WA Works Summer Edition 2016/17

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This is a unique opportunity for buyers and suppliers to find each other. WA Works offers your business the chance to advertise to both the resource sector and companies servicing the sector. ENQUIRE NOW: WAWORKS@CCIWA.COM OR PHONE (08) 9365 7544



SUMMER 2016/17




elcome to the summer edition of WA Works, the magazine dedicated to reporting stories of enterprise behind our state’s evolving economy. This evolution was on full display this month at CCI’s sold-out Doing Business with Defence conference, as 200 people packed the Parmelia Hilton to hear updates from some of the biggest names in the industry. See our On The Ground section for more on this fantastic event. WA Works is committed to covering this exciting new opportunity as WA’s supply chain gears up for Australia’s $195 billion defence acquisition program over the next decade. But there is also plenty more happening in other sectors. To find out how we’re adapting from mining construction to production, turn to our exclusive Economic Outlook produced by CCI’s Economics team, along with our regular Major Projects List and Major Resource Projects Map, various perspectives from leading federal and state ministers and a host of insightful features on resources, construction, infrastructure and energy. And, of course, there’s Yelverton to round off this edition with his unique take on the year that was. We hope you enjoy WA Works as much as we do putting it together. Please share your thoughts and feedback with us at editor@cciwa.com¢

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The BIG Picture From the CEO’s desk From the Premier’s desk On the ground INFRASTRUCTURE: Tunnel Vision Power to the people ENERGY: Carnegie’s big splash Western Power sale to drive jobs growth Solar sector heats up CONSTRUCTION: Eagles vs Dockers FMG’s next big play Economic Outlook Major Resource Projects Map Major WA Projects List RESOURCES: Charging up lithium valley Sliver lining for Perth Mint DEFENCE: Full steam ahead for Garden Island

It’s your business to register.

BAE Systems in the hunt Civmec’s watershed moment Done and Dusted/Going for broke Mindworks/Yelverton Published quarterly by Chamber of Commerce and Industry of Western Australia (Inc) 180 Hay Street, East Perth WA 6004 T (08) 9365 7555 F (08) 9365 7550 E info@cciwa.com www.cciwa.com President Agu Kantsler

If you employ workers in the construction industry you may be required by law to register in the Construction Industry Long Service Leave Scheme. Find out by visiting www.myleave.wa.gov.au or by calling 08 9476 5400.

Chief Executive Officer Deidre Willmott

Editor Stephen Bell (08) 9365 7445

Production Editor Tony Barrass (08) 9365 7627



Graphic Designer Katie Addison (08) 9365 7518

Advertising and Subscription Paula Connell katie.addison@cciwa.com (08) 9365 7544 advertising@cciwa.com

Disclaimer: This information is current at December 2016. CCI has taken all reasonable care in preparing this information, however, it is provided as a guide only. You should seek specific advice from a CCI adviser before acting. CCI does not accept liability for any claim which may arise from any person acting or refraining from acting on this information. Reproduction of any CCI material is not permitted without written authorisation from the General Manager, Corporate Affairs. © Copyright CCI. All rights reserved.






ort Hedland is one of the biggest tonnage ports on the planet – and will get busier as the mining giants of the Pilbara ramp up production like never before. In the last financial year, what was originally known as Mangrove Harbour waved goodbye to an astonishing 460,408,649 tonnes of mainly iron ore bound for the insatiable steel mills of China. Despite the price of the commodity dipping since the halcyon days of the mining boom, massive carriers like this one, shot by Tom RovisHermann from a fixed-wing aircraft with a Canon 5D Mark ll, remain a regular feature on the Pilbara horizon. ¢



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From the CEO’s desk The fight is on to get our fair share of defence contracts, says CCI CEO Deidre Willmott


t looks like the timing was just right for the introduction of WA Works – Western Australia’s construction, defence, energy and mining industries have all had a diverse and exciting year. CCI has been proud to work with these critical industries to keep the issues that impact each sector on the public agenda. This year WA celebrated 50 years since our first export of iron ore left the state headed for Japan. This was a pivotal moment in WA’s economic history and the beginning of an incredible half-century of enormous growth and investment driven by our resources and construction sectors. But 2016 also saw new threats to the industry. After successfully battling against federal mining taxes (from the Rudd and Gillard governments, respectively), WA iron ore is now once again defending its future against a proposal from the WA Nationals to unilaterally alter State Agreements made with BHP and Rio Tinto and lift the Special Lease Rental to $5 per tonne.


sector can be engaged in new projects to grow and create jobs. While there have been some policy worries, there have been significant wins too. The recent passing of legislation to re-establish the Australian Building and Construction Commission, together with the scheduled introduction of a WA Building Code of Conduct, will safeguard both the local and national construction industry against unlawful union behaviour that undermines productivity, wastes taxpayer dollars and damages our investment reputation, thereby creating less opportunities for new projects to start and new jobs to be brought on line. And speaking of new jobs, the naming of Perth as one of Australia’s two shipbuilding and defence hubs this year has been a historic achievement that will contribute significantly towards creating a more diverse economic landscape for WA’s future. CCI founded the WA Defence Industry Council, along with state and federal MPs, defence experts and industry stakeholders, and we will continue to fight to make sure WA gets its fair share of the multi-billion dollar shipbuilding, sustainment and maintenance contracts. CCI was also proud to recently host the inaugural CCI Defence Conference with Federal Minister for Defence Industry Christopher Pyne. We would like to thank Minister Pyne for his support of WA’s defence industry and his pledge to involve as many SMEs as possible in the national shipbuilding effort. In more good news for business, CCI welcomed the Barnett Government’s recent commitment to partially sell Western Power

and use the estimated $11 billion to pay down state debt and invest in new infrastructure. CCI has long called for the privatisation of Western Power and released a report earlier this year with PWC that busted many damaging myths about electricity asset privatisation. New infrastructure paid for by recycled sale funds will create thousands of jobs and stimulate the economy, so CCI recommends all political parties commit to an asset sales agenda, no matter who forms the next State Government. While the sale of Western Power has been applauded by business, CCI urges all parties to now go one step further and release a long-term state infrastructure plan for WA. Business owners, investors and the wider community need a 20 year infrastructure vision that goes beyond the short-term political life cycle, so they can plan new investments and make strategic decisions with certainty. Industry needs to know when things like roads, rail, ports, bridges, airports and other key items are coming so they can engage in the consultation process, plan for their business’ growth and make smart choices about the future. As we head into a new year in 2017, I would like to thank you for your support of WA Works and encourage you all to share your stories with us so we can continue to amplify the voice of business to decision makers at home and in Canberra. On behalf of all of us here at CCI, I hope you and your families each have a very merry Christmas and a safe and happy New Year. CCI looks forward to working with each of you to make sure 2017 is the best year for industry yet. ¢

CCI has unequivocally called for this proposal to be scrapped. It is a flawed policy that will hurt SMEs throughout the resources supply chain and will see 90 per cent of the proceeds go to other states under the GST distribution model. Moreover, it will send investors to cheaper, less volatile economic environments like Brazil which poses a significant risk to future job creation and the stability of the current workforce. CCI will continue to fight against this proposal to ensure our resources industries remain competitive and the construction SUMMER 2016/17 WA WORKS 7

THE MOST FORMIDABLE THING WE’VE BUILT FOR AUSTRALIA IS OUR CAPABILITY. Over the past 30 years we’ve been building and maintaining Australia’s frontline naval defence capabilities – the Collins Class submarines and the Hobart Class air warfare destroyers. With our world-class facilities, our highly skilled workforce and our diverse supply chain, ASC’s capability extends above the water, below the water and across the world.


From the Premier’s desk The work we do today will have long-term benefits for the state, says WA Premier Colin Barnett


estern Australia has a worldclass naval shipbuilding, repair and maintenance industry, along with considerable heavy engineering capacity. The state also boasts niche defence industry capabilities, including aircraft maintenance, cyber security and ICT support for defence programs. Over the past 15 years, WA’s defence sector has become one of the state’s economic success stories. There are more than 180 defence-related companies delivering on contracts worth more than $700 million and employing up to 4,000 people. The Australian Marine Complex in Henderson provides significant industry capability support for the Royal Australian Navy (RAN) based at Fleet Base West, Garden Island, and provides repair and maintenance to the COLLINS Class submarines and ANZAC Class frigates. WA’s competitive strength has been recognised after it was identified as one of

only two national shipbuilding precincts. Henderson has been confirmed as the nation’s minor naval vessel hub. With the announcement by the Federal Government of a $89 billion package to build a new fleet of warships in Australia over the next 20 years, WA is in a prime position to contribute to the project with; the majority of 12 Offshore Patrol Vessels ($3 billion) to start construction in WA in 2020, with the first two hulls starting construction in Adelaide in 2018, and then shifting to WA when the Future Frigate program commences construction in Adelaide. This program is expected to create more than 400 direct jobs; an expectation that WA industry will contribute to the build and sustainment programs of the $30 billion Future Frigate program (starting construction in Adelaide in 2020), and the $50 billion Future Submarine program (commencing construction in Adelaide in mid-2020s);


WA-based Austal selected as the preferred tenderer to build up to 21 Pacific Patrol Boats ($280 million), commencing construction next year and securing more than 120 direct jobs. With its expertise already honed in the highly-competitive oil and gas and resources sectors, WA industry is also perfectly placed to extend its capabilities into defence projects. This combination of existing infrastructure and capability will provide a significant opportunity for WA businesses to expand their operations and in turn, provide thousands of additional jobs for West Australians for decades to come. The Liberal-National Government is committed to putting its weight behind the existing strength of the WA defence industry to ensure its capabilities are known to key decision makers in the multi-billion contract process. This work has significant potential to boost the economy and create jobs. In November, Commerce Minister Michael Mischin led a delegation, including CCI CEO Deidre Willmott, to France, the Netherlands and Germany to meet with the shortlisted designers for the OPV vessels and promote the WA defence industry’s capabilities. The Department of Commerce recently partnered with DCNS – the preferred international design partner for the future submarine program – to provide an overview to WA businesses on potential contracts that will be available during the construction phase of the submarines. More than 200 people attended the seminar. The State Government also announced 11 metropolitan and five regional small to medium-sized businesses shared in $350,000 through our Industry Facilitation and Support Program Defence Round 1. Round 2 of this program has recently been announced which will provide financial assistance of up to $25,000 to eligible small to medium-sized enterprises (SMEs) who are seeking to enhance their competitiveness to better enable them to participate in the naval shipbuilding and maintenance programs. These are long lead programs and the work we are doing today to help the industry secure contracts will have long-term benefits for the WA economy, and will provide jobs for decades to come for our children and grandchildren. ¢


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Memo from the Minister Being vibrant, connected and productive is pivotal to our future, says Transport Minister Bill Marmion


or the first time in decades, Western Australia now has a research-backed blueprint, a real vision for how Perth’s transport infrastructure needs to be managed and developed for a population of 3.5 million people. Released in July, the Perth Transport Plan is based on independent research and modelling data, and looks well beyond political cycles and priorities. It recommends significant change across all transport modes including rail, road, buses and cycling for our city. Its key objective is simple – we need to plan, optimise, integrate and grow our transport network over forthcoming decades to ensure Perth remains one of the most liveable cities in the world. We want Perth to be vibrant, connected and productive. This will not only require significant investment in new infrastructure and better use of what we already have, but also the need to challenge everyone on their daily travel choices and options, especially as the city changes and more people and vehicles use our transport network. With a current population of around two million people, Perth is experiencing growing transport network challenges. Each and every day, there are nearly seven million trips in and around Perth and, of these, more than five million of those trips are by car. Not surprisingly, many of these cars have a single occupant.

significant frustration to drivers and commuters and increased productivity losses and costs for business. The Perth Transport Plan is the result of a two-year collaboration between academics from Perth’s universities (Planning and Transport Research Centre of WA) and State Government agencies, including the Department of Planning, Main Roads, the Public Transport Authority and the Department of Transport. Importantly, the Perth Transport Plan is aligned to the state’s key planning frameworks that guide where people live, work and play in Perth for decades to come. It’s all about using our existing transport infrastructure in smarter ways. It’s about ensuring our current and future transport networks – whether they are roads, rail systems or cycleways – are fully integrated and keep people and vehicles on the move. And it’s all about expanding and growing our transport network infrastructure at the right time to meet the requirements of a growing population.

THERE ARE NEARLY SEVEN MILLION TRIPS IN AND AROUND PERTH AND OF THESE, MORE THAN FIVE MILLION OF THOSE ARE BY CAR Congestion costs across the city was estimated at around $2 billion per annum in 2015, and by 2030 that figure is expected to more than double to between $4.4 billion and $5.7 billion. Domestic, commercial and freight traffic is tipped to climb over 12 million trips per day by the time Perth’s population reaches 3.5 million people in about 35 years’ time. Without a comprehensive transport network plan in place to manage the anticipated population growth, our city will quickly and regularly come to a standstill, causing

What the plan is not is the current Liberal-National Government’s ‘wish list’ of transport projects. Each recommended project and initiative needs to be assessed, funded and progressed by the government of the day. That said, it is my belief that any project may be considered for long-term strategic reasons that underpin how Perth develops and grows. With most governments across the world facing ever increasing fiscal belt tightening, I believe future leaders will need to widen the traditional net of accessing capital to fund key

transport infrastructure initiatives. Governments must work with developers, industry and the community to create and share value from infrastructure initiatives. The development of successful value capture models will allow the advancement of further infrastructure investment. For example, the government is currently working with industry to identify and capture value and productivity gains through a future heavy vehicle freight charge. This initiative could deliver an expanded freeway network for the state and deliver significant productivity savings to the industry through faster travel times and lower fuel and maintenance costs. Work to date indicates more than 50 per cent of these productivity gains could be returned to industry through improved profit outcomes, while the remaining value capture could fund State Government borrowings for the transport projects. It’s a win-win all round. While we recognise the need to explore more innovative future funding solutions to keep Perth moving, since its election in 2008 the State Government has delivered a significant number of key transport initiatives throughout WA. But there is much more that needs to be done. The Perth Transport Plan outlines a strategy across all transport modes that integrates our urban communities with key “activity centres” across the city. It’s an aspirational view on the optimum integrated infrastructure required for Perth. I am pleased that thousands of West Australians, including industry groups and individuals, have now provided feedback on the Perth Transport Plan. That feedback is now being reviewed and assessed as the plan is finalised in preparation for public release. I expect to release the report in the next few months. This will ensure the people of Western Australia understand the State Government’s clear vision and plan for managing our city’s transport needs well into the future – one that keeps Perth moving and ensures it remains one of the most liveable cities in the world. ¢ SUMMER 2016/17 WA WORKS 11

ON THE GROUND ROY HILL EYES 600 NEW WORKERS Roy Hill says it remains on track to hire 600 new workers in the next 12 to 18 months as the Pilbara iron ore exporter continues to ramp up operations. “We’ve always said that we’ll employ 2000 people directly and this (hiring) is the culmination of that,” Roy Hill CEO Barry Fitzgerald told reporters at Roy Hill’s operations centre in Perth. “Basically as we ramp up we’ll bring them on. They will predominantly be truck drivers, operators and maintenance personnel. “Certainly we’ll be looking locally in WA – we see no real reason to go anywhere else.” Roy Hill shipped its first iron ore in December 2015 after a $10.5 billion construction program. The mine is due to reach its rated iron ore shipping capacity of 55Mtpa in 1H 2017, though total earth movement will increase over the next year or two as mining extends deeper, Fitzgerald says. “We need to put the mining equipment in, we need to move the tonnes,” he said. There are no near-term plans to automate mining at Roy Hill, but “we keep our options open on that – technology is changing rapidly.” ¢

SUCK IT UP; VTA SAYS HOOROO TO OLD LOO Perth-based Vacuum Toilets Australia’s managing director John Neskudla wants people to rethink the way they go to the loo. “We are trying to change the toilet ballgame,” says Neskudla who makes the point that hundreds of millions of litres of fresh drinking water are currently being flushed down the toilet every day. He believes this is “unthinkable in a country like Australia where fresh water is scarce. Vacuum Toilets Australia is trying to change exactly that.” How? “By using vacuum,” says Neskudla. “Jets vacuum toilets use air to transport the waste rather than water. A minimal amount is used to rinse the bowl only.” At 0.8 litres per full-flush, Jets vacuum toilets are way ahead of even low-flush gravity alternatives and water savings of up to 90 per cent are guaranteed. And with Australia’s water resources continuing to diminish, a low-flush toilet that runs almost entirely without water is clearly a step in the right direction. “Vacuum toilets are the future for Australia,” he says. “We simply cannot continue to flush fresh water down the toilet.” This year has seen a breakthrough for Vacuum Toilets Australia, with the company now certain they have the most water efficient toilet on the market. ¢

12 WA WORKS SUMMER 2016/17




ustralia is the midst of an “arms race” that will ultimately benefit defence suppliers to the Asian and America regions, says Kim Beazley, Australia’s former defence minister and now a director of US giant Lockheed Martin. Beazley made the comments at CCI’s sold-out Doing Business with Defence conference, attended by 200 people in Perth. “I don’t actually think we’re spending much on defence,” he said, when asked if Australia was doing enough to ensure the nation’s decade-long $195 billion defence acquisition project became a sustainable industry. “And I don’t think we are spending in an unsustainable way given the competing requirements of a budget,” he said. “What that program contains, what it produces, is just enough in the environment in which we’re located. “When you look at what’s happening around us we’re in the middle of an arms race.” That race was going to “intensify” over the next decade, he said. “We cannot do less than what that $195Bn says we ought to do, and it is in a framework that is eminently affordable.” Beazley pointed to signs emerging from the US that President-elect Donald Trump’s regime would revert to a “peace through strength” strategy in Asia, which would see America take a more aggressive

approach in the South China Sea dispute, for example. “Opportunities for those engaged in production for Australian, Asian and American armed forces are going to be available to you for quite a long time,” he said. Beazley was appointed in June to the Australian board of Lockheed Martin, recently named as combat system integrator for the $50 billion Future Submarines project. The company is also supplying the new generation F-35 fighter jets to Australia. Earlier, German Defence major Rheinmetall urged WA suppliers to pitch their capabilities to the company. Rheinmetall was seeking more engagement with industry after its BOXER combat reconnaissance vehicle was shortlisted in June for the Phase Two Land 400 project to replace and upgrade Australia’s Light Armoured Vehicle fleets, said Chief Operating Officer Gary Stewart. The company wanted to “maximise” opportunities for local suppliers, with the BOXER now in competitive field testing. “We need to ensure that we’ve got the industrial base in Australia to support this equipment for the next 30-40 years,” he said. Interested in finding out who’s who in WA defence? Visit CCI’s new Defence Directory: www.wadefence.com.au/ ¢


Janelle Woodley, Infrastructure co-ordinator, Port Operations, FMG


y start times at Fortescue’s port (at Port Hedland) do vary, but generally I come through the gate at 5.30 am. The gate is already open – we’re a 24/7 operation – so there is no sleeping here. I come into the main administration and log onto the computer, then chat with my team to find out if there is anything safety-wise I need to know, anything critical. I need to get all the day’s planning out of the way, get the guys out on the shop floor doing what they need to do.

conveyor and is normally around the transfer stations where the conveyors meet each other. So instead of going onto our normal day work, we needed to concentrate on that specific area. To clean it up my team uses a tele-handler (a mobile machine with a telescopic boom), a loader and a tip truck. You’ve got to pull the spill out, get it on the truck and get it onto our port stockpiles for our dust management. We work on a 12-hour cycle, which is a day shift until we come into a shutdown, and then we have a 24-hour cycle.

