resourcing The people, projects and happenings in SA minerals and energy
SA
INTO the FUTURE
Powering life
Sharing the backyard with oil & gas
UNCONVENTIONAL... what’s happening? The nuclear opportunity SA’s pioneering renewables Issue 2 Autumn 2016
$9.95 (incl. GST)
General construction services for the mining and resources sector.
Full time presence in the Cooper Basin and Upper Spencer Gulf.
Mine Site Infrastructure - Design & Construct Feasibility - In-House Building Trades Camp Construction - Hydro Excavation Transport & Logistics - Concrete Supply & Placement - Mine Site Rehabilitation Cranage & Rigging - Environmental Remediation Demolition - Plant Hire - Earthworks
Contact Chris Plumb on 0400 743 101
www.mcmservices.com.au
04 From the editor Editor Megan Andrews Deputy editor Stephen Batten Publisher South Australian Chamber of Mines and Energy (SACOME) Production editor Lindy McNamara Editorial committee John Roberts, Tino Guglielmo, Anya Hart, Dayne Eckermann, Sylvia Rapo, Yasmin Chrisohoou, Lachlan Wallace, Jacqui Dealtry , Leanne McClurg, Steve Whitham, Clara Roccioletti Designer Raymond Capozzi Printing Lane Print Cover Photo of Stephen, Yelena and Symphony by Andy Steven Advertising & SACOME Membership Stephen Batten (08) 8202 9999 sbatten@sacome.org.au Online magazine www.sacome.org.au/sacome-media/magazine Frequency Quarterly Subscribe sacome@sacome.org.au $9.95 per issue; $20 for four issues
Tell Us What You Think..
Your opinion and feedback is important and we always appreciate hearing from readers. Love or loathe something you’ve read, or simply want to get something off your chest then please feel free to drop us a line. editor@resourcingsa.com.au
Follow SACOME on facebook.com/southaustralianchamberminesandenergy Linkedin/South Australian Chamber of mines and energy Twitter @Mining_EnergySA
from the
Editor
The other day I came across an animation of a kinesin protein walking along a microtubule. If you haven’t seen it, it’s worth a google. Not being involved in the medical or biological industries, I had assumed the miraculous transportation of stuff within our bodies occurred by osmosis, muscular movement, chemical attraction or various push/pull actions involving globules of various shapes and sizes. I did not picture a miniature robotlike critter plodding along adorably while towing a huge ball. If you are not deeply involved in an industry it can be almost impossible to understand the science behind it. It’s normal to make assumptions. How can interaction with the earth through mining or drilling deep for oil or gas not impact dramatically on surrounding environments, not create copious amount of dust, not interfere with aquifers? How can nuclear power, being so incredibly powerful, be safe?
Both the science and economics of energy is often taken for granted. But it’s important to understand it to some extent, as not only do we rely on it for our everyday lifestyles, but our economy relies on affordable and reliable energy to power business, attract investment and create jobs. In a functioning mine for example, a half hour power outage can result in several days production loss as pumps are brought up to normal operating levels and sumps and possibly workings are cleared. No doubt other industries, manufacturers and all sorts of businesses are affected equally hard when power unreliability hits, in ways we may not understand and in ways that we do – like the health care industry and its critical equipment. I hope you find something in the coming pages that you were previously unaware of. Energy may not be quite as adorable as a kinesin strutting along its microtubule, but it can be just as surprising.
How can a viable method of storing power from wind and solar still evade us, almost 80 years after commercial solar power was created with the invention of the solar cell? Science is amazing. Both the science of nature and the science we have built on over centuries to take us to where we are now. In this issue of Resourcing SA we are focusing on energy.
Megan Andrews Editor
www.sacome.org.au
Resourcing SA is published by the South Australian Chamber of Mines and Energy (SACOME), our partners include:
Diamond
Platinum
Silver
ISSUE 02 RESOURCING SA Autumn 2016
Gold
Copper
Black Gold
Zircon
Contents 05
9 | COMMUNITY Mount Barker Mayor Ann Ferguson’s views on mining in the local region
32 | FEATURE
36 | FEATURE Santos’ first cargo of LNG left the Gladstone jetty in Queensland on a ship bound for South Korea late last year – marking the most significant milestone in the company’s history
Australia still has a way to go in achieving workplace equality
6 FEATURE
18 FEATURE
38 OPINION
8 ENVIRONMENT
19 BUSINESS
Pastoralists Graham and Sharon Betts share their backyard with oil & gas production
The Great Australian Bight Research Program – one of the largest and most comprehensive whole-of-ecosystem programs in Australia
10 OPINION
Jason Kuchel; Are we reliant on mining?
11 COMMUNITY
A Uni graduate’s search for work
12 ENVIRONMENT
A scientist explains fracture stimulation
14 FEATURE
Future energy – times are changing and our energy mix is evolving…how will Australia be affected?
16 EDUCATION
Companies are pushing ahead to investigate oil & gas reserves in the Great Australian Bight
The evolution of Walga Mining
20 INNOVATION
An accommodation and logistics hub could become central to SA’s Cooper Basin story
22 LEGAL
Understanding resources and land access
26 RENEWABLES
39 FEATURE
How nuclear was banned
40 INNOVATION
Collaborative SA projects lead cutting edge technology
42 NEWS 48 EVENTS 50 COMMUNITY
28 WORKFORCE
An Adelaide Hills family business is finding opportunities at a mine
29 INNOVATION
Terry Burgess; SA power under the spotlight
Helping to keep geoscientists in SA
SA’s water sector innovators
51 OPINION
30 FEATURE
Dirt TV awards recognise creative excellence
Unconventional – the search continues but at a more subdued pace
17 EDUCATION
34 BUSINESS
Copper is set to cast its net even wider by playing an increasing role in public health
Ben Heard’s nuclear vision
With SA electricity prices sky high, innovative thinking is needed
ISSUE 02 RESOURCING SA Autumn 2016
06 Feature
Betts’ backyard
Working two million acres of land with 10-12,000 cattle near Moomba, Graham and Sharon Betts know a thing or two about the land. They also know about sharing it, as a large proportion of their property is home to Santos’ Cooper Basin operations. By Stephen Batten
Looking after thousands of organicallycertified cattle, multiple dogs, cats, horses and even a camel on an enormous pastoral property is the daily routine of Graham and Sharon Betts. It’s a big job, but they wouldn’t have it any other way. “We really love it out there on the land. Every time we come to the city it doesn’t take long and we want to go back home,” says Graham. ‘Home’ is split between Mungerannie Station, in South Australia far north-east, which covers more than 1.5 million acres and Epsilon station in Queensland’s south-west, set over half a million acres. Compare the Adelaide council area – including parklands and North Adelaide – at a meagre 3700 acres and you can begin to appreciate the Betts’ backyard. Both stations have been in the Betts family for generations and have played home to an extended family for more than 50
ISSUE 02 RESOURCING SA Autumn 2016
years. The iconic Cooper Basin, one of the world’s largest energy resources, is also the heartland of Santos’ oil & gas operations. “Our relationship started early on, with Dad owning a transport business that carted pipes for Santos when they pegged and drilled Innamincka 1 back in 1959. When he bought Mungerannie in 1958 we basically grew up with Delhi and Santos,” Graham says. He recalls his earliest memory of sitting with drillers out on a rig watching movies and eating icecream when he was a young boy. Graham says the relationship with Santos was easy from day one and it was all about taking the time to understand each other. Nowadays, the Betts family wouldn’t work a day without coming across a rig or survey activity on their property, but Graham says communication has always been very open and nothing goes ahead without consultation. “That’s the kind of relationship we have.”
Working side by side for more than five decades also opened up opportunities to invest in sealed roads and surrounding infrastructure, including fencing and gates, which have been critical in such a remote part of the country. Like many rural families, the Betts’ have run the pipeline of highs and lows. However, hard work together with a good understanding of the land and their industry has brought them great success, particularly in running their premium organic product alongside oil & gas activities. Obtaining and retaining organic certification for their cattle is a major accomplishment and something the family is justifiably proud. With both US and Australian accreditations (NASAA and OFC) they are able to command higher prices for their clean, South Australian product. Australian certification was gained in 1996 and US in 1998. It involves special branding for the organic cattle to make sure there are no chemicals present. The process requires being
Feature 07
With both US and Australian organic certification, they are able to command higher prices for their clean, green, South Australian product
The Betts-Santos relationship is now moving on to the next generation, with son Clayton, 28, stepping in to help manage the stations. Graham and Sharon recall fond memories of Clayton and his siblings Luke, Carly and Jamie attending boarding school in Adelaide and catching the plane to Moomba during the holidays to spend some time back home. This was just one of the many ways that the Betts and Santos families would help each other out. The recipe to success in any relationship is trust and the Betts family have truly embraced co-existence with the oil & gas industry.
audited every 12 months to make sure the operations remain up to international codes.
Country hospitality has also played its part in helping the two ‘families’ to bond.
“Santos have been great in learning to deal with and accommodate the organic process. Simple things like fencing in their production zones were necessary for us to uphold our certification,” says Sharon.
Many conversations have been held over the dining table with a cup of tea. But what is most important is that the relationship formed was built on respect and no issue – however big or small – was ever brushed under the table.
ISSUE 02 RESOURCING SA Autumn 2016
08 Environment
More than a mouthful
The Great Australian Bight Research Program is a collaboration between BP and various academic and research institutions and one of the largest and most comprehensive whole-of-ecosystem research programs ever undertaken in Australia. By Dr Steve Lapidge It’s January 2016 and the Great Australian Bight Research Program (GABRP) is in full swing. Australia’s new Marine National Facility, the RV Investigator, has just returned from a three week voyage of ecological discovery in the Great Australian Bight, sampling from ocean depths never explored before in the region. Flying above was an Aero Commander 500, undertaking one of the most extensive offshore aerial whale surveys ever conducted in the Bight. And all around were satellite-tagged sharks, seals, seabirds and Southern Bluefin Tuna – unknowingly revealing the ecological hotspots in the largely unknown ecosystem. Back on land, the program’s economists and sociologists have been benchmarking community dynamics and the economics of the region ahead of potential future oil & gas exploration and production in the region. This is the GABRP, one of the largest whole-ofecosystem research programs ever undertaken in Australian waters. It is a four-year, $20 million research program which will improve our understanding of the environmental, economic and social values of the Bight to inform future sustainable development. ISSUE 02 RESOURCING SA Autumn 2016
It involves a collaboration between BP, CSIRO, the South Australian Research and Development Institute (SARDI), the University of Adelaide and Flinders University. The program brings together multi-disciplinary research teams comprising more than 100 of Australia’s leading scientists, technical staff and independent experts focused on seven major research themes including oceanography, pelagic (open water) ecosystems and environmental drivers, benthic (ocean floor) biodiversity, iconic species and apex predators, socio-economics, and ecosystem modelling. The program is now just past its mid-point and has never been busier. The program commenced in April 2013 with one of the last voyages of the Investigator predecessor, the RV Southern Surveyor. This voyage alone discovered 60 new benthic species. Since that voyage, the program’s oceanographers have been developing intricate models of the currents and waves in the Bight, ecologists have been studying why it is one of the most productive marine ecosystems in Australia and have been undertaking surveys of the iconic species and apex predators in the region, including whales, sharks, dolphins, seals, tuna and seabirds.
