced significant exploration for uranium in the
region and date positive results have been recorded on its Yaninee project near
Streaky Bay and Poochera.
Rex Minerals, iron ore
The Rex Minerals Cowell project, on the Eyre Peninsula, is prospective for
iron ore and occurs in an area which has produced iron ore since the late
1800’s. The project is near the township of Cowell on the Eyre Peninsula. A
12 kilometre long magnetic feature dominates this project, which Rex
interprets to be the extension of the Middleback Ranges.
24 The Logistics Challenges and Opportunities of the Eyre Peninsula, Centrex Metals presentation to
Mining South Australia, December 2008.
25 Potential exports from Sheep Hill include iron ore, grain, manganese, gypsum and coal.

Lincoln Minerals, magnetite
The Gum Flat project area is prospective for a large range of polymetallic
minerals including iron ore (both hematite and magnetite), Pb-Zn-Ag (Cu-Au)
mineralisation and uranium. Company drilling for iron ore has identified
banded hematite iron formation (BIF) with up to 56.6% Fe overlying broad
intervals of magnetite BIF. The resource has been estimated to be in the order
of 250 Mt.26
The project is some 20km west of Port Lincoln and with good access to road
and rail infrastructure and close to a port.

characteristics
The Eyre Peninsula incorporates the councils of Ceduna, Cleve, Elliston,
Franklin Harbour, Kimba, Le Hunte, Lower Eyre Peninsula, Port Lincoln,
Streaky Bay and Tumby Bay. The 2006 ABS census found that the region’s
population was 34,293. With a population of 14,262, Port Lincoln is home to
almost half of the region’s inhabitants.27
The region’s key industries are agriculture, tourism, fishing, aquaculture, and
mining. The latter provides just under one per cent of the region’s
employment (see Table 7).
Table 7 Employment by industry – Eyre Peninsula region

Public administration & safety 700 4.5
26 Lincoln Minerals website, http://www.lincolnminerals.com.au/gum-flat.php.

27 This part of the report draws from Strategic Infrastructure Plan for South Australia, SA Office for
Infrastructure Development, May 2005 and the Eyre Regional Development Board, 2007.


Mining 136 0.9
Total 15,442
Data source: Australian Bureau of Statistics 2006 Census
Table 8 Population by Council – Eyre Peninsula

Council 2001 2006
District Council of Ceduna 3640 3672
District Council of Cleve 1897 1988
District Council of Elliston 1155 1175
District Council of Franklin Harbour 1305 1322
District Council of Kimba 1234 1159
District Council of Le Hunte 1455 1370
District Council of Lower Eyre Peninsula 4217 4577
District Council of Streaky Bay 1989 2128
District Council of Tumby Bay 2591 2640
City of Port Lincoln 13756 14262
Eyre Peninsula 33239 34293
Data source: Australian Bureau of Statistics 2006 Census

Eyre Peninsula is supported by a network of regional infrastructure that
underpins a diverse range industries and businesses throughout the region. The
region has well developed core infrastructure including transport, energy
supplies, water, communications, port facilities and industrial land.
Energy
The transmission network is being upgraded to meet the standards of the

South Australia Transmission Code. The region has good wind resources, but
wind firms have taken their investment elsewhere in the State. The increasing
cost of electricity has become a barrier to undertake investment in farms and
high intensity agriculture.
Eyre Peninsula has an extensive electricity system, with the main transmission
supply of 132kV being operated by ElectraNet. These transmission lines
provide the backbone to the regions network and extend from Whyalla to

Yadnarie sub-station near Cleve. The 132kV lines system extends both west to
Wudinna and south to Port Lincoln sub-stations. Due to the large distances
involved, two diesel turbine generator systems located at Port Lincoln and
operated by Synergen, provide the region with the capacity of a backup system
in the event that the transmission network fails through events like lighting or
fire. The remainder of the radial network across the region is provided by
ETSA Utilities and includes all 66kV, 32kV and 11kV distribution systems.
These distribution networks are extensive and service the majority of the
communities and farming enterprises throughout the region. Eyre Peninsula’s
power supply is generated through a combination of both wind energy and
coal based supply. The region has been identified as one of the world’s best
locations for renewable energy in wind and wave energy technology. Significant
investment has already occurred in the development of two wind farms at both
Cathedral Rocks (66MW) south of Port Lincoln and Mt Miller (70MW) near
Cowell, ensuring that the region is a net exporter of renewable energy.
Water
Most of the region relies upon groundwater to supply its water. The main
sources are underground basins located on southern Eyre Peninsula (Uley,
Wanilla, Uley South and Lincoln), supplemented by limited supplies from
Polda Basin (Elliston/Lock) and Robinson Basin near Streaky Bay.
SA Water operates and maintains Eyre Peninsula’s water system, including a

main pipeline supply radiating from Port Lincoln, west to Ceduna and east to
Cleve. Branch lines from these east/west arteries pipe water to other towns
across the region. The region’s annual consumption over the past five years has
averaged between 9.4 and 10 GL. SA Water has recently completed a pipeline
between Kimba and Iron Knob, connecting the region to the State’s mains
water distribution network.
The level of demand for water has exceeded the sustainable yield and the
quality of groundwater has declined as a result. Options are being considered
to augment the water supply in the area, including desalination. A large
desalination plant (co-funded by the private and public sectors) has been
proposed for Whyalla, as part of BHP Billiton’s expansion project at Roxby
Downs. If this desalination plant is built then it will increase the region’s
access to potable water.
Roads
There are 13,798 km of roads, with 970 km of sealed roads, including the
primary connection to Western Australia. Sealing and maintenance of the local
road network has been identified as a local priority.

Eyre Peninsula has an good network of major arterial highways, affording the
region a fast, efficient and safe system for travel across the length and breadth
of the region. National Highway 1 (Eyre Highway) is the major east-west road
corridor across Australia, traversing Eyre Peninsula from Port Augusta to the
WA/SA border. A sealed dual lane highway runs along the eastern coast of
Eyre Peninsula (the Lincoln Highway). It services the Spencer Gulf towns
between Whyalla and Port Lincoln. The Flinders Highway provides a sealed
connection between Port Lincoln and Ceduna. It also services coastal
townships on the west coast of Eyre Peninsula. Running north-south between
Port Lincoln and the Eyre Highway at Kyancutta is the Tod Highway,
servicing the towns of central Eyre Peninsula.
These three highways are maintained by Department of Transport, Energy and

Infrastructure. Eyre Peninsula’s councils are responsible for maintaining a
local road network representing 18% of South Australia’s total road network.
Freight routes to terminals and port facilities need to be maintained. Upgrades

to rail (including truncation), road and loading facilities have been identified as
a local priority. The Australian Rail Group (ARG) narrow-gauge rail system is
used extensively for the movement of export grain and gypsum.
Demand for wharf access across the peninsula from the fishing and
aquaculture industries is also growing.
Rail
The rail system on Eyre Peninsula is a discreet narrow-gauge network operated

by Genesee Wyoming Australia (GWA).
In an average year, the Eyre Peninsula region produces 2.1 million tonnes of
grain and 1.6 million tonnes of gypsum. The rail network provides a vital
transport link for the delivery of the grain harvest to Port Lincoln for export.
Similarly, the rail network of western Eyre Peninsula plays an integral role in
transporting gypsum from the Kevin Mine through to the Port of Thevenard.
In the future, rail is expected to play a similarly important strategic role in the
development of the mineral potential of the Gawler Craton and the coal/iron
ore deposits near Lock. Historically the Eyre Peninsula rail system covered
670km, however a integrated investment plan will see a $30 million upgrade of
the regional rail network from Port Lincoln to Wudinna and between
Cummins and Kimba.
A viable rail operation alleviates the considerable pressure on the region’s local
road network.

Ports
With over 1600km of coastline, the Ports of the region play a critical role in the
transfer of primary produce, seafood and minerals to other parts of Australia
and overseas. The main commercial port facilities are located at Port Lincoln
and Thevenard. Both have significant grain storage capacity and associated
bulk loading facilities.
Port Lincoln is situated on one the world’s best natural harbours28 and can
accommodate the largest of Panamax carriers. The principal export passing
through the port is grain. The major import through the port is fertiliser for
the agricultural sector.
Thevenard is located in Ceduna is the major multi-commodity port on western

Eyre Peninsula.29 Gypsum, salt and grain are all exported through this
important west coast facility. In terms of export tonnages and vessel calls, the
two ports on Eyre Peninsula rank among South Australia’s most productive
regional facilities.
In 2006, Port Lincoln ranked fourth in terms of export tonnage output, with
1.7 Mt of cargo exported. The Port of Thevenard was the third in export
tonnage output, with almost 2 Mt of product being exported.
The escalating mineral activity in the Gawler Craton and Eucla Basin will place
extra demand on the capacity and efficiency of the region’s ports and planning
is underway to maximise the use of the export facilities at Port Lincoln and
Thevenard.
SeaSA commenced operation of a roll on roll off car and passenger ferry
service in 2007, operating three return trips daily between Lucky Bay and
Wallaroo. The ferry trip across Spencer Gulf provides an essential new
transport link for freight and passengers between the Peninsulas of Yorke and
Eyre. The voyage takes 2 hours and reduces the road journey between Port
Lincoln and Adelaide by in excess of 300 km. This new service enables rapid,
same day delivery of freight between Adelaide and Port Lincoln.
Airports
In a vast and remote regional community like Eyre Peninsula, commuter air
services provide a critical element of the regional public transport mix – for
business and industry, tourism, the convention market, health, education and
for social and recreational purposes.
28 The harbour can accept ships with a draft of up to 14.7m.

29 Thevenard can accept ships with a draft of up to 8.2m.

Airport facilities on Eyre Peninsula are owned and operated by Local

Government. The two main regional airport facilities are located at Port
Lincoln and Ceduna, licensed by the Civil Aviation Safety Authority (CASA).
Modern turbo prop aircraft operate 55 return flights to Port Lincoln each week
and 12 return flights weekly to Ceduna. Port Lincoln is South Australia’s
busiest regional airport, with in excess of 150,000 passengers annually, while
the Ceduna airport passenger numbers have also grown with an increase of
54.7% over the last four years and 20,000 passengers annually.
In addition, there are sealed strips with pilot activated lights at Wudinna,
Streaky Bay and Cleve. The smaller centres generally provide unsealed airstrips
to accommodate light aircraft and Royal Flying Doctor Services. Plans to
expand facilities at Port Lincoln and Ceduna Airports to meet future passenger
and freight demands are currently being evaluated.
Health services
There are 10 hospitals in the region, serving 32,500 people. Ceduna and Port
Lincoln are larger regional facilities. The eight smaller hospitals provide a range
of primary health services, including residential aged care. Remoteness and
distance between communities are major challenges for health services in this
region.

Investment in infrastructure is the key to ensuring that the region maintains its
competitive advantage in the export of key commodities and the distribution
of products and services across the region.
Access to adequate potable water supplies for the region’s population as well as
water for industry processes is a key hurdle for resources developments in the
region. The current level of use has already caused a decline in the quality of
water extracted from existing groundwater sources.
Upgrades to road, rail and loading facilities have been identified as priorities in
a number of local areas. To cope with the transport task associated with
increased minerals developments
Growing demand for access to port facilities from the fishing fleet in the
region is already evident. In the absence of upgrades to port facilities this may
pose a barrier to new or expanded minerals expansion.