THE GATE IS ALREADY OPEN – WE’RE A 24/7 OPERATION, SO THERE IS NO SLEEPING HERE I have multiple contractors that report to me. But on a daily basis my team here is six people, including a supervisor. They are mostly involved in maintaining the port site, cleaning up spillages, removal, civil work. Recently there was a big spill of iron ore. It comes off the

The big shuts (for regular maintenance on the port’s conveyor belt and ship-loader circuits) are every 20 weeks now. Those major shuts usually last for three to four days, or 88 hours on average. On a normal day the team will eat lunch together. It depends

on how my day is rolling as to whether I sit with them out in the field and check on how everything is progressing. Or there may be issues they want to raise with me – how they are going themselves. We have to manage the heat issue here. They are allocated a one-hour break (per shift) but I actually advise them to take shorter and more frequent breaks throughout the day. If they feel fatigued I am not going to ask them to keep going, I want them to pull the truck up and have a drink of water – just take a break. There are two pre-start, or handover meetings, each day. You do that of a morning and in the evening. I jump in with the other shift supervisors in case they need to know anything that my guys have worked on. Then I attend their handover to the next shift at the end of the day. We have it (the handover) in writing, which we email to each other, but you also have the verbal if any questions need to be asked. The size of those meetings will depend on the type of day. If one of our port machines – a reclaimer or a stacker for instance – needs to be moved then obviously we need to get

the team out there. And that information is shared with the supervisors. In that instance you might have 10 people. Then you have double-up days when everyone is in, and you might have up to 30 people. And that is just operations – it doesn’t include our maintenance buddies. In the afternoons I start to get into the planning for the next day. If there was something important that we missed because of another priority, I need to plan that out again. At the end of the day I jump in my car. It is a 15-minute drive to and from work. My day is structured but there is always something new. I am new to Fortescue’s port and I can’t say that I haven’t learned something every single day, almost a year later. I’ve been in this role since November 2015. Prior to this I was a co-ordinator at VTEC, Fortescue’s Vocational Training and Employment Centre. The biggest thing to learn in this job was how the iron ore gets onto the ships. To learn the market, the different products and how the port sits as a whole, even to our international customers, was a huge learning curve for me. ¢ SUMMER 2016/17 WA WORKS 13


TUNNEL VISION Italian construction giant Salini Impregilo and NRW are creating a new world of quick, easy travel underneath our city and river BY STEPHEN BELL WA Works Editor


t has been described as a game-changer for public transport in Perth and the biggest expansion of the city’s rail network since the Mandurah line was completed nine years ago. The $2 billion ForrestfieldAirport Link will certainly change the way Perth travels. From late 2020, commuters will be able to catch a train from the city to the airport and on to Forrestfield via a new 8km dual tunnel. Richard Graham, project director of the Salini Impregilo-NRW joint venture, may well be on one of those early, epic train journeys deep under the Swan River. SI-NRW was appointed by the WA Government in April to design, build and maintain the huge venture – a contract worth $1.18 billion. Graham and his construction team will have to navigate their way through a delicate engineering job – one that needs to be done carefully, safely and quickly to ensure the trains start running on time. 14 WA WORKS SUMMER 2016/17

“It is quite delicate – apart from tunnelling below the environmentally-sensitive Swan River we are going under Perth Airport, under the runways, so it has to be done very carefully, with extensive instrumentation and monitoring,” he says. But the job certainly doesn’t faze Graham, a Scottish engineer who’s worked for Salini Impregilo for two decades. He points out that the company’s expertise is in undertaking “challenging” major projects, including current metro jobs in Copenhagen, Doha, Riyadh and Milan. Graham’s last job was directing Salini’s construction of the Riyadh Metro project in Saudi Arabia, a rail line of 42km with tunnels, viaducts and 22 stations. “Salini Impregilo is one of the world leaders in complex tunnelling,” he says. “We have this expertise and are hungry for work to expand, and the Forrestfield-Airport Link is a very good opportunity to launch ourselves in Australia.” The company is also bidding for work on two Melbourne contracts – the $10.9 billion

Metro tunnel and the city’s $5.5 billion Western Distributor highway project. “We do other types of projects than metros, but at the moment it seems to be the theme of the decade.” Salini Impregilo is the lead partner with 80 per cent share in the integrated SI-NRW joint venture with its strong local partner NRW.

of residential and business developments planned along the rail route,” says Premier Colin Barnett. “The link will not only benefit people living in the new rail corridor, but will serve airport passengers and tourists alike and will leave a great first impression for visitors to Perth.” Barnett says the railway will

THE BIGGEST EXPANSION OF THE CITY’S RAIL NETWORK SINCE THE MANDURAH LINE Handover to the client, the WA Government’s Public Transport Authority, is due late 2020. It is certainly a headline infrastructure project in the lead-up to a state election. “The FAL will provide a much-needed 20-minute public transport link between Perth’s CBD and the eastern suburbs, and importantly will service future projected growth

also bring benefits to airport passengers and staff. “In particular, this will be a boon for WA’s thousands of fly-in fly-out workers who will no longer have to drive to the airport and leave cars parked there for weeks on end.” The overall project is expected to create 2000 new jobs during construction, Barnett says. It will connect the Midland


Line, just past Bayswater Station, to Forrestfield, running underground in tunnels underneath the river, Tonkin Highway and Perth Airport. Included are three new rail stations: Belmont Station (located underground in Belmont); Airport Central Station (located underground at Perth Airport to service both domestic and international flights); and Forrestfield Station. SI-NRW will directly excavate the tunnel and also make the concrete pre-cast segments to line it in a rented warehouse near Forrestfield. The precast factory will employ about 45 people, mostly West Australians, while the concrete, about 180,000 cubic metres in total, will be supplied locally, Graham says. SI-NRW will also excavate the three railway stations, including undertaking the concrete works, while the equipment installation will be sub-contracted to big Australian companies. This work will include air conditioning, lifts, safety devices, track-work, electrical supply, systems and all other plant and equipment. The locals will need to dig

deep – literally. While the tunnel’s depth will average about 25m, the section below the Swan River will see it descend about 30m below the riverbed. And, given the river’s mythological importance to local Aboriginal people, it is fitting that some of those locals will be involved in the project. Under the terms of its contract, more than two per cent of Salini-NRW’s work force must be indigenous. “We have to award contracts worth more than $15 million to indigenous businesses, and we need to allow indigenous businesses to bid for jobs worth more than $40 million,” says Graham. “Those are the targets – they are in our deed – and we are working with the Public Transport Authority to try to achieve those targets.” The PTA has also established the Noongar Business Working Group with the assistance of CCI to maximise procurement opportunities for Aboriginal people. “We participate in this working group and try to tailor our opportunities to give

preference to the Noongar and Whadjuk communities,” Graham says. A jobs portal link is now live on the SI-NRW website and provides further information about the pre-qualification and

tendering process, as well as the availability of early works packages. Businesses interested in seeking work should register their interest at www.si-nrwjv.com.au. ¢

ANYTHING BUT BORING The delivery and commissioning of the two huge Tunnel Boring Machines, currently under construction in Germany and China, will be critical to the Forrestfield-Airport Link’s timeline. The 130m-long machines weigh 600 tonnes and cost about $25 million each. Due to be launched in July 2017, they will be shipped in modules to Fremantle, trucked to the Forrestfield site and assembled in the so-called dive structure – a long, narrow trench where the TBMs will begin tunnelling. At the front of each machine is a 7.15m diameter rotating cutting head which effectively forms the end of a 25m steel tube (the shield) within which the cutter driving motors, related equipment and personnel work in a safe environment. The remainder of the big caterpillar-like structure is devoted to servicing the front end. One of the key maintenance tasks will be replacing worn cutters, scrappers and teeth, with the frequency of the changeouts dependent on how the machines deal with Perth’s geology, Richard Graham says. “The geology of Perth and most of the tunnel is in alluvial material, (the remainder in clays), and the two TBMs that we’ll be using here can operate at 4 bar pressure under water in both these conditions and are thus very sophisticated. I think there are only eight of them in the world, so we’ll be ninth,” he says.

SUMMER 2016/17 WA WORKS 15


POWER TO THE PEOPLE While the Pacific island of Nauru is never far from the headlines, a Perth engineering company is quietly revolutionising the power supply to the world’s smallest republic

Above; On approach to Nauru, and right, a tradie gets to work on the island’s new powerhouse.



A’s Barclay Engineering is leading the push to restore Nauru’s dilapidated powerhouse to its former glory, guaranteeing reliable power supply to its 10,000 citizens and helping the island’s many businesses plan for their future. Barclay has just completed the $1.4 million Stage 1 of the Nauru Electricity Supply, Security

THE LOGISTICS OF WORKING THERE WHEN YOU ARE PERTHBASED ADDS TO THE CHALLENGE and Sustainability Project, and is working with Sterling and Wilson Cogen Solution Pvt Ltd and IS Systems to complete the $12m Stage 2 by mid-2017. Stage 1 saw the replacement of the island’s powerhouse roof and other building works, while Stage 2 will see two new medium-speed diesel generating sets installed in the now robust facility. 16 WA WORKS SUMMER 2016/17

Nauru has been plagued by electricity supply disruptions which the Nauru Utilities Corporation attributes to a ‘legacy of insufficient investment in capacity’. While known as an offshore processing destination of asylum seekers, Nauru – at only 21sq km – is a tad bigger than Rottnest Island (19sq km) but the logistics of working there when you are Perth-based add to the challenge. Awarded the project in March, CEO Terry Barclay says all materials and equipment needed on site have to be shipped from Australia, including asbestos removal gear and labour to ensure the asbestos process was done according to Australian safety regulations. A specialist hygienist was also onsite to manage air monitoring. Barclay Engineering also shipped its own cranes, vehicles and WA workers to complete its re-sheeting of the 1950s building which not only involved asbestos removal but significant repairs to the corroded structure. The first step was replacing the asbestos V-shaped roof on the 72m x 16m building, and as the

powerhouse was still operational, the team had to work around the only remaining generator and other old equipment. With the asbestos gone, the roof re-sheeted and its columns repaired or replaced, Barclay says it looks as good as new from the outside. “We built a 50MW power station in Myanmar for the Yangon project and that was a new build, and you know everything that you need to take with you for the project,” says Barclay. “Refurbishments are more difficult as until certain items are removed, you do not know the full scope of materials required. “Many of the steel columns in the building were encased in concrete for the first 1.5m but where the concrete had cracked the rain had seeped inside and created a corrosion point. All of this concrete around the beams had to be removed to inspect the beams and repair or replace, whichever was required by our engineer.” With Stage 1 wrapped up, Barclay Engineering is already working on Stage 2 with Sterling


& Wilson, who will supply the 2.8MW diesel gen-sets and IS Systems on the electrical installation. Barclay will build the exhaust mufflers, silencers and ventilation package and install all the equipment. Stage 2 will require even more planning as a major change to shipping routes have complicated the already complex logistics of the contract. Direct shipping movements to Nauru from Brisbane more than 3000km away have gone from two a month, to one, to none, with ships diverting to Fiji or the Solomon Islands. “Fiji Port does not have the facilities to handle the heavy loads of this particular project, only a 20ft shipping container which on arrival at Nauru port facilities has to be loaded into a barge and brought ashore, providing the swell in the ocean is at a safe level,” Barclay says. “As the two medium-speed gen-sets (75 tonnes each) are over the capacity to be handled by the normal shipping, we are going to charter a landing craft which has the capacity to carry

the gen-sets from Brisbane port to Nauru. “Due to the weight of these gen-sets, specialist lifting and carrying equipment has been designed and commissioned by Barclay Engineering purposely for this project. This equipment will be able to lift the gen-sets and drive them into a position in the powerhouse.” “This specialised piece of equipment is designed to carry 80 tonne and pick up 20ft and 40ft ISO containers. It is driven by remote control system to a diesel engine supplying hydraulic power to the wheel motors.” Barclay says the equipment, which does not have a name, will be shipped back to Australia for future use. He says despite the hurdles, it’s been a rewarding project. “All in all, we win work because it is a challenge, it’s good to have challenges, it keeps us on our toes,” he says. “And you feel privileged you’ve been involved in improving the facilities. To me that is an important part of what we do. You feel a sense of achievement once you’ve done something like that.” ¢ SUMMER 2016/17 WA WORKS 17


ALL’S SWELL Carnegie positions itself for a global renewable energy wave BY ROBYN MOLLOY CCI Senior Journalist


hen Carnegie Wave Energy starts selling its underwater CETO 6 wave energy converter units, its shareholders will no doubt welcome the rewards of cornering a world market. The company is in calm waters after winning a European Regional Development Fund grant to build the world’s first commercial wave project connected to the electricity grid in Cornwall, UK, which it will do concurrently with the first microgrid project now underway here off Garden Island. Both projects have propelled the Fremantle-based company onto the world stage for renewable wave energy and are a leap forward in the quest for commercialisation. Carnegie’s managing director 18 WA WORKS SUMMER 2016/17

and CEO Michael Ottaviano says the $25.5m ERDF grant for a 1MW converter is a game-changer. Cornwall’s Wave Hub is the most technologically-advanced site for developing offshore renewable energy, so the project will push Carnegie’s product under the noses of European utilities who are very interested in buying wave technology. “Cornwall is critical because it is the centre of renewable energy globally, as Europe and the UK government has done more for wave energy than any other government. They have really set the bar high in terms of the support they provide and their ambitions to be a world leader in the space, which means the most sophisticated investors, the infrastructure there like Wave Hub, there’s feed-in tariffs available specifically for wave energy as well and the supply chain.

“It’s a huge achievement for a little West Australian company.” Ottaviano says Carnegie, which has 10,000 shareholders, is the only WA company to keep its head above water in the wave energy space since the business began 10 years ago. “We are really the leader and survivor in this race and so if we get it right over the next two or three years, we should have monopoly access to this huge global market,” he says. “I would say now we are officially the world leader in this. “We’ll start selling CETO 6 units as soon as those CETO 6 projects are complete. We’ll complete Cornwall in 2018 and then be selling our first units in 2019, so while that’s still two or three years away – that’s after basically a 10-year journey – so we’re close to the end now.” CETO 6, the sixth generation of Carnegie’s underwater wave energy device, converts ocean

wave energy into electricity and desalinated water. The company will spend $30m delivering the Garden Island micro-grid project which will see the construction of 2MW solar panels and a battery storage system integrated with the existing desalination plant, and the new CETO 6 technology. Australia’s renewable energy agency, ARENA, has contributed $2.5m to the project. “That’s roughly what we spent through the CETO 5 project as well. They are expensive development projects which only generate you a return in terms of knowledge and intellectual property, not in terms of revenue.” CETO 5 was tested as the Perth Project and saw three units connected to the grid to supply power to the Department of Defence’s naval base at Garden Island. It also provided data for the CETO 6 model,


which Ottaviano believes will be particularly attractive to small island nations looking for affordable and reliable energy solutions. “So when we go (to market) we’re able to not just sell them the wave system, but sell them the entire integrated wave, solar, battery, wind, diesel potentially, micro-grid,” he tells WA Works. While the demonstration will drive sales from island nations, Ottaviano says there are opportunities on the mainland as well, such as offering CETO 6 as an alternative to upgrading or increasing capacity of ageing transmission lines near the coast. “It’s a very expensive exercise to do that and a much cheaper, more secure and cleaner way of doing it is putting in embedded renewable micro-grids on the end of those transmission lines rather than upgrading them,” he explains.

“What is very clear to us on islands where energy security is really paramount is that the solution for islands needs to be a mixed renewable solution and heavily-integrated and controlled with advance control systems, which is really what a micro-grid is.” As part of CETO 6, buoyant actuators will increase from 11 metres in diameter to 20 metres to produce a 1MW capacity, with between one and two of the buoys to be deployed at a depth of 35 metres 10km west of Garden Island. Being further offshore will increase risks of damage to the buoys, but Ottaviano is confident Carnegie’s years of sophisticated testing will pay off. “The key element for us, and one of the real differences between what we’ve done and what everybody else has tried to do in our space is that we’ve taken quite a slow incremental

approach where we’ve progressively deployed larger more efficient buoys in more energetic sites over the period of a decade. We do a lot of very sophisticated computation and modelling that nobody else in the world does.”

simply need to then design a system to make sure it can withstand those loads.” CETO 6 will go into construction next year, with the design phase extended so it meets the requirements of both Garden Island and Cornwall sites.

IT’S A HUGE ACHIEVEMENT FOR A LITTLE WEST AUSTRALIAN COMPANY CETO 5 testing included attaching 400 instruments to the buoys to measure forces, movements, displacements, flows and pressures. “Now having done that five times we are really confident in the load and the forces that CETO 6 will see and we just

Carnegie sources components globally, primarily from the oil and gas industry. “We made a decision early on we didn’t want to invent any new components. We wanted to use proven components with similar application. “The smart thing we do is >p20 SUMMER 2016/17 WA WORKS 19

ENERGY > integrate these components in a novel way and then how we actually control the system in real time is really where there is a lot of intelligence. In terms of the actual componentry that’s quite dumb in a way. It’s off-the-shelf often from the oil and gas industry which means we go to the supply chain that already exists and that tends to be heavily European and UK-focused, some Asian focused, some US.

“Where we can, we do use WA companies. For example the three CETO 5 buoys that we manufactured and deployed off Garden Island were made by Strategic Marine, a WA company, because it made sense for us to do that.” Given the surface of planet Earth is 70 per cent water, Ottaviano says the potential for the energy source is huge – the fact that it is a virtually untapped market until now is surprising.

“Part of the reason is that for most of the time it’s a very consistent energy source but for a small percentage of the time it’s a very fierce, destructive energy resource. “Over the last two or three decades little companies have often come up with ideas to try to harness the ocean’s energy, they haven’t had a lot of money, they’ve therefore taken a risk and tried to build a big unit to make


everything work in one go and they’ve underestimated their forces. “They’ve been hit by a big wave in a storm event and they’ve sunk. Literally the unit’s sunk and the company’s gone down with their technology. “We’ve seen that any number of times in Australia and we’ve seen it any of number of times internationally, it’s an unfortunate reality of the wave energy space. “So for me it’s not so much a technical problem, although what Carnegie has done is to be very different by being fully submerged. No other wave technology has done that, and we have done that deliberately to avoid those extreme events. “We’ve also taken this slower, more conservative development pathway where we have gone and put five units in and five generations of systems in the ocean and tested them before we go and launch our commercial product, the CETO 6 unit.” ¢







What you get with your WA Works annual subscription: Fortnightly eNewsletter Premium quarterly magazine Online directory Access to Major Projects List Invitations to WA Works Sundowners Each subscription entitles 10 people in your organisation to the benefits of WA Works ENQUIRE NOW: WAWORKS@CCIWA.COM OR PHONE (08) 9365 7544

20 WA WORKS SUMMER 2016/17
















WA Treasurer Mike Nahan.

The partial sale of the giant utility is good news for business and WA, says CCI CEO Deidre Willmott


he WA business community has described the State Government’s plans to partially sell Western Power as an enormous step forward that will create thousands of jobs and drive economic growth. CCI Chief Executive Officer Deidre Willmott says the announcement of a 51 per cent public float and creation of a Next Generation Account on November 30 will boost business confidence and enable the State Government to create jobs by investing in new infrastructure. The move, which is supported by Nationals WA, would only go ahead if the Liberal Party wins the March election.

around $8 billion, which will boost business confidence and attract investment by taking us one step closer to restoring the all-important AAA credit rating. “Recycling the funds into a $3 billion ‘Next Generation Account’ for infrastructure will also create thousands of jobs for WA workers at a time when our unemployment rate is the worst in the country . . . . this is a critical initiative for both business and the wider community. “CCI has long called for the

THE PARTIAL SALE OF WESTERN POWER WILL BRING PRIVATE SECTOR EFFICIENCIES TO THE ASSET “This is an enormous step forward for WA – the partial sale of Western Power will bring private sector efficiencies to the asset which will actually lead to improved service delivery for consumers,” Willmott says. “The proposed sale model is projected to reduce state debt by

sale of Western Power, and indeed of any asset that does not naturally need to be owned by the state. “Given the WA budget position, an asset sales program will be vital to any future government’s budget and infrastructure strategy.”

WA Treasurer and Energy Minister Mike Nahan said electricity prices would not increase and there would be no reduction in the safety and reliability of the electricity network as a result of the proposed public float of Western Power. “Under the 51 per cent public float proposal, the State Government will remain the largest shareholder (at 49 per cent), with indicative targets of 30 per cent of shares being sold to Australian superannuation funds and 20 per cent to mum and dad retail investors, including Western Power employees,” he said. “This model will address any national security concerns about foreign ownership. Western Power will not be foreign owned or controlled.” Nahan recently used a joint CCI-PwC event – the launch of The Case for Change: Privatisation of Western Australia’s Electricity Networks discussion paper – to call on business leaders to support his call for privatising Western Power. The discussion paper dispels myths that privatisation of

Western Power and Horizon Power transmission and distribution networks would negatively impact price, supply, safety and customer service. He said if West Australians were well informed about the positives of selling one of the state’s largest assets, then ultimately they will strongly support the move. “What is very common in this country is to sell what you no longer need and use the proceeds to fund what you do need,” he told 150 business leaders at the launch. “I do it, you do it, businesses do it, even my son does it – he sells a bike to buy another bike. I sell a house to buy or augment another house. Businesses do this on a regular basis – it is standard policy. Governments do it, households do it and we should do it here.” Labor leader Mark McGowan, who is vehemently against the plan, says the “flogging off” of the state asset would lead to higher power bills, a demise in service quality and lost jobs. He vowed to fight hard against the move. “Western Power belongs to all Western Australians. If we let Colin Barnett and Brendon Grylls sell it, we will forever lose its ongoing revenue that goes a long way to paying for our schools and hospitals.” ¢ SUMMER 2016/17 WA WORKS 21


SOLAR SECTOR HEATS UP The visibility of rooftop solar panels drove residential take-up of the technology—now the commercial sector is catching up BY CARRIE COX



A households may have blazed the trail, but it’s the commercial sector that is now writing the future of solar energy in the state. Infinite Energy, a Perth-based company that since 2008 has become the fifth largest solar provider in the country (wedged between east coast big-hitters AGL and Origin), says commercial take-up has “taken off” in the last couple of years as cost-conscious companies inspect the math. “The residential market is still strong – and the Perth market is

the strongest in Australia – but the commercial market is growing very rapidly and it was only a matter of time,” says Infinite CEO Shane Cremin. He says even 18 months ago a 100KW solar project was a “big deal” for companies like Infinite, but they’re fast becoming the norm. In March 2016, the company installed 948 solar panels (312KW) on the roof of Broadway Fair Shopping Centre in Nedlands – the project cost about $600,000 but was designed to save the centre about $20,000 a month in energy

costs from day one. Infinite has an even larger 600KW project on the books for a site in Ellenbrook in 2017. “Commercial projects are substantially bigger than residential ones – just one project makes up many residential sales,” Cremin says. “It’s not yet the dominant source, but growth in commercial is coming on so quickly that it will soon be the dominant sector.” A number of factors have contributed to the shift, including prices coming down, red-tape reduction (see box: Dollars make

THE SALE OF WESTERN POWER One of the more important issues the WA Government will take into the March 2017 election is the potential sale of Western Power. Infinite Energy CEO Shane Cremin, who has extensive experience in development and operations management within the WA electricity and renewable energy sectors, says the sale makes good economic sense and should happen sooner rather than later. “My fear is that if Western Power isn’t sold, in 10 years’ time the government will be propping it up and if you think we’ve got a debt problem now,” Cremin says. “In 10 years, I can’t see Western Power having the same level of revenue-raising capacity as it does now because companies like ours are doing as much as we can to bring electricity supply from in front of the meter to behind the meter – and we’re seeing that grow so rapidly that effectively something has to change with revenue model. “That said, there is a lot of money looking for a home at the moment and the returns on Western Power over the next 10 years are still probably better than many other options for savvy investors. “But it has to happen soon and, if anything, it should have happened before now. You shouldn’t be leaving your large-scale policy initiatives for a third term. I would have thought the second term was the time for those sorts of considerable changes to the electricity sector.”