Results from the program have already started flowing with scientific findings and reports being published on the program’s website as they become available (misa.net.au/GAB). In August 2015 the research program held its first Stakeholder Science Symposium in Adelaide with near 80 people attending. The audience contained representatives from the fishing industry, environmental groups, universities and government departments, who were presented with the results achieved so far. A second end-of-program Stakeholder Science Symposium will be held in June 2017. The GABRP will use the ecological, economic and social data collected throughout the program, all of which will be made publicly available, to develop whole-of-ecosystem models of the region. The models will help ensure sustainable management of the Bight. One of the models, Atlantis, is internationally regarded as the finest ecosystem model by the United Nations and its public release will be a lasting legacy that all can benefit from. Dr Steve Lapidge is Research Director at the GABRP
Community 09
Q&A
with Mayor Ann Ferguson How long have you been Mayor of Mount Barker? I have been Mayor for nine years. What interactions have you had with local mining company/s? I have visited Hillgrove mine on several occasions. I receive the quarterly newsletter and speak at community events.
What are some of the challenges of having a ‘mine in the backyard’ that your council has encountered? The main challenge was dust and keeping up with the suppressant, but that issue was resolved after community consultation.
What do you think are some of the benefits of having ‘mining in the back yard’?
Are there some impacts or issues that the community has had to live with – if so what are some of the community attitudes you have come across?
Benefits are many. Employment is number one, families at schools and kindies, sporting clubs all benefit. Infrastructure is improved with the increase in population.
I believe the community is satisfied with the outcome and the benefits, from the conversations that have occurred. I am sure at the end of the mine’s life it will be a sad day.
Has a local mine provided any benefits specifically to residents or the council generally in terms of regional infrastructure or facilities?
Have you heard much feedback from community members about having a mine in the region?
Callington has benefited due to the water pipe going to the mine and then on to the oval, supporting the local school and recycling shed.
The community have regular meetings, with the management chaired by Bob Goreing. An elected member is on the committee as an observer.
Do you personally know any residents who work for a local mine or supply services to a mine? If so, how important do they consider the mine to be for their business, family or future? No I do not know them personally, but I have received many messages and talk about the impact it has had on the community. Do you think resource sector activity (exploration, mining, production, drilling for oil & gas) is compatible with agriculture? What about its compatibility with tourism or a regional lifestyle? If you want it to work, it can happen. Do you have any advice for other councils faced with the prospect of mining or petroleum as a new industry within their region? Work with the community from the very beginning.
ISSUE 02 RESOURCING SA Autumn 2016
10 Opinion
Are we really reliant on mining? By Jason Kuchel
This issue’s front cover reminds us that minerals and energy are woven into the fabric of our everyday lives. For some, lower commodity prices and media coverage recently gives the impression of a dying industry, yet nothing could be further from the truth. Whilst demand for materials and energy goes up and down based on global economic factors, we continue to need our mined resources. Shortly, we will no longer mine coal in South Australia. In 2014, global coal consumption stopped growing for the first time since the 1990s with demand in China falling for the first time this century. However, the International Energy Agency predicts that the global coal demand is forecast to grow by 0.8 percent per year until 2020, with Australia set to become the largest coal exporter in the world over that period. Closer to home, South Australia is increasing its reliance on wind energy and gas concurrently. The more gas we can find and develop, the more industry and domestic users benefit. Although we need to remember that we will continue to use coal-fired power from Victoria for many years to come. We use energy to power our homes, our smart phones, tablets and computers. We use fuels to get around, whether it be in the car, a motorbike or the bus. We mow the lawn, trim hedges or whipper snip the weeds with petrol or electric driven tools. Some of us generate our own power with solar panels on the roof, which themselves use 16 different minerals such as arsenic, coal, lead and iron ore, through to the more exotic sounding minerals of titanium, selenium, gallium and indium.
ISSUE 02 RESOURCING SA Autumn 2016
And what about our food? Our farmers can’t produce anything without the electricity to drive irrigation pumps or the fuels for large and small farm machines. Not to mention the metals that go into making the machinery Our technology-driven lives are more than ever dependent on minerals and energy. A typical smartphone contains all sorts of minerals from gold, palladium and platinum to rare earth minerals and petroleum products. The houses we live in contain steel, copper and plastics produced from oil for plumbing, fittings and electrical products. Mined sands are used to make glass, aluminium window frames with mined clays to make bricks. Concrete – which is made of mined sand, gravel and lime – is produced from one of the biggest mines on the Yorke Peninsula. Even the roofs over our heads are made from either mined clay to make tiles or steel for colorbond and 90 percent of the plasterboard in our walls and buildings comes from gypsum, mined west of Ceduna on the Eyre Peninsula. And what about our food? Our farmers can’t produce anything without the electricity to
drive irrigation pumps or the fuels for large and small farm machines. Not to mention the metals that go into making the machinery, the petroleum used in making tyres, belts and hoses and the mined materials used to make the fertilisers they need. Even the simple things we take for granted are mined – there is titanium in toothpaste, iron in knives and forks, copper inside your kettle, silica in glass… where do I stop? But what of the future? Aren’t we becoming more renewable? In one sense we are, but even wind turbines and solar panels use vast mined resources. Electric cars are more minerals and metals intensive. An average electric car uses up to three times more copper than traditional cars for example. While we are investing more in renewable energy, which is a positive thing, it still appears that compared to a decade ago we are more resource intensive than ever. For renewable energy to provide baseload power (that is reliable, on demand power 24/7) it must be able to store energy in the form of large scale batteries using minerals such lead or lithium, and always requiring copper and rare earth elements. Smart technology, renewable energy, advanced manufacturing all mean much more use of the minerals we take for granted. Whilst we find ways to save energy, such as LED lighting, we also develop new technologies that use more energy. The bottom line is that we all take mining for granted! So are we really reliant on mining? Just take a look around and see.
Community 11
Kelsy with her thesis at the Port Lincoln wharf
Waiting for her ship South Australia’s jobs crisis is hitting hard and Adelaide University graduate Kelsy Dyer is just one of many waiting for her ship to come in. By Tamsin Scholz Geology Honours student Kelsy Dyer could be forgiven for being pessimistic about her future. After all, out of her class of 36 Honours graduates at Adelaide University this year, she doesn’t know of one with a job prospect. And employment prospects close to home near Port Lincoln on the Eyre Peninsula are extremely limited to say the least. South Australia is the country’s second worst economy, placing just ahead of Tasmania. It has the highest jobless rate, with unemployment at an 18 year high and further job losses are looming… so it’s no wonder many are predicting worse to come. In 2015 there were many reports of mining job losses around Australia, from Glencore in Queensland and the Northern Territory, to Santos, BHP Billiton, Arrium and Alinta in SA. Yet Kelsy has confidence in the mining industry and believes there will be opportunities in the future. “I’ve applied for all the graduate positions, all the junior geologist positions, but unfortunately there’s not a lot out there. “It’s pretty limited at the moment, but I’m sure it will come back up at some point. “It always does; you always need commodities... we just have to wait and see when.” Kelsy’s Honours thesis uses data from Iron Road’s Central Eyre Iron Project, examining the effect of non-economic minerals on the magnetite.
She is one of a growing number of female geology students at the university. Males outnumbered females throughout the undergraduate degree, but Kelsy says this evened out in the Honours classes to around 50/50. The Iron Road project was of particular interest to her when choosing her thesis topic because of the local Eyre Peninsula connection. Kelsy was fortunate to be one of few Honours students approved for an industry-based project. “It can help having completed that industry based project, because you have that connection to a company and you can say ‘I did some work on your project’,” she says. Regardless of where Kelsy seeks work, the industry-based thesis has provided her with excellent real world experience – “it’s not just a project run through a university that has no relevance to the industry”. However, finding a job in South Australia, close to friends and family, isn’t going to be easy. Kelsy has been applying for jobs all over Australia and is willing to move anywhere there’s work. She’s resigned to that fact that the limited number of opportunities means it is likely she will be moving outside of the State, at least initially. Queensland and Western Australia have the most potential, as she’s found they have the majority of the job prospects. “At the moment I just need to take whatever I can get.”
Unfortunately, it’s not just her fellow Honours students she’s competing with for work. In South Australia alone, there are also third-year students graduating and many of the Honours students from 2014 are still seeking work. While Kelsy admits there’s an oversupply of new geologists, she remains hopeful. Ideally she would like to stay in South Australia, close to home on the Eyre Peninsula. However, Kelsy concedes that there are few projects progressing. “If Iron Road’s Warramboo (Central Eyre Iron Project) gets up and going it will create a fair few jobs, and it’s not too far from Lincoln.” Like the other 70,000 South Australians looking for work and the additional 84,000 part timers seeking more hours, job creation is precisely what Kelsy needs – and the chance to get her foot in the door.
S S E R P P O ST
Since this article was written, Kelsy has now signed a six month contract with SA uranium miner Heathgate Resources, where she will be part of the geology team at it’s Beverly mine - flying in and out to site - from late January/early February this year. Congratulations Kelsy!
ISSUE 02 RESOURCING SA Autumn 2016
12 Environment
Frack science SA scientist of the year 2015, Professor Craig Simmons, leads the National Centre for Groundwater Research and Training at Flinders University and is globally known for his research in hydrology and unconventional gas development. He explains fracture stimulation. By Professor Craig Simmons Professor Craig Simmons
The use of hydraulic fracturing – or ‘fracking’ – to enhance the flow of natural gas from underground rock reservoirs has been fiercely debated. In March 2015, the New York Department of Health recommended a ban on hydraulic fracturing because of unknown risks to environmental and public health. Numerous US cities and local governments, such as Maryland, have banned it and Germany, France, Scotland, Wales and Luxembourg have bans or moratoria on its use. Since 1969 hydraulic fracturing has been used in South Australia in the Cooper Basin to enhance the recovery of oil & gas. To date there are no known impacts on aquifers. Over several decades, the South Australian government has built up substantial knowledge and experience in regulating and managing hydraulic fracturing. South Australia has a comprehensive regulatory and approvals process that is part of the Petroleum and Geothermal Energy Act 2000. The Act is plain and unequivocal: it requires all environmental, social, economic, safety and health and wellbeing matters to be comprehensively identified and completely addressed through Environmental Impact Reports that involve community consultation and engagement. It requires approved Statements of Environmental Objectives for each project.
It is a technique for fracturing (or cracking) underground rock using a pressurised fluid, to extract oil or gas. This fracking fluid is mostly water, but also contains sand or ceramic grains suspended with gelling or foaming agents. The fluid is injected under high pressure down an oil or gas well, creating cracks in the rock body that allow for gas (or oil) to flow more freely to the producing well, making it easier and cheaper to extract them. Once the pressure is removed, the small grains of sand used in the fracking fluid help prop the fractures open. The fractures generated typically range in length from tens of metres to hundreds of metres. Fluids used for gas fracking are usually about 90 percent water, 9.5 percent material such as sand, with 0.5 percent other chemicals which aid the fracking process in several ways – reducing friction and distributing the sand, preventing bacterial growth (which can gum up the cracks in the rock), inhibiting scale and corrosion in the casing and cleaning. Community concerns about possible effects on the environment, human health and land values have led to calls for greater transparency and baseline monitoring. People are worried whether chemicals used have been properly tested for health and safety. How risky fracking is depends not only on the chemicals used, but also on local conditions of geology and groundwater, as no two wells are the same.