Planning initiatives
The South Australian Government Strategic Infrastructure Plan and the Eyre
Regional Development Board have identified key infrastructure projects to
underpin the continued development of the Eyre Peninsula in South Australia.
Significant potential prospects have been identified in recent years as a part of
the State Government’s Plan for Accelerating Exploration (PACE) program.
The Eyre Regional Development Board has developed an Integrated Eyre

Peninsula Ports Master Plan for the Ports of Port Lincoln and Thevenard. The
project includes the assessment of the present industry users and future mining
developments to ensure that a master plan and scoping plans consider the
integration of transport, handling and storage facilities and loading facilities.
The importance of the development of Gawler Craton and the Eucla Basin in
underpinning the economic performance of the South Australian economy
suggests that it will be important to maintain a comprehensive approach to
infrastructure planning.
Planned infrastructure
Energy
• ElectraNet Pty Ltd has a $19m project to install a second 275/132kV
transformer at Cultana substation, separate the Cultana-Davenport 275kV
line into two individual circuits, divert the Playford-Whyalla #2 132kV line
in and out of Cultana substation, and install capacitor banks at Port Lincoln
and Yadnarie substations. This work is required to maintain adequate
voltages throughout the Eyre Peninsula region under both normal and
contingency operating conditions. The project is expected to be completed
by end 2009.
• ElectraNet is also spending $16m to upgrade the Whyalla to Port Lincoln
132kV transmission line. It is currently designed for 49°C operation30, and
will be upgraded to comply with 65°C operation (Whyalla-Middleback
section) and 60°C operation (Middleback - Port Lincoln section), to meet
statutory line clearance obligations.
30 This temperature refers to the maximum operating temperature of the transmission line.
Lower operating temperatures can mean that transmission throughput needs to be reduced
during periods of high ambient temperature.

Ports
• The Eyre Regional Development Board has developed an Integrated Eyre
Peninsula Ports Master Plan for the Ports of Port Lincoln and Thevenard.
The project includes the assessment of the present industry users and
future mining developments to ensure that a master plan and scoping plans
consider the integration of transport, handling and storage facilities and
loading facilities.
Transport
While not specifically aimed at the minerals industry, the following is likely to
bring benefits to the industry if only due reducing demands on infrastructure
used by both the minerals and other sectors.
• The government has announced it will develop a master plan to identify
preferred locations for the redevelopment and maintenance of wharfs for
fishing and aquaculture industries.
• Eyre Peninsula Grain Transport Plan – A $40m joint Local Government,
State Government, Commonwealth Government and private sector project
to upgrade the road grain handling and rail assets of the Eyre Peninsula
grain transport network to ensure the long term sustainability of the export
grain transport logistics system.
• Extend the Port Lincoln airport and upgrade the terminal to cater for
increased freight and tourist flights, subject to demand and identification of
a viable carrier.
4.8 Discussion of growth scenario

The sections that follow essentially examine SA Eyre Peninsula region minerals
projects that are currently in the pipeline and discuss their potential impact on
existing and planned infrastructure. To do this we have included those
projects that have been reported in various ABARE and the SA government
documents. Where necessary we have supplemented that information
through our own research and consultations with industry.
We have not examined the extent to which the Eyre Peninsula region growth
scenario discussed below aligns with the national Advance scenario for
minerals production. Nor have we discussed the implications for Eyre
Peninsula region growth if actual outcomes align more with the national
Holding the Line and Decline growth scenarios.31 Obviously, to the extent
that some minerals projects are either delayed or do not proceed and actual
31 For more information of these scenarios please see the Access Economics reports:
demand scenarios.

growth is therefore less than that discussed below, the demands on

infrastructure will be reduced. Section 4.9 discusses potential growth in
minerals production under what could be regarded as a scenario that broadly
aligns with the Advance scenario. This discussion is summarised in Table 9.
Table 10 summarises the infrastructure requirements under this growth
scenario.

Table 9 Summary of growth scenario to 2020 for the Eyre Peninsula growth region
Gold / Copper • Early results are encouraging. The region appears to be highly prospective but further work needs to
be done before any developments can occur
Uranium • Firms such as Adelaide Resources, Toro Energy and Diatreme Resources have active uranium
exploration programs underway
Iron ore • Ironclad Mining’s Wilcherry Hill project producing some 2 million tonnes of magnetite a year
• Centrex Metals to produce some 2 Mt of ore from its Wilgerup project a year starting in 2010
• Centrex Metals’ Carrow prospect online by 2012. Production estimated at 5 Mt a year. The same
firm’s Greenpatch/Bald Hill prospect could be delivering in excess of a further 5 Mt a year by 2013
• Several other firms (including Rex Minerals and Lincoln Minerals) have iron ore prospects that could
collectively be producing over 8 Mt a year sometime after 2012
Other metals • The Iluka Resources Ambrosia project proceeds. Production of approximately 300,000 tonnes of
zircon, 3,050 tonnes of rutile and 175,000 tonnes of ilmenite a year
• The smaller Tripitaka heavy minerals prospect developed (possibly in parallel)
• Additional heavy minerals resources developed over time (Gulliver and Typhoon projects)
• Monax mining could potentially be shipping half a million tonnes a year of Manganese from its project
at Waddikee by 2012
Data source: List of major mineral and energy projects, ABARE, 2008
Table 10 Summary of infrastructure requirements under growth scenario to 2020 for the Eyre
Peninsula region
Roads • Roads may not be • The capacity is currently adequate. Although if rail infrastructure does not keep
adequate to deal with pace with minerals developments then it will put additional pressure on the road
growth in freight traffic network. Intermodal transfer facilities are likely to be needed
Railways • Age and capacity of rail • While the capacity is currently adequate, the rail infrastructure is relatively old and
network is likely to need to be upgraded as minerals projects are developed
Airports • Capacity insufficient for • Upgrades to regional airport facilities may be needed to deal with a larger number
higher FIFO numbers 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, • Electricity suppliers will need to upgrade their supply infrastructure to deal with
transmission and increased demand from industrial, commercial and domestic customers
distribution capacity • The region has been identified as having an excellent potential for wave and wind
inadequate for growth 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 infrastructure32
Water and • Existing groundwater • Desalination is likely to be necessary to augment supplies. The potential exists to
wastewater resources producing at use wave energy technology to produce desalinated water
(or near) sustainable
levels
• A lack of potable and
process water
Community • Service levels may not • Increasing population in the region the main driver for enhanced community
infrastructure match needs of growing infrastructure
population • 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
The following section discusses the implications of the growth scenario for the
Eyre Peninsula region.
4.9 Growth scenario – Eyre Peninsula
The Eyre Peninsula is regarded as highly prospective for minerals

development. The region’s economy is likely to grow significantly if policy
settings are favourable and the infrastructure required by the minerals industry
is available in a timely manner.
Under the growth scenario we foresee significant growth in the minerals

industry in the region. Most of the growth will be from new mines rather than
expansion of existing mines. Minerals products are likely to include mineral
sands, iron ore, uranium, manganese and gold.
Potential non-minerals resources developments under the growth scenario

include:
• Construction of one or more wave power plants

• Growth in wind power plants

• One or more desalination plants (possibly in association with wave energy
plants).
Realising the above growth scenario for the Eyre Peninsula region would
require a high level of infrastructure planning and provision from government
and the private sector. Key infrastructure issues are access to adequate (and
appropriate quality) water supplies, reliable power, port export capacity and
efficient transport corridors to get minerals products to those ports.
Key infrastructure needs for the Eyre Peninsula region are discussed below.
Energy
The generation and transmission network is will need to be upgraded to keep

pace with growing demand from the minerals sector. The region is well placed
to utilise wind and, in the slightly longer term, wave energy for generating
electricity. However, we note the costs of generating electricity using these
technologies are higher than those that use conventional sources of energy.
Furthermore, the rising cost of electricity has already been identified as a
barrier to investment in the region.
The need for upgrades to import facilities to cope with an increased demand
for transport fuel associated with minerals developments will also need to be
considered.
Water
Access to water for both drinking and process uses is a key barrier to growth in
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. The option may exist to
combine wave energy generation with desalination.
Transport
The growth in the volume of minerals traffic is potentially very significant.

Freight routes to terminals and port facilities will need to be upgraded in line
with that growth in that sector. 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.

It is worth noting that the transport network will need to deal with not only
existing and new mineral developments but also the movement of other bulk
products such as grain haulage. The Eyre Peninsula Grain Transport Plan is a
good initiative however it 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.
If uranium developments in the region proceed then decisions will need to be

taken on the most appropriate export route for their product.
Airports in the region may need to be upgraded to deal with a larger number of
FIFO flights servicing new and expanded mining operations.
Ports
The expansion of mineral activity in the Gawler Craton and Eucla Basin will
place extra demands on 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.
However, 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.
Again, any port planning processes will need to take account of all potential
users’ needs.
While the population is decreasing inland in the Eyre Peninsula development is

increasing along the coast with consequent demand for land, housing and
associated social infrastructure to facilitate both expansion of the local
population and tourism opportunities.
in turn generate a need for industrial and community infrastructure such as
serviced land that will require collaboration between government and the
private sector to plan and develop.

5 Fleurieu / Mid North / South East /

Riverland region
This corridor gathers the regions of Murray and Mallee, Mid North and Yorke
Peninsula, Barossa, Adelaide Hills, Northern Adelaide Plains, Fleurieu
Peninsula, South East and Limestone coast. In this report we have
occasionally collectively referred to these regions by the shorthand reference of
“Southern SA region”.33 The total corridor population is 296,500.34
The region is surrounded in the north by the Northern region and Victoria in
the East.
The Murray area’s key industries are primary production, dry land farming and
horticulture, wineries and manufacturing. The Yorke Peninsula depends mainly
on coastal and marine resources, agriculture, wine, aquaculture and fishing.
The Adelaide Hills, Northern Adelaide and Fleurieu Peninsula are rapidly
growing regions, both in economic and population terms. Currently tourism,
viticulture and wine, beef, dairy and sheep are the main industries.
The South East area is mainly known for the production of wine and seafood,
as well as for the tourism attracted by its nature reserves.
33 Much of this report draws from the SA Office for Infrastructure Development report
entitled Strategic Infrastructure Plan for South Australia, May 2005.
34 Australian Bureau of Statistics 2006 Census.
Fleurieu / Mid North / South East / Riverland region 47

Figure 4 Murray Lands map
Data source: Strategic Infrastructure Plan for South Australia, SA Office for Infrastructure Development, May 2005
Figure 5 Yorke Peninsula

Figure 6 Adelaide Hills, Northern Adelaide, Fleurieu Peninsula and

Kangaroo Island
Figure 7 South East / Limestone Coast

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

The Mid North and Yorke Peninsula have magnesite deposits west of the
ranges around Beetaloo and Laura, some diamond exploration activity around
Oodla Wirra and Craddock, gold exploration activity on Yorke Peninsula and a
significant copper-gold resource has been discovered near Olary, east of
Peterborough. Salt for human consumption is produced at Price and Lochiel,
with gypsum mined near Everard Central and at Stenhouse Bay. Sand is
harvested on Yorke Peninsula. Adelaide Brighton Cement moves about 1.5
million tonnes of limestone from Klein Point to Port Adelaide by sea annually.
The total value of mineral production and processing for the region in 2002/03
was $57 million.
The Mindarie Zircon Mine owned and managed Australian Zircon is located
148km east of Adelaide. It is principally a zircon mine but it will also produce
ilmenite, rutile and leucoxene. The Company holds an exploration tenement
portfolio covering approximately 16,000 km² within the Murray Basin.35
The mine expects to produce some 36,000 tonnes of zircon for export through
Port Pirie this year.
The Angas Zinc Mine is owned by Terramin Australia is located 2km from the
town of Strathalbyn, 60km from Adelaide and 70km from Port Adelaide.
The mine’s reserves are estimated to be 2.4 million tonnes at 9.7% lead and
zinc. These reserves are sufficient for an initial seven year operation. Situated
in prospective ground in an historical mining belt, strong exploration prospects
on the Company’s tenements could potentially lead to an increase in
production and an extension of mine life. Production in 2008-09 is estimated
to be around 84,000 tonnes of concentrate.36
The Fleurieu region has bluestone, limestone, sand, clay and other quarry
products, and siliceous sands.