WA’s largest solar rooftop installation to date, Broadway Fair shopping centre at Nedlands.

sense) and more attractive loan financing options by WA lenders. Less measurable but certainly underway is a mind shift among commercial business owners. “Broadway is a good example of this,” Cremin says. “I remember when we were presenting it as a finished project and people were saying, ‘well, commercial now seems to make economic sense and here’s proof of it’. “But if you had a look at the rationale as to why Broadway went ahead, they had a problem with their roof – they weren’t thinking about solar. “It was a fairly big capital works project to fix that roof, which they would then have to pass on to their tenants, and so they were approached by us and a story was constructed around the fact that they could fix their roof at zero net cost because of the benefit of solar. “The commercial benefit of solar in and of itself wasn’t enough whereas now, several months down the track, people are looking at it and saying ‘This makes good sense – this gives me the best payback’.” Being in a market that delivers cost savings during a downturn has also worked out well for Infinite.

“Solar behind-the-meter prices are decreasing, so we’re becoming more and more competitive,” Cremin says. “Diesel replacement is a no brainer – it’s such an expensive fuel – so the cost of installing solar makes sense if the project has a significant life span to realise cost savings.” The future certainly looks sunny for Infinite Energy, which still occupies modest offices opposite Perth Zoo. Cremin says: “While the WA market is good and will continue to grow, there are wonderful opportunities interstate and we now have a platform, brand and product offerings to really move into those markets and do very well.” ¢

DOLLARS MAKE SENSE Companies considering installing commercial-scale solar power systems in WA can now save much more after the removal of regulatory red tape. Under the WA Government’s red tape repeal initiative, operators of commercial solar power stations are no longer required to be licensed by the Economic Regulation Authority, an issue that had previously prevented some from installing a system. In announcing the move, Energy Minister Mike Nahan said: “These changes potentially reduce the cost of commercial-scale rooftop solar installations by up to $30,000 per system, while maintaining the safety and integrity of the electricity network. “The next phase of the solar revolution will be driven by commercial rooftop solar systems and that’s why we’re making it easier for businesses to take advantage of this technology.”

SUMMER 2016/17 WA WORKS 23


US NAVY Littoral Combat Ship

US NAVY Expeditionary Fast Transport


ROYAL NAVY OF OMAN High Speed Support Vessel







Mary Hackett, GE Oil and Gas Regional Director

But we must focus on talent, technology and plant operations first




ary Hackett believes that for Australia to become the world’s biggest exporter of LNG, a whole range of factors unique to the industry must change. As GE Oil and Gas’s Australia and New Zealand regional director, Hackett questions “contracting models, competition and dysfunction within our community”. She says the importance of a clear organizational vision is acute but stresses that to build on GE’s – and Australia’s – continued success in the industry, we must become world leaders in talent, technology and plant operation. GE has been operating in Australia since the world’s first LNG train was installed on the North-West Shelf in the mid-1980s. GE now employs almost 600 people in five major locations across the country. It has established a regional hub in Perth and continues to expand, opening a new oil and gas facility in Broome in 2015 to support subsea projects. This commitment to growth underpins its status as a major player in the region’s oil and gas industry. As a female engineer in an industry dominated by men, Hackett is known for her “outside-the-box” leadership and her passion for mentoring and developing the careers of women in the resources sector. She is adamant that people are a company’s most important

resource, and the best way to give good people the confidence to stay with the company is if they believe in long-term prospects. “Without our people, we don’t have a business,” she says. In the current industry climate, this presents a considerable challenge to leadership. And as the company looks at resizing due to the downturn, there may be a tendency to take easy wins. “Unfortunately, the people sometimes targeted to go will be graduates and people who are generally earlier on in their careers or flexible workers, which can often be women,” Hackett says. “But we’ve been very considered as we’re restructuring to ensure we maintain diversity, as it is one of the key platforms for innovation. “Something we’ve introduced in this past year is what we call PD@GE, which is all about ongoing professional development through a live, realtime feedback process.” This, she says, is a significant move away from the traditional performance management system, which generally involves quarterly, formal reviews and one annual review between the manager and the employee. “The interactive PD@GE app is used on mobile devices. This means we can all ask for, provide and receive feedback through what we call ‘Insights’ or ‘Considers’ from our peers, managers, executives and colleagues from across the globe at any time and from anywhere.

“It’s a live process and is not something where you write a plan at the beginning of the year and then look at it next year. It’s an ongoing evolution. This is an example of how using digitalisation is such a powerful way to engage consciousness in an organisation.” Hackett regards GE Chairman and CEO Jeff Immelt as a great visionary who understands global presence and market cycles better than almost any other corporate leader. “In 2010, he predicted the emergence of the industrial internet would be critical to the future of industry. It was already well advanced in the consumer and retail industry; and he recognised that for heavy industry, oil and gas, health care and aviation, the need would be even greater. “He called it the power of 1 per cent productivity, and calculated that just 1 per cent in efficiency gains could equate to more than $150 billion saved annually for the energy, transportation and healthcare industries. He believed digitisation was going to be critical – that you’d go to sleep one night with an industrial business and wake up the next morning a digital company. And he was right.” In 2015 Hackett was included in the annual Australian Financial Review and Westpac 100 Women of Influence awards in recognition of her successful leadership during a difficult time in the oil and gas sector. ¢ SUMMER 2016/17 WA WORKS 25

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TRAINEES ‘A FRESH SET OF EYES’ EAG throwing up top-level operators with an understanding of safety


andidates for oil and gas apprenticeships in Gladstone via EAG have reached the pointy end of a recruitment process. WA-based EAG (Energy Apprenticeships Group) – a collaboration between CCI and ACEPT – is a group training scheme providing long-term training and apprentice management solutions for the oil and gas sector.

EAG to bring process operators quickly on line. “APLNG and Shell are both keen to focus on diversity in the recruitment process and this is reflected in the spectrum of candidates that have applied,” says EAG Operational Manager David Hilliard. “Out of 940 applications, we aptitude tested about 150 people and from that process, 80 were interviewed. In the first round of 38 interviews, 33 candidates were female.”

ABOUT 12 TRAINEESHIPS WILL BE AWARDED FOR WORK ON THE GLADSTONE SITES The group presently runs four-year apprenticeships for WA school leavers and a two-year traineeship for candidates of all ages in the north Queensland city, where the need for skilled process operators is immediate. Three new MNG plants have been built on nearby Curtis Island. Two of them – projects by APLNG (run by Origin Energy and ConocoPhillips) and Shell (formerly QCG) – have hired

Quadrant and Vermilion. Hilliard says early indications are the new apprenticeships are producing future process operators of top-tier calibre. “Because we hit the ground running, immersing the apprentices in site-tasting experiences and building their confidence from the outset, the first-years are already turning heads on project sites with their levels of astute observation and safety awareness,” he says. “Recently one of our apprentices noticed a loose rung on a ladder that was positioned over a turbine on a site. More

experienced operators had overlooked it and yet it was potentially an accident that would have cost thousands of dollars in damage alone. “Sometimes it takes a fresh set of eyes to notice the things we gloss over every day and these apprentices are really instilled with a sense of responsibility about being that fresh set of eyes, and about speaking up about any safety issues they might notice. “At such an early stage of their careers, that’s a very encouraging sign, and it’s great news for the industry moving forward.” ¢

Ultimately, about 12 traineeships will be awarded for work on the Gladstone sites. Meanwhile in WA, the EAG team has been in full recruitment for the second round of school leavers to commence four-year oil and gas apprenticeships. Last year’s intake, the program’s first, resulted in 16 apprentices taken on board for expert training provided by EAG in conjunction with Shell, SUMMER 2016/17 WA WORKS 27


EAGLES VS While the Eagles’ 2016 season ended rather abruptly, their world-class training facilities at Lathlain are finally taking shape


ith turf just planted and two ovals to be completed by the end of this month, the Eagles’ new home – their biggest undertaking in the club’s history is starting to spring to life. The new training facility, to be built at the existing Perth Football Club’s Lathlain Park HQ, will form the major part of the Town of Victoria Park’s overall $68 million Lathlain Precinct Redevelopment Project. The rejuvenation will open up the area to the community and bring them closer to the elite AFL team via new sport, recreation and leisure facilities where they can watch the Eagles train and share the use of venue. Eagles’ Projects, Infrastructure & Technology general manager Digby Moullin says the position of the facility was ideal because of its close proximity to the new

28 WA WORKS SUMMER 2016/17

Burswood stadium, Perth Airport – which is about 7km away – and various public transport facilities, such as Victoria Park railway station and buses. He says despite the attention granted to the Perth Stadium, the Eagles’ facility is still high-profile and will bring the three-time premiers and 2015 grand finalist closer to the community. “Our current facilities are very inaccessible to the community and we think this will be a wonderful opportunity to open the doors up and allow the community to connect with the club,” he says. “It will improve things for the Eagles and provide us with the necessary space we need. The current facilities initially housed 30 people and we now have in excess of 100 people working out of them so they are grossly inadequate in terms of size and the layout. “They are built underneath a grandstand, there’s no natural light, are compromised by the shape of the building and columns and so this will be a purpose-built facility designed

accordingly for a modern AFL club with all the necessary elements we need for a high performance.” At the turning of the sod ceremony in September, then club chairman Alan Cransberg said the club would build world-class facilities. “For the West Coast Eagles, this is a massive decision, probably the biggest decision we’ve made. We’ve been at Subiaco Oval since our inception and now we are moving out here for probably the next 80-90 years,” he said. While forward works, including an overhaul of the existing oval and creation of a second one, are underway, the proposed 13,290sq m administration, training and community facility is currently out for public comment, with tenders to be called for next year. The plan includes an indoor 2150sq m training field, aquatic, medical, board room, media, rehabilitation and recovery facilities. It also includes a café, interactive sports and cultural area, museum, function rooms and community > p30


DOCKERS The Dockers’ state-of-the-art facilities in Cockburn are exactly what a high-performance AFL team needs to succeed


n altitude training room, hot and cold whirlpools, function, meeting and press rooms, not to mention a new oval – the Fremantle Dockers are set to move into their state-of-theart training and administration facility within months. CCI was granted exclusive access to the Poletti Road construction site in Cockburn for a tour of what the future holds when a local council and a high-performance AFL team come up with a grand plan to meet both their needs. The almost completed

THE TOTAL FOOTPRINT OF THE FACILITY IS 24,000SQ M WHICH MAKES IT ALMOST DOUBLE THE SIZE OF THE EAGLES’ LATHLAIN PARK $110 million facility embeds exclusive Fremantle Football Club facilities into the City of Cockburn’s community aquatic

and recreation centre with indoor and outdoor pools, waterslides, six-court indoor stadium, oval, gym and café. It’s an ingenious deal between the Dockers, who were on the hunt for a new headquarters, and the City of Cockburn, who had grand plans for a public facility, and together they have created arguably one of the state’s most unique sporting venues. It’s where someone taking a fitness class can look out a window and be inspired by the elite team training below on their fresh new oval, where swimmers can find themselves doing laps next to their Freo favourites. The marketing potential is exponential. Major contractor Multiplex’s Regional Managing Director Chris Palandri says the facility, which includes 17,000sq m of fully-enclosed undercover area, will be completed on time and on budget – just 18 months since the first sod was turned. “We’re really excited to be involved in the project because it’s so multifaceted and we have a relationship with the Dockers through the Perth Stadium, which we’re also building, and I

thought it was quite symbiotic to be doing this project at the same time,” he says. “I just look at the massive variety of things we are doing on this project from office fit out, swimming pools, basketball courts, indoor pools, outdoor pools, slides, which is quite unusual. “The other thing we have had to work through was the collaboration with multiple parties, primarily Cockburn council, the Fremantle Dockers and LandCorp, who owned the land originally. “So Multiplex was thrown in the middle of that – of course coordinating everything adds to the challenge and the variety of what we are doing here. “I look at this project and think of it almost as the uberfication of buildings because what Cockburn and the Dockers are doing is shared use of facilities, and the arrangements they’ve put in place means Cockburn as an area is getting a much bigger, (and get) better facilities than what would otherwise be possible if they just worked by themselves.” The exclusive Dockers area also includes a private deck > p31 SUMMER 2016/17 WA WORKS 29



Work well underway at the Eagles’ Lathlain Park HQ.

> education centre that will enable expansion of the Eagles in community programs in partnership with the Town of Victoria Park. The main building will be two and three storeys in different sections with 212 car bays, including a basement car park with 60 spaces. The ground level is 6860sq m, level one 3080sq m and level two 1250sq m, with a function space and business lounge.

BCL Group General Manager Louie Hancock, head contractor for the forward works, says construction of the two ovals requires about 80 personnel per week, including 45 onsite and 35 off-site, in an administrative support and management capacity. The project is running on time and on budget. Since the sod turning, the construction team has put in almost 30,000 hours on the project with about 15,000 more

WE’RE DEVELOPING A PRECINCT THAT IS ACCESSIBLE TO EVERYONE Strengthening ties with the community, it will also house the Wirrpanda Foundation, which mentors Aboriginal and Torres Strait Islanders. It will be home to about 200 people, including WCE administration and support staff, players, medical staff and Wirrpanda Foundation mentors. 30 WA WORKS SUMMER 2016/17

needed for completion by the end of this month. One oval will be the same dimensions as the new Perth Stadium, while the other will mirror the MCG so the Eagles can replicate the two main ovals they will be playing on. The total surface area of the

two ovals is 38,336sq m – that’s a lot of earthworks – 55,305m3 to be exact. Almost 11,500sq m of existing material will be re-engineered for onsite use, while 90 per cent of demolition material is being recycled for future use. Hancock said 95 per cent of total project expenditure is invested in WA businesses, employment and products. Turf stolons were planted in November to take advantage of the favourable growing conditions this time of year. Hancock says a joint training, employment and indigenous participation program has been developed between the project team and the Wirrpanda Foundation to help with the facility’s construction as well as provide full-time employment across a number of projects across Perth. “It is expected the Wirrpanda Foundation will also actively participate in providing skills and employment in the long-term maintenance of the facility, in conjunction with BCL Group Pty Ltd,” he says. With two ovals to be available for the Eagles, Perth Football Club

and the public, Moullin says there will be greater flexibility for usage, the turf will not be overloaded and the whole area will be more accessible to the community. “We’re developing a precinct that is accessible to everyone, providing a precinct that people can enjoy and utilise for generations to come,” he says. The Federal and State governments have contributed $10m each to the precinct redevelopment. “We’ve had tremendous support from the stakeholders, Perth Football Club and the Town of Victoria Park and I think it’s because the project got off on a really solid footing early. All parties came to the project really enthusiastic and keen to see a common vision realised and it’s been a win-win the whole way along,” he says. “We’ve had tremendous support from the community and all tiers of government from all political persuasions so from a stakeholder point of view it’s been fantastic.” The Eagles are expected to move to the new facilities towards the end of the 2018 season. ¢




An aerial shot of the facility, top, along with some inside glimpses of things to come. Right: Multiplex’s Chris Palandri and Cockburn Mayor Logan Howlett > overlooking their training oval, which is large enough that the goal posts can be moved to replicate any ground in the country. Their private gym will be fitted out in December. Multiplex Site Manager Construction and Development Matthew Hille said building the oval first created a few accessibility issues during construction as it effectively blocked access to the northern end of the site for the rest of the build. Situated near the Beeliar Drive exit of the Kwinana Freeway and Cockburn railway station, features open to the public include a second oval for open use, another gymnasium, meeting and function rooms, 600 car parking bays and a café. Energy efficiency has been a high priority with a 1200m geothermal bore in the process of being drilled to heat the pools, energy-saving lights and plans to install 1MW of solar panels next year, while the multipurpose indoor stadium can be reconfigured to suit any indoor. Aside from three 18m high waterslides from Turkey, basketball rings from the US,

composite timber flooring for the stadium and hard wearing non-slip flooring for the pool areas from the eastern states, every other material has been sourced from WA. The project has created work for about 1000 workers, with more than 90 per cent of sub-contractors from WA companies. It will provide ongoing employment for 250 to 300 people once in full swing. Dockers’ General Manager of Strategic Projects Brad Paatsch, who has travelled overseas to research elite sporting facilities, says the size and scale of the project “blows him away”, is a “jaw dropper” and better than any in the world. “I’m at bit like an expectant father in a lot of ways, I have worked on this project for close to eight years now, if not a little bit longer,” Paatsch says. “On behalf of the club I’ve had two trips overseas to look at the latest in facilities and I walk through the Cockburn facility now and I can piece together in my mind ‘we took that idea from the New York Jets and that idea from the Giants and that idea from Dallas Cowboys’.

“We probably changed and improved those concepts and pulled it together to create the facility that we have.” He said the Cockburn facility will house up to 150 administration staff, with 90 currently housed at Fremantle Oval which was designed for only 50, with the overflow working from a temporary building. Several east coast clubs have already shown interest in the Fremantle model. The total footprint of the facility is 24,000sq m which makes it almost double the size of the Eagles’ Lathlain Park project at 13,200sq m – and way beyond the next biggest AFL facility owned by the Essendon Bombers at just 6000 sq m. “It’s a big piece of kit, as I like to say,” he says. “The city is predicting anywhere from 1m to 1.3m visitations a year, so for us that is a huge opportunity to get our brand out there – they are all potential new members and supporters. “A key aspect of our strategic planning is to make sure we are always continuing to grow our membership and supporter base,

so we can fill the new stadium on the Burswood peninsula as well, so that’s certainly a unique aspect for us that we really embraced.” The $110 million project – possibly the largest ever sporting project by a local government in the country – was made up of funding from Cockburn City and the Dockers, $18 million in land and funding from the Barnett Government and $10m from the Federal Government. City of Cockburn Mayor Logan Howlett says the project has moved the goal posts on how a project can deliver the community a better service and product at a lower cost. “It signals a change in direction of forming partnerships with local government right across Australia in terms of major projects, as we’re seeing now with the Eagles in Victoria Park – it’s absolutely brilliant.” Palandri, a Sydney Swans support who rates the Dockers as his second team, agrees: “It is really progressive. Twenty years ago this sort of thing would have been unheard of – it’s really progressive way of delivering a project.” ¢ SUMMER 2016/17 WA WORKS 31



A $2b expansion of its Pilbara footprint will ensure the mining giant maintains momentum



ot too many years ago, Fortescue Metals Group was famous for building lots of stuff, namely the mines, port and railways that make up its huge Pilbara iron ore export business. These days the company is better known for sweating those boom-time assets. In essence, Andrew “Twiggy” Forrest’s former brainchild, conceived in his Cottesloe kitchen in 2003, has grown up into a mature mining company. That’s great news for investors, but not so exciting for WA engineering and construction contractors. Fortescue’s last major capital project, a US$9.2 billion expansion capped by its new Solomon hub, was completed nearly three years ago. It has been steady sailing since then, with the company squeezing more tonnes out at lower costs. But soon it will begin building again, albeit at a modest cost compared to the heady days of the boom. CEO Nev Power says the 32 WA WORKS SUMMER 2016/17

company is only 12-months away from calling for bids on building its Firetail mine replacement project, expected to cost up to $2 billion. “I’d say it’s about a year before we are at that stage,” Power told WA Works on a recent site visit to Fortescue’s operations. “There are is a lot of design work and approvals to go before then.” Part of the Solomon Hub, Firetail is Fortescue’s shortest life mine and its 25Mtpy production needs replacing in the next four to five years, Power says. A decision on which of two deposits – Western Hub or Nyidinghu – will be developed as its replacement could be made in as little as six months. “In six to 12 months we will be able to identify which of those options we want to do a further detailed study on,” he says. “We’ll select one and do everything we need to get the approvals.” Western Hub, boasting 740Mt of resources, will need a new 130km railway to connect it to Solomon, while the much bigger 2.5Bt Nyidinghu resource, east toward the Cloudbreak mine, requires a 100km rail link, Power says.