So what exactly is fracking?
The facts in SA • Fracture stimulation has been used since 1969 in around 700 unconventional and conventional wells. • No negative environmental or human safety impacts have been identified. • New drilling or fracking activities may occur only following both the preparation and government approval of a detailed Environmental Impact Report (which identifies all potential risks for a proposed area and their management) and extensive ISSUE 02 RESOURCING SA Autumn 2016
stakeholder consultation (with concerns adequately addressed). • Gas targeted in South Australia is 2000-5000 metres below the surface, predominantly located in deep shale. This is well below aquifers and potable water (unlike coal seam gas resources interstate, which are typically less than 1000 metres deep). • Chemicals used in fracture fluids are common additives used in household cleaning products, hair products and food
additives and make up around 0.05 percent of fracture fluid. These include guar gum, sodium hypochlorite (pool chlorine), acetic acid and sodium bicarbonate. • It is illegal for well operations to contaminate underground aquifers. This is regulated in SA – an area independently identified as one of the top three global regulatory jurisdictions for shale and tight gas.
Environment 13 The US has employed fracking for oil & gas production for more than 70 years especially, in more recent times, for ‘unconventional’ oil & gas extracted from shale beds and coal seams. Over this time, it has been used in more than a million wells, mostly at depths of between 1200m and 4200m.
Fracture stimulation in deep shale/coal reservoir
The main risk to the environment, particularly to underground water resources, is from fracking chemicals escaping via fracture zones or faults in wells into groundwater for human or animal use. However, government studies of the scientific data have found little or no evidence of groundwater contamination from actual fracking at normal depths, typically below 900 metres. So is fracking really necessary? Oil & gas drillers have found that fracking is sometimes essential to improve rates of gas flow for economic gas production from coal seams, shale and ‘tight’ sands. The National Centre for Groundwater Research and Training at Flinders University is undertaking a new project for the South Australian Government to provide the first global assessment of the full range of potential impacts from unconventional gas production, including hydraulic fracturing. It will bring the best available international science together in a single place for the first time.
Most importantly, from the community’s point of view, the project will inform public discussion by bringing together quantitative scientific
evidence to ensure South Australia’s policy and regulation of this area are the best in the world.
Breathtaking beauty Exhibition at the South Australian Museum 25 September 2015 – 14 February 2016 www.samuseum.sa.gov.au
Corporate Sponsor
Entrepreneur Irena Zhang wearing a stunning Coober Pedy opal and pearl necklace decorated with a spray of diamonds, on loan from Unique Opals, Adelaide.
14 Feature
TIMES ARE A CHANGIN’ With the world’s energy demands predicted to grow by one third over the next 25 years, the energy sector of tomorrow will take on a completely different look to that of today. By Lindy McNamara The energy sector is in a constant state of flux. Recent reports show that the world’s demand for energy will continue to grow at a fast pace over the next quarter century, with the reliance on fossil fuels changing significantly as nations reassess efficiencies and economies. According to the International Energy Agency’s Global Energy Report released in November, the world’s energy demands are expected to grow ISSUE 02 RESOURCING SA Autumn 2016
by nearly one third between 2013 and 2040, with all of the net growth coming from nonOECD countries, such as China and India. With the increased demand will come a change in the reliance on some fossil fuels. After decades of growth, coal use in China will plateau close to today’s levels, as the country’s economy rebalances and industrial coal demand falls. Meanwhile the world’s largest oil
consumer, the United States, will experience a huge reduction in demand – declining by around four million barrels per day and returning to levels last seen in the 1960s. On the flip side, the report suggests there will be a broad-based growth in global natural gas demand – up by a massive 47 percent – led predominantly by China and the Middle East.
Feature 15 turbines cutting a swathe through the skyline of rural South Australia, or the rows upon rows of solar panels soaking up the sun on the roofs of Adelaide homes have become an integral part of our energy story. Today, South Australia leads the nation in renewable energy, with more than 1400 MW of wind and around 600 MW of solar capacity installed. According to Terry Kallis, Principal of Kallis & Co and a leading consultant to numerous renewable energy projects, South Australia’s demonstrated success with renewables will put it under the spotlight as the world actively seeks cleaner power options. “If South Australia was a country, it would be second only to Denmark in the world in terms of the percentage of generation capacity installed from wind energy. “At a global level the State is also among the leaders for the amount of solar energy installed on a per capita basis.” With the recent Paris Climate Change conference focusing considerable attention on the role and impact of renewable energy, Terry expects there will be an opportunity for South Australia to share its expertise and knowledge. Besides renewables, what other energy sources will be ‘winners’ in the future? Industry analyst Dr Graeme Bethune, CEO of Energy Quest, says Australia’s petroleum production will escalate, far outstripping the 18 percent growth over the past decade. “Over the last 10 years Australian petroleum production has grown from 470 to 550 million barrels of oil equivalent (MMboe) – in the next 10 years it could easily be 800-900 MMboe,” he predicts.
“By 2040, oil and coal collectively relinquish nine percent of the global energy mix, with renewables growing by five percentage points and gas and nuclear each growing by two,” the reports says. Although coal and gas are expected to be a smaller part of the mix percentage wise, their actual growth however will be phenomenal. During the same period, the world’s demand for electricity is set to skyrocket by more than 70 percent and there will be a concerted effort to reduce the environmental consequences of power generation. This means the spotlight will move onto renewables – good news for South Australia, which is considered a world leader in technology to harvest solar and wind power. In recent years the massive blades of wind
“Australia is likely to remain a major energy exporter of coal, gas and uranium. Domestically, electricity and transport fuels will continue to be the major markets, but with increasing penetration by renewables.” However, he cautions that while world energy demand grows, it does not come without problems to be overcome by Australian producers. “High Australian costs are an issue for exporters and domestically, changing government policies on renewables and climate change have been major issues.” The energy sector’s impact on climate change is a hot topic and the industry needs policy direction, according to Keith Orchison, Principal at Coolibah Consulting. Since the mid 1980s he has been working with the energy industry and governments, debating the need for integrated policies for energy and carbon emissions. It has been a frustrating
By 2040, oil and coal collectively relinquish nine percent of the global energy mix, with renewables growing by five percentage points and gas and nuclear each growing by two process as governments – and visions – have changed continuously over the years. However, Keith believes major progress was made late last year. “While the Paris agreement on climate change is getting all the attention, perhaps the most important development in December for Australian industry was the agreement of the CoAG Energy Council to work to integrate energy and carbon policies,” he says. “The failure of governments individually and collectively to do this in Australia has been a serious problem for good energy management and for investors for the best part of 10 years.” Keith believes continued progress in 2016 is crucial in order for the industry to plan successfully for the future. “The year ahead features both a Federal Election, where promises can further derail energy/carbon integration, and the important second national energy technology assessment to be undertaken by the Federal Government ahead of a revision of national abatement targets in 2017. “If by the end of 2016 integration is still talk and not positive action, energy businesses will have good reason to be concerned about investments over the rest of the decade.” So while industry concerns itself with the issues of today, energy producers must also be keeping a sharp eye on the trends of tomorrow – the opportunities expected to arise, the inevitable changes that will occur and how they will fit into this scenario. Once thing is for sure, the next 25 years will see the evolution of a completely different looking energy industry. Exactly what form that takes, remains to be seen.
ISSUE 02 RESOURCING SA Autumn 2016
16 Education
PAY DIRT!
Leighton (centre) and his team celebrate winning $5000 for the BHP Billiton Best Overall video
Dirt TV 2015 showcased the creative minds of South Australian students with the winners announced at a spectacular awards night at the Adelaide Oval. By Stephen Batten With more than $10,000 up for grabs, teenagers and their families gathered at Adelaide Oval last September, eagerly awaiting the announcement of winners for the 2015 Dirt TV High School Video Competition Awards. Opened by the State Treasurer, the Hon Tom Koutsantonis MP, the red carpet event was attended by arts and resources industry guests, but definitely the stars of the show were the student writers, actors and directors of the video entries. The standout winner of the night was Dig a Little Deeper, led by team leader and director Leighton Elliot from St Johns Grammar School. This entry took out the BHP Billiton Best Overall Video award and also the Santos Best Director award. Three other winners were announced on the night, together with two special commendations. Megan Keough, mother of Emily who entered a video with her friends titled, More than numbers on a screen, said the girls learnt a lot when preparing their piece. “This is the second year my daughter has entered Dirt TV with her friends and the girls really get a lot out of the program. When researching they learn a lot about how mining and oil & gas affect our everyday lives for the better,” said Mrs Keough. Unveiled in December 2013, Dirt TV is an annual video competition run by SACOME that requires students in Years 7 to 12 to produce a short video clip illustrating What mining means to me? or What oil & gas means to me?.
ISSUE 02 RESOURCING SA Autumn 2016
A pool of about $10,000 is awarded across five categories, including $5000 for the esteemed Best Overall Video first prize. SACOME Chief Executive, Jason Kuchel, said “The aim of the initiative is to raise awareness and interest in science and the minerals and energy industry in South Australia, including arts oriented students who may not be as aware of the opportunities”.
DSD DPS
With the exception of the Peoples’ Choice Award, entries in the annual competition were judged by an elite group of representatives from renowned South Australian media organisations including the South Australian Film Corporation, Flinders University and Whitham Media, together with resource sector heavy weights Santos and BHP Billiton to assess entries for accuracy.
Students can focus their video clips on a range of topics, such as the use of mined materials, the key economic role the industry plays in South Australia, employment opportunities, corporate social responsibility or the industry’s effect on livelihoods and lifestyles. SACOME encourages the competition to be used within the Australian curriculum. “South Australian members of our entertainment, media and resources industries have shown a high level of support for the initiative, appreciating the opportunity to promote arts and science among our youth and to widen career perceptions together with awareness of the resources sector in SA and to our daily lives,” said Mr Kuchel. Students thinking of entering a video in the 2016 competition can find the information at dirttv.com.au.