Rex Minerals, Hillside Project
Rex Minerals Limited recently announced that they had obtained high grade
copper-gold results from drilling at their 100% owned Hillside Project on the
Yorke Peninsula in South Australia.
35 http://www.australianzircon.com.au/mindarie-zircon.php accessed 26 March 2009.

36 South Australia’s Major Operating Mines and Mineral Development Projects, PIRSA
January 2009.

In addition, the recently discovered Parsee structure reportedly returned high

grade uranium results that compare well with the quality of other existing
uranium deposits throughout Australia.
Australian Zircon, Mindarie Zircon Project (expansion)
Australian Zircon’s prime asset is the 100 per cent owned and managed
Mindarie Zircon Mine, located 148km east of Adelaide. The mine is principally
a zircon mine but it also produces smaller amounts of ilmenite, rutile and
leucoxene.37 Production is ramping up and is expected to meet the target rate
of 35,000 tonnes of zircon a year in the first half of 2009.38
Maximus Resources, Bird in Hand Project
During 2008 Maximus progressively upgraded its estimated resource. The

latest estimate suggests a gold resource of around 237,000 ounces.
After having completed a positive scoping study during the year, Maximus is
now carrying out a pre-feasibility study into the possible redevelopment of the
Bird in Hand Mine. One of the concerns expressed, regarding the
development of the mine, have been about the potential effects of
depressurisation of the aquifer. The concerns relate to the possible
deterioration of quantities and quality of water used by nearby irrigators as a
result of this depressurisation.39
Hillgrove Resources - Kanmantoo
On 16 April 2004, Hillgrove acquired the former Kanmantoo Copper Mine,

located in the Mount Lofty Ranges 55 kilometres southeast of Adelaide. The
current resource is indicated to be total contained copper metal of 290,000
tonnes and 216,900 ounces of contained gold. Hillgrove has its Mining Licence
granted and is now working with Government to finalise other approvals. A
plant construction and engineering contractor has been appointed and subject
to the completion of financing, Hillgrove is hoping to commence operations in
the first quarter of 2010.
37 http://www.australianzircon.com.au Accessed 29 March 2009.

38 ibid.
39 http://www.maximusresources.com.au - accessed 29 March 2009.


characteristics
The 2006 ABS Census found that 885 people were employed in mining (some
.66% of the region’s population).
Energy
In the Murray and Mallee region, the electricity transmission system and
distribution networks are privately owned and required to comply with
minimum performance standards, such as strength and reliability of supply.
The Murray lands region has three main connection systems at Mannum,
Mobilong and Tailem Bend, and distribution is from the 33 kV sub-
transmission network or via three distribution sub-stations. The Riverland has
two main connection systems – at Berri and North West Bend – and supply is
via nine distribution sub-stations.
The energy needed for pumping water through SA Water’s pipelines and for
irrigation and water processing is a major source of demand in the region.
Extension and augmentation of electricity supplies to satisfy new demand from
agriculture, horticulture, mining and processing industries can require long lead
times.
Gas is supplied to Murray Bridge and Berri from Envestra’s Riverland

transmission pipeline. The SEA Gas line has a take-off point at Tailem Bend to
enable supply for future industrial development.
Electricity for the Yorke region is supplied via the Hummocks sub-station
north-west of Port Wakefield. A 132 kV transmission line runs to the
Ardrossan West sub-station, which serves most of the Peninsula. There are
currently six wind farms approved in the region, located from Wattle Point to
Barunga, totalling approximately 560 MW. Gas is available in the Peterborough
and Burra districts, but is not reticulated in other parts of the region – although
a pipeline passes through the Mid North.
In the Fleurieu Peninsula region electricity supply networks are generally well
developed. The southern Fleurieu is recognised as having high potential for
wind generation, having good wind and grid connections. The 34.5 MW
Starfish Hill wind farm was completed in 2003. A new peaking electricity
generator at Angaston should, along with transmission upgrades, alleviate
supply issues in the Barossa.

While both the SEA Gas and Moomba gas pipelines run through the region,
only Freeling, Angaston and Nuriootpa are supplied with mains gas for
residential and/or industrial purposes.
In the South East region, the electrical interface with Adelaide is a meshed
network of 275 kV and 132 kV transmission lines and substations. Two 275
kV lines provide interconnection to the Victorian network.
Three distillate-fuelled gas turbine generators installed at Snuggery, and the

Ladbroke Grove gas turbines near Penola provide 45 MW and 72 MW
respectively into the network. Two wind farms are operational in the South
East.
The Katnook gas field supplies natural gas to industrial, residential and other
customers in the Mount Gambier region. Spur lines deliver gas to KCA’s
processing plant at Tantanoola, the SAFries chip factory and the Nangwarry
timber mill. The SEA Gas pipeline passes within 8 km of Naracoorte and
continues to the south-west of Keith. A spur line to supply gas to the Teys
Brothers abattoir near Naracoorte was recently commissioned.
Water
The River Murray is the largest single surface water resource in the state, and
provides water to most of the industrial activities.
In the South East region, water is sourced from a number of supplies. The
Tailem Bend to Keith pipeline services a number of towns and large
agricultural areas in the north. The region obtains the balance of its water from
a combination of surface and groundwater. The City of Mount Gambier also
gets water from the Blue Lake.
Rising groundwater levels and dryland salinity remain the largest threats to the
use of River Murray water for irrigation, domestic and industrial purposes. The
Murray-Darling Basin Agreement requires salt interception schemes to be put
in place before new developments can proceed.
The Mallee Prescribed Wells Area is located in the eastern portion of the
region around Lameroo and Pinnaroo. Consideration is being given to
prescribing additional areas to the west and south. Licensing arrangements
generally regulate management and use of this shared resource.
Water availability and quality in the Mid North and Yorke Peninsula area is a
critical issue. Northern Yorke Peninsula is dependent on water from the River
Murray, while the south relies on aquifer and rainwater supplies. Most pipes in
the region were laid prior to the 1960s to service small townships and

agricultural areas. More recent coastal tourism and residential development,

especially retirement and holiday homes, will test the system’s peak capacity.
Additional reticulated water is required to support recent residential and

industrial developments planned for Balaklava, re-zoning of the Bowmans
industrial site, Port Wakefield township expansion, poultry industry expansion
and Primo Abattoirs expansion.
In the Fleurieu Peninsula region, The Adelaide Hills watershed provides on

average 60% of Adelaide’s mains water supply. The River Murray provides the
remainder. Water from both sources is stored in the Adelaide Hills reservoirs.
Use of groundwater aquifers and surface water in farm dams is approaching

the estimated sustainable limit. Several private water schemes are in operation
but have limited spare capacity. Irrigation schemes using recycled water
require consideration of impacts on groundwater and potential for soil
salinisation. Regional irrigation management plans – as opposed to individual
plans – need to be considered before new irrigation schemes are undertaken.
Treated wastewater from the Bolivar wastewater treatment plant may be an
alternative source of non-drinkable water.
Residential, commercial and industrial growth will require timely expansion of

existing water infrastructure. Many septic tank effluent disposal schemes
(STEDS) across the region are already at capacity. Still other communities are
awaiting the installation of STEDS. In some cases these installations depend
on access to reliable water supplies. A number of STEDS will need to be
upgraded to cater for residential and industrial growth.
Transport
The Sturt Highway is the major northern interstate connector and the freight
route to Outer Harbor and Adelaide Airport. The South Eastern Freeway
provides a strategic connection between Adelaide and Murray Bridge.
The rail link between Adelaide and Melbourne passes through Tailem Bend,
where a junction connects to standard-gauge lines terminating at Loxton and
Pinnaroo. These rail lines transport grain to Port Adelaide for subsequent
export. There is no strong demand for commercial air services in the Murray
and Mallee area.
In the Mid North and Yorke Peninsula agriculture and mining generate most
of the heavy vehicle movements. The increased use of roads by farm produce
and bulk grain vehicles is placing significant demands on the road network.
Increased safety and efficiency could be achieved by improving east – west
routes, such as those connecting Snowtown, Blyth and Brinkworth.

The standard-gauge mainline railway line from Adelaide to Perth/Darwin

passes through the region. The intermodal container facility at Bowmans has
access to the standard gauge rail network. The development of abattoir, hay,
grain and other processing activities near Bowmans/Port Wakefield is expected
to generate more freight activity on local roads and the mainline rail network.
The national highway and rail routes meet in the region. Vehicles from the
Barrier Highway, Sturt Highway and the Dukes Highway cross through the
region to reach Highway One. The Barrier Highway is the primary freight
route from New South Wales to Adelaide. Port Wakefield Road provides a
major highway connection from Yorke Peninsula, south to Adelaide and north
towards Western Australia and the Northern Territory.
There are numerous road freight companies in the area, mainly servicing the
grains industry. Bulk grain handling facilities are located in the region, e.g.
Gladstone and the deepwater ports of Port Giles and Wallaroo, which receive
regular shipping services for collection and export of grain.
A complex, multi-modal transport network runs throughout the Fleurieu

Peninsula region, supporting a vast range of diverse activities including
agriculture, tourism, commuting, leisure and local travel. Freeways and
highways running through the region connect Adelaide and South Australia to
interstate markets. Some major growth industries, such as viticulture;
associated processing and value-adding industries; horticulture; forestry; and
tourism are expected to place increased demand on transport networks.
The Adelaide suburban rail services extend to Gawler and Belair. There are
daily bus services to Adelaide from Goolwa, the Barossa Valley and Victor
Harbor. Commuters to Adelaide from the larger population centres are
serviced by regular peak-hour bus services, but options outside of peak times
are limited.
The interstate standard-gauge Adelaide–Melbourne, Adelaide–Perth and

Adelaide–Darwin rail lines run through the region. The Gawler–Angaston
broad-gauge line is primarily used for limestone. An intermodal hub at
Angaston may see greater rail use by the wine industry and provide direct rail
access to interstate and overseas markets (particularly if new rail shuttle
technology is developed). The key transport issues in the region are largely the
result of tensions and conflicts that occur due to the competing needs of
freight, tourism, commuters and local and regional travel.
Specific infrastructure issues related to the road networks include road re-
classification, road duplication, bypasses, road upgrades, and designation of
freight routes, particularly for over-sized vehicles.