“Some of the thinking around that is what future options those rail lines might give us. “For example, a rail line to the Western Hub opens up a lot of other opportunities, so we would take that into account when we build that rail, whereas at Nyidinghu it might be a dedicated spur.” The total Firetail replacement cost could reach US$1.5 billion, with the majority to be incurred between FY19 to FY21, the company says. In the meantime, Fortescue is looking to develop one or more small satellite deposits to supplement Firetail’s production as it nears the end of its life. These will require minor capital works such as haul roads, maintenance and crewing facilities, he says. The first satellite, possibly either Saddle or Fredericks, is likely to be in production inside 12 months, with scheduling already completed, he says. “Because they are relatively small deposits, we can’t mine them at a significant rate. “They are only mineable at, say, a couple of million tonnes a year, so we want to bring

them in while Firetail is still going strong, and we can maintain our 25Mtpy.” During the tour of its operations, Power and his management team reinforced their commitment to further streamlining, having already reduced the company’s cash costs for 11 consecutive quarters. The most recent improvement trimmed Fortescue’s costs to US$13.55 per wet tonne of ore, placing it in the same ballpark as the other Pilbara majors as they batten down amid lower iron ore prices. For the current year ending June 30, 2017, Fortescue forecasts exports of 165-170Mt of iron ore at a cash cost of US$12-13/t. The savings have allowed Fortescue to preserve margins and pay down much of its debt taken on during the boom. Alongside favourable currency and oil price movements, Power says much of the savings have derived from improved techniques at Solomon, allowing it to mine a “halo” of lower grade ore at its big Kings mine and then upgrade it at an ore processing facility.


FMG’s Perth control centre, left, the company’s loading facility in the Pilbara, top, and CEO Nev Power, above. “We are shipping material that other companies would be putting in their waste piles,” Power says. Other savings have included the ongoing shift to remote operation of much of its Pilbara mine rail and port assets at the company’s Perth office, most recently the Cloudbreak mine. The company’s port, for instance, is monitored and controlled by Perth operators watching big-screen images generated by 120 cameras at Port Hedland, although the final step – loading ore onto ships at the wharf – is done manually by an operator sitting inside the ship loader. Fortescue has also invested heavily in equipment automation, with 54 of its Solomon trucking fleet now unmanned, compared to 13 driven manually. An automated truck is “really just a computer on wheels”, said one Fortescue executive as journalists watched the machines at Kings interacting seamlessly with the mine’s manual trucks and small vehicle fleet. The computerised trucks are monitored and programmed by 3-5 people in the Solomon administration

office, and restricted to an “autonomous zone”. Mine workers all have access to several fail-safe systems, including an emergency device – it has never been used – that immediately stops all automated trucks in the area. Having fine-tuned the trucks for the last couple of years, Fortescue claims they are 20 per cent more productive than manual fleet trucks of the same type due to reduced manning, more precision and less maintenance. Fortescue has also the ability to retro-fit the Caterpillar automation system to its existing fleet, rather than buy new trucks. Outside the mines, the company has several other near-term improvements in the works, including the expected arrival in December of the first of eight new Very Large Ore Carriers, 327m long and 57m wide, now being built in China. The new vessels, to be owned and operated by Fortescue, will be capable of carrying 260,000 tonnes of iron ore, much more than existing Cape Size carriers. Once all eight VLOCs are in service, they are forecast to

improve loading efficiency at Port Hedland and potentially increase the company’s export capacity, which currently sits at 180Mtpa across five berths.

At this stage, Fortescue has no plans to remove the train drivers, as it believes they still play an important role in terms of monitoring or dealing with

WE ARE SHIPPING MATERIAL THAT OTHER COMPANIES WOULD BE PUTTING IN THEIR WASTE PILES Fortescue is also looking to optimise its huge railway network, which consists of 620km of track connecting four mine sites. The 3km-long trains each carry 36,000t of iron ore using 250 ore cars and have an average cycle time – mine loading through to port dumping and return – of 22 hours. On average, Fortescue aims to have 15 trains hauling and unloading about 500,000t each day. The trains are controlled and monitored from the Perth operations centre, but still use drivers who are provided with a “virtual” signaling system on a tablet.

incidents such as breakages, bushfires, flash flooding and livestock on the tracks. Nevertheless, plans are afoot to increase the effective rail capacity by introducing a Driver Assist ‘cruise control’ to the locomotives that will apply the throttle and brakes automatically. The aim is to reduce cycle times, fuel consumption, and wear and tear. Fortescue’s railway team was evaluating tenders for a new cruise control system as WA Works went to press. If approved by management, the system is expected to take 18-24 months to implement. ¢ SUMMER 2016/17 WA WORKS 33



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34 WA WORKS SUMMER 2016/17

Memo from the Minister The MRA is playing a key role in creating a dynamic Perth, says Planning Minister Donna Faragher


ew hotels, restaurants and cafes, entertainment facilities and world-class events are helping shape Perth and build on our vibrant culture. A complementary mix of apartments, townhouses and high-quality renovations, along with the refurbishment of heritage buildings, are also redefining the urban fabric. This kind of planning and transformation is more than just development. It requires an approach that combines entrepreneurial thinking with legislative backing and government strategy, as part of the overall long-term vision for what we want WA to be. The Metropolitan Redevelopment Authority is part of that picture. Formed in 2012, it brought together its four predecessors from East Perth, Subiaco, Midland and Armadale. The authority is responsible for delivering key government projects and manages

more than 2600 hectares of land across metropolitan Perth. It is a statutory planning authority and property developer in one entity and has worked on a range of projects that reflect the changing face of Perth. These include Elizabeth Quay and the Perth Cultural Centre, a revitalised Northbridge and William Street, and soon the riverfront around East Perth. Outside the CBD the strategic metropolitan centres of Subiaco, Midland, Scarborough and Armadale are being transformed. One of the authority’s significant current projects is Perth City Link, with a range of lots going to market over the past year and a hotel development already confirmed. Next door is one of Perth’s biggest public projects, Yagan Square. As it takes shape it epitomises the cross-discipline work the MRA undertakes. Nestled among the heritage-listed


Horseshoe Bridge, Yagan Square has involved major engineering challenges – loading restrictions over existing rail tunnels underneath the site, geo-technical issues and difficulties associated with working so closely to a heritage site. The construction site has also had to operate around a number of neighboring construction projects with the associated challenges of minimising the impacts for pedestrians, traffic, train and bus commuters, city workers and visitors. One of the main ideas in establishing Yagan Square was that it would reflect WA culture and history. As a result, there is a strong Aboriginal narrative incorporated into the design of the project, including stories from the traditional owners of the land, the Whadjuk people. Yagan Square will include a range of event spaces, a public amphitheatre, fresh food market, children’s play area, native gardens and a water feature flowing through the centre. There will be 25 retail tenancies with a leasing campaign designed around securing leaseholders committed to showcasing WA food and beverages. Outside the CBD, the MRA has played a key role in transforming Midland through its work on the historic rail yards and workshops and has developed partnerships with major institutions – Curtin University, St John of God Hospital, private developers for apartments and specialised living – and smaller unique entrepreneurial arts and business providers. From an economic perspective, a return of more than $16 billion is forecast from combined government investment of less than $4 billion over the life of the MRA’s 13 projects. In the past five years the MRA has delivered one million square metres of office, retail and commercial space. Each square metre means new jobs, emerging businesses and a growing economy. More than 80,000 people have also found a place to live in almost 40,000 new homes, townhouses and apartments that have been, or are about to be, built. By managing population growth through urban renewal and higher-density development, the State Government, through agencies such as the MRA, is reinvigorating and reinventing places that respect our past and helps us prepare for our future. ¢ SUMMER 2016/17 WA WORKS 35


SLOW BOAT TO CHINA The WA economy is sluggish, but there are some glimpses of recovery expanding export volumes which now drive growth – rather than domestic economic activity. This is evident through the contraction of State Final Demand (SFD) for the last three financial years. SFD shrunk by four per cent in the 2015-16 financial year, compared to a reduction of 2.8 per cent in the 2014-15 financial year, and 1.5 per cent in 2013-14. On the export front, WA continues to be the most significant contributor to our national exports, accounting for about 42 per cent of all exports. WA contributes at least twice the export volume than any other state, with China remaining our number one destination, with exports valued at approximately



e continue to hear about “moderating” growth in WA, and have even heard the “R” word grabbing headlines in recent months. What we mustn’t forget is that the levels of growth and expansion we have seen were unprecedented and have impacted positively on the overall development of the state. But as major projects come online and move into the production phase, business investment is declining. We are now seeing these previous high levels of investment transform into WA’s

WA Merchandise Exports By Destination, Value $7bn $6bn

$7bn China















$0bn Sep 96

Jan 00

May 03

Sep 06

Jan 10

May 13

$0bn Sep 16

Source: ABS Cat. 5432.0

Headline Unemployment Rate Aust & WA, Percentage


9% WA
















1% Oct 96

Feb 00

Jun 03

Source: ABS Cat. 6202.0

36 WA WORKS SUMMER 2016/17

Oct 06

Feb 10

Jun 13

1% Oct 16

$6.5 billion. Japan is the next largest export destination with just under $1.1 billion. Private business investment continues to be the biggest detractor from growth, falling 16.9 per cent in 2015-16, while public capital investment remained relatively steady over the year after falling almost 10 per cent in 2014-15. Both household and government final consumption expenditure slightly increased. Despite the changing composition of the economy, in 2015-16 WA continued to grow, with Gross State Product (GSP) expanding by 1.9 per cent. CCI forecasts the WA economy to grow by 1.8 per cent in 2016-17 and 3 per cent in 2017-18. The ongoing trend of part-time job creation and the corresponding reduction in full-time jobs has continued, with softer domestic economic conditions impacting on the WA labour market. Over the past year, 49,100 full-time jobs were lost and 26,800 new part-time jobs were created, resulting in a total loss of 22,300 jobs in the WA economy. WA’s unemployment rate has reached the highest of the states with 6.5 per cent (seasonally adjusted) in October 2016. CCI believes unemployment will remain at 6.5 per cent for 2016-17 and 2017-18. According to the latest data (September 2016), the WA labour market has seen employment growth over the past 12 months in sectors such as retail trade (12,900), professional services

(10,100), agriculture (9,100), and hospitality (8,400). But others have been hard hit, such as construction (-36,400), health and social services (-9,800), mining (-6,600) and transport and storage (-6,200). At an annual growth rate of 0.5 per cent for September, Perth’s consumer price index (CPI) growth remains at its lowest annual rate since March 1998, when it was -0.3 per cent. The major detractors from growth were communication products, falling 7.7 per cent, and transport, falling 3.4 per cent. Housing also declined almost two per cent, driven by falling rents which declined by 6.4 per cent. CCI believes inflation will increase to 1.5 per cent in 2016-17, and 2.2 per cent in 2017-18. The latest wage price index (WPI) data showed that the WA WPI grew by 1.7 per cent over the year to September. The spread between private and public wage growth remains, with private sector wages growing by just 1.5 per cent and public sector wages by 2.3 per cent. The industries in WA that saw the largest year-onyear growth in September were public administration and safety (2.6 per cent), education and training, and retail trade (both 2.5 per cent). The industries that saw the slowest growth were professional and technical services (0.3 per cent), mining (1.1 per cent), and construction (1.2 per cent). National WPI for the year to September 2016 was 1.9 per cent. CCI has forecast WPI to increase to 1.9 per cent in 2016-17, and 2.2 per cent in 2017-18. ¢

MAJOR RESOURCE PROJECTS MAP AND LIST An artist impression of Kings Square office campus





ublic infrastructure and gold mining dominate the new entries in WA Works’ Major Projects List, an exclusive feature updated each quarter for the benefit of our valued readers. Of the 10 additions to the spring edition, three are gold projects worth a combined $813m – great news for a WA supply chain starved of resources opportunities in recent times. All three projects are reaching out to suppliers as they prepare for construction starts next year. Gold Road Resources’ $507m Gruyere project near Laverton has the biggest price tag and is WA’s most substantial gold mine development for years. Construction of Gruyere is expected to kick off early in 2017 after Gold Road ensured its funding commitments by selling half of the project to South Africa’s Gold Fields. The mine, expected to create about 500 construction jobs and 300 permanent roles, is due to begin producing gold by late 2018. Contractors can also pitch for work on Dacian Gold’s $220m Mt Morgans project, also near Laverton, where construction is due to kick off in the first quarter of next year, and Gascoyne Resources’ $86m Dalgaranga gold project in the Mid West. Outside the sudden gold glut,

there are continued infrastructure opportunities in Perth and surrounds, such as the WA Government’s recently approved $540m Roe 8 highway extension. A consortium led by CIMIC Group’s CPB Contractors is building a 5km, four-lane extension of Roe Highway from the Kwinana Freeway intersection through to Stock Road. Separately, John Holland is working in partnership with Main Roads WA on the $281m NorthLink WA Central and Northern Sections project, which will upgrade Tonkin Highway from Guildford Road to Reid Highway. Beyond transport, Civmec and Black & Veatch are working on a $196m upgrade of Water Corporation’s Woodman Point Wastewater Treatment Plant. The additions are rounded out by two energy ventures – Altina’s proposed Yandin wind farm and TransAlta/Horizon’s North West power station, the K+S salt project at Onslow, and Sirona Capital’s Kings Square development in Fremantle’s town centre. On the minus side, seven entries drop off from last issue, mostly due to the finish of several urban road and construction projects. A notable deletion, however, is Hess Corporation’s long-mooted Equus offshore gas development in the Pilbara, which was lately considered a likely source of

third-party “backfill” gas for Woodside’s North West Shelf venture. Equus is now on hold, with Hess saying the prolonged decline in oil prices meant the company had a reduced capital budget from which to fund major projects. The latest Major Resource Projects two-part map, meanwhile, is provided exclusively to WA Works by the WA Government’s Department of Mines and Petroleum and is another must-see feature. As well as differentiating mines and projects via handy commodity symbols, the map uses a colour scheme to dig down further into the detail. Projects that are operating or currently under development with an actual or anticipated value of production greater than $10 million are shown in blue, while proposed or potential projects with a capital expenditure greater than $20m are in red. Such is the detail that even projects under care and maintenance are show on the map in purple. WA Works subscribers wishing to access the latest WA Works Major Projects List and the Major WA Projects Historical List, go to cciwa.com/wa-works/majorprojects-list or contact the WA Works Editor on (08) 9365 7445 or email waworks@cciwa.com. ¢ SUMMER 2016/17 WA WORKS 37


Major Resource Projects

Eaglehawk Mutineer Fletcher Persephone Exeter Finucane Athena Hermes Lambert Deep Searipple Egret Lambert Capella Angel Perseus Cossack Thebe Forestier North Rankin Wanaea Montague Ajax Chandon Gaea Keast Hurricane Goodwyn Rankin/Sculptor Tidepole Yellowglen Pemberton Urania Goodwyn/S.Pueblo Wheatstone Sage Jansz Dixon/W.Dixon Pluto Geryon Iago Dockrell Saffron Reindeer Io South Toporoa Xena Scarborough Eurytion Winchester Gnu Brunello Chrysaor/Dionysus Corvus Wilcox Balnaves Caribou Briseis Bravo Maenad Julimar Wandoo Orthrus See Glencoe Tusk Acme West Tryal Rocks Barrow Island Oryx Achilles Nimblefoot Yara Pilbara Clio enlargement Stag John Brookes Clio South The Grafter Nitrates Chamois Gorgon Clio North Yara Pilbara NWSV LNG Satyr Fertilisers Rosella Mentorc n | Pluto LNG Chester Rosella North n Anketell | Dampier | n Spar Maitland Dampier Salt Cape Preston East Bianchi Halyard Cape Lambert Cape n| n Zola Preston | Devil Creek Radio Antiope Maitland River Gas Hill Tallaganda Pasco Sino Iron Munni Munni Pt Pd Bunyip Flinders Shoal Whundo Balmoral South Zn Cu

North West Shelf

Novara South Chervil Nasutus Tanglehead Coniston Cadell Cyrano Van Gogh Stickle Nimrod Australind Moondyne Vincent Corowa Pyrenees Stybarrow Outtrim John Brookes Coaster Laverda Blencathra n Onslow | Enfield Macedon n Onslow Salt | Scafell Crosby Leatherback Ashburton North Wildbull Ravensworth Wheatstone LNG Macedon Gas






Pharos Ichthys West Ichthys



Precious mineral

Shark Bay Salt

Ord River Hydro Energy Speewah V Ti Fe Speewah Fl Smoke Ridges Creek Matsu Argyle

Oobagooma Point Torment Lloyd West Terrace Boundary Thunderbird Sundown Blina

Derby | n

Browse LNG Precinct

n Broome |

Ungani Duchess–Paradise



Phoenix South

Savannah North McIntosh Gr Panton Pt Pd


Precious metal Au (or as shown)

Steel alloy metal Ni (or as shown)

Speciality metal

Ti–Zr (or as shown)

Base metal Iron Alumina

All sites are bauxite

Coal and lignite Uranium Industrial mineral Processing plant

Balline Grt Port Gregory Grt

Koongie Park Zn Cu Pb ! HALLS CREEK Hastings REE Nb Zr Lamboo Kapok West Pb Zn Ag

n n | |

n n| |

n |

Browns Range REE Cummins Range REE

Citadel Au Cu Woodie Woodie Mn

Telfer Au Cu O'Callaghans W Cu Zn Pb

Nifty Cu

Maroochydore Cu Co

Yeneena Cu Kintyre

Lake Mackay K

Nicholas Downs Mn Lake Disappointment K

18 See Pilbara enlargement (inside cover)

Yangibana REE

Ilgarari Cu

Butcherbird Mn

Abra Pb Cu Zn


Horseshoe Lights Cu Au Ag Plutonic Fortnum Yalbra Gr

Telecom Hill Peak Hill

DeGrussa Cu Au

Beyondie Plutonic Dome Thaduna Cu Ag Monty Cu

Wiluna Jundee–Nimary Paroo Station Pb Lake Way Central Murchison Centipede–Millipede Gabanintha V Ti Fe Wiluna West Honeymoon Well Hillview Weld Range Hinkler Well Yeelirrie Mt Keith Cue JV – Hollandaire Cu Au Ag Nowthanna Lake Maitland Gidgee Cliffs Barrambie Big Bell Bronzewing Yakabindie V Ti Fe Great Fingall Murchison / Silver Lake Dalgaranga Mt Magnet


West Musgrave


Succoth Cu PGE

Lake Wells North K

Tollu Cu

Lake Wells West K

Gruyere–Yamarna Thatcher Soak

Windimurra V Fe Kirkalocka

n | n Geraldton |

Cyclone Tropicana

Mulga Rock

Petroleum symbols

Gas field Oil field Oil and gas field Significant gas discovery Significant oil and gas discovery Processing plant Oil / gas pipeline, operating Oil / gas pipeline, proposed

Savannah Copernicus

Port Hedland | n n |

Jack Hills Andy Well

n |



Edna May

PERTH n Fremantle | n |

Collgar wind


Nova–Bollinger Eucla West

See Goldfields Cosmic Boy Concentrator Wickepin Kln enlargement Salmon Gums (inside cover)


Power plant Irrigation / water / desalination Port

Ord Stage 1 ! KUNUNURRA

Cockatoo Island Irvine Island Koolan Island


Mineral symbols


Admiral Bay Zn Pb

Silver Gold Kentish Knock Brederode Cobalt Copper Eendracht Diamond Iron Fluorite Gypsum Graphite Garnet n n| | Potassium Kaolin n | Limestone Liquefied natural gas Magnetite See North West Shelf Manganese enlargement Niobium Nickel Carley Bore Lead Palladium Platinum group elements Platinum Cape Cuvier | n Lake MacLeod Gp Rare earth elements Lake MacLeod Salt Titanium CARNARVON ! Vandium Tungsten Zinc Zirconium


Cape Bougainville Gwydion

Sorby Hills Pb Zn Cu Ord Stage 2

Barrow I



Cornea Echuca Shoals

Brecknock Calliance



Ag.......... Au.......... Co.......... Cu.......... Dmd....... Fe.......... Fl............ Gp.......... Gr........... Grt......... K............ Kln......... Lst.......... LNG....... Mag........ Mn.......... Nb.......... Ni........... Pb.......... Pd.......... PGE....... Pt........... REE....... Ti........... V............ W........... Zn.......... Zr...........