2015 Dirt TV Award winners BHP Billiton Best Overall Entry: Dig a little deeper by Leighton Elliott, St John’s Grammar School Iron Road People’s Choice Award: More than numbers on a screen by Emily Keough, St Peter’s Girls School SACOME Best Music Award: Life with Mining by Cassandra Netz, Concordia College OZ Minerals Best Writing Award: How mining contributes to our daily lives
by Emilia Blagojevic, St Joseph’s Memorial School, Norwood. Santos Best Director Award: Dig a little deeper by Leighton Elliott, St John’s Grammar School Special Commendation – Directing: A world without mining by Harvey Newland-Harman, St John’s Grammar School Special Commendation – Screenwriting: Mining why not recognise it by Samantha Summerford, Loreto College
Education 17
Dr Copper has been in demand for thousands of years. Its uses are continuing to increase and diversify with advances in technology, including a growing role in health care. By John Fennell Playing a key role in electronics, telecommunications, manufacturing, energy, construction, transport and more, copper is in demand. Global consumption of the popular metal rose by 8% last year. Now, a growing role in public health is set to become one of the industrious metal’s most surprising yet. Much research has gone into proving that copper surfaces, including bronze and brass alloys generally referred to as Antimicrobial Copper, not only kill 99.9 percent of bacteria and viruses within an hour of contact, but actually stop the spread of germs and infections. A US Department of Defense trial showed that a hospital room with six commonly touched surfaces like bedrails, IV poles, nurse call devices, tables, and visitor chairs, cut the chances of picking up an infection by 58% when copper was installed, including drug resistant superbugs like the potentially deadly superbug Methicillinresistant Staphylococcus aureus (MRSA) – the most common super bug found in hospitals. A recent study revealed that the cost of installing more expensive copper surfaces over stainless steel or plastic, paid for itself in less than two months - because hospitals spent far less treating people who had caught infections. Making a dent in the hundreds of millions of patients globally who pick up a bug in hospital is big business, with thousands of pharmaceutical, healthcare and technology companies racing to find a simple, effective and affordable solution. The Antimicrobial Copper brand, an initiative of the International Copper Association and the US Copper Development Association, has quickly built a global presence, and is seeing the pace of installations and introduction of new products quicken. The term may apply to products containing 60% copper or more that comply with the stringent technical requirements of the registration scheme. Over the last year, around twenty healthcare facilities in Europe, the U.S. and Asia Pacific have installed Antimicrobial Copper surfaces, including Australia’s first “copper hospital” in Sandringham (Melbourne) and Germany’s largest hospital chain, Asklepios. It’s not just medical facilities turning to copper to protect its patrons. In the last year a restaurant chain in South Korea, a fitness
centre in California, a school in Brazil, a French employment agency, an ice skating arena in the U.S, and a veterinary clinic in Zimbabwe are amongst the increasing number of organisations installing copper for its antimicrobial properties. Thermometers, shopping trolleys, writing pens and keyboards are among recent applications around the world. The surge in Antimicrobial Copper creativity is being boosted by alliances between the fabricators who produce the copper and alloy materials, and companies and designers who see a new opportunity. A standout is North American company Olin, which created an Antimicrobial Copper line and then formed ‘supplier-to-market’ alliances with affiliated companies to innovate, develop and manufacture new products. These now include a huge range of products for use in public, high traffic areas like taps, sinks, light switches and door handles-as well as homes.
DSD DPS
The company recently sparked attention when it announced the first line of Antimicrobial Copper fitness equipment now in use at the Los Angeles Kings professional basketball team’s training centre. Countries in the Asia Pacific, particularly China, Korea and Japan, are also seeing a rise in copper installations and products. Japan has been especially active and is looking at Antimicrobial Copper surfaces for public areas at the 2020 Tokyo Olympics. In a rapidly growing industry, 13 Australian & New Zealand manufacturers and medical hardware companies have formed a consortium to broaden the range of Antimicrobial Copper products available in the Asia Pacific, and encourage healthcare facilities to consider installing these products as part of their infection control strategies. John is CEO of the International Copper Association Australia
SA facts South Australia is Australia’s copper capital, hosting 70 percent of its known resources, including the giant Olympic Dam copper mine together with a number of smaller deposits and (most believe) extensive undiscovered deposits.
ISSUE 02 RESOURCING SA Autumn 2016
18 Feature
Great WHITE hope
Momentum builds towards unlocking potential oil & gas reserves offshore South Australia, with exploration expected to start late this year. By Lindy McNamara
Attention will be focused off the West Coast of South Australia later this year, as people search for one Great White that has the potential to change the fortunes of the State. People won’t be looking for the fish variety, however, but instead they will be following the progress of the ‘Ocean GreatWhite ’ – a drilling rig that is being purpose built to undertake BP Australia’s much awaited exploration program in the Great Australian Bight (GAB). Norwegian company Statoil is also a 30 percent partner in the project. At this stage, BP plans to start its drilling program in late 2016, subject to approval from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). In November, NOPSEMA determined that the environment plan did not yet meet the criteria for acceptance under the environment regulations; BP is now working toward resubmitting an updated version of the plan. While this occurs, planning continues for an end of year start to drilling of the first of four wells in its expansive 12,100 square kilometre acreage, located approximately 395 km west of Port Lincoln and 340 km southwest of Ceduna. Regardless of the results of the exploration program, BP says it will bring many benefits to the South Australian community.
Already BP has shown its commitment to the State as a founding partner of the Aboriginal Business and Industry Chamber for South Australia that will create opportunity for Aboriginal enterprise. The company, together with CSIRO, SARDI, the University of Adelaide and Flinders University, is also involved in a research project which aims to improve the understanding of the environmental, economic and social values of the Bight (see story Page 8). Logistical support for its exploration program will be provided by supply vessel from a marine support base in Port Adelaide and by helicopter from the Ceduna Airport and an alternative helicopter landing facility at Coorabie. BP and its contractors are using the Industry Capability Network portal to maximise the exposure of opportunities to local businesses, with nearly 1000 companies registering an interest to work with BP on the project. Contracts have already been awarded in connection with onshore supply base infrastructure, with local company Flinders Logistics partnering with global company ASCO to run the marine supply base. Diamond Offshore Drilling is building the ‘Ocean GreatWhite ’ drilling rig, which will be tested in sea trials before being moved on location later in the year. “All of the activity underway means jobs, contracts, infrastructure and community
development for South Australia – whether we find any oil or gas or not, this activity is of real value today,” says Claire Fitzpatrick, Managing Director BP Australia Upstream. “We have conducted face-to-face meetings with identified stakeholders, ranging from fishing and aquaculture associations and licence holders, councils, environmental groups, indigenous groups and State Government departments. BP is not reaching these new frontiers alone – we are doing this together, in partnership,” she says. Two other petroleum companies are also involved in the search for oil & gas in the GAB. Chevron Australia was awarded two deep water exploration permits in October 2013 and has now completed a seismic survey, with 22,000 square kilometres of data acquired. It is currently interpreting the data to determine its drilling program, including drilling locations and rig selection. At this stage, it hopes to begin drilling in late 2017/18. There are encouraging signs from Murphy Australia Oil and its partner Santos in their commitment to the exploration program. Since award of permit EPP43 in October 2013 Murphy has accelerated its work schedule to include the collection and processing of 7367km2 of 3D seismic data. According to its schedule, drilling would begin in October 2018 at the earliest. Executive Director of the Energy Resources Division at the Department of State Development, Barry Goldstein, is excited by the “giant oil & gas potential” in the Bight. “You could potentially see an industry of the size of what we have on the North West Shelf,” he says. “We know it can happen in an environmentally sustainable way, but we need to wait for the drilling from the end of this year to have a better handle on things.” Like everyone else in the petroleum industry, all eyes will be on that special Great White later this year.
ISSUE 02 RESOURCING SA Autumn 2016
Business 19
Elliott McNamara with his daughter, Karina, who also works for Walga
IN FULL FLIGHT
Elliott McNamara has experienced first hand opportunities the minerals industry can provide his people, the Barngarla, whose traditional land extends from Port Lincoln on the Eyre Peninsula to just north of Port Augusta. By Megan Andrews Chairman of the Barngarla Aboriginal Corporation, Elliott McNamara, is a self-made man of relentless determination, optimism and business nous – a combination that has enabled his own company to flourish while providing opportunities for his people. “My father always worked hard and refused to receive any handouts,” he says. “He always told me to have respect for others because no one owes us anything.” It’s a philosophy Elliott’s firm on and has instilled in his own children. Others may take a different view, but from a parenting perspective, it’s an empowering foundation. For Elliott, it was a key driver in the resolve to run his own successful business. Walga Mining was launched in 2004 with the signing of a five-year mining services contract to the Middleback Ranges mines owned by OneSteel (now Arrium). Walga means ‘eagle’ in the Barngarla language, a name Elliott chose as a fitting representation for his company. “I pictured the business as an eagle flying overhead, seeing the opportunities that were there for us.” The opportunities for Walga have grown and evolved and Elliott is ensuring the company adapts to its environment. In 2014, this meant stepping up its dealings with Arrium with the prized contract for processing and handling at its Iron Knob mine.
opportunities outside of mining. “We’ve just won a contract with Defence to do the fencing in Cultana for the training area expansion, it’s a 12-month long contract,” Elliott explains. The company is also tendering for another civil works contract with Defence. Elliott admits times are tough right now. “Like any business, the key is to diversify and move with the times,” he says. As a 100 percent Aboriginal owned company, Elliott and his team aim to employ and develop Aboriginal people into key leadership roles. “Currently our workforce is around 30 percent Aboriginal, our vision is to increase this to 50 percent.” Elliott explains that in gaining a foothold in the mining services sector he never sought funding from the government or industry, but he did take the opportunity to benefit from relationships – surrounding himself with commercial experts and contacts. Most of Arrium’s mines are located on Barngala land and the late Jim White, former One Steel executive, was instrumental in the company’s development. “I looked at all the work coming out of the Middleback Ranges and thought, it’s not benefitting my people,” Elliott explains. “I went to see Jim and said ‘I’d like to set up my own company that can provide services to yours’.”
Elliott suggested he work for Jim for several years, learn the business, then set up his own enterprise that could provide the services and people required by the mining industry. Jim agreed. Elliott is also appreciative of former Arrium Mining Chief Executive, Greg Waters, who helped progress Walga’s work at Arrium, as well as Department of State Development Chief, Dr Paul Heithersay. He says Paul encouraged him early on, setting up mine visits for Elliott across the Pilbara in WA. These increased Elliott’s mining knowledge and provided him with a broader context that would go on to influence his decision making. Now Elliott is in the position to inspire others and play a role in their achievements. “We’ve started going to high schools, talking to kids about our business and trying to inspire them in what they could achieve,” he says. Walga also sponsors its own initiatives and supports other local businesses. Eventually, Elliott is keen to expand his company’s mining services and broaden its impact, perhaps into the APY lands. “I’d like to set up a branch there, we could train people who are interested and they could subcontract to us.” A big part of Walga’s – and Elliott’s – vision is to open up all sorts of opportunities for Aboriginal people, particularly local youth, helping to ensure future generations benefit from this unique undertaking.
