20 September 2017 Outlook for Western Australia Growth and ... · 2001-02 2003-04 2005-06 2007-08...
Transcript of 20 September 2017 Outlook for Western Australia Growth and ... · 2001-02 2003-04 2005-06 2007-08...
Outlook for Western Australia Growth and opportunities
28th Biennial Ports WA Forum
Geoffrey Wedgwood, Deputy Director General Resources Development and Defence
20 September 2017
Department of State Development
Industry Development
Western Australia Tourism Commission
Department of Jobs, Tourism,
Science and Innovation
International Education
Office of Science
Office of Defence West
Western Australian Government – global offices
Current Context
WA merchandise exports
0
50
100
150
200
250
300
$0b
$50b
$100b
$150b
2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14 2015-16
Export values Export volumes (1996-97 = 100)
Transition from investment to exports
Forecast
$0b
$25b
$50b
$75b
$100b
2008-09 2012-13 2016-17 2020-21$0b
$50b
$100b
$150b
$200b
2008-09 2012-13 2016-17 2020-21
Iron Ore LNG Other
Forecast
Investment Exports
Major Asian export markets
$0b
$20b
$40b
$60b
$80b
$100b
$120b
2001-02 2006-07 2011-12 2016-17
China Japan Korea Hong Kong Singapore India Taiwan
WA’s top services exports – by industry
$0.4b
$0.6b
$1.0b
$1.6b
$2.1b
$6.4b
$0b $2b $4b $6b $8b
Technical, trade-related & other business
Business travel
Transport
Education-related travel
Personal travel
Total services exports
2016
2006
Industry Trends
WA iron ore exports – by port
$0b
$10b
$20b
$30b
$40b
$50b
2012-13 2014-15 2016-170 mt
200 mt
400 mt
600 mt
800 mt
1000 mt
Port Hedland Port Walcott Dampier OtherNote Bar = volume (left axis) Line = value (right axis)
Iron ore outlook Chinese demand
• Economic conditions in China have supported the iron ore price in recent months
• Chinese demand is expected to hold up, but additions in low-cost supply will see some downward pressure on the price
What next?
• Western Australian iron ore exports:
2005-06: 243 million tonnes
2015-16: 757 million tonnes
2020-21: 835 million tonnes
• Iron ore benchmark price:
2017-18: US$67.2 per tonne
Major iron ore developments*
Project Anticipated Capital
Expenditure
Silvergrass mine expansion $468 million
Yandicoogina Oxbox $247 million
Western Turner Syncline Stage 2 mine extension
$200 million
Koolan Island seawall re-build $97 million
Balla Balla mine, rail and port $5.6 billion
Koodaideri mine $3.1 billion
South Flank deposit up to US$3.2 billion
Firetail mine replacement up to $1.5 billion
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*not an exhaustive list
WA LNG exports – by project
0 mt
10 mt
20 mt
30 mt
40 mt
50 mt
2012-13 2014-15 2016-17 2018-19
North West Shelf Pluto Gorgon Wheatstone Prelude
Projected*
*assumes projects will operate
at full nameplate capacity
Liquefied Natural Gas outlook New developments
• Existing projects are now in their final stages of construction and commissioning
• Future ‘backfill’ investments to maintain production at existing project capacities
LNG demand growth
• LNG demand is expected to grow rapidly, however additions to global supply will outstrip demand in the short-term
• New supply (including backfill) may be required from the mid-2020s
Other petroleum exports
In addition to LNG, the State also has other significant petroleum export markets. WA petroleum exports in 2016:
WA gold exports – by market
$0b
$5b
$10b
$15b
$20b
2002 2004 2006 2008 2010 2012 2014 2016
China United Kingdom Singapore Thailand India Others
Note: China includes Hong Kong
Gold outlook
Gold price and supplies
• WA gold sales volumes remained fairly steady, however increased gold price → 10% increase in sales value in 2016
• Gold price supported by a softer US dollar and Federal Reserve prospect of raising interest rates occurring slower than previously expected
Major gold developments*
Project Anticipated Capital
Expenditure
Gruyere JV $532 million
Mt. Morgans $220 million
Gwalia Deeps mine extension
$100 million
Dalgaranga $86 million
Monty Copper-Gold JV $75 million
Millenium up to $30 million
Matilda/Wiluna expansion $114 million
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Under consideration *not an exhaustive list
Lithium outlook Increasing global demand • The battery market is growing at an annual average rate of 15% a year • Battery demand has the potential to create big opportunities for WA’s mineral producers
New projects • Current mine production ranges from DSO to 4-6% lithium concentrate • Further processing projects under way/planned will produce Lithium hydroxide
and Lithium Carbonate
Other WA minerals export markets – 2016
Country Value ($billion) Country share
Nickel Value ($billion) Country share
Malaysia 0.4 28%
China 0.3 19%
Taiwan 0.2 14%
Others 0.6 38%
Total 1.5 100%
Base Metals Value ($billion) Country share
South Korea 0.87 27%
China 0.76 24%
Philippines 0.6 19%
Others 0.97 30%
Total 3.2 100%
Alumina and Bauxite Value ($billion) Country share
United Arab Emirates 0.97 22%
Bahrain 0.6 14%
Mozambique 0.38 8%
Others 2.5 57%
Total 4.5 100%
includes copper, lead and zinc
WA agricultural exports – by market
$0b
$2b
$4b
$6b
$8b
2003-04 2007-08 2011-12 2015-16
China Indonesia Vietnam Japan South Korea Others
Agribusiness outlook
Global demand • Global trade flow analysis of 600+ agrifood
products to high-potential Asian and Middle Eastern markets → potential for WA agribusinesses
• Future of the WA agrifood sector is highly dependent on exports, particularly to Asia
• Businesses must become increasingly internationally competitive and capture Asia’s high value, premium markets
Major agribusiness projects*
Project Anticipated Capital
Expenditure
Project Sea Dragon US$1.45b (all stages)
Wagyu Beef and Irrigation $200m
Ord East Kimberley expansion
$517m
*not an exhaustive list
WA Defence industry – Defence West • The State Government is committed to enhancing the capability
and competitiveness of the defence industry in WA: – more than $400m invested in common use infrastructure at the
Australian Marine Complex (AMC) in Henderson – appointed a Minister for Defence Issues the (Hon. Paul Papalia, CSC) – established the Office of Defence West, and – appointed a WA Defence Advocate to champion the interests of the
WA defence industry
• Henderson is already home to a world-class naval shipbuilding, repair and maintenance and heavy engineering industry: – selected by the Navy as the site for the continuous build of minor war
ships