Concerto/Ichthys Mimia

n Wyndham |

Bambra Ulidia Linda Wonnich Deep km Lee Bambra East Rose North Alkimos Monty Josephine Harriet Baker Agincourt Simpson South Plato Little Sandy Pedirka Double Island Victoria Gorgon LNG West Cycad Narvik Barrow Island


Rough Range

Project labels:

Projects operating or currently under development with an actual or anticipated value of production greater than A$10 Million are shown in blue Proposed or potential projects with a capital expenditure greater than A$20 Million are shown in red Projects under care and maintenance are shown in purple

Barrow Island



Laminaria East


Exmouth n | Rivoli

Cape Range Lst

December 2016

n Bunbury |

See South West / Midwest Coastal Data for offshore Commonwealth controlled enlargement (inside cover) waters is up-to-date as of February 2016. Enquiries for latest information for Commonwealth controlled waters is available from the National Offshore Petroleum Titles Administrator (NOPTA) 38 WA WORKS SUMMER 2016/17 at <info@nopta.gov.au>


Scaddan Mt Cattlin Li Ta Great Southern Au Cu


n Albany Albany wind |


n Esperance |








Major Resource Projects December 2016

Gnu Caribou

Reindeer Corvus Tusk Oryx Stag Chamois

Port Hedland Salt



n Port Hedland |

Yara Pilbara Nitrates NWSV LNG Yara Pilbara Fertilisers | n Cape Lambert Pluto LNG n Anketell | n Balla Balla | Monty n Dampier | Salt Creek Zn Cu Pb Josephine Baker Cape Lambert Dampier Salt Balla Balla Fe V Ti Cape Preston Sherlock Bay Cape Preston East Whim Creek Cu n| | n Devil Creek Gas Maitland River Radio Hill Sino Iron Whundo Zn Cu Munni Munni Pt Pd Balmoral South

Mineral symbols

Tabba Tabba Ta


Corunna Downs

All sites are bauxite

Middle Robe Mesas Mesa J Mesa A – Warramboo Caliwingina Firetail



Mulga Downs Cloud Break


PARABURDOO Turee Syncline ! Western Range Eastern Range Paraburdoo Channar



Power plant Irrigation / water / desalination Port

Mineral separation Geraldton | n Geraldton brick Narngulu synthetic rutile Greenough River solar Alinta wind Mumbida wind Irwin River Mount Horner Corybas

Golden Grove Cu Zn Pb Au Cu Ag Shine

Data for offshore Commonwealth controlled waters is up-to-date as of February 2016. Enquiries for latest information for Commonwealth controlled waters is available from the National Offshore Petroleum Titles Administrator (NOPTA) at <info@nopta.gov.au>

Magnetite Range

Three Springs Tlc

Extension Hill Mag Corybas

Eneabba/Sheffield Eneabba/Iluka



Emu Downs wind Atlas Cooljarloo/Tronox




Iron Hill Mummaloo






Garden Well & Rosemont

Agnew–Emu Ben Hur – Epsilon


Bentley Zn Pb Cu


King of the Hills

Mt Forrest Cashmere Downs

Mt Morgans



Sons of Gwalia Mt Bevan

Mt Ida


Red October Second Fortune

Calingiri Cu Mo Ag Au

PERTH n Fremantle |

Deep South

Chandala mineral separation and synthetic rutile Felicitas ! NORTHAM Fortuna Caversham tile Middle Swan brick Midland brick Airport brick

Lake Giles

Windarling Meckering Kln

Marda Mt Jackson J4 J5

Bungalbin East

Armadale brick Cardup brick


n |

Koolyanobbing Keysbrook Huntly Pinjarra Alumina Wagerup Alumina



Boddington Au Cu Marradong Saddleback



Kemerton Sisd Titanium pigment Worsley Alumina Collie Bluewaters 1–2 Premier Ewington Collie–Shotts urea Muja Muja South

Capel North Synthetic Rutile Wonnerup Wonnerup North Wonnerup South Tutunup Tutunup South Yoongarillup 100 Whicher Range Ta


Jump Up Dam


Malaga brick

Sunrise Dam

Murrin Murrin

Mt Mason

Burtville Mt Weld Phos Mt Weld REE


Red Gully


Southern Seawater desalination Chlor alkali Silicon smelter n Bunbury | ! Cristal mineral separation

Moolart Well





Kwinana–Rockingham Alumina refinery Ammonium nitrate n Bulk terminal | Cement and lime Chlor alkali Desalination Fused alumina Fused zirconia LNG LPG Nickel refinery Oil refinery Power plant Sodium cyanide Titanium pigment Zirconia



Apium Evandra

Tarantula 5 Beharra Springs N Beharra Springs

Yerecoin Boonanarring Gingin West


Waitsia Centauri 1 Xyris


Moora Chert

Projects under care and maintenance are shown in purple



Dandaragan K Phos

Proposed or potential projects with a capital expenditure greater than A$20 Million are shown in red



JURIEN BAY ! Badgingarra wind

Projects operating or currently under development with an actual or anticipated value of production greater than A$10 Million are shown in blue

Mt Mulgine W

Karara Mag Hem

See Dongara enlargement Cliff Head

Silver Gold Chert Copper Iron Hematite Potassium Koolinite, Kaolin Lithium Liquefied natural gas Liquefied petroleum gas Magnetite Mica Manganese Molybdenum Nickel Lead Palladium Phosphate Platinum Rare earth elements Silica sand Tantalum Titanium Talc Vandium Tungsten Zinc Zirconium

Project labels: Bilberatha Hill

Deflector Au Cu Ag

Oakajee | n



Prairie Downs Zn Pb Ag

South West / Midwest Coastal


Processing plant Oil / gas pipeline, operating Oil / gas pipeline, proposed

Marillana Extension Nyidinghu Yandi/BHPB Iron Valley Yandicoogina/HI Hope Downs 1 Mining Area C Jinidi South Flank Rhodes Ridge West Angelas Ophthalmia Wonmunna Hope Downs 4 31 Wheelarra JV 24–25 Giles Mini Mt Whaleback ! Davidson Creek NEWMAN 35 17–18 Jimblebar Robertson Range




Gas field Oil field Oil and gas field

Christmas Creek Roy Hill



Western Turner Syncline ! TOM PRICE Tom Price

Brockman 4


Petroleum symbols

Mesa – Ant Hill Mn


Beasley River Rocklea CID


Coal and lignite Industrial mineral Processing plant

McPhee Creek Cookes Creek W

Nullagine CID



Mt Stuart JV


Base metal Iron Alumina




Speciality metal

Ti–Zr (or as shown)


West Pilbara

Ni (or as shown)

Abydos Li Ta Sulphur Springs Zn Cu Pb ! Wodgina Ta MARBLE BAR Iron Bridge Mag Maghemite

Mt Webber

Bungaroo Creek Bungaroo South

Steel alloy metal

Miralga Creek


Ag.......... Au.......... Chert...... Cu.......... Fe.......... Hem....... K............ Kln......... Li............ LNG....... LPG....... Mag........ Mica....... Mn.......... Mo.......... Ni........... Pb.......... Pd.......... Phos...... Pt........... REE....... Sisd....... Ta.......... Ti........... Tlc.......... V............ W........... Zn.......... Zr...........

Au (or as shown)

Spinifex Ridge Mo Cu Pilgangoora Li Ta


Precious metal


Goongarrie Scotia Karari Aphrodite Canegrass Cawse Siberia Pinnacles Lindsays Sandy Ridge Kln Ora Banda Black Swan Kalgoorlie North Paddington Kanowna Belle Castle Hill Frogs Leg KALGOORLIE-BOULDER Kundana Superpit ! Nimbus–Boorara Ag Au Zn White Foil Nickel smelter COOLGARDIE Blair Coolgardie ! South Kal Bullabulling Mt Monger Aldiss Burbanks Randalls Carnilya Hill Mt Marion Nepean Long–Victor Li Ta Mica Nickel concentrator St Ives and Toll treatment plant Lanfranchi



Mt Caudan

Polar Bear

Earl Grey Li

Mt Thirsty Lake Johnston

Greenbushes Li

Bald Hill Ta


Flat Rock wind

Flying Fox

New Morning Spotted Quoll



SUMMER 2016/17 WA WORKS 39









Q1 2018


Admiral Bay Zinc development

Mining & mineral processing

Currently in Prefeasiblity



North West

Advanced Meter Infrastructure Project

Asset replacement project




Horizon Power service area

Anketell Port and Strategic Industrial Area





North West

WA Dept of State Development

LNG and Condensate




North West

Woodside (Operator), Shell, BP, MIMI, PetroChina

Capital Square Tower 1



Q1 2015

Q2 2017



Cockburn Regional Physical Activity and Education Centre



Q3 2015

Q1 2018



Collie Coal to Urea

Mining & mineral processing



4 years from financial close

South West

Perdaman Chemicals and Fertilisers


Mining & Mineral Processing



Q1 2018

Mid West

Gascoyne Resources

Elizabeth Quay

Mixed use

440 (Government funding)


2020+ Public realm finished H1 2016


Metropolitan Redevelopment Authority

Forrestfield-Airport Rail Link






Public Transport Authority

Gorgon Expansion (1 LNG Train)





North West

Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo Gas, JERA

Gorgon Project (3 LNG Trains)





North West

Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo Gas, JERA

Transport & Storage




Wheatbelt North

Main Roads WA


1900 (US)


2020 (first oil mid-2019)

North West

Woodside 60% (Operator) Mitsui 40%

Greater Western Flank Phase 1 Project

Gas & Condensate




North West Shelf

Woodside operated North West Shelf Project

Greater Western Flank Phase 2 Project

Gas & Condensate

US$2 billion



North West Shelf

Woodside operated North West Shelf Project


Mining and mineral processing


Q1 2017

Late 2018


Gold Road Resources








Q3 2016

Q2 2018

North West











Late 2019


Sirona Capital


Detailed Engineering

Late 2016



Phoenix Energy Australia




2H 2016

North West



Q2 2016

Q1 2018



Browse Development

Great Northern Highway (Muchea to Wubin Stage 2) Greater Enfield

HMAS Stirling Redevelopment Karratha Health Campus Karrinyup Shopping Centre Redevelopment Kings Square Kwinana Waste to Energy Julimar Development Project Mandurah Forum Shopping Centre Redevelopment MAX Light Rail Project

COMPANY/ ORGANISATION BGC Development Pty Ltd Metalicity

Horizon Power

Doric Group

Woodside 65% (Operator) and KUFPEC 35% Multiplex






Public Transport Authority

Transport & Storage





Main Roads WA

Mining & mineral processing



Q3 2016


Neometals Ltd/Mineral Resources Ltd/Ganfeng Lithium Co., Ltd

Mt Morgans

Mining and mineral processing


Q1 2017

Q1 2018


Dacian Gold

Multi-storey car park at Edgewater train station

Transport & Storage





North West Coastal Highway (Mia-Mia to Barradale) Stage 2

Transport & Storage



Late 2016


Mitchell Freeway Extension – Burns Beach Rd to Hester Ave Mt Marion Lithium Project

40 WA WORKS SUMMER 2016/17

Public Transport Authority Main Roads WA

MAJOR WA PROJECTS LIST NorthLink WA Central and Northern Sections

Transport and Storage





Main Roads WA

NorthLink WA Southern Section

Transport and Storage



Early 2018


Main Roads WA

Onslow Salt

Mining and mineral processing




North West]


Persephone Project

Gas & Condensate



2H 2017

North West Shelf

Woodside operated North West Shelf Project






John Holland

Perth City Link

Mixed use, transport

1300 (Government funding)


2020+ Yagan Square mid-2017


Metropolitan Redevelopment Authority, Public Transport Authority, City of Perth, Leighton Properties (developer, Kings Square precinct)

Perth Freight Link (Roe 8)

Transport & Storage





Main Roads WA John Laing, Brookfield Financial, Brookfield Multiplex and Brookfield Global Integrated Solutions

Perth Children’s Hospital

Perth Stadium



Q3 2014

Q4 2017


Pilbara Power Project

Power generation




North West


Pilbara Underground Power Project (Phase 2)

Power generation




North West

Horizon Power


Mining & mineral processing


Q4 2016

Late 2017

North West

Pilbara Minerals





North West

Shell Australia, INPEX, Kogas, OPIC






Public Transport Authority




Q4 2017


CPB Contractors, Georgiou Group, WA Limestone, GHD, AECOM and BG&E





North West

BHP Billiton Petroleum, ExxonMobil




Q4 2017

North West

Rio Tinto Southdown Joint Venture (Grange Resources Ltd owning 70% and SRT Australia Pty Ltd owning remaining 30%)

Prelude FLNG Project Purchase of Additional Railcars Roe 8

Scarborough FLNG project Silvergrass

Mining & mineral processing




South West

Square Kilometre Array





Mid West

Stadium Rail Project






Power networks





Western Power

Transport & Storage


End 2015



Main Roads WA

Power Generation


Late 2015

Early 2017

North West




Late 2019


Southdown Magnetite Project

State Underground Power Program (SUPP) Round 5 Swan River Pedestrian Bridge TransAlta Power Station WA Museum

SKA Organisation, Australian and Western Australian Governments PRISM Alliance (PTA, Laing O’Rourke, AECOM)

TransAlta Energy (procured by Horizon Power Multiplex Chevron (Operator), Kuwait Foreign Petroleum Exploration Company, Woodside Petroleum Limited and Kyushu Electric Power Company, together with PE Wheatstone Pty Ltd (part owned by TEPCO)

Wheatstone Project

LNG and Domestic Gas


Late 2011


North West

Woodman Point Wastewater Treatment Plant



late 2016



Mine extension




North West

Rio Tinto

Power Generation





Altina Energy

Yandicoogina Oxbow mine life extension Yandin Wind Farm

Civmec, Black & Veatch

Key - New since September 30 SUMMER 2016/17 WA WORKS 41


CHARGING UP LITHIUM VALLEY It may be the start of a long journey but investigations are already underway to see if WA can create a ‘Lithium Valley’ that would produce lithium-ion batteries for the globe’s green energy revolution BY STEPHEN BELL WA Works Editor


n a windy day last October, nearly 170 people squeezed into a marquee on Kwinana’s industrial strip to watch two men in suits toss dirt into the air using shovels decorated with big red ribbons. It is likely that Premier Colin Barnett and Tianqi Lithium Chairman Jiang Weiping would have drawn a big crowd even without the trimmings, which included traditional Aboriginal dancing and didgeridoo playing to complement Richard Walley’s Welcome to Country. The event marked the start of WA’s first foray into the uncharted waters of downstream lithium processing via Tianqi’s $400 million Kwinana plant, which is now under construction. Tianqi – headquartered in China and the world’s largest producer of lithium chemicals derived from mineral concentrates – had 150 people on its original guest list but was forced to send out more invitations once the word got around. 42 WA WORKS SUMMER 2016/17

Those who did get inside the tent included most of Tianqi’s big Chinese, Japanese and Korean battery customers, all cheered by the prospect of buying lithium hydroxide out of Australia once the plant starts running in late 2018. Lithium in either its hydroxide or carbonate form is an essential cathode material for long life lithium-ion (more commonly referred to as Li-ion) batteries used in hybrid and electric vehicles (EVs), as well as mass energy storage systems. Demand for the metal has soared in China in the past year as new battery plants are built to cater for the growing tide of EVs and home energy storage. Tianqi plans to process raw concentrates of spodumene – a lithium-rich mineral found widely in WA – derived from Tianqi’s 51 per cent-owned Talison Lithium Greenbushes mine in the South-West. The mine currently provides the bulk of China’s lithium chemical production from “hard-rock” sources. According to Barnett, Talison is likely to double output in order to supply the new Kwinana plant,

while maintaining existing spodumene concentrate exports out of Bunbury. Once processed, the lithium hydroxide will be exported from Fremantle to Tianqi’s Asian and European customers. Those chemicals will eventually end up in the cathodes of batteries that return to Australia as the power sources for our electronic devices and, increasingly EVs and home electricity storage. It raises the obvious question: why don’t we make the batteries as well, given that Australia has big reserves of most of the raw ingredients needed to make them, including lithium, nickel, cobalt, copper, aluminium and manganese?

most mining companies were solely focused on getting their raw products to China as quickly as possible. But the downturn, alongside a surge in demand for batteries, has seen more and more people asking; “Why not?” If not batteries, then why not make cathodes – the electrodes inside them that generate the current? Indeed, BHP Billiton’s Nickel West division is now moving down that path via test work at its Kwinana nickel refinery to see if production of nickel sulphate – used in cathodes – is viable. The plan came to light recently when Nickel West President Eddy Haegel told the Australian Nickel Conference he was monitoring

IT RAISES THE OBVIOUS QUESTION: WHY DON’T WE MAKE THE BATTERIES? During the boom the question might only have been of academic interest, given that

“with interest” the shift towards EVs and Li-ion batteries to see if opportunities developed in the


company’s business. By 2035, BHP believes there will be around 140 million EVs on the road, or 8 per cent of the predicted fleet size of 1.8 billion. The company has noted a trend towards heavier nickel-lithium batteries, which are expected to increase their share of the market from 38 per cent in 2015 to 57 per cent by 2025, according to industry consultant Avicenne Energy. “We are keeping a watching brief on the developments of this market and its potential opportunities for Nickel West,” Haegel says. “As a large, established producer of high-quality refined metal in a stable operating environment, in close proximity to raw materials and the Asian battery market, we believe we are well placed should opportunities emerge. “The first opportunity – should it be an economically-rational thing for us to do, and we have to do the valuation, understand the technical and financial aspects – would be nickel sulphate. “That would be the first step in the journey, producing a very high-quality nickel sulphate so

as to target the premium end of that market.” Industry insiders are intrigued by Haegel’s comments, particularly given the location of BHP’s nickel refinery as a near neighbour of Tianqi’s new plant. It doesn’t take too much to imagine that Tianqi and BHP might wish to discuss cooperation on downstream lithium opportunities given that they will both be running Kwinana plants

which, collectively, would be capable of producing most of the key battery ingredients – lithium hydroxide (Tianqi) and nickel and cobalt (BHP). For Tianqi, which has aspirations to become more ‘Westernised’ by building its first ever lithium plant outside China in Kwinana, partnering with a company the size and reputation of BHP would no doubt represent a desirable prospect.

Such a partnership, if it eventuates, might prove a catalyst for Kwinana becoming a processing hub for battery chemicals. It would have sufficient firepower to attract a Panasonic or a Samsung to investigate whether WA might also house a battery cathode facility to feed off the chemicals. Industry sources say Japan and Korean battery customers are already excited about the > p 44

SUMMER 2016/17 WA WORKS 43


> opportunity to buy product from WA, outside the dominant lithium supply chain in China. How excited would they be about gaining the ability to source key battery components from here as well? Such a development may still be years away, and require plenty of corporate and government willpower – not to mention dollars – to bring it to fruition. But the opportunity for the research sector and industry to come together on production of battery components is “real”, according to Tim Walton, Director of Energy Research Initiatives at Curtin University’s Office of Research and Development. “It is something that should be pursued,” Walton tells WA Works. He says several research institutions, including Curtin and Melbourne’s DST Group, are currently working out what the best chemistry is for Li-ion batteries in terms of energy storage and discharge. The research may also need to balance those features against which process is safest, says CCI Chief Executive Deidre Willmott. “From WA’s perspective, with our big reserves of spodumene, the next big development in battery technology will be ‘safe’ lithium batteries,” she says. Existing Li-ion technology is considered relatively safe but episodes such as the recent Samsung Galaxy Note7 recall, due to fire risks, shows that improvement is needed, especially for industries where a fire might prove catastrophic. Australia’s new diesel-electric submarine fleet, for instance, will require batteries but the Department of Defence is yet to decide which type. “As we are in the preliminary stages of design work, a decision on the battery technology to be used in the Future Submarine is yet to be determined,” a Defence spokesperson said. “This decision will be informed by an analysis of the capabilities, suitability and maturity of various technologies.” Willmott, however, believes the first submarines will use traditional lead-acid technology, with safer lithium batteries providing an opportunity down 44 WA WORKS SUMMER 2016/17

the track for WA’s supply chain. Those long-range opportunities might be challenging for WA industry to get its head around, according to Ken Brinsden, CEO of Pilbara Minerals, which is about to start construction of its $214 million Pilgangoora lithium mine in the Pilbara. “Having been through a few battery materials and cell-making factories I can tell you that manufacturing them is not for the faint-hearted,” Brinsden says. “I think WA’s place in the industry obtains highest value through participation in valueadding materials rather than the end-product, i.e. battery packs.”