More recently, Walga has been exploring the ISSUE 02 RESOURCING SA Autumn 2016
20 Innovation
High speed vision
An accommodation and logistics hub, developed by a local entrepreneur on the proven principles of collaborate and share, could well become central to SA’s Cooper Basin story. By Megan Andrews
Tim Murton, Chief Financial Officer at KJM Contractors, jokes that staff know to brace themselves when Managing Director Kim McNamara returns from a couple of days of “fresh bush air”. For many people, an escape to nature can encourage creative thoughts and motivate action. For Kim, vision and fast pace is routine. Supplement that with some time out amongst the red sands or the gum trees… and it can be a daunting turbo boost. “We know on those Mondays he’ll be overflowing with far-sighted ideas, and ideas on those ideas,” Tim says. “You need to be completely on the ball and able to race ahead in your own mind and branch out too – so you can grasp where he’s at.” One hundred percent engaged, 100 percent of the time, Kim says it how he sees it, listens and learns as much as he talks, and has no time for those unwilling to walk the talk. To Kim, words and action go hand in hand and never fast enough. A local success story, Kim established his business in 1992 to provide transport and camp accommodation to a burgeoning resources industry. It’s been an impressive journey, earning the spirited entrepreneur a number of awards along the way as he’s turned his business to any opportunity he saw or predicted. KJM Contractors has grown since the early days, with logistics support, engineering, food services, hire and water treatment services amongst its ever diversifying repertoire. Cooper Parks, however, may well be its most visionary venture to date. Located in South Australia’s Cooper Basin, 65km east of Moomba and 35km south of
ISSUE 02 RESOURCING SA Autumn 2016
Innamincka, KJM developed Cooper Parks as a ‘town concept’ on 95 hectares of land, with the capacity to expand as the local oil & gas industry grows. Currently, the development comprises a 185-person hotel, restaurant, bar, shop and truck wash down service. “From the beginning my focus has always been on what the industry needs to move ahead, to save costs, to run their business,” Kim says. The idea for Cooper Parks began close to a decade ago, as the Cooper Basin started to see an increase in activity amid a growing awareness that its potential was yet to be realised. While it’s a world class resource it suffers, among other challenges, from the tyranny of distance. “For companies operating out of the Cooper Basin, services are 10-12 hours away at best,” says Kim. The remoteness of the basin means labour, transport, service and maintenance all come at a premium and even at the high oil prices of previous years, companies acknowledged the need to reduce their costs by around 30 percent. “In Canada and the US if you want a service you call the provider in the local town, you don’t need to call someone from Perth, Adelaide, Sale, Toowoomba, Roma – all over the country – pay the significant transport costs and put your operations on hold waiting for something to arrive.”
or single rooms, internet, theatre, bar, general store, alfresco dining with misting fans and heating, allowing patrons to watch the sunset over the desert in comfort. The development has a number of blocks ready and waiting for additional services to move in, all enabled with power, water and telecommunications.
Cooper Parks ultimately aims to provide everything local operators need and it’s already well down the track in achieving this goal.
Kim believes a centralised development is essential for South Australian services to share in the opportunities of the Cooper Basin.
Kim says a company running a 60-person camp would save around 30 percent by using Cooper Parks rather than setting up its own. And it’s a modern camp in every way – double
“It’s unlikely a service provider could set up in the remote Cooper Basin themselves and be a viable business, here the infrastructure and facilities are in place ready to share.
Innovation 21 Kim McNamara with wife Nyrell and sons at KJM’s Edinburgh Park (SA) hub, where the Cooper Parks buildings and structures were manufactured.
“It’s unlikely a service provider could set up in the remote Cooper Basin themselves and be a viable business, here the infrastructure and facilities are in place ready to share”
“We’ve set up the footprint. We’ve put the utilities underground. We’ve planned for the shop. Suppliers wouldn’t have enough demand to establish their own shop, but they can put their products in ours. Likewise, in a remote area service providers need the infrastructure and the clientele of an established hub.” Kim maintains businesses coming on board will be able to pay their own way and make a profit “just like they do everywhere else in the world”. And while he is keen to see the facilities at Cooper Parks grow, including more services, a multi-user airstrip and a medical facility, Kim admits he’s frustrated by the lack of collaboration from both industry and government.
“There’s no blueprint for the Cooper Basin, no planning for mutual benefit, no understanding of how all the services, infrastructure and facilities could and should work together,” he says. “I say let’s lay all of our plans on the table and see what people want and need so we don’t have to duplicate costs”. He adds that everyone talks about collaboration, yet companies are still doing their own thing. “If you can’t back vision, what’s the point of having vision?”
ISSUE 02 RESOURCING SA Autumn 2016
22 Legal
LAND RIGHTS
Tension between resource companies and landowners over access to land is not new. Lawyers Leanne McClurg and Anjali Sarma explain some of the rights of each stakeholder. In Australia, resources in the ground do not belong to the landowner. Instead, they belong to the State as technically they are “vested” in the Crown. This is different to some other countries, such as the United States, where landowners do own these resources. The regime that South Australia has developed to allow its mineral resources to be recovered is set out in the Mining Act 1971 (SA) (Mining Act). A similar regime for the extraction of petroleum is set out in the Petroleum and Geothermal Energy Act 2000 (SA) (Petroleum Act). This article focuses on mineral resources, with the aim to provide a basic understanding of the situation in South Australia through general comment. The issues around individual cases do vary, and professional advice should be sought for specific circumstances. If a landowner is the registered proprietor of
ISSUE 02 RESOURCING SA Autumn 2016
a freehold estate, their rights in respect of the land are the “best” or “fullest” that Australian law confers, however the landowner cannot completely disregard the rights of others. In some situations other stakeholders, such as resource companies, may have competing rights concerning the same land. These competing rights can create tension between the two stakeholders. Under the Mining Act, if a company proposes to explore for minerals, it can apply for and obtain an exploration licence. Grant of this licence will allow the company to carry out “exploratory operations” on land subject to the licence. In the case of a mining lease, a company receives an exclusive right to conduct “mining operations” (subject to the Mining Act and any terms and conditions of the lease). The holder of the mining lease is also authorised to sell and dispose of minerals recovered and use
these for commercial or industrial purposes. While the rights granted to a mining company may be significant, a landowner’s rights are also taken into account by the Mining Act. These requirements (or in some cases restrictions) must be addressed before the company can proceed with exploration or mining activities. One way the Mining Act ‘protects’ the rights of a landowner is by declaring certain land ‘exempt’ from mining operations. This can include land genuinely used as a yard, garden, cultivated field, plantation or orchard; land situated within 400 metres of a residence; land located within 150 metres of a structure that has a value of at least $200 and is used for an industrial or commercial purpose; and land situated within 150 metres of a spring, well reservoir or dam.
Legal 23 What this means, is mining operations (including exploration) must not be carried out in these areas unless the landowner waives the benefit of the exemption. If the parties are unable to reach agreement on an exemption, then a company may apply to the court for an order waiving this benefit. If the company satisfies the court that any adverse effects of the proposed operations on the landowner can be appropriately addressed, for example through conditions, or compensation payments, then the court may allow the activities. Another way the Mining Act can protect landowners is by restricting the manner in which a company may enter land. A mining company may only enter land to carry out operations if there is an agreement with the landowner which authorises entry, or if the company has served a prescribed notice of entry on the landowner. Where a notice of entry is served, certain landowners have objection rights which - if exercised - may involve a court hearing. Outcomes could include a determination that the land should not be used for exploration or mining, that the company may carry out exploration or mining operations, or that activities may be carried out subject to certain conditions.
While tension between stakeholders may sometimes be unavoidable, an understanding of the legal rights each has is important. Armed with this information, both are better equipped to make informed decisions.
Wednesday
Mining companies also have obligations in relation to use of certain ‘declared equipment’ on the land and must serve written notice of any intention to use ‘declared equipment’. Certain landowners have the right to object, which again may result in a court hearing. Outcomes could include a determination that either the ‘declared equipment’ should not be used, or that it may be used but under certain conditions. Landowners must also be paid compensation by a mining company for economic loss, hardship and inconvenience in respect of the land use. The payment amount is to be agreed between the parties, and again if agreement is unable to be reached, it may be determined by the court. Finally, a company extracting mineral resources must pay a royalty. This is in effect the price at which the State agrees to sell its resources. The State may use the money collected to benefit rural areas by, for example, building required infrastructure. While tension between stakeholders may sometimes be unavoidable, an understanding of the legal rights each has is important. Armed with this information, both are better equipped to make informed decisions to help resolve any issues that may arise.
20 April 2016
SAVE THE DATE South Australian Chamber of Mines & Energy
Annual Resources Industry Dinner Presentation of the Premier’s Community Excellence Awards in Mining & Energy & SACOME Industry Awards Adelaide Convention Centre
Department of State Development Department of State Development
Fact Sheet Fact Sheet
PACE PACE Copper Copper
20 20
$
$
INITIATIVE
INITIATIVE
MILLION
MILLION
There critical issue facing resources right now There isisaacritical issue facing the the resources sectorsector right now –– aa significant significantdecline decline in exploration investment and project in exploration investment and project advancement which hashas ledled to increased unemployment. advancement which to increased unemployment.
The time forfor South Australia to deliver The timeisisright right South Australia to deliver geoscientific initiative. aa new newprecompetitive precompetitive geoscientific initiative. An initiative that will help the exploration industry recover from
An initiative that will help the exploration industry recover from the challenging global economic cycle of the past five years the global economic cycleinofexploration the past five and challenging confidently face the next global surge for years and confidently faceasthe next global surge in exploration for strategic metals such copper. strategic metals such as copper.
PACE Copper is a $20 million initiative that will lead the transformation of the South Australian mineral exploration PACE Copper a $20 million industry over theisnext two years. initiative that will lead the
transformation of the South Australian mineral exploration industry over the next two years.
FUTURE & EMPLOYMENT
PACE Copper is both a future and employment focused initiative that will provide essential foundations for the South Australian Government Economic #1:and Unlocking the full potential PACE Copper is bothPriority a future employment focusedofinitiative South Australia’s resources, energy and renewable assets.
NEW DISCOVERIES
opportunity to bring forward new discoveries and set the foundations for the next generation of mineral industry growth and job creation in the services, supplies and manufacturing sectors. and This new initiative will provide the necessary information
FUTURE & EMPLOYMENT
NEW DISCOVERIES HIGH-QUALITY
COPPER RESOURCES
HIGH-QUALITY WORLD’S LARGEST COPPER RESOURCES GEOPHYSICAL
PROGRAM WORLD’S LARGEST COLLABORATIVE GEOPHYSICAL DRILLING PROGRAM WORLD-CLASS DATA
COLLABORATIVE
that will provide essential foundations for the South Australian Government Economic Priority #1: Unlocking the full potential of South Australia’s resources, energy and renewable assets. This new initiative will provide the necessary information and
opportunity to bring forward new discoveries and set the foundations for the next generation of mineral industry growth and PACEcreation Copperin is also a critical upstream of the job the services, suppliescomponent and manufacturing sectors. State’s Copper Strategy, driving the discovery of new highquality copper resources.
PACE Copper is also a critical upstream component of the PACE Copper willStrategy, deliver: driving the discovery of new highState’s Copper quality x thecopper world’s resources. largest high-resolution airborne geophysical and terrain imaging program as part of a ‘regeneration’ of exploration in the highly prospective Craton PACEGawler Copper will deliver: x industry–government collaborative drilling on new x the world’s largest high-resolution airborne targets and domains geophysical and terrain imaging program as part of a x world-class dataof and interpretation thathighly will open up ‘regeneration’ exploration in the prospective an untouched mineral province in the Gawler Craton State’s Far West (Eulca Basin/Basement).
x
industry–government collaborative drilling on new
20:1 $ 20 $ 400 1000
INVESTMENT RETURNS
The evaluation of the PACE initiative (Plan for Accelerating Exploration) between 2004 and 2013 has shown that an investment in precompetitive geoscientific data and collaborative programs such as this can provide returns on investment over 20:1.
