Overview of South Australia's Resources Sector and Initiatives Australian delegation - Sweden June 11, 2014

OPEN THE DOOR TO SOUTH AUSTRALIA

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KEY LOCATION FOR SUSTAINABLE BUSINESS

• A robust, resilient, knowledge based economy – with capacity to grow.

• World leading minerals and energy assets – ranked as Australia’s top destination for resources investment.1

• Leading agricultural region producing premium quality food and wine for global

export markets.

• A strong manufacturing base, including automotive, submarines and warships and high-value advanced manufacturing.

• Home to Australia’s wind and solar power industries.

• A world-class education system; leader in research and development; flexible and skilled workforce; and the fifth most liveable city in the world.2

DIVERSE INDUSTRY BASE

Minerals & Energy Agriculture Renewable

Energy Advanced

Manufacturing Defence

1 Resourcestocks 2012 World Risk Survey 2 EIU: A Summary of Liveability Ranking and Overview August 2012

Education Health

State population Adelaide population

1.6 million 1.2 million

THE STATE OF SOUTH AUSTRALIA

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Source: ABS 5220, 5368, 6202, DMITRE, Department of Treasury & Finance

PROGRESSIVE AND STEADY GROWTH

Over two decades of uninterrupted economic growth

Linked to fast growing Chinese, Indian and other Asian economies

Major developments exceeding $100 billion fuelling future growth

6.6% unemployment (January 2014)

Export Destinations (12months to Dec 13)

East Asia (excl. China) (27%)

China (24%)

United States (11%)

Middle East (8%)

European Union (8%)

India (5%)

Rest of the world (17%)

Gross State Product $94 billion (2012/13)

Services (48%)

Construction, housing and utilities (19%)

Retail & wholesale trade (9%)

Manufacturing (8%)

Agriculture, forestry & fishing (5%)

Mining (4%)

Major Developments $100 billion (2013/14)

Minerals & Energy (42%)

Defence (20%)

Urban Development (16%)

Manufacturing & Industrial Development (7%)

Health, Education & Other Services (5%)

Infrastructure (5%)

Water Management (4%)

Exports $11 billion (12months to Dec 13)

Metals (35%)

Wheat (12%)

Wine (10%)

Meat (7%)

Other (36%)

INDUSTRY HIGHLIGHTS

• 7% of Australia’s population

• 81% of Australia’s uranium reserves

• 69% of Australia’s copper resources

• 62% of Australia’s wine exports

• 38% of Australia’s wind power capacity

• 30% of Australia’s defence industry

• 20% of Australia’s grain production

• Home to Australia’s largest onshore oil & gas province

ECONOMY OF STRENGTH

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STRONG ECONOMIC CREDENTIALS • Australia has recorded over two decades of uninterrupted annual growth to 2012.

• In the five years from 2008 to 2012 Australia was the most resilient economy (on a five year average) according to Institute for Management Development.

• The IMF estimate that in 2013 the Australian Government’s net debt will be 12.4 per cent of GDP well below the average of 79.1 per cent for advanced economies.

STABLE POLITICAL AND LEGAL ENVIRONMENT • Australia’s political environment is stable and open providing investors with a high degree of

certainty and confidence.

• Australia’s legal framework is efficient and transparent driven by a strong system of checks and balances.

CONDUCTING BUSINESS • The World Bank ranks Australia as the second easiest country to start a business and the

fourth easiest country to obtain credit.

• Australia ranks third in the 2012 Index of Economic Freedom completed by the Heritage Foundation highlighting the ease of conducting business in Australia.

STRONG FINANCIAL SERVICES SECTOR • The World Economic Forum ranks Australia fifth amongst the world’s leading financial systems

and capital markets.

• Australia’s Big 4 banks are the pillars of the financial services sector each with a long term credit rating of AA- (Fitch, S&P) and Aa2 (Moody’s).

Source: ABS 5206, Austrade, Institute for Management Development: World Competitiveness Yearbook, IMF: 2012 Fiscal Monitor, World Bank: Doing Business 2013, World Economic Forum: The Financial Development Report 2012, The Heritage Foundation: 2013 Index of Economic Freedom

Australia is rated AAA by all three global rating agencies with real GDP growth expected to outperform other major advanced economies to 2017

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1994 1997 2000 2003 2006 2009 2012

GDP Growth (%)

Resilience of the Economy*

IMD World Competitiveness Yearbook

1 Australia 6.9

2 Norway 6.7

3 Qatar 6.7

4 Switzerland 6.5

5 India 6.5

* Average score 2008 to 2012 Qatar represents four year average

THE AUSTRALIAN ADVANTAGE

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LOW COST AUSTRALIAN BUSINESS LOCATION • Labour Costs – South Australian labour costs are 10% below the Australian average

(including 20% below Western Australia, and up to 10% below New South Wales, Queensland and Victoria).