THE VALUE OF WA LITHIUM, TANTALUM AND TIN PRODUCTION FELL 15 PER CENT FROM $251 MILLION IN 2014–15 TO $213 MILLION IN 2015–16 With EVs and battery technology the flavour of the month, investment bank UBS featured a half-day session at its recent Australasia Conference in Sydney. Its panel of academics spoke to the factors that go into making a good battery, viewed as a trade-off between power, energy density, cycles and safety. “The panel believes that lithium-ion batteries will be in use for at least the next 10 years, particularly in the consumer sector, and hence in terms of raw materials, the panel expect lithium and graphite will experience growing demand for some time,” UBS says. Australia doesn’t boast any significant graphite mines. At present China dominates the market, producing 66 per cent of

global “flake” graphite feedstock for battery usage, with India (7 per cent) and Brazil (21 per cent) the other significant producers. Despite this dominance, Benchmark Minerals Intelligence Managing Director Simon Moores believes that the small scale of mines in China and hence limited product consistency is likely to be an inhibitor to expansion as demand grows, UBS reported. Graphite is an important ingredient in most types of lithium batteries used in modern EVs and other applications. However, the fact that WA doesn’t currently mine any graphite is unlikely to prohibit the state’s downstream lithium ambitions, according to Chris Reed, Managing Director of Neometals, a mining company that recently started production of spodumene concentrates at its jointly owned Mt Marion lithium mine near Kalgoorlie. Reed says high-quality forms of the carbon mineral can also be manufactured synthetically out of petrochemicals. But lithium from spodumene is the metal of the moment, with China rushing to secure WA supplies from Mt Marion and Mt Cattlin, another mine restarted by Galaxy Resources. Pilbara Minerals, meanwhile, plans to begin construction of its

$214 million Pilgangoora project early next year; and Altura Mining, which recently raised $41.6 million via a share sale to Chinese battery producer J&R Optimum, is also planning its own Pilgangoora project. As it stands, WA is the world’s largest supplier of lithium and it is adding mine capacity faster than anywhere else in the world. “However, compared to the impact our non-renewable raw materials are having on global energy systems, we recover virtually no value,” says Reed. “We need to put more focus on recovering more value domestically while we have the opportunity.” According to the State Government, the value of WA lithium, tantalum and tin production fell 15 per cent from $251 million in 2014–15 to $213 million in 2015–16. This trend is likely to dramatically reverse over the next two years with new production coming on line. The new mines will generate hundreds of millions of dollars in sales, but Reed says that WA raw lithium could be transformed into a multi-billion dollar sector if the spodumene concentrates were processed into chemicals or cathodes. All of the major Asian battery producers are building new


factories to cater for the rising demand from the EV sector, he says. “They are building them in China because China is converting Australian hard-rock (spodumene) into lithium carbonate and lithium hydroxide,” he says.

JAPAN AND KOREAN BATTERY CUSTOMERS ARE ALREADY EXCITED ABOUT THE OPPORTUNITY TO BUY PRODUCT FROM WA “If we could get one of the ex-China battery makers to put their plant down here, it would be much better for Australia as you’re going to be producing much higher-value product. “It is not a labour-intensive business and eminently do-able.

It boils down to how badly the Federal Government wants to create a new industry here, given that more than 90 per cent of batteries currently come from Asia and half of those from China. “This is at a time when renewable energy plus lithium battery storage is cheaper than existing grid power in the US and Australia, and some countries in Europe, so there is an opportunity there.” Neometals is partnered with Mineral Resources and China’s Ganfeng Lithium at Mt Marion, with the first shipment expected in the December 2016 quarter. The two WA companies have also agreed to study the feasibility of building WA’s second downstream lithium processing facility in the Goldfields. They will investigate using Mt Marion’s concentrate to produce a battery-quality product suitable for cathodes, and aim to make a final investment decision in Q3 2017. Neometals is also involved in a new working group recently set up by the Association of Mining and Exploration Companies (AMEC) to “business plan” the opportunity to add as much value as possible to WA’s current exports of raw lithium, says chief executive Simon Bennison. “The industry came to us and

said, ‘Let’s see what we can make happen’,” he says. “I think everyone is very keen and excited about the battery space and what can be done in the context of storing energy, and seeing what role Australia can play in the manufacturing of batteries. “We’ve been talking to the (WA) Government and there has been varying levels of interest from certain agencies. Bennison freely concedes it is just the start of a long journey. But it is a journey well worth taking, according to Peter Newman, Professor of Sustainability at Curtin University, who has been talking up the potential for WA to host a “Lithium Valley” for some time. “I have been telling many local and global audiences, including 20 million people in the US who listen to National Public Radio, that WA has the largest share of the lithium export market, that there are several new mines starting, and that we are looking at how to create Lithium Valley -the next economy after Silicon Valley,” he says. It sounds more like a marketing dream than a solid business plan, and Newman accepts that the best development path remains unclear at this stage. “But I suspect that industry

would have lots of ideas and that government could enable this in partnership with a range of stakeholders,” he says. “I do know that the market for lithium ion batteries is only just beginning. And it does seem to me that we’re locked into lithium. There is nothing else at this stage that can compete.” But why bother building cathodes or batteries in WA, when the market is already heavily supplied from new Gigafactories in China and South-East Asia? To Newman, the answer lies in the unique characteristics of WA and much of the Australia – remote cities and communities heavily reliant on back-up energy if the power goes out. South Australia’s state-wide blackout in late September put this issue in stark focus. WA will no doubt use the lessons learned from SA as the WA Government seeks to dramatically increase the use of solar and wind power to meet national renewable energy targets. And renewable systems require plenty of battery storage. “We are going to be one of the first places to use a lot of lithium ion batteries, and we produce a lot of lithium, so why not close the circle on that?,” Newman says. “We could do a next generation battery plant and make it cheaply.” ¢ SUMMER 2016/17 WA WORKS 45


SILVER LINING FOR PERTH MINT To coin a phrase, the East Perth institution is back in the money BY STEPHEN BELL WA Works Editor

46 WA WORKS SUMMER 2016/17


old rushes may come and go, but for Perth Mint CEO Richard Hayes the business of running one of WA’s biggest export institutions carries on regardless. But there is no denying that Hayes – a veteran precious metals executive who came to WA from Zimbabwe nearly three decades ago – has enjoyed a golden run since being promoted to the Mint’s top role in July last year. In the first year of his tenure, the organisation’s pre-tax profit more than doubled to a record $41 million on turnover of $9 billion from its refining, manufacturing, minting, marketing and storage operations. The sterling result has set a high bar for Hayes as he seeks to forge fresh overseas

markets and launch new projects, including a gold futures trading product in coming years. “We are coming off an exceptional 2015-16 and this year won’t be quite as strong, but it will still be a good one for us,” Hayes told WA Works. “Much of our after dividend profitability is ploughed back into creating demand for Australian gold in local and overseas markets,” he adds. Last year’s performance was helped by strong demand for gold as a safe haven asset amid the continued political and economic uncertainty gripping world markets. The result was also sweetened by the roaring success of the Mint’s new Kangaroo 1oz silver coin, launched in September 2015. “We had planned to manufacture and sell about five million of these globally every year, and, in fact, we sold double that in the first year,” he says. “So we got a very good global response to the Kangaroo coin

(legal tender value of $1), and that was really the icing on the cake for us last year. “We launched into a pretty hot silver market, but it was also a new product. Australia is viewed as exotic by many people overseas, and featuring something as iconic as a kangaroo makes it very desirable and hence saleable in overseas markets.” Typically the coin is shipped overseas to retailers, wholesalers and investors in boxes of 250. “We are still selling pretty decent volumes of it,” he says. In terms of the Mint’s overall product range, Hayes noticed increased demand following the US election result. “But the conciliatory nature of Trump’s acceptance speech and the lack of any rhetoric thus far has seen gold prices revert to previous levels and below,” he says. “With much water to flow under the bridge between now and the early days of the Trump presidency, much could happen.”

RESOURCES It would probably surprise many to learn that The Perth Mint – the trading name of the WA Government’s Gold Corporation – is WA’s fifth biggest exporter by value, sitting behind big resources names such as Rio Tinto, BHP Billiton and Woodside. That’s because looks can be deceptive. The Mint’s imposing Colonial-era structure built of Rottnest Island sandstone has stood in East Perth for more than a century but is just the public face of what has grown into a globally significant enterprise for WA.

It also offers the Perth Mint Depository, which uses central bank-grade vaults to store precious metals for investors who don’t need to take physical delivery. Current holdings are worth a staggering $3.1 billion – as good as any measure of the Mint’s stature in the precious metals game. It also happens to be owned by the WA Government, which assumed ownership in 1970 from Great Britain after it had established the Mint in 1899 to refine gold from the recently discovered Kalgoorlie goldfields.

IN 2014-15 WE SOLD JUST OVER FIVE MILLION PRECIOUS METAL COINS The displays of coins, bars and jewellery that greet tourists as they wander in from Hay Street are just the tip of the iceberg. The Mint employs about 500 people across its various divisions, including a big refining operation at Perth Airport that produces cast bullion bars, minting of bullion coins designed by a team of six artists in East Perth, tourism and retail.

“We are the only one in the WA Government’s stable of trading enterprises that is classed as for-profit,” Hayes says. “So we don’t get any government funding – everything we do here is self-funded and we pay dividends back to government every year.” In the past decade the Mint has paid about $200 million in dividends into state coffers.

Probably because of its public ownership, the Mint has struggled to achieve full recognition of its role in adding significant value to the raw gold and silver produced from Australia’s network of gold and silver mines – most of them located in WA. “We refine the vast bulk of the gold mined in Australia, and from surrounding Pacific nations such as New Zealand, Papua New Guinea, Fiji and the Solomon Islands,” Hayes says. “So our gold refining volumes are somewhere between 300-350 tonnes every year.” It also refines plenty of silver – 690 tonnes in the last financial year. The refinery produces a range of cast gold and silver bullion ‘London Good Delivery’ bars, which are marketed globally and constitute the bulk of the Mint’s recurring revenue. Only a small percentage of the gold and silver is refined into a range of precious metal coins and specialist bars. Most of the cast bars go to South East Asia and last year it was primarily China, which is the world’s biggest gold producer but also a growing importer of the metal. The coins, meanwhile, have found a big market among collectors and investors in the US, with Germany the second-biggest buyer. “But we do have clients and customers in 133 countries.”

Hayes says there are no big capital works programs on the immediate horizon, with the Mint having finished an approximate $18 million factory expansion last year to increase coin production capacity. “In 2014-15 we sold just over five million precious metal coins, whereas in 2015-16 we sold almost 16 million, so it really allowed us to significantly increase our volumes.” One new project on the boil is a proposed Gold Futures Contract that would be run by the ASX in partnership with The Perth Mint. “That will appeal to a range of local and international investors, partly because it allows physical delivery of the underlying metal, which is different to most of the other futures contracts that exist.” The new contract is some way from launching and not expected to have an impact on the Mint’s revenues until FY2018. “We also have a number of international projects in play that will come to fruition late in this fiscal year or early in 2017-18,” Hayes says, adding that the new ventures relate to the Mint’s charter of “creating demand, overseas, for Australian gold”. One initiative is expected to impact sales into North America, with the other directed at the Australasian and south Asian regions, he says. ¢

FRESHLY MINTED The Perth Mint is WA’s fifth biggest exporter by value. It was founded in 1899 by Britain’s Royal Mint and believed to be the only ‘gold rush’ mint in the world still operating from its original premises. It holds $3.1 billion worth of gold for investors in central bank-grade vaults in and around its East Perth HQ. It established a new refinery at Perth Airport in 1990 after outgrowing the capacity of its Hay St building. It refines 94 per cent of Australia’s newly mined gold. It produces a range of cast bullion bars, including gold and silver London Good Delivery Bars, which are marketed globally. Coin production volumes grew by more than 300 per cent to just over 16 million in 201516 after new capacity came on stream. 50.9 million numismatic and bullion coins have been minted and sold worldwide since 1987, adding value to 85.8M ounces of gold and 98Moz of silver.

SUMMER 2016/17 WA WORKS 47



Mahmood Hussein, left, and members of his GDS training team at the firm’s Alfred Cove training site

It’s been a rapid ascent for these unmanned flying machines into the commercial atmosphere, but safety laws have struggled to keep up



he excitable take-up of drone technology by the commercial sector continues to outstrip the many safety and security questions it poses. What minimum training should a commercial drone pilot have? How do commercial sites stop unauthorised drones from flying over their work spaces? If a drone falls in a forest and no-one hears it, could it start a bushfire? (Answer: yes.) While the many cost savings and technological efficiencies delivered by drones are irrefutable and impressive, safety legislation – slow and risk-averse by definition – has struggled to keep up.

drones themselves are vastly different now, with far greater capacity and applications we’ve never before envisaged. “We are acutely aware that the rules need to keep up with the pace of intake and so we have scheduled a full-scale review of drone rules in the not too distant future.” CASA’s timeframe is ambiguous. The Federal Government recently announced a review of aviation safety regulation in relation to drones (or Remotely Piloted Aircraft Systems – RPAs – as they are known in the world of acronyms), ostensibly to be overseen by CASA but effectively run by a Senate Committee.

THE RULES NEED TO KEEP UP WITH THE PACE OF INTAKE AND SO WE HAVE SCHEDULED A FULL-SCALE REVIEW OF DRONE RULES “That’s absolutely correct,” says Peter Gibson to claims new laws can’t keep up. As the Civil Aviation Safety Authority’s Head of Corporate Communications, Gibson has witnessed the drone juggernaut at the same warp-speed as the rest of us. “Since 2002 (the year that CASA became the first international aviation authority to draft a set of rules governing drones), the scene has changed dramatically,” Gibson says. “The 48 WA WORKS SUMMER 2016/17

The review is, arguably, a kneejerk response to CASA’s decision in September to ease licencing restrictions (and red tape) for lightweight RPAs – a decision that drew the ire of many, not least the Australian Federation of Air Pilots. Federation president David Booth, a Virgin Australia pilot, recently told The Australian: “I believe in Australia we owe the travelling public a duty to provide good regulation on drones and

these laws won’t do that. Unlike a bird, drones are hard and made of metal, composites and lithium batteries, which could explode on impact. These new rules remove layers of safety and pose serious risk to air safety in Australia.” So will CASA sit on its hands until the Senate Committee delivers its conclusion? “There’s no point in us doing anything until after that committee has finished its work,” Gibson tells WA Works. “After that, typically we’ll release a discussion paper and invite comment. In the meantime, businesses need to know this is not a free-for-all.” Though certainly not a freefor-all, at least in the industrial sector, drone take-up continues unabated. In September 2015, WA’s Department of Mines and Petroleum described an “explosion in the use of drones as cheap, yet extremely versatile sensor platforms” – and there’s been plenty of drone action since then, with companies using them to measure stockpiles, conduct 3D mapping surveys and carry out once-laborious maintenance checks of large equipment.

But while hailing the drone’s many benefits, the department also issued this warning note at the time: “Not only do drones present business risks (e.g. public image and privacy risks), but there are also technical and safety risks.” It described an incident in which a drone had become unstable after encountering interference, hit a roof and unsheathed one of its lithium-ion batteries, which subsequently started burning on the roof. In another reported incident investigated by CASA, a drone flown by a member of the public flew into Port Hedland Harbour and crashed in a laydown area – fortunately not on anyone’s head. Early adopters of drone technology in WA mining largely framed their own safety parameters while the drafting of rules and regulations caught up. Heritage Manager at BHP Billiton Daniel Bruckner, who uses drones daily to find and map sites of cultural heritage where they exist near sites, says his team was “looking at drones even before CASA”.

THE BIG PICTURE While drone technology has more than paid for itself in Daniel Bruckner’s work of mapping cultural heritage, he says financial justifications for their use are “myopic” and miss the point. “For me, the bigger picture is what this technology allows us to do that could never have been done before, and for us that means being able to share and preserve cultural heritage that might otherwise have been lost,” he says. “We’re now able to share all our footage with local Aboriginal groups for tourism and other purposes, and they’re extremely grateful for that possibility.”

RESOURCES In fact, his team built its first drone using a kit. “Early on we were investigating whether we needed a pilot licence to operate the drones, and in our case it was determined our purposes were more research than commercial,” Bruckner says. “Since then, and being a risk-averse company, we’ve done our own full risk reviews for the various classifications of drones – any usage outside of those parameters requires raising a JHA (Jobs Hazards Analysis).” Drone technology has transformed the nature of Bruckner’s work. Traditional mapping involved drawing sketches and taking pictures mostly at ground level – a slow, methodical task. Now a two-minute drone flight can capture “a couple of thousand pictures” that are fed into a GIS (Geographic Information System) using 4D software technology, explains Bruckner. “A few years ago, talking about using drones in the way we are now was like James Bond stuff,” he says. Interestingly, Bruckner’s primary safety concern isn’t that a drone might crash into someone’s head – or, for example, a culturally irreplaceable stone arrangement belonging to local indigenous people – but rather that an overheated drone that isn’t landed safely could spark a fire in the red-hot Pilbara. “Drones run on batteries and batteries generate heat – in the Pilbara that could spell danger if there was a crash,” Bruckner explains. “So we’ve looked very closely at mitigation and there hasn’t been an incident so far. We’ve found there’s a trade-off in

that bigger drones, while lasting longer and capturing more data, need bigger batteries and generate more heat and therefore have a greater fire risk. “So we opt for nothing over 1kg – it’s about finding that sweet spot.” On the issue of fire risk, CASA’s Gibson concedes the threat had only recently appeared on his radar. “It’s a valid point – lithium batteries can cause thermal runaway and there is nothing in the rules about that right now,” he says. “How would you regulate that? Our advice is that sites themselves should think carefully about those risks where they might apply.” People also need to be mindful of unauthorised drones on their sites, Gibson says. “Sites should ensure that any drone on their property adheres to the required rules and regulations – for example, they must be 30m away from people, avoid crowds, have line-of-sight control,” he says. Easier said than done, one might argue, if someone spots an errant third-party drone flying over a site but not its controller. It’s a possibility that quickly takes drone discussions from the area of safety into security. BHP’s Bruckner says: “While it’s not an issue for us at present, with most big iron ore producers using the same technology, there is the potential for industrial espionage involving drones and this is the sort of thing the Australian Government should be writing legislation about now, rather than waiting to see an incident on the news and then relying on precedent legislation that is likely to be active and shortsighted.” ¢

NEW BUSINESS IS FLYING HIGH Growing demand for trained drone pilots in WA – and an abundance of ex-FIFO workers looking to reskill themselves – provides the impetus for Mahmood Hussein’s new business, Global Drone Solutions. The British-born WA “turnaround expert” and aviation enthusiast spotted a gap in the market three years ago and went after it like a fighter pilot. “I thought this is fantastic . . . the prices are coming down, the drones now have fantastic sensors on board, they’re a lot safer and I could see that a number of mining companies were starting to use them for all sorts of applications,” he says. “So the time was right and things have only mushroomed since then.” Hussein took nine months to get approval from CASA – “it’s like setting up a small airline” – and then developed approved training modules to set GDS up as a certified training organisation and operator. Successful graduates of his one-week course receive a Certificate III in Aviation (Remote Pilot – Visual Line of Sight). While GDS currently runs one training course each month (with a maximum of eight participants), demand has led Hussein to offer a second monthly course from March 2017 and he’ll open a Brisbane office in January. “FIFO workers who were made redundant are coming to us to get a new skill and go back to the mine sites with a new capacity for work as a contractor,” he says. “And people come to use from other sorts of industries too and for all sorts of reasons – drone flying is a job of the future, really.” In addition to training new drone pilots, GDS assists them in gaining early baby-steps experience – weddings, roof inspections and other small jobs – to quickly amass enough flying hours to qualify for mine site work. Besides mining industry take-up, drones are finding plenty of work in construction applications too, Hussein says. “Many companies are using them to create monthly update reports for stakeholders – 90-second videos that visually show the progress of a construction,” he says”. “Drones can capture angles that are otherwise very hard to imagine when you compare the cost of using one for a few minutes to the cost of hiring a cherry-picker for the day.” On the issue of safety, Hussein is a fan of greater regulation. “My position on training requirements is not a vested one; it’s a genuine safety concern – you don’t want something dropping from a height of 120m onto someone’s head,” he says. “Basic training should be essential. Every drone pilot should know the rules and regulations and I believe that any drone above 250g should be registered.”