The $20 million investment in PACE Copper is this Government’s response to the challenges facing the resources sector, and will aim to:
INVESTMENT
MILLION
MILLION
x
PRIVATE MINERAL EXPLORATION
x
x
DIRECT & INDIRECT
JOBS
generate over $400 million in private mineral exploration return for the State create and retain up to 1,000 direct and indirect jobs within the minerals industry and services sector drive the exploration investment and discovery of the new high-quality copper resources required to meet the copper production goal of 1 Mtpa by 2030.
Marla
FURTHER INFORMATION Dr Ted Tyne Executive Director Mineral Resources Phone +61 8 8463 3000 Mr Miles Davies PACE General Manager Phone +61 8 8463 3159
Coober Pedy
Ceduna
Eucla Basin / Basement project area
Port Augusta
Work program primary focus area
ADELAIDE
The primary focus of the work program is highlighted in red.
WPA boundary Gawler Craton 0
50
100
Map of South Australia highlighting the prominence of the Gawler Craton in the central part of the State.
The Eucla Basin / Basement project area, in the State’s Far West, lies within the purple area.
200
KILOMETRES
Mount Gambier
27/11/15 – 204712
26 Feature
Queen of GREEN
South Australia is renowned for pioneering renewable energy, leading the nation with more than 1400 MW of wind and around 600 MW of solar capacity installed. ByTerry Kallis
If South Australia were a country, it would be second only to Denmark in terms of percentage of electricity generation capacity from wind. At a global level, the State is among the leaders for the amount of solar energy installed on a per capita basis. The transformation of the electricity sector in SA has occurred rapidly over the past decade and has resulted in the State meeting and beating its various renewable energy targets. South Australians have embraced roof top solar and lead the country in the uptake of solar technology. The State is host to many windfarms, more per head than any other state, and with more wind power capacity than any other state. Over 2014/15, wind power generated 30 percent of our energy needs. South Australia has also invested significantly in other pioneering sustainable energy technologies including geothermal (energy from deep hot rocks) and biomass (energy from the breakdown of organic product). Aiming to be operational by 2017, a unique biomass energy project model for the Yorke Peninsula was launched in September last year. Discussions are being held with SA Power Networks regarding how the existing electricity grid network could be used to
ISSUE 02 RESOURCING SA Autumn 2016
construction and ongoing operations.
There have been substantial economic benefits for South Australia arising from around $5.5 billion investment in renewable energy over the past 12 years, with jobs from construction and ongoing operations facilitate lower-cost power. The project would see local biomass suppliers (mainly farmers and straw aggregators) own and operate the Yorke Biomass Supply company. There have been substantial economic benefits for South Australia arising from around $5.5 billion investment in renewable energy over the past 12 years, with jobs from
The State has the lowest carbon signature of any mainland state, partly driven by the percentage of gas power generation but primarily from the level of renewable energy generation. The recent Paris Climate Change conference focused extensively on the role and impact of renewable energy, in SA much focus has been on the Weatherill Government’s objective of zero net emissions by 2050. There has been considerable debate surrounding renewable energy and electricity prices and even more recently, debate on renewable energy and future electricity supply security in SA. There is no doubt that SA’s electricity market is the peakiest in the western world with almost double the average demand required during the height of summer. South Australians have always paid a lot for their electricity and currently electricity costs in the State are amongst the highest in the world. The recent announcement of the closure of Alinta’s Leigh Creek coalfield and associated Augusta Power Stations have ushered in a new era in the SA market – a ‘two speed’ market. That is to say there is one price when wind
Feature 27 is blowing and a much higher price when wind generation falls and we are reliant on expensive gas peaking plants that are able to immediately provide the shortfall.The two existing interconnections with Victoria can provide South Australia with access to 460 MW in lower cost power generation (from coal), to be increased to around 700MW in the middle of this year, which helps to contain wholesale electricity prices in SA. As even this increased capacity will provide only a quarter to a third of SA’s demands there will be a need for the State to find a variety of solutions to ensure the local electricity market is stable and capable of delivering affordable power to local consumers. Those solutions could include expansion of the existing interconnectors (Heywood interconnector expansion already underway and to be completed by end of 2016); access to reasonably priced gas for power generation – not an easy find with eastern state gas prices attracting available gas – to feed existing power station capacity; review of the National Electricity Market fundamental design – that is an ‘energy only’ market to a NEM design that includes both ‘capacity and energy payments’ – thus encouraging base load investment (important for a state that has high summer peak demand) and longer term, the potential to introduce nuclear powered generation to provide large scale (around 500 MW) baseload emission free electricity. Advances in technology could also lead to solutions through the development of storage options for solar or wind generation and commercial development of new baseload renewable generation, such as biomass. In the short term, a review of the National Electricity Market design is the most appropriate solution to encourage baseload investment and also smooth the volatility of the SA wholesale pool and across the other NEM regions.
South Australian Resources Industry Awards 2016 Nominations open now! INNOVATION IN RESOURCES COMMERCIAL ACHIEVEMENT The resources industry is critical to South Australia. A well performing resources industry providing royalties, taxes, jobs, service opportunities, infrastructure and regional benefits helps to ensure a high standard of services for everyone–including health, education and more. The South Australian Resources Industry Awards provide a new initiative to recognise the achievements of South Australia’s mineral and energy industry, including explorers, developers, produces and providers of goods or services. Nominations close 18 March
sacome.org.au ISSUE 02 RESOURCING SA Autumn 2016
28 Workforce
G N I T G H D I E R B
GAP participant Neil Chalmers inspecting drill core at Six Mile Hill (Kingston Resources)
GAP
The GAP is proving a hit with companies looking for geoscientists to work on South Australian projects and retain an expert local skills base during the current low point in the resources cycle.
The Geoscientist Assistance Program (GAP) assists companies to hire unemployed geoscientists, or those who are severely underemployed, on short to medium term projects through a salary subsidy scheme. Kingston Resources is one of several companies that have taken advantage of the program, enabling it to employ Neil Chalmers on a six month contract at its Six Mile Hill project. Neil’s role is predominantly field based, managing the drill program including logging drill core, collecting petrophysical measurements, interpreting new technology drilling data, managing Kingston Resource’s sampling procedures, as well as assisting with onsite logistics and occupational health and safety procedures. Neil is appreciative of the opportunities the program has provided him. “The GAP program has allowed me to continue my career utilising my knowledge of South Australian geology during a severe downturn in the industry,” he says. Funded by the Department of State Development through the Plan for Accelerating Exploration and managed by the South Australian Chamber of Mines and Energy (SACOME), GAP was introduced as a ISSUE 02 RESOURCING SA Autumn 2016
response to the effect of the current economic cycle on the local resources industry.
unemployment since the survey series commenced in 2009.
Jonathon Forbes, Director of Projects at SACOME, says the aims of GAP are to prevent the loss of experienced geoscientists from South Australia’s exploration, mining and petroleum industries, while maintaining and diversifying the skills of both geoscience graduates and experienced professionals affected by the tough economic times.
“Australian geoscientist unemployment in the September quarter was 15.5 percent nationally, up slightly from the June quarter result of 15.2 percent.
“The key function of the program is to provide subsidies to companies for the employment of approved candidates, these may be either graduates or experienced geoscientists,” Jonathon explains. As program manager, SACOME assists with application processes, sourcing and matching suitably qualified candidates and providing additional opportunities for skills development. GAP can also provide up to $1000 towards site readiness training such, as first aid or four wheel drive certification. Jonathon says the need for the program was highlighted by the results of the Australian Geoscientist Employment Survey for the September 2015 Quarter, which revealed the highest levels of national geoscientist
“The underemployment rate was also disappointing, at 21.2 percent, a significant increase on the 19.9 percent recorded in June.” In South Australia, the survey showed unemployment for geoscientists was 14.7 percent, with underemployed rates of 26.5 percent. The GAP ends in December this year, or when the funding has been exhausted, which Jonathon says is likely by mid-2016. “The GAP has been steadily taken up by companies since March last year and a number of those companies have been granted an extension to their original project, so we’re well ahead of projections coming into 2016.” Any companies interested in participating are urged to contact Jonathon on 08 8202 9999 or jforbes@sacome.org.au
Innovation 29
dating
South Australia’s water sector innovators put their presentation skills to the test in a unique event to uncover solutions for some of the challenges faced by oil & gas operators in the Cooper Basin. Companies operating in South Australia’s world class oil & gas region in the Cooper Basin face a number of challenges. These include excess co-produced water and requirements for large volumes of water by shale gas activities, together with the issues around potable water supply and sewage disposal faced by most remote operators. South Australia’s Water Industry Alliance, in conjunction with the Roundtable for Oil & Gas Projects and the Industry Capability Network, coordinated a unique event in October that attracted the State’s top innovators and encouraged collaboration within the industry. A pitching competition preceded the event, with 11 businesses shortlisted from many applicants. These were then provided with elevator pitch training in preparation for the event where they would each have just five minutes to promote their wares and get their message out to an audience of around 70 industry stakeholders. Andy Roberts, CEO of the Water Industry Alliance, said the South Australian water industry has a strong track record and excellent reputation globally for delivering solutions to water challenges. “This event was a great step to connect this expertise to the oil & gas sector and we’re grateful to ICN, DSD and the Oil and Gas Roundtable for partnering with us to help make it possible,” he said.
One of the presenters was Stepney-based Sentek Technologies, which demonstrated how low total dissolved solids water can be used to grow feed for livestock, providing a benefit to pastoralists. The technology uses sensor probes and software to manage irrigation levels and maintain soil water content within the optimum range and can be managed remotely via satellite.
The South Australian water industry has a strong track record and excellent reputation globally for delivering solutions to water challenges
Parkside-based Hydrosmart also participated, presenting a flowchart that illustrated its technology to prevent and remove scale in water for use in hydraulic fracturing and recycling of flowback water from the hydraulic fracturing process. Other technologies showcased included continuous flow electrolysis to treat wastewater and mobile commercial scale units to treat hydraulic fracturing flowback water. Paul Goiak, Director Industry Participation at the Department of State Development, praised South Australia’s progressive water industry and its innovative solutions that could be applied to the State’s oil & gas sector. “Through information sharing initiatives such as the Water Business Pitching Event we have successfully connected two sectors,” he said. A full summary of the event and the water technologies showcased can be found at Department of State Development website via bit.ly/1TOskhR.