In the South East region, there are 9091 km of roads, of which 2071 km are
sealed. The main Adelaide – Melbourne standard-gauge rail line passes through
Tintinara, Keith and Bordertown. There is a broad-gauge line between
Wolseley to Millicent and Mount Gambier to Portland. The Blue Gum forests
are expected to yield an additional 1 million tonnes of timber when harvesting
commences. Impacts on the community from transporting the projected
tonnage by road are a major issue. There is a significant network of bridges
associated with the South East Drainage Scheme. The size and condition of
some of these bridges will impact on heavy vehicle movements.
Traffic flows in the South East have led local communities to lobby the
Australian Government for release of AusLink funding for heavy vehicle by-
passes around major towns
Ports
Wallaroo and Port Giles are primary grain export facilities for the state and are
projected to increase exports by 10% by 2013.
The harbours of Cape Jervis, Penneshaw and Kingscote currently provide

access to Kangaroo Island for freight and passenger traffic via roll-on-roll-off
ferries. Other Kangaroo Island harbours include American River and Vivonne
Bay.
The Noarlunga to Cape Jervis road services the Kangaroo Island ferries and
the towns of Yankalilla, Normanville and Myponga. The Adelaide to Victor
Harbor road services the growing Encounter Bay area, including Port Elliot,
Middleton and Goolwa.
Health services
In the Murray and Mallee region health authorities cover community and
primary care services and 11 hospitals. There is a continuing need for
additional high-level aged care across the region. The ageing population
requires further development of a range of services including rehabilitation,
high-level residential care, geriatric medical assessment, cancer care and chronic
disease management. Health infrastructure needs to accommodate the teaching
role with medical, dental, nursing and other health professionals.
There are 19 health services in the Mid North and Yorke Peninsula region.
The significant numbers of early retired and aged persons in the region is a
major issue for the provision of health services. There are some access
difficulties to local and metropolitan health facilities due to limited public and
community transport.

The Fleurieu Peninsula region is experiencing population growth above that

seen in other regions. The region’s hospitals and health facilities are facing
increasing demands on health services. Demand for accessible services for the
elderly is increasing, particularly on the South Coast. Services for children and
families are a focus in Mount Barker, Strathalbyn and the Northern Adelaide
Plains.
There are seven hospitals in the South East region. The largest is Mount
Gambier Hospital. This hospital is the major health facility in the region and
provides a high level of accident and emergency services.
The pressure on hospitals is exacerbated by accommodation shortages due to

population growth driven by industry growth. These shortages impact on the
ability of health services to attract and retain professional staff.

Expansion of natural gas and electricity networks is considered a priority for
food processing and other manufacturing businesses planning to establish or
expand operations in the region.
Some areas, particularly the southern Fleurieu Peninsula, and Kangaroo Island,
experience supply inconsistencies and poor reliability, particularly at ends of
single wire earth return (SWER) lines.
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 (both for their own operational needs and the
needs of their workforce) is expected to pose a significant challenge to
expansions of the minerals industry.
The use of roads and rail for transporting agricultural production places
significant demands on the road network. 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 region.
Access to land for accommodation will be needed to underpin both growth in

the workforce associated with expansion of mining activity and the
improvement and expansion of services such as health care provision. There is
already strong demand for accommodation in parts of the region making it
difficult for firms and services to attract and retain staff.

The South Australian Government Strategic Infrastructure Plan has identified

key projects to underpin the continued development of the Southern SA
region. The importance of this development in underpinning the economic
performance of the South Australian economy suggest that the SA government
will maintain a comprehensive approach to infrastructure planning.
Energy
• The Riverland Development Corporation and local government have
investigated extending gas reticulation to Loxton, Renmark and Waikerie to
support the high-volume LPG users and value-adding activities.
• Several wind farms are proposed for the Yorke region, including large
farms (up to 320 MW) in the Goyder and Northern Region local
government districts. The gas-fired electricity plant at Hallett is to be
expanded to 430 MW.
• As a result of recent demand increases at Kimberly-Clark Australia’s pulp
mill at Tantanoola and connection to approved wind farms at Lake
Bonney, ElectraNet is expending $30 million on network upgrades at
Snuggery, construction of a new sub-station (Mayurra) and the 132 kV
transmission connection between Mayurra and Snuggery.
• Origin has committed to build the SESA pipeline to link Katnook with gas
transported in the SEA Gas pipeline. Gas from fields in the Otway basin
will supplement the declining supplies from the Katnook gas fields.
Water
• A major rehabilitation program including improved infrastructure is being
undertaken in the Lower Murray reclaimed irrigation area to address the
decline in water quality resulting from the discharge of polluted wastewater
into the river. This program is expected to free up water for higher-value
use.
• There is growing demand for development in the northern Gawler suburbs
and north east of Willaston including the developing industrial area of
Kingsford Estate. As projects are approved SA Water is upgrading the
sewerage system to meet this demand.
Transport
• Proposed development of a multi-modal transport hub to the north of
Adelaide could generate more road freight activity on a north-west route
from the Riverland, and attract freight from Victoria.

• As traffic volumes increase a bypass at Port Wakefield would improve

safety, amenity and efficiency, particularly during holiday periods.
Upgrading of the Bower Boundary Road may be required if the
Robertstown intensive animal precinct is developed.
• The Victor Harbor road is currently being upgraded which will assist both
freight and tourism users.
• New harbor facilities are being considered (at Ballast Head) to service the
blue gum industry.
5.8 Overview of growth scenario

The sections that follow essentially examine the minerals projects that are
currently in the pipeline and discuss their impact on existing and planned
infrastructure. To do this we have included those projects that have been
reported in various ABARE and the SA government documents. Where
This study has not examined the extent to which the region’s growth scenario
aligns with the Advance scenario for minerals production. Nor have we
discussed the implications for the region’s growth if actual outcomes align
more with the Holding the Line and Decline growth scenarios. Obviously, to
the extent that some minerals projects are either delayed or do not proceed and
actual growth is therefore less than that discussed below, the demands on
infrastructure will be reduced. The potential minerals production growth
scenario discussed is a scenario that broadly aligns with the Advance scenario.
This discussion is summarised in Table 11. Table 12 summarises the
infrastructure requirements under this growth scenario. Existing mines are
assumed to continue to operate through the outlook period.


Table 11 Summary of growth scenario to 2020 for the Fleurieu/Mid

North/South East/Riverland growth region
Gold / Copper • Rex Minerals’ Hillside project proceeds
• The Kanmantoo Copper Mine is restarted by Hillgrove
• The Bird in Hand project is developed by Maximus resources
Uranium • Rex Minerals’ Parsee uranium project is developed
Other minerals • The Mindarie Zircon expansion proceeds as planned
Data source: ABARE’s list of major mineral and energy projects, October 2008 and South Australia’s Major Operating
Mines and Mineral Development Projects, PIRSA, January 2009
Table 12 Summary of infrastructure requirements under growth scenario to 2020 for the Fleurieu/Mid
North/South East/Riverland region
Transport • Competing demands from the • There is significant and growing demand for the use of roads and
agricultural sector may rail for transporting agricultural production. Identifying and
constrain use by minerals upgrading local linking freight routes in order to improve the
sector efficiency of freight handling and transfer is likely to be a priority
• Some parts of the region have • The proposed development of a substantial mineral sands deposit
inadequate infrastructure 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 meet the demands for energy from both the minerals industry and
inadequate for 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
Fuel • Inadequate fuel import • SA is one area where imports of petroleum products into have
infrastructure been identified as potentially suffering from constraints due to
import infrastructure40
Water and wastewater • Water availability and quality • Salt interception schemes need to be put in place before new
is a critical issue throughout developments can proceed
the region • 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 infrastructure • Land for accommodation in • Health services may need to be augmented. Access to land for
short supply accommodation will be needed to underpin both growth in the
• Health care facilities workforce associated with expansion of mining activity and the
inadequate to meet growing improvement and expansion of services such as health care
demand provision

Mineral production
The growth scenario is a view of minerals development in the Southern SA

region that would see the region contribute to the anticipated expansion of
mineral production in South Australia as a whole. It is a scenario for mineral
developments that could occur if markets generally remain strong, policy
settings are favourable and infrastructure is available in a timely manner.
Realising the above growth scenario for this region would require a degree of
Given the close interaction between the minerals sector and the energy sector
in the region in the future, the infrastructure requirements set out below take
into account developments in both sectors.
Infrastructure requirements
The region’s infrastructure requirements are likely to include:
Roads
Upgraded transport services to deal with expanded operations existing mines

and the development of new mines.41 Freight handling and transfer are likely
to particularly important needs to resolve. Growth in production of minerals
sands will lead to a growth in the associated transport task.
Ports
Growth in the demand for port services will need to be monitored. Existing
and projected demand for port services from both the minerals and other
sectors should be compared to port capacity to assist in planning for timely
increases in that capacity if shown to be appropriate.
Energy
Augmentation of electricity and gas networks is likely to be needed to meet the

demands for energy from both the minerals industry and a growing population.
Parts of the region’s electricity system are in need of major augmentation and
upgrading to accommodate increased demand for electricity. Demand from
the agricultural sector and continuing population and industry growth in areas
such as Mount Barker, Barossa and Victor Harbor are also putting strain on
the exiting energy networks.
41 Demand for road freight from other sectors such as the agricultural sector needs to be
taken into account.

Fuel
The growth scenario is likely to result in increases in the demand for diesel
fuel. This may require an upgrade of the region’s storage tanks for imported
petroleum products.
Access to water supplies and wastewater management are major issues for the
region. Mine developments will need to address growing concerns in this area
to ensure their continued operation and growth.
activity. Realising the growth scenario will require:

Northern Territory


resources regions
May 2009
(03) 9600 3144.
ACIL Tasman Pty Ltd

ABN 68 102 652 148

Darwin
48-50 Smith Street

Please contact:
Telephone (02) 6103 8200 (08) 9449 9612
Mobile 0404 822 302 0404 822 492
Contents
1 Vision 2020 Project 1
2 Report overview 3
3 The Northern Territory economy and mining 4
3.1 Current Northern Territory resources production 6
4 The Darwin growth region 8
5 Planned and proposed resources production 9
6 Resources-related demography 10
7 Current and planned infrastructure 12
7.1 Roads 12
7.2 Rail 13
7.3 Ports 16
7.4 Airports 17
7.5 Gas pipelines 18
7.6 Electricity 19
7.7 Telecommunications 20
7.8 Community infrastructure 20
7.9 Infrastructure planning and issues 20
8 Growth scenario and infrastructure 22
8.1 Growth scenario, Darwin region 24
8.1.1 Mineral production and export 24
8.1.2 Resources services 25
8.1.3 Oil and gas development 25
8.2 Infrastructure impediments 29
List of figures
Figure 1 NT - Onshore mineral and energy resources 6
Figure 2 Location of the Darwin region 8
List of tables
Table 1 Mineral production Northern Territory, 2007-08 7
Table 2 Employment by industry – Darwin region 10
Table 3 Potential for rail to support mining operations 15
Table 4 Summary of growth scenario to 2020 for the NT and Darwin growth region 22
Table 5 Summary of infrastructure gaps and requirements under the growth scenario to
2020 for the Darwin region and associated supply chains 23
iii
1 Vision 2020 Project

This report forms part of the Mineral Council of Australia‟s Vision 2020
industry.


market.
The Vision 2020 Project‟s growth scenarios were prepared prior to the
Vision 2020 Project 1

This report examines growth scenarios for Northern Territory mining and gaps
in infrastructure for the Darwin region and supply chains linked to it. It draws
on the results of a range of existing studies.
Vision 2020 Project 2