• Property Prices – Adelaide’s residential, commercial and industrial property prices are amongst the lowest of Australia’s mainland capital cities.

• Construction Price – Adelaide is competitive in terms of construction costs for the development of new multi-residential, commercial and industrial properties.

Source: ABS 6302, 6416, AECOM: The Blue Book 2012, KPMG: Competitive Alternatives 2012, EIU: A Summary of Liveability Ranking and Overview August 2012, Property Council of Australia: Australian City Liveability Index 2011, Mercer: Worldwide Cost of Living Survey 2012, Suncorp Bank: Family Friendly City Report

KPMG ranked Adelaide as having lower business location costs than Sydney, Melbourne and Brisbane in their 2012 international business location costs study

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SouthAustralia

Australia ACT NT WA NSW QLD VIC TAS

Average Weekly Earnings ($) Nov 2013

LOCATION • South Australia is located at the centre of Australia’s road, rail and air logistics networks;

with time and cost advantages for air and sea freight transport to key Asian markets.

• The South Australian time zone (Greenwich Mean Time +9.30 hours, or +10.30 during Daylight Savings time) is within two hours of major Asia Pacific centres.

A GOVERNMENT OPEN FOR BUSINESS The South Australian Government is pro investment, supporting business including:

• Direct access to key government decision-makers.

• A dedicated Invest in South Australia team and renowned case management service to streamline investors’ establishment and approvals processes.

• An ambitious and successful red tape reduction program.

• A commitment to create 100,000 training places within broader activity to meet industry demand for skilled workers.

• Pro-investment programs including the Plan for Accelerating Exploration (PACE), which has resulted in extraordinary growth in the State’s minerals and energy sector.

Adelaide: The most liveable city • The 5th most liveable city in the world by the

Economist Intelligence Unit.

• The most liveable city in Australia by the Property Council of Australia.

• The cheapest of the Australian mainland capital cities according to Mercer’s Cost of Living Survey.

• The safest city in Australia by Suncorp Bank’s Family Friendly City Index.

ADVANTAGES OF SOUTH AUSTRALIA

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Investment Fundamentals • Sector characterised by early stage exploration and

development projects.

• Investment required across the industry life cycle:

• Exploration

• Feasibility

• Development (including infrastructure)

• Production

• Explorers and developers seeking equity funding, joint venture partners and offtake.

• Over $10 billion in publically announced projects.

Low Jurisdiction Risk • High ranking endorsements across a broad range of mineral

industry indicators.

• Consistently ranked in the top quartile in various categories of the Fraser Institute’s Annual Survey of Mining Companies.

Government Support • Opening up new areas for exploration.

• World leading geoscientific data.

• World class drill core library.

• Co-funding for exploration drilling.

• Mining Industry Participation Office.

Copper

Gold

Rare earths Minerals Sands Silver

Coal Zinc

69% of Australia’s economically demonstrated copper resources

Uranium

Iron Ore

28% of Australia’s economically demonstrated gold resources

81% of Australia’s identified resources

14 billion tonnes in identified resources

Lead

World Leading Deposits

Graphite Nickel Tin

THE SOUTH AUSTRALIAN RESOURCE SECTOR

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SOUTH AUSTRALIAN MINERALS INDUSTRY INDICATORS 2001-2013

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Mineral royalties

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• 21 Major Mines • ~30 Developing Mineral Projects • 5 World Class discoveries in last

decade • Prominent Hill • Jacinth-Ambrosia • Carrapateena • Four Mile • Hillside

2004 2014

MINES AND DEVELOPING MINERAL PROJECTS

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2004 2014

MINERAL EXPLORATION ACTIVITY

A Decade of Success

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3 operational copper mines

3 development projects & over 40 prospects

69% of Australia’s economically demonstrated copper resources

Olympic Dam – the 4th largest copper resource in the world

For more information on copper please contact Invest in South Australia

Many of the deposits in South Australia’s copper provinces are covered by a sequence of

younger rocks that have effectively hidden many large copper deposits from the early

explorers.