ISSUE 02 RESOURCING SA Autumn 2016
30 Feature
TAKING A BREATHER The search for gas in unconventional reservoirs was at fever pitch just a few years ago; new technologies had been developed and the growing Asian demand for gas meant everyone wanted a piece of the action. But the lower oil price is taking its toll and progress in unconventionals has cooled. By Lindy McNamara Five years ago the resources sector was abuzz – Australia was in the grip of a mining and energy boom. Investors were clambering to get in on greenfields projects, companies were exploring at a frenetic pace and there were generally, smiles all round. One of the stars of the show at this time was natural gas. Companies were keen to take advantage of the growing eastern states and Asian markets – all that was needed was the infrastructure to transport the liquefied natural gas (LNG) and a ready supply of gas. Construction of pipelines from several basins ensued, as did the establishment of new processing and terminal facilities, including the Gladstone LNG plant (Queensland) with the ability to access South Australian gas. ISSUE 02 RESOURCING SA Autumn 2016
While there was a bountiful supply of natural gas in conventional reservoirs, attention also turned to gas in unconventional reservoirs – that is, gas that can’t be extracted by ‘typical’ methods. New technologies developed in the US meant that this gas was now more viable, it was just a matter of developing reserves and progressing the technology to suit South Australian conditions. The Cooper Basin, with its valuable South Australian acreage, was suddenly in the spotlight. While gas and oil production had been declining from the ‘mature’ basin in recent years, explorers believed it was harbouring potentially large reserves of unconventional oil & gas and now was the time to find them.
Investors dug deep and companies had drilling rigs working overtime in search of unconventional plays. The State’s oil & gas exploration spend for 2013-14 was a record $531 million, with a large portion of this focused on exploration for unconventional plays in the Cooper Basin, the offshore Bight Basin and two significant exploration wells were drilled to assess the possibility of gas in unconventional reservoirs in the Otway Basin in the South East. It seemed as though nothing could stop the unconventional revolution. Fast forward to 2016 and while there have been some considerable advances in uncovering gas reserves in unconventional reservoirs, the heat has definitely come off.
Feature 31 The dramatic drop in world oil prices over the past 18 months combined with the hefty cost of doing business in Australia have taken their toll across both oil and gas investment. It is relevant to note that the majority of netbacks from LNG exports are linked to the price for oil. Investors are cautious, boards are conservative in their decision making and as one industry analyst suggests, a significant part of the oil & gas industry is in a period of “long pause”. “I think we’re going to have a pause now in LNG construction, which means the gas resources we have in SA will probably be stranded for a few more years,” says Drew Edwards, Head of Oil and Gas Research at the ANZ Bank. “At the moment with the oil price as it is, people aren’t drilling as many wells as they had planned, so that accumulation of knowledge which is needed to make these wells ultimately efficient and economically viable is happening very slowly. “The successful shale development in the US demonstrates the unconventional technology works, but it’s not a simple case of transferring the technology and dropping it into SA. Everyone’s shale is a bit different and it is going to take time for the drillers and producers to work out how to optimise the process – and that takes wells.” Edwards notes that Australia has just come through a boom where there were nine LNG projects under construction at the same time. “Those projects had their visions in 2009/10 when there was a different oil price and exchange rate at the time. Oil prices are not going back to $100 any time soon. They could increase to the $70-$80 mark over the next three years and at those sort of prices LNG makes sense again.
Santos/Drillsearch/Sundance JV’s Washington 1 in the Patchawarra Trough in the Cooper Basin as providing recent encouragement. He points out gas production from unconventional reservoirs is nothing new. Since 1969 fracture stimulation (fracking) has been used since to produce oil & gas from unconventional reservoirs in the Cooper Basin and there is also gas coming from shallow coal seams in Queensland and NSW. However, the extent of commercialising future oil & gas unconventional plays are yet to be determined. “Certainly exploration has slowed down, there is no question,” he says.
Despite the current tough conditions several companies, including Santos, Beach Energy, Drillsearch, Sundance Energy, Strike Energy, Senex Energy and Origin Energy, are continuing their quest to prove unconventional plays in the Cooper Basin – with tight sandstone and ‘source rock plays’ attracting the most recent spate of investment. Beach Energy initially teamed with Chevron to undertake the first stage of an exploration program in the Cooper Basin, drilling 18 wells in the Nappamerri Trough, with 16 fracture stimulated. The program highlighted a big contingent resource, in the order of 500 million barrels of oil equivalent.
“Industry is, unsurprisingly, investing in a timely way to meet markets in the context of price. We can look forward to more aggressive investment in all forms of oil & gas as prices rise and/or foreign exchanges value fall.”
Acting CEO Neil Gibbins says unlocking unconventional resources in the Cooper Basin remains an “important part” of the company’s future.
During the current downturn, Goldstein says it’s imperative for all parties to adopt a cohesive approach to safeguard the future of the industry.
“LNG is driving longer-term short supply in the domestic market. If we can unlock additional gas reserves that can push into the eastern market, it will certainly give us the ability to generate additional revenue,” he says.
“The development of the industry has always been characterised by periods of activity followed by long pauses while the market consolidates”
“The development of the industry has always been characterised by periods of activity followed by long pauses while the market consolidates.”
“Lowish prices could be with us for a fair time, so it is incumbent upon Australia to do everything it can to sustain its international competitive advantages.
When the oil price does recover, he predicts South Australia will be at the forefront of developing gas in its unconventional reservoir plays – but he doesn’t see serious quantities of gas from unconventional reservoirs from South Australia produced for about seven to 10 years.
“Government and companies need to be working together to enable land access, to minimise costs of developing and expediting the time it takes for development – but developing safely so they are not harming the environment.”
“Power generation and energy consumption in Asia is not going away, it’s only increasing and we’re perfectly positioned to provide it,” he adds.
Goldstein says there will need to be a couple of significant changes before exploration rigs once again start dotting the skyline in outback South Australia.
Barry Goldstein, Executive Director - Energy Resources at the Department of State Development agrees that while the exploration and development of gas in unconventional plays has tapered for now, it will eventually play a significant part in the State’s economic future. He states that some investment in playmaker exploration wells continues – citing the
“You won’t see that happening unless a few things are in evidence – someone has discovered a play which will make money with a fair degree of certainty based on well productivity, the terms of contracts for gas, the price of oil and the foreign exchange rate; or a sub-set of these things.”
“The first stage we did with Chevron and now we’re setting up scope for stage two which may involve some pilot work. “We feel the resource has great potential, but it’s just going to take more evaluation work and assessment going forward and we’d like to do that with a partner.” Beach Energy is also looking at deep coal potential in two areas of the Cooper Basin. One is very thick wet coal at about 1500-2000 metres deep in the south of the basin and another is dry coal in existing Permian gas fields. “It’s a bit of a sleeper in the basin, but we believe it has good potential.” Exploration also continues in the Otway Basin, where Beach drilled a couple of wells two years ago to assess the unconventional potential. “We’re still waiting on analysis of the results of the coring programs in those wells, but the pleasing result was highlighting a conventional play at a deeper level which we’re excited about and looking at drilling further wells to.” So while most explorers remain in a holding pattern and are taking the time to catch their breath, others are pushing on – although with less intensity and greater caution. It’s a sign of the times, but one thing’s for sure. When the tide turns and things start heading north, unconventional gas will again be firmly in the spotlight and there will be smiles all round.
ISSUE 02 RESOURCING SA Autumn 2016
32 Workforce
All things
EQUAL
There is much to be said for advances in workplace diversity and in the resources industry particularly. But Australia still has a long way to go. By Kate Hobbs Women are equal in the eyes of the law. Generally speaking they are able to work in any area a male can, including underground mining, which was illegal until the mid-1980s. In 1974, the minimum wage was made the same for males and females in Australia. However, the reality of salary inequity remains prevalent, particularly in industries such as mining and construction where female participation is the lowest in the country, at around 14 percent. Regardless of the basic equity principle that people should be paid the same for the same work, the significant impact of pay inequity on the Australian economy has only recently began to be understood. An increasing body of research is showing that the gender pay gap discourages the participation of women in the workforce and results in ‘lower levels of economic output across the economy’ (Bandias and others, 2011), together with a greater need for welfare support from the government due to unemployment or underemployment. This directly impacts the ability of women to build enough superannuation to support them in old age, again leading to greater pressure on the welfare system. With the average Australian woman retiring now with approximately 59 percent of the superannuation balance of the average Australian male, yet living for significantly longer in retirement, the situation is clearly unsustainable.
There is also a growing understanding of the impacts more women in senior roles and on boards has on overall business performance. Studies specific to the mining industry have been carried out in this area with PWC’s Mining For Talent 2015 review of the top 500 global resources companies providing clear evidence that more women on the board of an organisation correlates to significantly stronger financial performance as well as better environmental, social and governance outcomes. This is an area for separate discussion, however it is important to note that growing research and consistent conclusions are encouraging companies to take greater notice of their organisation’s gender composition and the effect this is having (or could potentially have) on their bottom line. The Workplace Gender Equality Agency (WGEA) reports on a variety of diversity indicators, including the gender pay gap, for Australia as a whole and for individual industries. The most recent results, released in 2015, show a 24 percent gender pay gap in favour of men. This is 1.4 percent worse than 20 years ago, which is disappointing when considering the past decade’s focus on gender equity. In addition to the 24 percent gap on base salary, men have also been shown to receive 35 percent higher bonuses for the same performance, indicating that the gap increases as negotiation plays a bigger role, usually at higher organisational levels. For mining, the WGEA data indicates that the industry with the lowest female participation
Kate Hobbs
in Australia has significantly improved over the past year, with the gap shrinking from 23.8 percent to 19.6 percent. The drop in the gender pay gap highlighted by WGEA is reflected in the Australasian Institute of Mining and Metallurgy’s (AusIMM) last member remuneration survey The AusIMM Remuneration Survey 2014: An analysis of professional remuneration in the minerals sector. However, the AusIMM’s data showed a higher total gender pay gap of 27.1 percent due to its focus on professionals within the industry rather than reflecting roles in equipment operation, finance, HR and administration. Other notable points from the AusIMM’s results include the significant ‘leak’ of women from the resources industry. A high percentage of graduates starting out in professional roles are
WIMnet and WinRSA A sub-group of the Australasian Institute of Mining and Metallurgy (AusIMM), the Women in Mining Network (WIMnet) was established a number of years ago to support the industry with attracting, developing and retaining women. WIMnet is a national organisation run by a group of industry professionals from around Australia and New Zealand who are passionate about diversity. In addition to the national ISSUE 02 RESOURCING SA Autumn 2016
team focused on policy and advocacy work, WIMnet has active teams within each state. In South Australia, WIMnetSA is known for regular networking and professional development events, as well as the mentoring program launched last year in conjunction with SACOME’s Women in Resources SA (WinRSA). As a committee of SACOME, WinRSA is focused on South Australia and runs events and
initiatives aligned with its strategy and that of SACOME, with a vision to shape the future for the South Australian resources sector by realising the benefits of increased participation, retention and advancement of women. More information on WIMnet is available at ausimm.com.au/wimnet and WinRSA at sacome.org.au/winrsa
Workforce 33
female (more than 30 percent) however, these consistently leave the industry over time or do not progress their careers, resulting in less than 10 percent of females in executive and senior professional roles. There has been a lot of research investigating why a gender pay gap continues to persist. Although some of the gap can be explained by things such as women having a tendency to work in lower paid industries or roles, career breaks to raise children, or because women may have different skills or experiences, as political commentator Annabel Crabb says, “there remains a stubborn 60 percent or so of the gender pay gap which cannot be explained by anything apart from
the presence or absence of certain dangly bits”. If you consider what it means to be a young Australian male and female worker today with equal qualifications, experience and career path, recent modelling (Summers, 2012) shows a penalty of close to $1 million of lifetime earnings for being female. Although there have been small improvements, Australia does not seem to be progressing in closing this workplace gender divide. WGEA reported last year that the number of employers with a gender equality strategy is slowly rising and 20.6 percent of organisations now have this in place. However, the majority
of organisations are not acting to reduce the gender pay gap. Only a quarter of reporting organisations undertook a gender pay gap analysis in the past 12 months and of those, only half then took action to address the issue. As stated in the WGEA’s summary of the data, it appears that the majority of employers simply do not recognise pay equity as an important issue. Kate Hobbs is the national Chair of WIMnet and is a Senior Consultant with First Principles Consulting.