2 Report overview
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 Darwin region is the logistics, services and personnel hub for the
Northern Territory mining industry. Darwin is also growing as an export port,
currently for Northern Territory mines and in the future for several South
Australian mines. The rapid growth of activity mining-related activity and
population in the Darwin region is placing strains on both industrial and
community infrastructure.
Ongoing growth and proposed new developments such as the INPEX LNG
project will generate major new demands for residential land, industrial land,
roads, rail and port facilities, utilities, and health and education facilities. In
remote areas, community, transport and telecommunications infrastructure and
services are of patchy standard.
Major new infrastructure investment is required to meet both the direct and
indirect requirements of the mining industry now and under future growth
scenarios. Investment in all classes of infrastructure is required. In particular,
investment in road, rail and port infrastructure is needed to allow the industry
to export its products.
Infrastructure deficits in roads, utilities and community infrastructure have

resulted from past under-investment in both new infrastructure and repairs and
maintenance. New investment and additional investment in repairs and
maintenance are required to overcome deficits.
Investment in community infrastructure is needed to attract and retain workers

both in the mining industry and in the industries that service it, and to
contribute to greater community wellbeing in the NT.
A summary of infrastructure gaps now and in the future, and upgraded and
additional infrastructure required is set out in Table 5.
Report overview 3
3 The Northern Territory economy and

mining
The Northern Territory economy is growing strongly. State Final Demand
(SFD)2 increased 3.4 per cent in the fiscal year 2007-08, up from the previous
year‟s growth rate of 2.2 per cent. 3 Mining (including petroleum) was a key
driver of, and the largest private sector contributor to this growth. In 2007-08
the value of mineral and petroleum production was $5.6 billion.
Mining accounted for 24.5 per cent of Gross State Product GSP4 in 2006-07,
more than three times the national contribution of 7.0 per cent. 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 (see Figure
1). 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.
Strong growth in economic activity and employment is a driver of population

growth. The estimated population of the Northern Territory is 221,000, with
annual growth of 2.2 per cent, which is well above the national growth rate.
2 State Final Demand (SFD) is an important measure of economic activity. It is an estimate of

the level of spending in the local economy by the private and public sectors. Spending is
reported on the basis of consumption of goods and services, and capital investment.
3 This report draws from several Northern Territory Government publications – 2009-10
Budget papers, mining production and outlook publications by the Department of Regional
Development, Primary Industry, Fisheries and Resources, and company reports.
4 GSP is a measure of the value added by economic production in States and Territories. It
differs in concept from SFD in that it measures “value added” rather than total final
expenditure.
The Northern Territory economy and mining 4

Economic forecasters predict a slowing of growth in the five years to 2012-13

due to the impact of the global financial crisis. A major new project, such as
the proposed INPEX LNG project, which is proposed to commence
construction by end 2010, should lead to a return to high growth rates. As
mineral prices recover, minerals production growth is expected to resume.
Infrastructure in the Darwin region is struggling to cope with the demands of

industry and rapidly growing population. The following sections examine
infrastructure adequacy currently and under three growth scenarios.
Mineral exploration has increased in the Northern Territory in recent years,

fuelled by strong commodity prices and demand, particularly from China.
During 2007- 2008, private mineral exploration grew 43 per cent, up to $132
million. Expenditure on uranium was the main driver, contributing almost 20
per cent to total expenditure growth followed by gold and copper.
Exploration for minerals and on-shore petroleum has been boosted by high
minerals prices, improving relationships with Aboriginal landowners and the
NT Government‟s innovative Bringing Forward Discovery program, involving
a range of initiatives to attract exploration investment.
Exploration for onshore and offshore oil and gas has increased seven-fold in
the last four years.
A relatively high proportion of Territory GSP is attributed to defence services

and government administration. This reflects the scale of the Defence presence
in the Territory and the diseconomies of scale associated with providing public
services to a small and dispersed population combined with the high needs of
the Territory‟s relatively large Indigenous population.

Figure 1 NT - Onshore mineral and energy resources
Source: Northern Territory Economy, Budget 2008-09
3.1 Current Northern Territory resources production

Manganese production at Groote Eylandt, lead-zinc production at McArthur
River and gold production from The Granites mine in the Tanami region
account for an estimated 68 per cent of the total value of mineral production in
the Territory in 2007-08. These three mines are expected to continue to
dominate production in the medium term. The value of total mineral
production is expected to reach $2.5 billion in 2007-08.

Table 1 Mineral production Northern Territory, 2007-08

Product 2007-08 Value 2007-08 Quantity
Alumina 516 956 253 2 150 310 t
Bauxite 267 256 793 5 250 989 t
Gold 322 234 761 13 574 910 g
Iron ore 56 844 535 741 055 t
Manganese 937 911 128 3 727 470 t
Mineral sands concentrate 10 764 706 24 400 t
Silver 437 110 1 434 799 g
Zinc/lead concentrate 331 584 007 299 616 t
Uranium oxide 423 318 710 5 254 t
Total 2,967,314,003
Data source: Department of Department of Regional Development, Primary Industry, Fisheries and Resources
In 2007/08, gold production value increased 21.7 per cent over 2006/07,
bauxite 52 per cent, manganese 10.5 per cent; while lead-zinc production
decreased 19.8 per cent.
The significant energy resources in the Territory are oil, uranium, natural gas,
LPG and condensate. The Territory‟s major energy resources and operations
include:
• Ranger uranium mine, and undeveloped uranium resources Jabiluka and
Koongarra in west Arnhem Land
• onshore gas and oil operations in the Amadeus Basin at Palm Valley and
Mereenie
• offshore oil operations at Laminaria-Corallina, Jabiru and Challis/Cassini
• Puffin in the Timor Sea; and undeveloped offshore gas and condensate
deposits, including Greater Sunrise, Evans Shoal, Petrel/Tern and
Crux/Argus in the Timor Sea.
In 2007-08, the value of energy production increased by 2.4 per cent from
2006/07, up to $3.1 billion (excluding uranium).

4 The Darwin growth region

The Darwin region is located in the Top End of the Northern Territory. Its
boundaries are shown in Figure 2. Darwin is the focal point for mineral
industry logistics and for a growing proportion of the industry‟s exports. The
rail line and major highways lead to the Port of Darwin, which is developing as
a major multi-user minerals export port. Many mining and construction
workers live in Darwin and commute to remote operations by air.
Figure 2 Location of the Darwin region
Data source: ABS
The Darwin growth region 8

5 Planned and proposed resources

production
In early 2008, the value of mineral production in the Territory (excluding
manufacturing) was forecast to increase by 54.3 per cent to $3.9 billion in
2008-09. The increase was due largely to a forecast increase in the volume and
value of manganese and iron ore production as well as increases in gold and
lead-zinc output. The value of energy production was forecast to increase by
18.1 per cent to $3.7 billion in 2008-09, driven by increased offshore oil and
gas production and higher oil prices
Actual production is expected to be lower than these forecasts due to softening

markets as a result of the global financial crisis, but strong growth will return
when markets rebound in the next two years.
Manganese production is expected to increase strongly the two current mines

and a potential new operation. Iron ore production from the Frances Creek
operation and possible new mines will grow. Base metal production will
increase from the McArthur River Mine, and the Browns polymetallic project
near Batchelor is expected to open. Several new or reopened gold projects will
lift gold production. A new rare earths mine north of Alice Springs will feed a
processing plant that is expected to be built in Darwin. Uranium production is
expected to grow, from the existing Ranger operation and from one or two
new mines. Phosphate production from the proposed Wonarah mine is
expected to be exported through Darwin.
The Darwin LNG operations will continue to operate at capacity of 3.5 Mtpa.
INPEX is undertaking final studies for an 8.2 Mtpa LNG project in Darwin
Woodside remains committed to the development of the Greater Sunrise gas
field, but the timing and nature of the development remain uncertain. In
particular, Woodside has yet to decide on whether to locate the LNG
processing facility in Darwin or on a floating vessel in the Timor Sea. Other
offshore oil and gas projects are also expected to be developed. Increased
onshore petroleum exploration could result in discoveries of oil and gas.
Gas from the offshore Blacktip field is planned to flow in 2009 and will meet
the Territory‟s long term domestic gas requirements. Backup supply is being
obtained via construction of a pipeline from the Darwin LNG plant that will
interconnect with the existing Amadeus Basin to Darwin gas pipeline. This
pipeline is expected to be completed by May 2009.
The outlook for develop of resources projects and for production is therefore
very strong, generating a consequential demand for services, workers and
infrastructure.
Planned and proposed resources production 9

6 Resources-related demography
The Northern Territory is sparsely populated, with a density of 0.16 persons
per square kilometre, lower than any other jurisdiction and well below the
national density of 2.68 people per square kilometre.
More than three-quarters of the Territory‟s population live in the six main
town centres. The Darwin region accounts for 54 per cent of the Territory‟s
population. Alice Springs accounts for 12 per cent, while the other regional
town centres (Katherine, Nhulunbuy, Tennant Creek and Jabiru) together
account for just 9 per cent.
About 25 per cent (or 52,000) of the Territory‟s resident population live
outside major regional centres and are therefore considered to live in a „remote‟
area. Of this total, 42,000 (81 per cent) people are Indigenous.
This pattern of settlement, particularly for non-Indigenous people, is related to

employment opportunities such as in government administration, defense and
construction in Darwin, hospitality and other service industries around Alice
Springs. The influence of mining and service industries in these and other
Territory towns is likely to increase in the future.
Employment data by industry for the Darwin region is shown in Table 2. ABS-
reported employment data does not include defense personnel or fly-in fly-out
(FIFO) workers and as such it should be considered only indicative of the
actual employment.
Table 2 Employment by industry – Darwin region

Arts & recreation services 1,176 2.17
Resources-related demography 10

Mining 845 1.56
Agriculture, forestry & fishing 720 1.33
Total 54,236
Data source: (Australian Bureau of Statistics, 2006)
The Territory labour market continued its strong performance in 2007-08, with
estimated resident employment growth of 4.8 per cent and an estimated
average unemployment rate of 4.5 per cent (up from 3.8 per cent in 2006‑07).
Related indicators point to continued strong employment growth and ongoing
shortages of skilled labour across many sectors.
Employment in the Territory is very much service-oriented. Service industry

jobs account for almost 90 per cent of employment in the Territory, compared
to just over 80 per cent nationally. The largest employers are retail trade,
government administration, health, education, construction, maintenance and
property and business services. Many service sector businesses and their
employees provide services to the mining industry.
Reflecting the Territory‟s abundant mineral and energy resources, the

proportion of people employed in the mining industry is almost twice as high
as it is nationally, at 2.0 per cent, although lower than in 1996 when mining
accounted for 3.5 per cent of Territory employment. Given record commodity
prices and exploration expenditure in the Territory in the past three years,
further growth in mining activity and employment is expected in the future.
A continued high rate of employment growth of 2.5 per cent is expected for
2008-09, underpinned by residential and commercial construction and work on
mining projects, and continued migration and tourism growth. The proposed
INPEX LNG project is expected to provide a large boost to workforce
demand in the next five years.
Resources-related demography 11
7 Current and planned infrastructure