COPPER

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4 operational mines

6 development projects

28% of Australia’s economically demonstrated gold resources

Olympic Dam – the 4th largest gold resource in the world

Gold mineralisation is widespread in South Australia and occurs in most geological

provinces.

For more information on gold please contact Invest in South Australia

GOLD

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3 operational mines and 1 approved mine

81% of Australia’s identified resources

25% of the world’s uranium resources

Olympic Dam – the world’s largest uranium deposit

South Australia has an unusually high incidence of ‘felsic magmatic rocks’, these provide an

excellent naturally elevated source for uranium.

For more information on uranium please contact Invest in South Australia

URANIUM

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3 operational mines and 1 approved mine

81% of Australia’s identified resources

25% of the world’s uranium resources

Olympic Dam – the world’s largest uranium deposit

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Forecast Iron Ore Production (Mtpa)

North Gawler Craton South Gawler Craton Braemar Province

Source: Deloitte Regional Mining & Infrastructure Plan

3 operational iron ore projects

20 development projects & prospects

Over 14 billion tonnes in identified resources

Forecast production of 105Mtpa by 2025

For more information on iron ore please contact Invest in South Australia

IRON ORE

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Cooper Basin Exploration & development for 50+ years

Otway Basin Mature & immature conventional/unconventional plays

Arckaringa Basin Unconventional plays with significant shale oil potential

Bight Basin BP & Statoil leading offshore exploration

An emerging unconventional oil & gas boom.

OIL AND GAS

14 For more information on oil and gas please contact Invest in South Australia

Over $10 billion in announced infrastructure

Path to Market Projects 6 port projects, multiple slurry pipelines, rail upgrades

Mine Infrastructure Projects Desalination plants, magnetite beneficiation plants

Electricity transmission upgrades Eyre Peninsula, North Gawler Craton, Braemar

Province

Infrastructure demand will be driven by the iron ore sector which has forecast production of

105Mtpa by 2025.

For more information on resources infrastructure please contact Invest in South Australia

RESOURCES INFRASTRUCTURE

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CENTRE of EXCELLENCE

South Australia

Minerals and Petroleum Services

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MINING AND PETROLEUM SERVICES CENTRE OF EXCELLENCE

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• Supporting the development of South Australian capabilities competing nationally and globally by providing high value added products and services to the resources sector

Objective

GOVERNANCE STRUCTURE

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MIPO Advisory Council

CoE Executive

Committee

CoE Projects

Project A

Project B

Project E

Project D

Project C

• Provides formal approval of project funding

• Individual projects managed by lead project partner

CoE Secretariat • Entry point for inquiries and project proposals • Manages CoE activities and funding • Supports the Advisory Council and Executive Committee • Connects SMEs, resources industry and researchers

• Reviews projects and makes recommendation to the CoE Executive Committee on project prioritisation and funding

• Generates recommendations for new projects to be considered

THE PROJECT PIPELINE

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4. Project(s) Projects to proceed with CoE and partner funding, with clear links to

overarching objective of the CoE

3. Fund CoE Executive Committee to approve funding for projects

2. Qualify CoE Secretariat to assess project ideas that emerge from Stage 1, apply

CoE criteria to assess eligibility, then provide information to MIPO Board who will provide recommendation to fund or not.

1. Generate CoE Secretariat to link SMEs, resources industry and researchers to

generate innovative ideas

Part

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CRITERIA TO GUIDE PROJECT FUNDING

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Build on existing SA comparative advantage, either in terms of research, industry or natural endowments

Have industry funding or in-kind support

Have material impact and be identified as priority for industry

Solve problems which industry can’t solve itself, for reasons such as incomplete or asymmetrical information or common resource problems

Have multiple partners and require a collaborative approach, and

Be publicly reportable

PROJECTS TO DATE

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• On-shore Petroleum training facility • Australia's first comprehensive mining and ICT Roadmap • Remote Mining Operations Centre; • Brukunga Mine Skills Centre Feasibility Study; • Support for a UniSA/BHP CRC bid in relation to colloid and

interface science in minerals processing (pending success of the bid);

• Support Adelaide Uni/BHP CRC bid in relation clean copper concentrates (pending success of the bid); and

• Real-Time Drill Site

The following projects will be supported by the CoE in its first year:

DISCLAIMER

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Presented by: Dr Paul Heithersay

Department for Manufacturing, Innovation, Trade, Resources and Energy

Adelaide SA 5000

Phone + 61 8 8303 2298

paul.heithersay@sa.gov.au