SUMMER 2016/17 WA WORKS 49



Opportunities aplenty as green shoots emerge from the north across a range of industries BY SALLY-ANNE CURTAIN


f you made a list of the food bowl regions of WA, the Kimberley probably wouldn’t be the first to spring to mind. But with the enthusiasm of keen international investors and the vital support of local suppliers and producers, a region traditionally known for its natural tourist attractions has given rise to a sea of growth. CCI caught up with Peter Stubbs, Director of Major Projects with the Department of Regional Development, at the recent Kimberley Economic Forum in Derby. There, the talk of the town was the green shoots coming from the agriculture, aquaculture and cattle industries, and the training, skills and growth those opportunities bring.

flurry of international investor interest, the Kimberley is angling to become a serious new food development and production hub. Stubbs speaks highly of foreign investor interest in the region, citing ventures such as the development of 30,000 hectares of irrigated farms by Kimberley Agricultural Investment Pty Ltd, and Bruce Cheung’s endeavour to establish a 120,000 head herd of Wagyu cattle in Pardoo. These projects will be game-changers for WA’s entry into foreign export markets. “In terms of the north, I see a lot of prospect and a lot of growth opportunities, and really it all gets down to how

THE ARRIVAL OF NEW PROJECTS HAS REVITALISED THE ECONOMY Stubbs is keen to talk about the aptly-named Project Sea Dragon – an up-and-coming venture so large it’s received major project status across federal, state and territory government jurisdictions. Stubbs explains that the world-class prawn production and processing facilities led by WA company Seafarms Group will not only revitalise the region’s aquaculture industry but also draw upon support from Wheatbelt grain growers and “involve potentially Darwin, Kununurra and Wyndham (to) create something in the order of 1600 jobs”. Sea Dragon is a $1.45 billion prawn aquaculture project on the 180,000-hectare Legune Station on the WA-NT border. It aims to make Seafarms the biggest prawn producer in the world. And it’s not the only venture of its kind. Following a 50 WA WORKS SUMMER 2016/17

willing we are as communities to make the decisions that are necessary to give investors the confidence to go forward and invest their money.” Lena Constantine, Manager of Apprenticeship Support Australia, toured the region alongside Stubbs’ team and was heartened by the flurry of activity in the region. She says the investments bring new opportunities to the younger people in the area, but also enable the existing workforce to upskill and expand its capacity. “Off the back of the mining downturn, we’ve seen a gap form in the workforce where a lot of skilled workers no longer have the opportunity to work in the roles they were trained for. These types of investments will give rise to the need for construction, production and processing skills in the region, so it’s a fantastic

opportunity for jobseekers and investors alike.” The arrival of new projects to the region has revitalised the local economy, with many local businesses set to reap the rewards. Stubbs believes the availability of local providers to support large-scale projects has presented as a big drawcard to those looking to invest in WA’s regional areas. “If you’re a new investor into the Kimberley, one of the things that [will give] you great confidence is how local business can engage, and what they can do to support you. If you look at Kimberley Agricultural Investment, which is a Chineseowned company operating in the Ord Scheme, there’s over 70 local businesses supplying goods and services to that company,” Stubbs says. While the major projects themselves generate direct job creation, they also open up the opportunity for smaller local ventures to invest in training and upskilling the next generation of Kimberley’s workforce. Constantine says the time is right for smaller business to jump on board the wave of change by taking the opportunity to train new staff with a view to expanding product and service capacity. “As the economy shifts to focus on new industries, people must adapt and grow their skills to meet the needs of business. For small business, this might mean looking at ways to break into the new markets created by these investments and taking on apprentices or trainees that can foster that expansion of

the business.” Stubbs emphasises it’s important to ensure there are ample reasons for young people to remain living and working in the Kimberley. Creating jobs in a variety of industries or for a variety of skillsets is a way to achieve that. “I think that without job creation, it’s pretty clear that there’s no future for kids coming through the system,” Stubbs says. “If they really want careers and they want to do well in life, they’re probably faced with the prospect of leaving towns like Halls Creek and Fitzroy Crossing, so the only alternative there is to that is to create some jobs.” Constantine agrees, saying it’s “imperative upon schools, TAFE, universities, community support services and industry to work together to ensure that the local community is adequately skilled for future growth prospects.” Stubbs is hopeful that key stakeholders within the communities across the Kimberley will jump at the opportunity to affect change within the region by taking advantage of the business, employment and skilldevelopment surge set to be generated by the new projects. “It’s very important that a key competitive advantage of any town is its ability to convince an investor, (and say) ‘Hey, trust us, we can supply and support the endeavour that you’re going to do’. “So we should never underestimate the importance of local people and local business to the success of major projects and major investments.” ¢

Memo from the Minister We must be vigilant in the face of misguided political popularism, says Mines and Petroleum Sean L’Estrange


est Australians are a resilient mob and the quick bounce-back we have experienced in the mining sector is testament to the entrepreneurial spirit and “can do” attitude of our mining explorers, financiers, and project developers. Through the first decade of this century we jumped on board the double-boom train of a massive and prolonged mining construction phase, coupled with high commodity prices. This saw WA surf past the 2008 Global Financial Crisis without missing a beat. In more recent times, with mining construction having slowed, and many of the commodity prices having taken a hit, we have all had to take a step back and re-focus our efforts in what is a structurally-altered state economy. As Minister for Mines and Petroleum, Finance and Small Business, I am fortunate to have the reins of three significant portfolios, which represent the engine room of our economy. For me, the key to an efficient and resilient mining sector is making sure that we, as a Government, continue to listen to the various stakeholders, whilst making every effort to shape the economic conditions for success.


foundations of our vitally important $90 billion WA resources sector, which directly employs over 100,000 people, indirectly employs over 400,000 people, and through its ongoing success supports vast numbers of businesses in Perth, regional centres, country towns and remote communities. The Liberal-National Government supports onshore petroleum exploration, including hydraulic fracture stimulation. Plus, we support efforts to tap into our uranium deposits. We support these important resource development endeavours because we have stringent, multi-agency approvals processes in place, involving the departments of Water, Environmental Regulation, Health, Mines and Petroleum and the Environmental Protection Authority. I am thrilled that, in early 2016, the highly-respected Fraser Institute rated WA as the world’s top mining investment destination, and I am determined to build on our leading status to continue attracting national and international investment. The Liberal-National Government gained this top ranking because of our desire to be the best in the business. This is evidenced by our rolling red tape reduction program, which has sped up approvals processing, cutting millions of dollars in mining industry costs. We continue to support investor confidence, through transparent regulation, a stable and proven royalty system and freely available world-class exploration data. Plus, we have the highly successful Exploration

Incentive Scheme, and its signature Co-Funded Drilling Program, which has been the catalyst for a large number of highly-successful mining projects. In the competitive world of global resources, investor confidence is one of our most precious economic imperatives. This has, historically, given WA its leading edge. With the cost curve now low and efficiency incentives high, this really is the best time to be building a mine in WA. Our commitment and efforts have enabled mining exploration to continue to grow throughout 2016 with a 25 per cent increase over the last 12 months. Plus, we currently have $97 billion of resource projects either under construction or in the committed stages. Underpinning all of this resources sector success is a determination to create more jobs. Growing the state as a global centre for mining and petroleum excellence and building on our automation, computing and geophysics leadership boosts our job creating performance. For instance, WA already produces the lion’s share of global mining software and hosts key centres for major operators like Chevron, BHP Billiton and Rio Tinto. We are also on track to become one of the world’s biggest exporters of LNG, including the Prelude Floating LNG project, which will bring a further technology surge to Western Australia. Sean L’Estrange is the Minister for Mines and Petroleum, Finance and Small Business. ¢

This requires strong leadership, targeted economic policy, sound governance and a willingness to step in and offer a hand when required. Importantly, in the lead up to the looming state election, we must be vigilant in the face of misguided political popularism and protest group pressure. To do otherwise is akin to economic vandalism which could damage the SUMMER 2016/17 WA WORKS 51


FULL STEAM AHEAD Changing tack to pick up Garden Island contracts highlights our evolving capabilities, says Doric BY HELEN CLARK

52 WA WORKS SUMMER 2016/17


s we now know, the Turnbull Government’s mantra of “jobs and growth” has a decent defence component, with the $50 billion submarine contract and a White Paper committed to spending 2.5 per cent of GDP on Australia’s defence. While the submarines will be built in South Australia, there remain some great defence opportunities in Western Australia. One of these has been the $345 million HMAS Stirling redevelopment at Garden Island – the country’s largest naval base and home to 2300 service personnel and a Submarine Escape Training Facility – which actually began in 2010. Perth construction contractor Doric has been handling the huge expansion, bringing its

workbook to more than $500m. As CEO Vince Mulholland sums it up; “Our state is undergoing a real transformation in metropolitan and regional areas, and we are excited about playing a part in that.” The contractor has projects from Busselton to Karratha, and on big city builds like Yagan Square. But a defence contract is another animal, although Project Director Justin Taylor believes it does not have to be difficult – even when it is highly technical. The Garden Island redevelopment will run until 2020, across a multi-stage schedule. It has, and will, continue to provide jobs across varied sectors from architects and design to roads, sewerage, power infrastructure and upgrades to maritime structures and bridges. “When we look at the project

in total and we look at the trades that will be required, it’s difficult to think of a trade that will not be required on the project just because of the spread of works,” Taylor says. There will be about 300 jobs up for grabs across 25 sub-projects as the base prepares for an increase in visiting subs under the SEA1000 project. All work will be advertised via newspapers and other media for expressions of interest and tender. Local engagement has been a key at every phase, from planning and liaising, with a suite of designers and big reputable providers like KBR, Aurecon, GHD and CCN Architects in Perth. But is the skilled labour needed for such a project still available locally? Yes, says Taylor. He believes resourcing was more difficult a few years


ago and the recent economic slowdown has actually meant a better labour supply.

the North-West are not that busy, so that affords us the opportunity . . . to engage locally.

THE GARDEN ISLAND REDEVELOPMENT WILL RUN UNTIL 2020, ACROSS A MULTI-STAGE SCHEDULE “In a way we are unfortunate because of the economic cycle, but at the same time, from a resourcing point of view, we don’t have the big problem we had a few years ago which was all to do with project resourcing,” Taylor says. “A lot of the companies, a lot of our subcontractors who were very, very busy a few years ago in

“Commonwealth procurement rules really dictate the process that we’ll take to procure trades. We will generally advertise here and also nationally . . . the focus is on local engagement and Australian content.” This, of course, is good news for WA workers at a time when the economy has slowed.

While various indicators have painted a picture of a faltering economy, that was reinforced again with recent figures showing the State remains the county’s weakest labour market. Now the initial design phase is almost over, what sort of timeline is Doric looking at for the rest of the project? They’ll plan on letting the first contracts by mid-2017 and, according to Taylor, “approximately mid-2018 we’ll be looking to let the last contracts. So in between now and then is when we’ll be going through the two-phase procurement process.” Renovating the country’s largest naval base is an undoubtedly ambitious project in a period when HMAS Stirling is doubling its submarine fleet. Taylor believes the trickier

and more important aspects are actually security and communications. He adds; “Then I’d have to say the maritime structures, just because of the nature of the works we’re doing to those or going to be doing – it’s tricky design.” Generally speaking, working a defence contract is always going to differ from a civil project, but it’s not so unusual or harder that various obstacles can’t be overcome. “The expectations, the processes, the systems, the way we go about delivering most projects, is comparable – it’s not that different,” Taylor says. The difference, he says, sits mainly in the Parliamentary approvals process and “because we’re working on Commonwealth land with Department of Defence, (that’s) a bit different.” ¢ SUMMER 2016/17 WA WORKS 53



Building capacity has been the key to BAE Systems’ impressive start in WA – now for the main game BY TONY BARRASS


f Ian McMillan ever decided to walk away from a successful career with BAE Systems, he’d have a bright future in the diplomatic corp. Articulate, thoughtful but cautious, the amiable general manager of BAE Systems gently bats away any googlies about the upcoming $3-4 billion SEA 1180 Offshore Patrol Vessels contract that his company is circling like an ominous white pointer. We’re sitting in the conference room of BAE’s expansive operations at Henderson – the hub of the most dynamic industry in WA at the moment – and while McMillan is keen to showcase the capacity he and his team have built into BAE’s 14.4-hectare waterfront operation that he describes as the most sophisticated shipbuilding and support base on the west coast, he’s not giving away much when

it comes to the OPV contract. When pressed about how much he believes BAE’s could snare of the OPV pie, McMillan simply smiles and says: “I won’t talk numbers.” Which is really not surprising considering the amount up for grabs; after all, not only is BAE in the hunt for a big slice of the patrol vessel opportunity, but the Future Frigates program – which is worth an estimated $35 billion when it comes online in 2020 – is clearly another target right in BAE’s crosshairs. Having only arrived from the Swedish office in 2013 where he ran BAE’s global combat weapons systems, McMillan and his young clan have settled right into the unique WA lifestyle. “My family loves it here – we love it – there’s no other word,” he says genuinely. He’s quite chuffed at the success of building capacity at the Henderson operation, which

services the robust oil and gas sector, carries out commercial ship repair and conversion, and of course targets the nation’s flourishing defence industries – a New World of opportunity that spins right within BAE’s orbit. Initially, his primary focus was building a new culture within BAE “from the top down and bottom up”. The operation had only been going two years when he arrived and had a workforce of just 40. He got to work scouting the brightest and best from BAE’s global offices and throughout his competitors, and trawled other sectors across the country. It was a challenge to build the workforce and get the right balance in skillsets, but “it’s a challenge our team has risen to”. “We’ve been getting outstanding feedback since we’ve been here,” he tells WA Works. Five years and $40 million after opening its Australian

Marine Complex doors, BAE is now a pivotal player in WA’s growing reputation as a worldclass defence core. And while he’s tight-lipped about what some of these contracts will mean to BAE in dollars and cents, McMillan is quick to talk up the benefits and flow-down effects of such opportunities to the wider WA economy. He says the reality is that “no one company has the capacity to do the whole lot”, so there will be many “collaborations” taking place and that, he believes, is a “great thing”. Describing the Turnbull Government’s Defence White Paper, released in early 2016, as “extremely encouraging”, McMillan is a firm believer in nations building “sovereign capacity” that brings with it economic, security and communal positives. The sheer size of the contracts up for grabs means the workload

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DEFENCE can be shared by many hands. “We think there will be lots of work for everyone,” McMillan says sunnily. The first two of 12 OPVs will be built in Adelaide, where BAE has a small team, but the next 10 will be WA-made and with that comes opportunities not only for big companies like BAE, but many small suppliers across numerous sectors. McMillan suspects it’s the ship lift that is BAE’s unique selling point and will give them an advantage over their competitors when it comes to the big contracts currently being considered by the Department of Defence. Indeed, he’s quite effusive about the capacity of the shipyard. With four dry berths and a rotating turntable that can spin a ship around on what seems like a dime, it’s the only facility in WA that can lift 8000 ton of vessel out of the water and dry dock it “wherever you want and undertake maintenance”. “And when you look at the Future Frigates, and the AWDs (Air Warfare Destroyers), this facility can actually bring these ships up and dock them,” he says. “We’ve also got three wet berths, and we get a lot of

massive vessels coming here, and, of course, we can service substantial vessels working the energy and gas sectors. “We also have the opportunity to bring modules or blocks up, spin them around and take them into our construction hole and do work undercover as well.” As he takes WA Works over an aerial photograph of the facility, he seems proud as punch as he points out each and every capability, from fabrication to cradle manufacturing to the fit-out of advanced electronic and engineering systems for the Royal Australian Navy’s Collins Class submarines and surface ship fleet. Apart from subsea structures and modules, BAE works on about 30 vessels a year, some to dry-dock and service, others to build and some to convert, including tugs and barges, survey and offshore supply vessels, tankers, dredges and trawlers. He says the company is happy to share – for the time being at least – their facilities with competitors as they go about expanding their business and catering for all customers, whether they be luxury superyachts or offshore supply vessels. McMillan says BAE must accommodate all work, whether

it be in the defence space or oil and gas to make sure “we keep and retain our capability” when the resources industry “comes off a bit”. “We have defence work coming through, and we’ve got some energy and resources work on the Subsea 7 project, and we’ve still got some commercial work coming through, but yes, we are a bit quieter – everyone’s a bit quieter,” he says. But whoever said the Scots were glass-half-empty people didn’t have McMillan in mind. He believes the energy and resources industry will pick up in

2018. He’s confident things will get better. He’s even radiant in his assessment of BAE’s main competitor Austal as both companies go head-to-head for the OPV billions, describing the WA outfit as “very good at what they do”. “Austal do good work, there’s no doubt about it – but our facility is a little bit different, it’s a bit bigger and more varied, and at the end of the day we focus on what we’re good at . . . and I’m sure Austal work hard at what they do.” Ever the diplomat. ¢

SUMMER 2016/17 WA WORKS 55

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DEFENCE Civmec’s Henderson facility with an artist’s rendering of new Forgacs factory in foreground

CIVMEC’S WATERSHED MOMENT Fabricator’s grand plan to elbow its way into contract stream BY STEPHEN BELL WA Works Editor


ifteen months after revealing plans to break into Australia’s tight-knit defence sector, Civmec has started building its WA assault weapon – an $80 million shed. Premier Colin Barnett has turned the first sod at a vacant block alongside Civmec’s Henderson heavy engineering facility, marking the start of a new era for the construction contractor. Over the coming weeks and months, that spadeful of soil will grow into a potent symbol of Civmec’s new defence business – a colossal workshop capable of housing the biggest vessels planned for Australia’s $195 billion defence renewal program. “It will be large enough to fit frigates into and will be badged Forgacs,” says Mike Deeks, managing director of Civmec’s wholly-owned Forgacs Marine and Defence unit. The frigates on everyone’s minds are those scheduled to be built over the next decade for the Australian Government’s new fleet of nine-anti submarine warfare frigates worth $35 billion.

The Government has said they will be built in Adelaide, but there is an expectation that some construction will spill over into WA as the program heats up. With its new building now underway, Civmec will have a powerful bargaining chip as it deals itself into defence, probably by forming joint ventures or partnerships with some of the key players. Civmec’s existing Henderson factory is already regarded as the largest heavy-engineering facility of its kind in Australia, but even it will be dwarfed by the new building, expected to measure about 60m at its highest point. It will feature a tailormade design with the main bays separated by central dividers to house planning and project offices, workshops and storerooms. “The lifts will be large enough to have a forklift with a pallet, so we’ll be able to bring bits of major equipment up onto the different levels,” says Deeks, a former Royal Australian Navy Commodore who joined Civmec in September, 2015. “The beauty of it is that crib rooms and ablution facilities will be right there so workers won’t be too far from a toilet

or a storeroom if they need to pick up consumables or get a new tool. “So it will enable a very high level of productivity.” The building, which also features two storeys of secure offices, could easily house 800 to 1000 people, Deeks says. Civmec carried out detailed research for the project, showing its drawings to other shipbuilders to incorporate their tips into the final design. But some things were non-negotiable, given Civmec’s location at Henderson’s Australian Marine Complex on the shores of the Indian Ocean. Fleet Base West – the home of Australia’s submarine force and half of the Australian frigate fleet – is at Garden Island, just 10km across the water. “The biggest thing is to just have a roof over your head,” Deeks says.” People say that WA’s climate is wonderful, but for shipbuilding in the open air you either get wet in winter or sandblasted and boiled in summer. “So the option of putting major vessels underneath a cover is a big plus.” The main roof will be twice the height of Civmec’s existing factory, with a third storey > p58 SUMMER 2016/17 WA WORKS 57

DEFENCE > roof space pushing its highest point to 60m. This will allow Forgacs to work on the new Offshore Patrol Vessels, along with the much bigger SEA 5000 Future Frigates and Australia’s Future Submarines. “This will be a perfect site to do sustainment work as well any construction that might be in the offing,” he says. “We can either build the OPVs, or ship and submarine modules,” says Deeks, referring to a submarine hull section built in 2015 to demonstrate Civmec’s capability for Australia’s $50 billion submarine project. It is now proudly displayed at the front entrance to Civmec’s administration buildings. The cost of the new building was being finalised as WA Works went to press, but is expected to be about $80 million. “One of the beauties of Civmec is we build all our own structures,” Deeks says. Civmec’s existing ‘Big Shed’ at Henderson – its main factory – took four months to build.