As noted earlier, the Northern Territory faces some unique infrastructure
challenges with a geographically large jurisdiction, small population, long
distances, rapid growth and limited financial resources. This section describes
the status of current infrastructure and discusses its adequacy.
7.1 Roads
As the Territory economy continues to grow, so too does the need for
transport and storage, and transport infrastructure. Transport and storage
contributes about 4 per cent to the Territory‟s Gross State Product (GSP).
The national highway network is the backbone of the road network system
across the Territory and provides the only sealed road links between the
Territory and the rest of Australia. The Territory is served by three national
highways which provide links to Queensland (Barkly Highway), South
Australia (Stuart Highway) and Western Australia (Victoria Highway).
While these highways are of reasonable standard, their reliability is sometimes

poor in periods of very high rainfall. The extended closure of the Barkly
Highway in early 2009 due to flood damage caused major disruption to supply
chains for Northern Territory industry and the population.
In 2007-08, AusLink expenditure on roads in the Territory was $46 million.
The remainder of the Territory road network consists of more than 36,000
kilometres of sealed and unsealed roads. About 22,000 kilometres are managed
by the Territory Government, including 12 per cent classified as national
highways, 19 per cent classified as arterial roads and 69 per cent classified as
secondary or local roads. The remaining approximately 14,000 kilometres of
roads, primarily for distributing traffic within local areas, are administered by
local governments.
In 2007-08, Northern Territory Government expenditure on roads was $77

million.
Total roads expenditure of $123 needs to be seen in the context of the very
lengthy road network and the overall poor condition of regional roads.
The condition of unsealed roads is generally very poor. In the Top End,
including the Darwin region, many roads are closed to heavy vehicles in the
Wet Season, or are closed completely. This means that transport is restricted
to high cost barge for communities and mining operations.
Current and planned infrastructure 12

The overall condition of the Territory road network has deteriorated during
the past decade. While some roads have been upgraded to better serve mining
and tourism industries, repairs and maintenance expenditure has fallen below
the level required to maintain the network. As a result, the reliability of roads
has declined and their damaging impact on vehicles has increased. This has led
to Territory industry and communities facing reduced amenity and higher
costs.
Much higher maintenance expenditure is required to maintain the road

network, and more capital funding is required to bring roads up to a standard
to meet community and industry needs.
Along with maintenance and widening activities, current major works to

overcome flooding problems on the Victoria, Stuart and Barkley highways,
including bridge works. These works should result in reduced road closures
caused by flooding. Improving of community and mining roads such as the
Port Keats Road and Tanami Road remains a priority.
In April 2008, it was announced that the Territory Government, in partnership

with the Commonwealth, would allocate $110 million to extend Tiger Brennan
Drive. When complete, the work will include a flyover and a 7 kilometre road
extension to the Stuart Highway. Extending Tiger Brennan Drive is an
important infrastructure project that will support the economic opportunities
of East Arm Port, providing better access for trucks and trains to deal with
increased transport and freight volumes.
It is important to place road and highway development in the context of the

relatively under developed nature of the Territory‟s regional economies.
Consequently, wider community needs such as safety, strategic defence
considerations, communications and regional economic development need to
be incorporated into any analysis to support roads associated with minerals
development – such as the Tanami Road.
7.2 Rail
The Adelaide to Darwin railway was completed in January 2004. FreightLink,
the railway operator, began rail transport operations with five freight services a
week capturing 85 per cent of the competitive interstate freight market within
three months of starting up. FreightLink continues to provide the primary
linehaul service along Australia‟s central freight corridor connecting Darwin
with freight services in Adelaide and other states. FreightLink now carries 90
per cent of the general freight between Adelaide and Darwin to rail and has
four minerals projects as bulk freight clients.

In November 2008, however, high debt levels and the board‟s inability to
obtain all of the required consents for a voluntary sale of the business led to
the board appointing a voluntary administrator. The operation of the railway
has not been materially affected to date. It is expected, however, that given the
financial results of FreightLink‟s operations, prices for rail transport will need
to rise to provide a commercial return for any new investors.
The value of the railway to the development of the Northern Territory

economy continues to be demonstrated by results, with a surge to record levels
of both bulk and general freight in 2006-07. The railway continues to
demonstrate its long-term potential to the economic development of both
South Australia and the Northern Territory. The net tonnage carried increased
67 per cent from 668,081 tonnes in 2005‑06 to 1,112,885 tonnes in 2006‑07.
The railway has acted as a catalyst for the development of the resources sector
throughout the Northern Territory and South Australia by offering an
alternative cost-effective way to move large quantities of bulk ore and materials
for shipment to overseas markets.
Through its subsidiary, OM Manganese Ltd (OMM), OM Holdings Ltd

(OMH) operates the Bootu Creek manganese mine, located 110 kilometres
north of Tennant Creek. Bootu Creek manganese is mined exclusively for
OMH Group‟s wholly-owned Qinzhou smelter, in south-west China. OMM
was the first mine to enter into a contract to haul manganese by rail from the
Bootu Creek operation to the Port of Darwin and is expected to produce more
than 550,000 tonnes of ore annually for many years.
Territory Resources Ltd‟s Frances Creek mine near Pine Creek commenced
operations in July 2007, with FreightLink carrying iron ore to the Port of
Darwin bulk minerals discharge facility at the rate of about 750,000 tpa.
Territory Resources aims to build shipments to 2 Mtpa.
Another mining company, OZ Minerals, has announced plans to transport

copper concentrate by rail from its Prominent Hill mine, south-east of Coober
Pedy, to the Port of Darwin, commencing in 2009. Some 240,000 t of
concentrate will be shipped annually.
Minemakers is conducting a feasibility study into the development of the

Wonarah phosphate resource east of Tennant Creek. Production rates are
projected at 1 Mtpa from 2010 building up to 3 Mtpa by 2011. Initial transport
will be by road to Tennant Creek, then by rail to the Port of Darwin. A study
is underway to assess the feasibility of a Wonarah – Tennant Creek rail link,
which would be required at production rates of more than 3 Mtpa.
Other companies with proposed mining operations in the Northern Territory

and South Australia are also in discussion with FreightLink and the Port of

Darwin about rail shipments and export through this port. Table 3 shows
potential mining operations which could use rail to move their product to the
Port of Darwin.
Notwithstanding the uncertainty about the future ownership of FreightLink,

the volumes of mineral products that are expected to be shipped by rail will be
a major factor in improving the viability of the railway operations.
FreightLink invested around $8 million in 2007 and 2008 to provide additional

track infrastructure along the corridor and in Darwin, with additional leased
rolling stock (defined as engines and wagons) to support the expansion of the
minerals business.
Table 3 Potential for rail to support mining operations

Company Project Location Product
Territory Iron Frances Creek Pine Creek Iron ore
OM Holdings Bootu Creek Tennant Creek Manganese
Territory Iron Warrego Tennant Creek Magnetite
Peko Rehab Peko Tailings Tennant Creek Magnetite
Arafura Resources Nolans Bore Alice Springs Rare earths
Olympia Resources Harts Range Alice Springs Garnet sands
Altona Resources Arkaringa Arkaringa SA Coal
Goldstream Cairn Hill Coober Pedy SA Magnetite/copper
Goldstream Peculiar Knob Coober Pedy SA Iron ore
BHP Billiton Olympic Dam Roxby Downs SA Copper concentrate
Sources: Department of Regional Development, Primary Industry, Fisheries and Resources, Department of the Chief
Minister
In addition to the $8 million invested in 2007 and 2008 in track infrastructure,

additional passing loops are likely to be funded by resource companies to
improve the efficiency of the line when projects come on stream. Loading
sidings will also be constructed as required under commercial arrangements
between FreightLink and mine operators.
Transport of up to 1.6 Mtpa of copper concentrate from the Olympic Dam

operations in South Australia would require construction of a line from the
mine site to Pimba in South Australia, connecting with the Trans Australia and
Adelaide to Darwin lines.
The proposed development of the Wonarah phosphate deposits east of

Tennant Creek has prompted the examination of a rail link between the
minesite and Tennant Creek to join up with the Adelaide – Darwin rail line.
Other phosphate prospects, such as IPL‟s Phosphate Hill mine near Mount
Isa, have also been identified as potential users of a rail link form Queensland

to connect with the line under study. While at this stage, the projected
transport task does not appear likely to be sufficient to support a rail link, the
region remains relatively unexplored, with potential for additional resources to
be identified that could underpin a rail link.
In addition, the potential for bulk zinc concentrate movements out of Mount
Isa to Darwin is also the subject of Northern Territory Government attention
given the congestion problems experienced at the Townsville port.
7.3 Ports
The Port of Darwin is a naturally occurring deep water port, with its main
facilities located at East Arm. It is Australia‟s closest port to South East Asian
markets. This strategic geographic location and its transport links will ensure
that it plays a fundamental role in future growth of mining exports.
The port facilities at East Arm are connected to the national rail network
through the Adelaide to Darwin railway to allow seamless movement of goods,
including bulk mineral and bulk liquid trades. Integration of port facilities with
the railway supports the Territory Government‟s vision of establishing Darwin
as a regional transport and logistics centre and an integral part of the
AustralAsia trade route.
Darwin Port is well equipped to handle container and general cargo, bulk
minerals, bulk liquids including petroleum, and live cattle. The Darwin Port
Corporation also operates facilities for non-trading vessels. These include
offshore oil and gas rig service vessels, and cruise, naval, fishing and pearling
vessels. The port plays a significant role as a supply, service and distribution
base supporting research and exploration of the oil and gas resources in the
nearby Timor Sea. This area of activity is a key focus for the Northern
Territory complements the delivery of similar services to the growing minerals
sector.
Total trade across the Port of Darwin‟s wharf facilities for 2006-07 increased
by 384 000 tonnes or 35.6 per cent on 2005-06 total tonnage. LNG
production in the region is responsible for 3.5 million tonnes of export trade
annually. There were 52 LNG carrier calls completed during 2006-07 at the
Port of Darwin‟s LNG facility, making it Australia‟s second largest LNG hub.
A growing number of mining projects are benefiting from the installation of a

$24 million bulk materials export facility at East Arm Wharf. Currently, iron
ore and manganese are exported at the combined rate of about 1.5Mtpa. The
current facilities have capacity for up to 2.5 Mtpa. Beyond that, major
investment is required for an additional rail unloading facility, stockpile
expansion, conveyors and a shiploader.

