Australian Institute of Mining and Metallurgy, Southern ... · •QRC is a not-for-profit peak...
Transcript of Australian Institute of Mining and Metallurgy, Southern ... · •QRC is a not-for-profit peak...
Australian Institute of Mining and Metallurgy,
Southern Queensland Branch
30 April 2015
Chief Executive, QRC
Green shoots, burning issues
Michael Roche
CONTENTS
QRC introduction 1 Queensland
resources sector context
Green shoots
Burning issues 2 3 4
• QRC is a not-for-profit peak industry association representing the commercial
developers of Queensland’s minerals and energy resources
• 78 full members – explorers, miners, mineral processors, site contractors, oil and
gas producers, electricity generators
• 193 service and associate members – the providers of goods or services to the
sector
• A multi-commodity, state-based advocacy body formed in 2003 as successor
to the Queensland Mining Council (itself a merger of coal, metals and gas
producers)
WHO IS THE QUEENSLAND RESOURCES COUNCIL?
78
full
members
– big and
small
158
service
members
35
associate
members
Aberdare Collieries
Adani Mining
Allegiance Coal
Altona Mining
Anglo American
Aquila Resources
Areva Resources Australia
Arrow Energy
Bandanna Energy
Beach Energy
Bengal Coal
BHP Billiton Cannington
BHP Billiton Mitsubishi Alliance
Caledon Resources
Cape Flattery Silica Mines
Carabella Resources
Carbine Resources
Carbon Energy
Carpentaria Gold
Civil Mining and Construction
Coalbank
Cockatoo Coal
ConocoPhillips Australia
Downer EDI Mining
Ensham Resources
ERM Power
Evolution Mining
Exco Resources
Glencore Coal
Glencore Copper
Glencore Zinc
Guildford Coal
GVK
International Coal
Investigator Resources
Isaac Plains Coal Management
Jellinbah Resources
John Holland
Kalimati Coal Company
Laramide Resources
Linc Energy
Lucas Group
Macmahon Holdings
Mastermyne
Metallica Minerals
Metro Mining
Millmerran Power Mgt
Minerals and Metals Group
Mitsubishi Development
Mitsui Coal Holdings
Moreton Resources
New Hope Group
Norton Gold Fields
Origin Energy
Paladin Energy
Peabody Energy
QCoal
QER
QGC
Queensland Coal Investments
Rio Tinto Alcan
Rio Tinto Coal Australia
Rockland Resources
Santos/TOGA
Senex Energy
Shell Australia
Sibelco Australia
Sojitz Coal Mining
Stanmore Coal
Summit Resources
Thiess
U & D Mining Industry (Aust)
Vale
Valiant Resources
Wesfarmers Resources
Westside Corporation
Whitehaven Coal
Yancoal Australia
We built THIS city on rock and COAL
#BrisbaneHiViz
QUEENSLAND RESOURCES TODAY
> Queensland #1 source of traded coking
coal
> Lead #2 in the world
> Zinc #3 in world
> Silver #6 in the world
> Bauxite #6 in the world
> Copper #12 in the world (#1 in Australia)
> Australia (with Qld CSG) world’s #2 gas exporter; potential #1 by 2020
COPPER $US2.5 BN
ZINC $US2.2 BN
ALUMINA $1.8 BN
SILVER $US0.9 BN
LEAD $US1.3 BN
GOLD $US1.4 BN
BAUXITE $0.8 BN
ALUMINIUM $1.2 BN
Source: BREE, IHS McCloskey
BLACK THERMAL COAL
$US4.9 BN
BLACK PRIME COKING COAL
$US16 BN
CSG $1.1 BN
2014 VALUE OF
PRODUCTION:
$AU34 BILLION
Green shoot #1: All Qld LNG plants exporting in 2015
43% of incremental gas demand from Asia 2012-18
QCLNG (2014) 8.5 MTPA (BG Group, CNOOC) * BG Group target of $AU94 billion
takeover bid by Shell
GLNG (2015) 7.8 MTPA (Santos, Petronas, Total,
Kogas)
APLNG (2015) 9.0 MTPA (Origin Energy,
ConocoPhillips, Sinopec) Queensland LNG helping Australia to
#1 LNG exporting nation by 2020
Green shoot #2: Bowen Basin poised to rebound
Green shoot #3: Surat Basin vote of confidence
Green shoot #4: Galilee Basin potential
Coal prices’ long journey south (since 2011)
Slowing of growth in China and continued poor economic performance in Europe that impacts steel
production and therefore coking coal demand. Coking coal prices flat-lining. Continued oversupply
of thermal coal in the seaborne market but recent trends see some uptick in spot prices. 12
Record coal exports – replacing price with volume
QUEENSLAND COAL EXPORTS (Mt) 2002 - 2015
Industry needs cost structure to withstand the cycle
‘We are struggling to survive and the current structure of the fixed costs on our industry i.e. take-or-pay on rail, port, power, water, accommodation etc. makes it very difficult to make a decision around 'survival' strategies.’