Construction of this much more substantial enterprise will, however, “probably take around two years”, Deeks says. The new factory will also keep alive the famous Forgacs brand: Civmec acquired the name in February, alongside the company’s Tomago shipyard facilities and assets near Newcastle in NSW. Forgacs has a rich 50-year history providing shipbuilding services to some of the world’s leading equipment makers, mining companies and the Royal Australian Navy on Australia’s east coast. Its new west coast era will include unimpeded access to AMC’s adjacent deep-port facilities, including heavy-lift transport systems and a 100m x 44m floating dock with a lifting and transfer capacity of 4600t. It is often used for submarine and frigate maintenance work. “We are probably one of the biggest users of the common user facility as it’s right on our back door and we use it for assembling large structures

and for shipping items out,” Deeks says. A second, bigger floating dock is under consideration but would be likely reliant on Federal and State funding. “We’d certainly be a major user of the second one if it’s approved,” he says. Construction for the new workshop will likely be closely watched by the half-dozen European shipmakers and designers vying for Australian defence contracts, including the $3-4 billion Offshore Patrol Vessel job. The Federal Government plans to select the winning OPV design/build team at the end of 2017 to allow construction to begin in 2018. The first two OPVs are set to be built in Adelaide and, following the start of the $35 billion Future Frigates project, the remaining 10 in WA. Luerssen, Damen and Fassmer have been shortlisted for the OPVs and are seeking Australian partners and suppliers. For the frigates, the Government plans to award a

contract in mid-2018 to one of three shortlisted shipmakers: BAE Systems, Navantia and Fincantieri. France’s DCNS, meanwhile, is the preferred designer for Australia’s new Submarines, with construction on that $50 billion program due to begin in the early 2020s. Deeks expects there will be plenty of opportunity for subcontractors to partner Forgacs in one or more defence contracts. “As of today we’ve never built a ship, so we recognise that we’ll need help in areas like systems integration, outfitting, testing and trials. “We are very good steel fabricators so we can do the hulls, insulation, surface treatment, cable trays, air conditioning and those sorts of things, but beyond that we would look at a partner or subcontractor. “Civmec’s workforce here is somewhere in the order of 1500, but you could probably add another thousand subcontractors that would be working with us on any given day.” ¢

A wholly owned subsidiary of Civmec

Rejuvenated and ready to deliver. • Offshore Patrol Vessels • Future Frigates • Future Submarines VESSEL MAINTENANCE & SUPPORT



58 WA WORKS SUMMER 2016/17



www.forgacs.com.au |



Memo from the Minister The defence industry is at the heart of our policy agenda, says Defence Industry Minister Christopher Pyne


n my last column for WA Works, I reinforced the fact that Western Australia is a vital part of our national defence industry, with exciting times ahead for the state as we transform the way we interact with industry and embark on a national endeavour to renew our naval shipbuilding capability. As we approach the first anniversary since the release of the Defence Industry Policy Statement it is important we reflect on what the Turnbull Government has achieved so far, and what is on the horizon for WA. My responsibility as Minister for Defence Industry is to ensure the Australian Defence Force (ADF) has the equipment it needs to achieve its mission. Australian industry is a vital contributor to the achievement of that mission and the jobs that go with it will only grow in the future. That is why Defence industry is at the centre of our policy agenda. The Australian Government has commenced the largest ever renewal and investment of Defence capability through our commitment to invest $195 billion in the coming decade.

Twenty-five attended and showcased their capabilities in Henderson to BAE Systems Australia and Rheinmetall, the two shortlisted companies. A major milestone was also reached in the military’s next generation Hawkei protected vehicle project in November. Two new Hawkeis were handed over to Defence, the last in an initial run of 10 vehicles to roll off the Thales production line in Bendigo, the same facility which produces the life-saving Bushmaster. Looking further afield, we signed a $500 million contract for electronic warfare operations support for maritime and land forces focused around the Edinburgh defence precinct in South Australia. Australian companies will deliver the major equipment to support deploying navy and army units, helping to drive local jobs and economic growth. We’ve also signed a $264 million contract to provide ongoing sustainment services for Defence’s F/A 18 Super Hornet and the newly-acquired EA-18G Growler fleets at Royal Australian Air Force (RAAF) Base Amberley.

WE SIGNED A $500 MILLION CONTRACT FOR ELECTRONIC WARFARE OPERATIONS SUPPORT FOR MARITIME AND LAND FORCES My commitment is to ensure that Australian industry has every opportunity to make a very significant contribution to this national endeavour, and through this to build a stronger and more resilient and capable Defence industry. In the short period since becoming Australia’s first Minister for Defence Industry, I am pleased with how much has already been achieved. We completed a critical review to ensure Australian industry has the opportunity to participate in Army’s multi-billion dollar Land 400 Phase 2 Mounted Combat Reconnaissance Capability, with contracts signed totalling $50 million for the next stage of evaluation for this project. In November, WA companies were given the chance to win work on the project during a series of workshops.

A $200 million contract has also been signed to support the Hawk Lead-In Fighter at RAAF bases at Williamtown and Pearce. This is in addition to the Government’s commitment to build 12 Offshore Patrol Vessels, nine Future Frigates, 12 Submarines and up to 21 Pacific Patrol Boats in Australia. With WA the hub for the construction of minor war vessels, these projects alone will create significant long-term jobs, both direct and indirect, in supply chains across the country which will benefit the whole economy. Like the Land 400 project, Defence organised a national roadshow to highlight opportunities for Australian industry in the construction and sustainment of our Future Frigates and Offshore Patrol Vessels. The roadshow kicked off in October and the turnout has been fantastic all over the

country. More than 300 people attended the event in WA in November – it was great to see such enthusiasm. In September, I announced our key defence innovation priorities for the year ahead. We will be incentivising new ideas and practices that sharpen our capability edge. The recent establishment of the Defence Innovation Hub provides a focus to work with industry and academia in developing the smart ideas within the key innovation priorities of Intelligence, Surveillance, Reconnaissance, and Electronic Warfare; Space and Cyber; Key Enablers; and Land Combat and Amphibious Warfare. Innovation is critical to Australia’s economic future, and as such I expect to see innovative WA companies and their ideas finding ways to enhance the ADF’s capability edge and spur our economy’s growth. I encourage WA companies to submit their proposals to the Hub. Information on both the CDIC and the Innovation Hub is available on the business. gov.au website. In October I announced that Rheinmetall Defence Australia had signed its first ever Global Supply Chain Program with Defence. This program provides greater opportunities for WA companies. Finally, we have launched the Centre for Defence Industry Capability (CDIC), the cornerstone of our new Defence-industry partnership. With Paul Johnson, MBE, and Kim Gillis co-chairs of the board, the CDIC will build on the success of current industry programs and ensure targeted industry development activities contribute directly to Defence’s requirements. Over the next 12 months we will really step up our work on initiatives such as strengthening the Australian Industry Capability Program to achieve concrete outcomes which generate growth. I look forward to the mid-2017 release of the Defence Industry Capability Plan which will clearly state just how much Australian industry supports defence capability. Also made apparent will be ways the Turnbull Government will manage and support the capabilities identified in the Sovereign Industrial Capability Assessment Framework. These initiatives will create enduring opportunities for competitive WA businesses to succeed by building export potential, skills and diversification in the defence industry. ¢ SUMMER 2016/17 WA WORKS 59


CIVMEC PICKS UP $196M WATER TREATMENT JOB GOLD FIELDS DEAL GUARANTEES GRUYERE MINE Major construction of WA’s biggest new gold mine for years – the $507 million Gruyere project near Laverton – is expected to kick off in 2017 after Gold Road Resources ensured its funding commitments by selling half of the project to Gold Fields. The South African-based company has agreed to pay $350 million cash plus royalties to Gold Road in forming a 50/50 joint venture to own and operate Gruyere. The mine is due to begin producing gold by late 2018, and is expected to create about 500 construction jobs and 300 permanent roles. Gold Road CEO Ian Murray said the experienced owner’s team established in the past 18 months would develop the mine under the guidance and leadership of Gold Fields. “This partnership further strengthens our strong balance sheet, allows us to significantly de-risk the Gruyere gold project, and enables us to pursue our growth plans much sooner than we may have under alternative funding options,” he said. The new joint venture was committed to progressing the project to construction, including finalisation of the EPC (engineering, procurement and construction), bulk earthworks and power supply contracts; the purchase of long lead time items; and continuing front end engineering and design work, he said. Gold Fields CEO Nick Holland said he hoped the deal would be the start of a mutually beneficial relationship and he envisaged “significant potential synergies in resourcing, intellectual property, procurement and technical skills”. Gold Fields is regarded as the world’s seventh-largest gold producer, with eight operations in four countries. It has been operating in WA since 2001 and currently owns and operates the Granny Smith, St Ives, Agnew, and Darlot gold mines. ¢

60 WA WORKS SUMMER 2016/17


joint venture between Civmec and Black & Veatch is working on its new $196 million contract to upgrade a wastewater facility for the WA Government’s Water Corporation. The expansion of the Woodman Point Wastewater Treatment Plant, south of Perth, will employ about 200 at its peak, with construction scheduled to be completed by the end of 2019, says Civmec CEO Pat Tallon. “We see water and wastewater infrastructure as a long-term business opportunity and are committed to working together with our partner to deliver the best project outcome for the Water Corporation and the local community,” Tallon said. “This is an excellent award for our hardworking workforce and is especially significant given the close proximity of the work site to our Henderson facilities.” The BCJV is a 50:50 joint venture between Civmec and Black & Veatch. Water Minister Mia Davies said the project would increase the plant’s capacity from 140 to 180 million litres a day to cater for future growth in region. The current facility serves an area

bounded by Kalamunda in the east, Byford in the south, and the coast to the west. “The Woodman Point plant is a critical part of Perth’s wastewater treatment network and it currently serves about 680,000 people,” Davies said. “Once this large program of work is completed, it will be able to accommodate 900,000 people by 2019. The project would be delivered using a construction alliance model, which the corporation had used to complete other infrastructure projects, including its two desalination plants, she added. The upgrade includes construction of a new grit removal facility, new flow distribution channel, expansion of existing odour collection and treatment systems, new sedimentation tanks and conversion of the existing batch reactor to a permanent aeration facility. She said the contract award followed a request for proposal and bid process. Civmec is one of several local contractors diversifying into other fields, including public infrastructure and defence. Black & Veatch is a US-based engineering and consultancy company. ¢



eorgiou Group will start building a $61 million mixed-use development in Fremantle after been chosen as the preferred tenderer for Defence Housing Australia’s Liv Apartments project. Situated in Fremantle’s east end, the project aims to transform a run-down former car yard site into a multi-story development featuring 166 apartments and ground floor retail and commercial spaces, as well as landscaped courtyards and public open spaces. When completed, it will be home to approximately 300 people, including private residents and Department of Defence families stationed in WA. DHA began marketing the development in early September. It says the first residents and commercial tenants are expected to move in by mid-2018. Georgiou CEO John Georgiou said the company was pleased to be appointed preferred tenderer after delivering the forward works package on the development earlier this year. “A key focus of our growth strategy in Australia, and WA in particular, is to build our reputation as a quality builder while strengthening our relationships with key clients such as Defence Housing Australia,” he said. “We look forward to delivering this iconic project in Fremantle and adding to our portfolio of quality, mixed-use developments.” ¢

Going for broke

WILL THE BULLS RUN IN 2017? There’s plenty to be optimistic about, says Dale Bryan


hile 2016 has been a much better year for resource markets, there has been little sign of the irrational exuberance that normally accompanies the top of resources cycles. It is certainly possible that the 2016 rally was just a bearmarket bounce, but the signs and construction of the rally is much more akin to a new bull market, and we expect the resources rally to continue in 2017. If the rally does continue and we hit a proper bull market, returns could be significant. It is always difficult to pick what narrative will drive resource markets. Next year’s narrative could be around the commodity intensity of battery storage and electric vehicles, such as

substantial increases in global copper and nickel demand and continued strong demand in the battery minerals. The impact of Donald Trump’s election is also starting to be felt in various rises in commodities based on rhetoric around the mass spending on infrastructure to “rebuild America” as the President-elect promised, and this could be the market narrative that drives resource market investment. Whether or not this spending is stymied by the Republican fiscal hawks is another question. Alternative narratives may be around India, China, Africa, inflation, global re-armament, portfolio diversification, under-investment, currency proxies – there are any number of catalysts.


Our preferred commodities are traditional base metals (copper, zinc and nickel), battery metals (lithium, cobalt, graphite) and oil and gold. Gold has had a great run in 2016, and while the gold price has pulled back in recent months, history shows that if the recent strong gold price environment is over then it would potentially be the shortest run ever seen. This suggests there may be at least another year to go. We have a strong list of gold companies we like and have been working with. These include producers Pantoro (PNR), Millenium (MOY) and Ramelius (RMS); developers Gascoyne (GCY) and Eastern Goldfields (EGS); and explorers Duketon (DKM); Explaurum (EXU); Nexus (NXM); Emmerson (ERM) and Ausgold (AUG). Internationally, we have worked with Beadell (BDR), West African Resources (WAF), Burey (BYR) and Cardinal (CDV). Zinc has been consistently rising throughout 2016. We have worked with Red River (RVR) which is planning to re-start its Thalanga mine and Ironbark Zinc (IBG) which is developing the very large Citronen Zinc Project.

Nickel prices rose about 45 per cent in 2016 on the LME, with most of the rally in recent months. We have been working with Buxton (BUX) and Cassini (CZI) to advance their nickel exploration plays. If the Nickel price remains strong, we see potential for mining restarts in 2017 from companies such as Panoramic (PAN). The so-called battery minerals of lithium, cobalt and graphite were hot this year and we expect that to continue into 2017 on the back of a continued surge of growth in the market for batteries. We have assisted lithium companies Pilbara Minerals (PLS), Kidman (KDR), Birimian (BGS), Core Exploration (CXO) and Global Geoscience (GSC) and cobalt hopeful Corazon Mining (CZN). Base metals that are exposed to battery storage offer another way to play the battery space. The copper price was disappointing for most of 2016, but it has recently spiked, which augers well for 2017. As a key component of batteries, it is also exposed to the same dynamics as the battery minerals, including lithium. We have been working with RTG Mining (RTG), Altona (AOH), Hot Chili (HCH), Avalon (AVI) and Avanco (AVB), which all offer strong leverage to a rising copper price. Traditional energy is still the largest underinvested stock market sector, in our view (oil, gas and uranium), and is where contrarian investors should focus for CY17. We have assisted 88 Energy (88E), UIL, Pancontinental (PCL) and Melbana (MAY), who are all well positioned for an uptick in sentiment. If the uranium price recovers, it would be very positive for companies such as Paladin (PDN) and Peninsula (PEN). Dale Bryan is Head of Corporate Finance at Hartleys Ltd. ¢ SUMMER 2016/17 WA WORKS 61













9. WA Premier, Colin ... 12












12. Ill-suited

8. Isolated

13. Night sky glow

10. Chores

14. Female pride member

15. Geological age

16. Wheel shaft

18. Australia’s largest naval base, HMAS ...

20. Carnegie renewable power project, ... energy



22. Ornamental sparkling dust


25. Vessel maintained at ASC West docking base


27. Stroke (guitar) 28. Archaic 30

29. Sightseer


30. Throws away Š Lovatts Puzzles

31. Upper legs Down


1. For all to see

Create as many words of 4 letters or more using the given letters only once but always including the middle letter. Do not use proper names or plurals. See if you can find the 9-letter word using up all letters. 12 Good

6. Military intelligence

11. Greenbushes mineral 7. Nickname of mining used in global magnate Andrew battery technology Forrest



2. Voice-over speaker

1. Award-winning 3. Warn of danger construction 5. Northern region company or the red known for its iron soil area of Kimberley ore & manganese 4. Wood sliver deposits

20 Very Good

17. Hawaiian garland

19. Apes or monkeys 21. Lived 22. Open bay south of the Nullarbor Plain with vast oil reserves, ... Australian Bight 23. Fleet Base West site, Garden ... 24. Chinese calculating frame 26. Sporting & theatre venue such as Perth Stadium 27. Coal mining company, ...32

SUDOKU Fill the grid so that every column, every row and every 3x3 box contains the numbers 1 to 9.

24+ Excellent

ANSWERS Across 1: Pindan, 4: Splinter, 9: Barnett, 11: Lithium, 12: Inapt, 13: Starlight, 14: Lioness, 16: Axle, 20: Wave, 22: Glitter, 25: Submarine, 27: Strum, 28: Ancient, 29: Tourist, 30: Discards, 31: Thighs Down 1: Publicly, 2: Narrator, 3: Alert, 5: Pilbara, 6: Intel, 7: Twiggy, 8: Remote, 10: Tasks, 15: Era, 17: Lei, 18: Stirling, 19: Primates, 21: Existed, 22: Great, 24: Abacus, 26: Arena, 27: South

62 WA WORKS SUMMER 2016/17

YELVERTON Yelverton embodies the characters that epitomise Western Australia’s pioneering spirit. It’s also the middle name of WA’s greatest engineer, C.Y. O’Connor. Any tips or suggestions – email: Yelverton@cciwa.com

DEAR READERS, Happy festive seasons and yule tidings. Before you have too much egg nog, Yelverton wishes to bring your attention to some of the more stellar achievements in WA business and politics this year. I envisage that the Yelvertons – as these awards will henceforth be known – will no doubt fill the deep, existential void that has gripped monarchists since the unexpected restoration, then equally spectacular fall, of Australian Regal Honorifics. Or the Abbotts, as they were known for that one year. We may even have to have a lapel pin minted in Leonora gold! The best kind. So without further ado: The Alinta Energy Management Buyout Award, goes to Nigel Satterley and John Poynton for their attempted takeover of the WA Government. Kudos must also go to supporting players (and fellow putsch-poll funders) Greg Poland and Vikas “what has the Premier done for me lately” Rambal. Although the group failed to get their man into the top job, they did highlight Dean Campbell Nalder’s qualities to such an extent that when next surveyed, about 2 per cent of Liberal voters and Dean’s mum said they’d vote for him. A rousing success, Yelverton feels! And hasn’t it been a great year for attempted coups, to such an extent that the Political Parties Who Haven’t Tried to Replace Their Leader Award goes to the Shooters, Fishers & Farmers. As a party of one (well, until that known Liberal rocket surgeon Nigel Hallett joined him), SF&F supremo Rick Mazza must have

briefly toyed with replacing himself after the Libs, Nats and Labor had a go. Although as Yelverton all-to-well knows, guns don’t kill people, people kill people, and Mazza obviously thought better of a selfie-coup. Note, Yelverton has ignored the Greens in this award. In general, he does. It’s for the best. The Sam Barnett Award for Mandarin Translation goes to former PM Kevin Rudd. Unlike Sam, Kevin would never have made the mistake of having his father’s picture (yes, the Premier, Colin) in a presentation he was making to Chinese investors (not trying to use dad’s name to win influence AT ALL!) No, Kevin would have used photo of himself. Or someone fornicating with a rodent. Yelverton can’t decide. Kevin also gets this award for his refreshing return to the World Stage, when he refuses to accept that people don’t like him very much. Last Yelverton heard, Rudd was staging a sit in at the UN until they elect him leader. The Longest Asset Sale Program in The History of the World Award goes to Treasurer Mike Nahan. So far he’s managed to offload a couple of carrots, a crate of lettuce and a block of land in Wanneroo. At the same time his younger, more handsome peer in New South Wales has flogged off the State’s electricity network businesses for north of $20 billion. Mike Baird’s latest success is rumoured to have prompted him to propose building the world’s largest refuge for greyhounds. Still, Nahan can’t take all the blame. Those cuddly Agrarian Socialists, the Nats, have opposed any move on Freo Port. After all,

who would want new loading facilities for wheat and sheep? Farmers need something to whinge about. Perth’s Best Renovation Award goes to those loveable international explorers, the Oswals. Despite finally returning from exile to settle that terrible misunderstanding with their banker ANZ, the owners of The Taj on the Swan decided not to fight the heart-breaking demolition of their tasteful pied-à-terre. Found among the rubble was a meat pie, apparently planted by builders in a puzzling tribute to the vegetarian and meateater-hating Radhika Oswal. Yelverton just doesn’t get it. And finally, the WA Billionaire Who Hasn’t Bought a Cattle

Station This Year Award goes to Kerry Stokes. Outflanked by Andrew Forrest and Gina Rinehart (and didn’t the Grand Lady make quite the entrance at the Melbourne Cup!), Stokes did console himself by buying Rupert Murdoch’s Sunday Times. The wily former TV antenna installer now controls pretty much the only news outlets anyone tunes into, and is reportedly considering filling his new plaything with weekly Telethon stories and pictures of Malcolm and Tonya McCusker. Yelverton finds he can’t get enough of the glamour couple! Safe travels!


SUMMER 2016/17 WA WORKS 63

Meeting cyber security challenges There has never been a greater need to protect Australian businesses, government and the broader community, as networks and internet-based technology become critical to all that we do. ECU’s Security Research Institute (ECUSRI) has twenty years of experience delivering security degrees and offers world‑class teaching and research across the four themes of: Cyber Security, Critical Infrastructure Security, Digital Forensics and Human Security. ECUSRI has a long history of engagement with Federal and Defence agencies, delivering successful research projects that have made a difference to the way we protect the nation. ECU offers the largest cyber security and research program in Australia, and courses are available in both on-campus and online modes. A range of industry-relevant undergraduate and postgraduate Computing & Security related courses are on offer, including: • Bachelors in Computer Science; Counter Terrorism Security and Intelligence; Information Technology; and, Bachelor of Science (Security/Cyber Security) • Graduate Certificates in Digital Learning Technologies; Security Management; and Cyber Security • Masters in Computer Science; Cyber Security; Digital Forensics; Information Technology; Science (Computer Science); and, Security Management • Doctor of Philosophy ECUSRI welcomes the opportunity to discuss research collaborations with public and private businesses and individuals who have a shared interest in the security industry. ECU, working to secure Australia’s future.

64 WA WORKS SUMMER 2016/17







303ML ECU12603 | CRICOS IPC 00279B