Darwin has been nominated by OZ Minerals as the preferred export port for
copper concentrate from its Prominent Hill mine in South Australia. Securing
the Prominent Hill business was an important milestone for the Port of
Darwin and it is expected that around 240,000 tonnes will pass through the
port each year.
BHP Billiton‟s Olympic Dam operations, when the proposed expansion

proceeds, could transport up to 1.6 Mtpa of copper concentrate a year to
Darwin for export.
The proposed Wonarah phosphate mine will produce at an initial rate of 1

Mtpa from 2010 and at 3 Mtpa from 2011.
Petroleum products remain the dominant import cargo, accounting for 71 per
cent of the port‟s import tonnage. Petroleum product imports increased by 4.4
per cent in 2006-07, in line with increased economic activity in the Territory.
Imports of bulk sulphuric acid at the rate of about 170,000 tonnes per annum
supply the mining industry.
Single user ports are also located at Nhulunbuy (Rio Tinto Alcan), Groote
Eylandt (GEMCO) and Bing Bong, near Borroloola to service Macarthur River
Mine, and a mineral sands loading facility at Port Melville in the Tiwi Islands.
The Bing Bong facility, in particular, could be available for further
development if other mines open up in the region.
Darwin Port Corporation (DPC) is seeking to expand its facilities to handle

higher volumes of bulk minerals and other freight. Funding has been sought
through Infrastructure Australia as well as additional Northern Territory
Government funding for capital to deal with projected growth. Within this
context major players such as BHP Billiton are likely to develop their own bulk
loading and storage facilities. DPC is finalising a Land Use Planning
Framework that will make the projected infrastructure needs to support
increased minerals development clearer.
For export of copper concentrate from Olympic Dam, BHP Billiton would
construct a dedicated closed system to prevent the release of dust during
transportation, transfer and at the storage and handling facility at East Arm.
The concentrate would be transferred from the storage facility to dedicated
export vessels in enclosed conveyors and a dedicated BHP Billiton ship loader
to be installed on the East Arm wharf.
7.4 Airports
Air transport is an important enabler of economic growth in the Northern
Territory, particularly given its isolation and vast distances. Major airports
capable of jet aircraft operations are Darwin, Alice Springs, Ayers Rock and

Nhulunbuy. Darwin International Airport (DIA) is an international gateway

and capable of handling the largest aircraft currently in operation. DIA serves a
range of full-service and low-cost domestic and international airlines, air freight
operators, tourism, business and holiday traffic as well as medical and general
flights to Northern Territory‟s remote regions. The airport is co-located with
Royal Australian Air Force Base Darwin, an important strategic facility for the
RAAF.
An expansion of the DIA passenger terminal and apron is planned on the back
of the development of DIA as a low cost carrier hub with flights to several
Australian capitals and a variety of Asian destinations. Alice Springs airport
receives international charter flights from Japan on a seasonal basis.
Airport Development Group (ADG) owns and operates three airports in the
Northern Territory – DIA, Alice Springs and Tennant Creek airports. In total,
the on-airport and off-airport businesses employed more than 1,600 people in
2006-07.
In the 2007-08, there was a total of 1.56 million passengers, of which 173,243
were international, 1,285,135 were „major‟ domestic (that is, excluding
passengers from within NT), and 103,838 were regional. Average annual
growth rates over the preceding decade are -0.2 per cent, 5.5 per cent and 2.4
per cent respectively.
Domestic services are operated to all Australian capital cities and some regional
centers by Airnorth, Vincent Aviation, Skywest, Virgin Blue, Jetstar and
Qantas. International services are operated by Qantas, Jeststar, Garuda
Indonesia and Airnorth.
FIFO operations centred on Darwin include McArthur River mine and the
Newmont Tanami operations. The large scale mining operations of Gove and
Groote Eylandt are also dependant on air transport for movement of people
and time-sensitive freight.
Air services between Darwin, Kununurra and Broome provide important

transport links to the mining industry in the Kimberley.
Mining operations at Tenant Creek are hampered by the lack of regular

passenger transport (RPT) services and rely on charter services.
7.5 Gas pipelines

Pipelines are the fastest and safest method of transporting large volumes of
natural gas over long distances. In the Northern Territory, they provide a vital
energy link for power generation and industry.

The Bayu-Undan field, located in the Joint Petroleum Development Area

(JPDA) in the Timor Sea, approximately 500 kilometres north of Darwin and
250 kilometres south of Timor-Leste, currently produces more than 100 000
barrels of liquids per day. The gas product is sent through a 502 kilometre sub-
sea pipeline to the Darwin LNG Plant where it is processed and shipped by
specially built transport tankers to Japan for the Tokyo Electric and Tokyo Gas
companies.
NT Gas Pty Limited, in its capacity as trustee of the Amadeus Gas Trust,
operates and manages over 2,000 kilometers of high pressure natural gas
pipeline and facilities in the Northern Territory, including the new pipeline
linking the Blacktip gas operations to the Amadeus Basin – Darwin pipeline
and the pipeline to the McArthur River mine.
Envestra Limited operates the natural gas transmission pipeline that connects
the Palm Valley gas field to Alice Springs. The 200 millimeter diameter pipeline
supplies gas to the Northern Territory‟s Power and Water Corporation for
power generation in Alice Springs.
Another pipeline is being constructed to interconnect the Darwin LNG Plant

and the Amadeus Basin – Darwin pipeline. This will enable back-up supplies
of gas to be provided in the event of supply shortfall or interruption.
In 2005, the then Alcan Gove alumina operations ended negotiations for gas
supply from the Blacktip field and wound up the joint venture that was to
build the Trans Territory Pipeline to supply the refinery. The Gove power
station has remained fuelled by heavy oil.
7.6 Electricity
Reliability of electricity supply in the Darwin region has been the subject of
public concern during the past year. While lower reliability than in southern
metropolitan and regional areas is to be expected during extreme weather
events, the reliability of electricity system itself appears to be a problem due to
a maintenance backlog and under-investment in new or replacement assets.
The NT Utilities Commissioner reported in March 2009 that remedial
spending is required in the form of both catching up on a maintenance backlog
and rehabilitating assets overdue for replacement or renewal.
The Northern Territory‟s Power and Water Corporation has implemented a

five year, $1 billion program to build, upgrade and maintain facilities. Power
and Water has allocated $825 million for capital and $258 million for repairs
and maintenance initiatives under this program across power generation,
power networks, water, sewerage and business services.

7.7 Telecommunications
While Darwin has high capacity optic fibre cable links to the rest of Australia,
the overall utility of telecommunications in the Darwin region lags many more
densely populated regions in Australia. Lack of competition in backhaul
capacity raises costs, similar to the experience of Tasmania and regional
Western Australia. High speed broadband coverage is mostly limited to the
Darwin metropolitan area, with no or patchy services in fringe lifestyle and
rural areas, and remote areas, including those hosting mining operations.
7.8 Community infrastructure

For its size, Darwin has a good standard of community infrastructure and
associated services. It offers modern, comprehensive facilities and services
such as schools, VET and tertiary institutions, health care facilities, sporting
and recreation facilities, and child and aged care facilities at levels that
approach larger cities.
Darwin‟s housing prices and rental costs have continued to grow strongly
during 2008 and into 2009, despite a downturn in real estate elsewhere. This is
indicative of both strong demand and shortages of land and dwellings.
Anecdotally, housing prices and rental costs are now at a level where they are a
disincentive for people to move to and remain in Darwin. Supply of
developed land is a high priority for the Northern Territory Government.
In the areas outside Darwin metropolitan area, the coverage and standard of
community infrastructure is fair to poor. There has been longstanding under-
investment in key community infrastructure such as schools and health
facilities, as evidenced by the expenditure that is now being applied to many
Indigenous communities to help close the gap on Indigenous disadvantage.
7.9 Infrastructure planning and issues

Several recent planning studies for the Darwin region have focussed on
infrastructure include:
• Minerals Study of the Central Region of the Northern Territory (2002)
• Northern Australia Transport Infrastructure Study, Department of
Business, Industry and Resources Development (2005)
• NT 10 Year Infrastructure Strategy, Department of Planning and
Infrastructure (to be released 2009)
• Territory 2030 - Fresh Ideas, Real Results – a 20 year strategic plan which
will set the future direction for the Territory
• 15 Year Strategic Land Use Plan for the Greater Darwin Region

• Darwin Port Corporation Land Use Planning Framework (being

developed)
• Land Development Corporation Master Plan for East Arm.
Infrastructure provision and use in the Darwin region and the wider Northern
Territory are hindered by factors of large distances, small population, small
economic and tax base, rapid growth in resources development and
population, and climatic extremes. At the same time, industry and the
community need high levels of infrastructure services, in part to deal with these
factors. For example, efficient transport infrastructure is needed to move
material and people over long distances, but in the Northern Territory
environment, construction and maintenance are expensive. As well, the
relatively low throughput until recently and in the near future has meant that
there have been few scale economies for ports and railways.
Relative to the infrastructure task, the Northern Territory Government has

very limited resources. As a consequence, infrastructure provision often lags
demand. In some cases, maintenance has also fallen behind the rate required
to maintain the serviceability of infrastructure, for example on roads and
electricity systems.
The Northern Territory is in the midst of high growth in industrial output,

population and overall economic activity. It is facing a period of even higher
growth when renewed mining investment occurs and new LNG projects are
committed.
Faced with these challenges, the NT Government has made submissions to the
Australian Government for additional infrastructure assistance. The NT
Government is also developing a 10 year Infrastructure Strategy to guide
infrastructure development and management. The strategy will cover
infrastructure of all types.

8 Growth scenario and infrastructure

The sections that follow examine the Darwin region minerals projects and
those that will utilise Darwin region that are currently in the pipeline. We then
discuss their implications for existing and planned infrastructure. We have
included those projects that have been reported in various ABARE and the
NT Government documents and have supplemented that information through
our own research and consultations with industry. Section 8.1 discusses
potential growth in minerals production under what could be regarded as a
scenario that broadly aligns with the Advance scenario. This discussion is
summarised in Table 4. Table 5 summarises the infrastructure requirements
and gaps under this growth scenario.
To the extent that some minerals projects are either delayed or do not proceed
and actual growth is therefore less than that discussed below, the demands on
infrastructure will be reduced, or at least delayed.

Table 4 Summary of growth scenario to 2020 for the NT and Darwin growth region
Gold Expansion of some existing mines and several new mines (eg Cosmo Deeps, Maud Creek) post 2011
Iron ore Increased production from existing mine (Frances Creek) and possible new mine with total production
of 6Mtpa
Uranium Expansion of existing Ranger mine and possible new Bigrlyi plant post 2011
Possible two or three new uranium mines in Top End and Central Australia
Manganese Expansion of both Groote Eyelandt (to 3 Mtpa) and Bootu Creek operations (to 1Mtpa)
Base metals Expansion of existing project (McArthur River) and opening of two new projects shipping a total of
200,000tpa by rail
Prominent Hill and Olympic Dam operations shipping concentrate via rail to Darwin at total 1.9Mtpa
Other metals Nolans rare earths project post 2011, Molyhill tungsten project post 2010. Total transport tonnage up to
700,000 tpa
LNG New INPEX LNG plant commencing construction 2010 and operations post 2014; second DLNG train
commencing construction 2012 and operations post 2015.
Phosphate New phosphate mine at Wonarah, producing 3Mtpa that is shipped via Darwin
Petroleum Several new oil and condensate projects (Montara/Skua, Puffin, Talbot oil fields, Crux liquids project)
2009 – 2013
Potential coal to liquids production In South Australia, with liquids shipped via Darwin
Data source: ABARE’s list of major mineral and energy projects, October 2008; Department of Regional Development, Primary Industry, Fisheries and
Resources, September 2008
Growth scenario and infrastructure 22

Table 5 Summary of infrastructure gaps and requirements under the growth scenario to 2020 for the
Darwin region and associated supply chains
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
heavy traffic reliable 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 • Improved road access to remote Indigenous communities,
which will improve their connectivity to mainstream community
and economy
Railways • Additional loading, unloading facilities • New loading sidings and associated infrastructure to service
and rail capacity (including passing new NT mineral developments along the Adelaide to Darwin
loops) required for minerals traffic from railway and in South Australia
the NT and SA • 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 2.5 Mtpa 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 passenger traffic
traffic
Energy • Electricity supply reliability in parts of • Remotely located companies are responsible for generation
Darwin is poor and supply of electricity to their own operations
• Generation, transmission and • PWC will need to upgrade Darwin supply infrastructure to
distribution capacity inadequate for improve reliability and deal with increased demand from
growth industrial, 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 wastewater • Water and wastewater facilities • Water and sewerage upgrades required for Darwin population
inadequate for growth growth and industrial expansion
• Responsibility for water supply and wastewater management
falls on the mine operator
Business infrastructure • Lack of common user facilities for • An upgrade to the existing common user facility for the
large-scale fabrication, storage and fabrication of engineered modules, storage of semi-fabricated
supply structures and servicing of vessels and large-scale equipment.
• Supply base for offshore oil and gas operations
Community infrastructure • Telecommunications services in rural • Land for housing, schools, health care facilities, sport and
and remote areas are poor recreation and child care will all need to be addressed. Doing
• Land and all classes of community so in the Darwin metropolitan area is likely to be easier than in
infrastructure are inadequate for remote areas
growth • Upgrade telecommunications services in rural and remote
areas

8.1 Growth scenario, Darwin 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.
For example, Darwin is the import port for fuel for much of the NT minerals
industry and is the export port for minerals from outside the region, including
concentrate from South Australian mines in the future. Darwin is also the
principal supply base for offshore oil and gas operations in the Timor Sea.
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.
As outlined in section 3.1, the principal minerals currently produced in the

Darwin region are gold, iron ore and base metals. Natural gas and oil reserves
are contained in the Timor Sea, with gas supplied to the current Darwin LNG
plant. Further petroleum developments are likely in the area.
8.1.1 Mineral production and export
The growth scenario described here is based on currently proposed minerals

developments in the Darwin region and likely to utilise Darwin as a service and
export hub. It is a scenario for mineral developments that could occur if
available and broadly aligns with the Advance scenario. If realised, this
scenario would cement Darwin‟s role as Australia‟s northern minerals and
energy hub.
If infrastructure falls below requirements, then growth will fall short of

potential.