‘Moving from construction to operations phase it is imperative that we ensure the cost base of the business allows for a positive economic outcome.’
BUSINESS ENVIRONMENT – CEO SENTIMENT
QRC asks members: ‘To what degree will these macroeconomic factors adversely
impact upon the objectives of your organisation over the next 12 months?’
15
> Australia (Queensland) to remain leading exporter of coking coal (60% share)
> Coking coal trade grows to 40% of global production
> Queensland has coking coal inventory of 11 billion tonnes (4 billion suited to open-cut)
> Large suite of potential projects of high-quality coking
> Coal preferred fuel for power generation in Asia due to availability, economics
> India’s import demand to lift from 126MT (2013) to 429MT (2040)
> Major India interest in new Queensland thermal coal province, the Galilee Basin
> Chinese coal imports expected to level off by 2025, but above current levels
> Coal imports in ‘other Asia’ (e.g. Malaysia, Thailand, Vietnam, Philippines) trebles by
2040
> Before 2030 Australia regains position from Indonesia as leading coal exporter
* International Energy Agency Nov 2014
Queensland coal trade facts: 2014 World Energy Outlook*
Source: BP Statistical Review, Feb 2015
LONG TERM OUTLOOK
Global coal demand by key region
Inputs to power in China
Global demand fundamentals – electricity
Global demand fundamentals – steel marker
> Moderate copper recovery forecast with lower dollar and stockpiles
> Zinc well poised, ironically with closure of Century Zinc Mine, Qld
> Aluminium (and pre-cursors bauxite/alumina) expected to be among stronger performers
> Silver in holding pattern dictated by gold price
> Lead outlook ‘neutral’
> Uranium: world class deposits whose time will come if policy allows
Metals toughing it out with some bright spots
Queensland’s global competitiveness central to planning and outlook, but other major challenges beckon……
WORKING ALONGSIDE THE GREAT BARRIER REEF
> Great Barrier Reef a global icon – same size as Italy or Japan
> Reef export gateway for global minerals and energy provinces
> Exports (resources, rural, tourism) via 11 Reef trading ports valued at
$AU40 billion (2012)
> Resources sector goal sustainable development in a World Heritage site
> Australia at forefront of environmental management
Naturally occurring Hardy Reef in the Whitsunday Group.
Photographed by Australian Geographic and misrepresented
on Facebook as the start of dredging on the Great Barrier Reef, four days before the Abbott Government was elected to
government in Australia.
‘The coal port at Abbot Point is next to the World Heritage listed Great Barrier Reef Marine Park. Build a powerful narrative about the global importance of the Galilee Basin and use this to build a high profile public campaign, putting issue in national and international spotlight.’ ‘Disrupt and delay key projects and infrastructure while gradually eroding public and political support for the industry’
‘We need to change the story of coal. This means challenging the economics of coal’
ACTIVISTS UNITED AGAINST COAL AND GAS
23
ACTIVISTS’ GOAL TO CLOSE COAL/GAS PORTS
Australian Institute of Marine Science
27-year longitudinal study
October 2012
REEF 2050 PLAN: ABBOT POINT EXPANSION > Queensland Government has restarted
approvals process with dredging referral to
Commonwealth
> Expansion dredge spoil to be diverted to
non-sensitive port industrial land outside WHA
As long as it’s not coal:
That still means recklessly ripping up seabed and sending more
coal ships through the Reef. Greenpeace Australia-Pacific
The Queensland Government has withdrawn plans to
dump dredge spoil in the Caley Valley wetlands! The wetlands act as a natural filter for the Great Barrier
Reef. The fight's not over yet, with the mining industry still pushing for the port expansion. Australian Marine Conservation Society
‘While we welcome that the dredge spoil will not be dumped in the reef’s waters or wetlands, the dredging,
shipping and climate impacts of building the world’s largest coal port in this World Heritage Area remain.’ (Queensland) Greens Senator Larissa Waters
INDUSTRY AGENDA: PROMOTE ACCURATE DATA
0
100
200
300
400
500
600
700
800
900
1000
1994 1996 1998 2000 2002 2004 2005 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mtp
a
Year
Queensland coal exports (capacity): actual and trend growth vs Greenpeace
estimates
Actual Greenpeace Trend
Source: BREE, QRC estimates, Greenpeace 'Boom Goes the Reef'
CAGR 5.4%
CAGR 19%
CAGR 6%
1.3 billion people without electricity
2.7 billion choking on household fumes every day
UN PRIORITIES: ENERGY POVERTY AND CLIMATE CHANGE
Renewables still to deliver reliability and scale to lift billions out of poverty
Electricity demand dictates we must deploy more of what we have – coal, gas, uranium, renewables – and faster roll-out
of low emission technologies According to WHO, 4.3 million
people a year die from the exposure to household air pollution from solid fuels
QRC standing up for members
Australian Institute of Mining and Metallurgy,
Southern Queensland Branch
30 April 2015
Chief Executive, QRC
Green shoots, burning issues
Michael Roche