After the deluge. Michael Roche. Chief Executive AusIMM Southern Queensland Branch 17 February 2011

Transcription

1 After the deluge Michael Roche Chief Executive AusIMM Southern Queensland Branch 17 February 2011

2 Today s key messages > Floods causing significant disruptions and production losses > Global demand fundamentals for resources remain positive > Queensland s resources endowment is exemplary > Looking ahead: potholes and challenges along the road

3 Who we are > The QRC is a not-for-profit peak representative body for the commercial developers of Queensland s minerals and energy resources > 88 full members explorers, miners, mineral processors, site contractors, oil and gas producers, electricity generators > 126 service members - providers of goods or services to the sector > Peak policy-making instrument: elected 30-member QRC Board

4 Aberdare Collieries Pty Ltd Adani Mining Alcyone Resources Altona Mining Ambre Energy Anglo American Exploration Anglo Coal Australia Aquila Resources Arrow Energy Aston Resources Bandanna Energy Limited BHP Billiton Cannington BHP Billiton Mitsubishi Alliance BHP Mitsui Coal Birla Mt. Gordon Blue Energy Bowen Central Coal Management Caledon Coal Pty Ltd Cape Flattery Silica Mines Carbon Energy Cement Australia Civil Mining and Construction Clean Energy Australasia Clean Global Energy Cockatoo Coal Cougar Energy Deep Yellow Diatreme Resources Downer EDI Mining Elementos Ensham Resources ERM Power Exco Resources Gloucester Coal Golding Contractors Hancock Coal Investigator Resources Ivanhoe Australia Limited Jellinbah Resources John Holland Lagoon Creek Resources Legend International Holdings Leighton Contractors Liberty Resources Linc Energy Lodestone Energy Macarthur Coal Macmahon Holdings Mastermyne Mega Uranium Metallica Minerals MetroCoal Millmerran Power Management Mineral and Coal Investments Minerals and Metals Group Mitsubishi Development New Hope Coal Australia North Queensland Metals Northern Energy Corporation Norton Gold Fields Origin Energy Paladin Resources Peabody Pacific QCoal QER QGC Queensland Magnesia QRC full members Rio Tinto Alcan Rio Tinto Coal Australia Santos/TOGA Sibelco Australia Sonoma Mine Management Stanmore Coal Stanwell Corporation Summit Resources Superior Coal Syntech Resources Tarong Energy Corporation Thiess Vale Waratah Coal Wesfarmers Resources Westside Corporation Xstrata Coal Australia Xstrata Copper Xstrata Zinc Australia Yancoal service members

5 Historical context > 2008: CQ floods and Ensham community concern over water quality > Hart Review: Fitzroy Water Quality (Nov 08); DERM Cumulative Impacts of Mining Study (April 09) > Mid-2009: Qld Govt tightens water discharge conditions via model conditions to be in force by end-2009 > End-2009: New tighter conditions in EAs of each mine site. With concern that mines were to operate under zero discharge conditions, they build more dams > After experience of wet season, QRC approached DERM and Minister re revisiting unrealistic aspects of conditions. QRC provides industry critique. > Second half of 2010, QRC increasingly concerned about wet season outlook > Nov 2010: DERM finally agrees to workshop and offers some minor concessions > Dec 2010: Concessions too late. Only mechanism available is TEP.

6 Unprecedented rainfall

7 Unprecedented rainfall

8 Unprecedented rainfall

9 Mine damage Bowen Basin 14 February 2011 Photo: Dalby Herald January 2011

10 Estimated impacts Of 57 coal mines in Queensland: 13% in full production 81% operating under restrictions 8% yet to resume normal operations 44 coal mines (and 7 CSG sites) have or still seeking TEPs Lost Coal production forecasts (2010/11): Qld Govt: - 15 MT (loss of $200m in royalties) QRC forecast: Low impact - 30 MT ($5b lost production, $400m lost royalties) High impact - 53 MT ($9b lost production, $700m lost royalties)

11 Rail damage limited

12 The solutions More of the same? 3 out of 4 mines working to or seeking Transitional Environmental Programs (TEPs) Use emergency provisions of the Environmental Protection Act Extend the effective use of TEPs Long term solution including planning to manage future events of such magnitude Allow road haulage; repair the Western and Rolleston Lines

13 2011 projects outlook 4% 18% 3% 56% 56% 56% 39% 3% 39% 25% 3% 25% 25% 3% 3% 3%

14 Future production and value of The industry s response production Source: QRC and members

15 Global resource demand fundamentals are strong The industry s response

16 Queensland s coal inventory (million tonnes raw coal in-situ) Total: 32,729 MT Queensland Government estimates Bowen Basin: 20,981 MT *Galilee Basin: 2208 MT 181 years at current production rates Surat Basin: 4198 MT Clarence-Moreton: 2250 MT Tarong Basin: 1384 MT * Company estimates closer to 14,000 MT

17 High prospectivity and potential Base metals Gold Uranium

18 Challenges ahead > MRRT > Carbon pricing > Attracting and retaining skilled employees > Land access/land use conflict > Industry s social licence to operate > Influence of Greens, in Queensland and federally

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20 Queensland s major discoveries last century 25% of mineral wealth generation 16% share of exploration spend Explorer ratings: Geologically Top 10 When reality bites Top 25 Queensland Exploration Council launch breakfast event 24 March

21 After the deluge Michael Roche Chief Executive AusIMM Southern Queensland Branch 17 February 2011