• expansion of mining from current mineral projects over current rates,
including iron ore, manganese, base metals, gold and uranium
• commencement of new minerals developments, including base metals,
uranium, rare earths, iron ore, gold and phosphate
• commencement of rare earths processing near Darwin from ores mined
near Alice Springs
• commencement of phosphate production at Wonarah east of Tennant
Creek
• strong growth of bulk exports through the Port of Darwin in the form of
iron ore, manganese, base metal concentrates and phosphate.

Total mineral tonnages being shipped by road and rail and through the Port of
Darwin could reach 10 Mtpa.
8.1.2 Resources services
In addition to hosting new minerals developments, the growth scenario

described here would also see the Darwin region expanding its role as a major
resources services centre. Mining services expansion under this scenario
includes:
• development of an integrated fabrication and engineering industry capable
of constructing complex medium-sized modules for resources projects
• enhancement of capabilities to supply and maintain major projects with
greater reliance on local technology and labour, and less on FIFO
maintenance workers
• enhancement of professional services offering in Darwin, able to offer local
business, legal, accounting, engineering and environmental services to
resources companies
• supply of goods and services from Darwin to other States and overseas.
8.1.3 Oil and gas development
Oil and gas development under the Advance scenario includes:

• offshore gas production from two facilities in the Timor Sea and offshore
oil production from an additional two facilities
• an additional on-shore two-train LNG plant, with an second train at the
existing DLNG plant
• pipelines feeding gas to the LNG facilities from the two Timor Sea fields,
and from the Browse basin
• a domgas pipeline from the Blacktip project supplying gas to Darwin and
to mines and power generation elsewhere in the NT.
The growth scenario in the Darwin region would require a high level of
The infrastructure requirements set out below take into account developments
in both the minerals sector and the energy sectors, as well as in services to the
resources sector.
The Northern Territory Government is developing a 10 year infrastructure

strategy that includes a high growth scenario for Darwin that approximates the
Advance scenario. If the plan is fully implemented and updated periodically as
proposed, it will provide many of the facilities required to support growth.
The limited financial resources of the NT Government will limit its ability to

provide high cost infrastructure such as major port upgrades. Close

involvement of the Australian Government and the private sector is required.

Impediments to infrastructure provision are discussed in section 8.2.
Roads
Some upgrades of the Stuart Highway and trunk roads in Darwin are required
to accommodate more mineral traffic and traffic associated with gas and
industrial developments. These upgrades would continue upgrades undertaken
in recent years and planned.

roads.
Railways
The Adelaide to Darwin railway is a key facility for the transport of mineral
products both from the Darwin region and from as far away as South
Australia. The railway is currently operating below capacity. However, new
loading sidings and associated infrastructure may be required to service mineral
developments in the region. This sort of infrastructure is generally provided by
the rail operator under a commercial arrangement with the mine operator.
The growth scenario will require the duplication of the current railcar
unloading facility at the Port of Darwin. The Darwin Port Corporation
proposes to fund and manage this.
If minerals projects in SA proceed with existing plans to export their

production out of Darwin then this may require some additions to rail
infrastructure. Similarly, the potential development of Mount Isa to Tennant
Creek rail link may have implications for the volume of traffic on the railway
into Darwin and necessitate infrastructure upgrades.
Ports
The Port of Darwin is the major port in the region. Port Melville, on nearby
Melville Island has exported mineral sands until recently and may do so in
future when mining operations recommence.
The Port of Darwin‟s mineral stockpiling and reclaiming facilities and the
shiploader will require major upgrades to deal with the big increase in export
tonnages envisaged. Storage sheds and a possible second shiploader will be
required at some point, particularly if minerals projects in SA proceed with
their plans to export their production through this port.

Airports
The Advance scenario will generate the need to upgrade Darwin Airport
facilities to handle greater passenger numbers. NT Airports is planning for this
upgrade.
Energy
Each mining operation under the Advance scenario requires electricity

supplies. The companies involved are responsible for generation and supply of
electricity to their own operations where these are remote from networks.
Where the mining and export operations are within network areas (in general
close to Darwin and to the transmission line to Katherine) these operations
have the option to have electricity supplied by the generator and network
operator under normal commercial arrangements.
The NT Government owned utility, Power and Water Corporation (PWC), is

planning for increased demand from industrial, commercial and domestic
customers. However the resources industry has raised concerns about the
levels of non-transparent taxation in this area.
The Blacktip gas project will result in additional gas becoming available for use
by minerals operations. Mining operators would negotiate commercial
arrangements for gas supply and transport with the operators of the gas field
and/or Power and Water Corporation and separately the pipeline operator.
The Darwin LNG project, operated by ConocoPhilips, may pride another

sources of gas if it is expanded, fed by a new offshore field such as Blacktip.
This gas could supply gas processing industries. Similarly, the INPEX Ichthys
LNG project, if it proceeds, could provide a gas supply option.
Water supply and wastewater management for mining operations is the

responsibility of mine operators.
In Greater Darwin, water supply is the responsibility of the government owned

utility, PWC. Increasing population will generate increased demand for these
services.
Telecommunications

telecommunications are the responsibility of providers, with government
providing CSO payment for telecommunications services in remote regions.

Telecommunications services in the inner Darwin are generally adequate, but

away from the high density residential areas, access to broadband is poor, with
slower and less reliable satellite broadband often the only alternative. Direct
government involvement may be required to drive the level of investment
required to develop fibre optic links.
Industry infrastructure
A key piece of industry infrastructure identified for Darwin is a common user

facility that is able to be accessed by a variety of firms for the purpose of
fabrication of engineered modules, storage of semi-fabricated structures and
servicing of vessels and large-scale equipment. During 2008, a pre-feasibility
study was undertaken for such a facility and the Government opened a
„common-user area‟ with minimal facilities. A more comprehensive facility
would enable Darwin industry to participate more fully in resources projects.
Other business infrastructure
will require government and the private sector to plan and develop. The
Northern Territory Government is planning for this.
increased populations in Darwin as a result of minerals and energy industry
• Land for housing: adequate land is required to a timeframe that meets the
needs of population growth so as to avoid land shortages and consequent
steep price increases
expanded and upgraded to service increased populations and to meet
contemporary health care standards (the Royal Darwin Hospital is now 30
years old)
• Child care: additional child care and children‟s services facilities will be
required to meet the needs of additional families.

Addressing this infrastructure needs in the Darwin metropolitan area is likely

to be easier than in remote areas. However, the ability of mining operators to
attract and retain workers will depend in part upon the degree of access to
these kinds of community facilities.
Remote community infrastructure requires major upgrading to provide

Indigenous people with the services required to enable them to participate in
the mainstream economy and improve their social situation. The NT and
Australian Governments are working together in a major investment program
to provide housing and other infrastructure and this will need to continue.
8.2 Infrastructure impediments

The principal impediments to timely infrastructure provision to support
minerals growth in the Darwin Region and Northern Territory are as follows:
Limited financial capacity
The Northern Territory Government has very limited financial capacity to

fund infrastructure, including through government owned enterprises, due to:
• high rates of growth
• competing demands
• limits on borrowing, including debt to revenue ratio caps and borrowing
difficulties.
Commonwealth involvement is required to supplement available funds.
Infrastructure deficits
Investment in both new infrastructure and maintenance in the Northern

Territory has fallen below requirements to sustain service levels. There is now
a substantial infrastructure deficit across several infrastructure classes including
roads and health facilities. Coordinated efforts and Commonwealth
involvement is required to overcome deficits.
Integrated planning
There has been a lack of integrated planning of infrastructure in the Northern

Territory, which has resulted in inconsistent approaches across infrastructure
classes. This has also resulted in current and potential land use conflicts, in
particular between residential land and future land for industry.
There has also been a lack of coordination with the Commonwealth.
The new Northern Territory 10 Year Infrastructure Strategy will put in place a
fully integrated approach to infrastructure planning and provision. The new

COAG approach should improve Commonwealth – State/Territory

coordination.
Commercial pressures
The voluntary administration status of FreightLink calls into question the

ability of the company to invest in upgrades and expansion of rail facilities to
meet minerals industry needs. Sale of FreightLink to a viable enterprise is an
imperative to enable new investment.

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Minerals Council of Australia

Vision 2020 Project

Prepared by ACIL Tasman for the Minerals Council

Vision 2020 Project: The

Prepared for the Minerals Council of Australia

Melbourne (Head Office) Brisbane Canberra

For information on this report

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

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

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

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

The principal infrastructure shortcomings in Western Australia currently are:

Figure 1 Regional development regions, Western Australia

Source: Department of Local Government and Regional Development 2009

The Kimberley growth region

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

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

The Kimberley requires major new infrastructure of all types to support

Telecommunications require extensive upgrade to provide the levels of service

The Pilbara growth region

Figure 2 Pilbara population projections to 2020

In order to accommodate large growth in minerals exports additional port

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

Onshore LNG developments may result in additional domestic gas becoming

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

Mid West growth region

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

Table 4 summarises infrastructure requirements for the Mid West in 2020

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

Minerals development and population growth will require development of a

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

Minerals development will result in increases in electricity demand.

Enhanced community infrastructure will be needed to service increased

Goldfields-Esperance growth region

Table 5 summarises infrastructure requirements for the Goldfields-Esperance

South West growth region

Table 6 summarises infrastructure requirements under the growth scenario to

Longer term priorities include providing adequate infrastructure to cater for

Figure 5 Queensland mineral, petroleum and energy resources

Source: Department of Mines and Energy

Mt Isa – Townsville growth region

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

Realisation of the growth scenario would greatly increase infrastructure

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

Newlands-Abbot Point/Bowen growth region

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

The Chinese aluminium producer CHALCO is investigating building an

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

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

Northern Bowen Basin-Mackay (Goonyella) region

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

The Fitzroy growth region

Alumina refining and aluminium smelting also generate significant resource

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

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

Surat Basin growth region

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

Ipswich growth region

New South Wales

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

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

New South Wales 27