Closing the gap What can individuals and organisations do to help reduce the gender pay gap? 1. Identify if and why there is a gender pay gap within your organisation. Undertake regular reviews of pay levels across roles and gender to ensure fairness. If there is a difference for a reason, be transparent, if the reason is not clear, do not accept it. 2. If a gender pay gap exists, take steps to rectify it. This may be as simple as levelling the pay of one or two individuals or there may be systemic issues to be dealt with.
Organisational policies are a good start, however they need to be followed by actions that directly address the inequities. 3. Values and unconscious biases govern decision-making, determine leadership style and drive organisational culture, as well as playing a noticeable part in recruitment and remuneration practices. Those making decisions within a business can benefit from unconscious bias training to help them understand where bias might be contributing to a lack of diversity.
4. Educate yourself and key individuals about diversity issues such as the gender pay gap. Take advantage of resources provided by organisations like WGEA who run events such as their coming webinar on 29 March this year – “Pay equity: how gaps emerge and what to do about them”. Groups such as the AusIMM’s Women in Mining Networking (WIMnet) and SACOME’s Women in Resources SA (WinRSA) are available to support workers, managers and organisations in diversity initiatives.
ISSUE 02 RESOURCING SA Autumn 2016
34 Business
Sky high
South Australian electricity prices, particularly for wholesale contracts, are continuing to escalate with no relief likely soon. Innovative thinking is essential for investment attraction and development across all industries. Andrew McKenna
By Andrew McKenna, Business SA Since Alinta announced in June its intention to close Port Augusta’s Northern Power Stations, volatility in the South Australian wholesale electricity market has increased markedly, leading to considerable price rises for large users purchasing forward contracts and other derivatives. The nature of any wholesale market is such that participants operate with a range of instruments and the timing of their needs can vary substantially. Accordingly, while some large users going to market since June have seen energy prices double the previous rate, others may still be locked in for another year or two and are yet to feel the effects of recent market changes. Considering the wholesale price of electricity can account for between 40% and 75% of the final bill, the impact of recent events on heavy users such as manufacturers and irrigators is high and will only worsen as more businesses are faced with having to re-contract their electricity needs. The factors driving recent volatility in South Australia’s electricity market are inherently complex but the underlying fundamentals relate to the economic drivers for generators to provide secure base-load power. The progressive increase in intermittent renewable generation in South Australia, predominantly wind and to a lesser extent solar PV, has gradually eroded the profitability of base-load generators fired by coal and gas. This is due to the merit order effect in the wholesale electricity market, whereby the generation made available at the lowest marginal cost sets the wholesale price. Considering wind power can be made available at near zero marginal cost, the cost of supplying one additional
ISSUE 02 RESOURCING SA Autumn 2016
megawatt hour of wind power is negligible. While the wind is not always blowing, when it is, the market price for thermal generators is below cost and eventually plant operators such as Alinta make the decision to close. South Australia will be without coal fired electricity generation from this April and we will become increasingly reliant on electricity imports from Victoria and higher priced gas fired power from local generators, until such time as renewables are able to provide secure base-load power. The rising price of wholesale gas, largely due to northern LNG export programs, is making gas fired electricity more expensive and only serving to exacerbate the issues associated with losing local coal fired generation. The market outcome of losing coal fired generation in South Australia is less competition amongst generators to provide base-load power when the wind isn’t blowing. This scenario increases the price due to basic supply and demand principles together with volatility in the SA wholesale market - which means increased risk. Retailers must price this into their energy rates to business customers, which has led to a doubling of contract rates since mid-2015. Renewable electricity met just 8.6% of South Australia’s energy demand in 2007/8, an amount which has increased almost five fold to 41% today, comprised of 34% wind and 7% solar PV. However, while wind can at times power the entire State, the contribution of wind generation to South Australia’s 2014/15 summer-time peak demand was only 9.9%. This is due to the intermittent nature of wind power and the reason why it cannot yet be relied upon to service the State’s base-load energy requirements which are essential for
maintaining and attracting new industry to South Australia. Furthermore, while solar PV is a relatively minor but growing contributor to South Australia’s energy needs, until battery storage becomes broadly economical, solar is still only available at times of sufficient sunlight. The table provided shows the recent price trends in the National Electricity Market (NEM). South Australian futures are trading at more than twice the level of Victorian futures from 2016 through to 2018. While South Australia’s spot market has traded on average at a 30% premium to Victoria over the past decade, the differential since June 2015 is a significant step change and has industry very concerned. The major electricity interconnector between South Australia and Victoria, Heywood, is currently being upgraded from 460 to 650 megawatts (MW) of capacity. However, maximum demand for South Australia in 2014/15 was 2,872 MW and average demand for the year ending October 2015 was 1,371 MW meaning we are a long way from being able to solely rely on Victoria to meet our base-load electricity requirements. Even then, some level of spinning reserve is required to maintain frequency control and can only be delivered by conventional generation which has sufficient inertia to dampen variations in frequency. Inertia can’t be provided by wind or solar (and as we recently found out), if SA relies on frequency control via the interconnector, blackouts can occur if the interconnector goes down. South Australia is currently the guinea pig of Australia’s Renewable Energy Target (RET) which has subsidised a considerable amount of investment in solar PV and wind power without
Business 35 appropriately allowing for a market transition period during which renewable energy is unable to provide base-load power. Business SA supports the move towards renewable energy but it must be balanced with ensuring industry has sufficiently reliable electricity supply.
approval process to ensure it actually returned a net benefit to the electricity market. Even then, South Australia still requires appropriate generation capacity in cases where the State is islanded, as it was in November, and widespread load shedding occurred.
South Australia is not alone in the world having a high penetration of intermittent renewables, but the size of interconnection between markets in the US and Europe is much greater which presents quite a unique challenge for us.
There are no simple solutions but Business SA would prefer a market mechanism which incentivises a level of base-load power generation to provide the underlying support industry needs to ensure South Australia can get through the next few years of structural economic adjustment without facing exorbitant power prices. By this time, electricity storage technology is likely to have advanced much further and should enable economic storage on an industrial scale.
It is not simply a proposition of doubling the size of the existing Heywood interconnector or building a new one, which for a start would cost in the order of $500 million dollars and would still need to go through a regulatory
SA is the guinea pig of Australia’s Renewable Energy Target, which has subsidised investment in solar & wind power without allowing for the transition period where renewable energy is unable to provide base-load power
Recent price trends in the National Electricity Market Base Future Prices Thu 12 Jan 2016 ($per megawatt hour) NSW
VIC
QLD
SA
2016
46.23
40.61
53.35
79.69
2017
46.69
41.01
54.49
86.34
2018
47.97
41.51
56.92
87.03
2019
48.50
41.90
53.37
61.05
ISSUE 02 RESOURCING SA Autumn 2016
36 Feature
TRANSFORMER Adelaide-based oil and gas company Santos has delivered its major LNG project in Queensland, transforming the company into a leading energy supplier in the Asia Pacific region.
Quick facts • More than 10,000 people have worked on the Santos-GLNG project • The project has seen more than $15.4 billion invested Australia-wide • Santos’ LNG plant comprises 27,000 tonnes of steel – that’s three times what was used to build the Eiffel Tower! • Asian gas demand is projected to grow at more than double the rate of the rest of the world
The story of Santos began in the 1950s in outback South Australia, when three men had the vision to explore and discover an energy resource that continues to power Australia today – the iconic Cooper Basin. This discovery not only helped to define the future of Santos, but also the future of South Australia and the nation. The Santos journey has not been without its challenges, but it has been one of determination and a pioneering spirit that has continued to drive the company throughout the decades. Late last year, the company’s first cargo of Liquefied Natural Gas (LNG) left the Gladstone jetty in Queensland on a ship bound for ISSUE 02 RESOURCING SA Autumn 2016
South Korea. This occasion marked the most significant milestone in the company’s corporate history – the growth of Santos into a major LNG player in the Asia Pacific region. The flagship US$18.5 billion GladstoneLNG (GLNG) project is the company’s largest project to date.
It was back in 2007 that the company reached a strategic turning point. Santos knew it had to look beyond the domestic market in order to grow. The rise in urbanisation Asia was continuing to soar, and Australia’s neighbours were looking for cleaner energy sources at competitive prices.
Santos partnered with three of the world’s largest energy companies including France’s Total, PETRONAS from Malaysia and KOGAS from Korea to expose gas from coal seams in Queensland to the global market.
LNG was the logical answer. It would not only boost domestic investment through the launch of mega-projects with large social and economic benefits, but it would also help to lower carbon emissions in the rapidly growing Asian economies.
How does a company progress from an oil discovery in one of the most remote parts of South Australia to an operator of one of Australia’s largest LNG projects?
So the direction was given to develop a Santos-owned and operated plant in Gladstone. At the time of announcing the decision, the project was touted as the
Feature 37 of Malaysia’s gas needs and 9 percent of South Korea’s. South Australia is an important cog in the GLNG wheel through its Cooper Basin resources, which will provide around 750 petajoules of natural gas to the project – underpinning billions of dollars’ investment in the State. The GLNG project is a game changer for Santos. It marks the end of the company’s large LNG investment cycle and will deliver a significant step-change in production, adding to the company’s already impressive LNG portfolio in Darwin and Papua New Guinea. However, the Queensland LNG industry, including the GLNG project, has not been short of critics, with many industry leaders voicing doubts on the concept and whether companies investing would see a return on investment. In reality, without these mega LNG projects, gas would remain in the ground. The birth of exports from Queensland has benefited the Australian domestic market by stimulating demand, bringing in skills and innovation, and helping drive down the costs of production for the local market.
SA is an important cog in the GLNG wheel through its Cooper Basin resources, which will provide around 750 petajoules of natural gas to the project and underpin billions of dollars’ investment in the State
What it means for Australia’s economy in the long-term is stable revenue streams and a boost to the Australian workforce. Although the GLNG project has been delivered into a lower oil price environment, it is a longterm project with an estimated lifecycle of 30-40 years – set to deliver significant cash flow for decades to come. Unlike some other commodities, the demand for energy is expected to remain strong. The volumes of LNG to be exported from the GLNG project are incredible, estimated to be more than 100 cargoes a year.
world’s first large-scale project to convert unconventional gas to LNG. The project involves gas field development in the Surat and Bowen basins, a 420 kilometre gas transmission pipeline and a two-train LNG plant on Curtis Island near Gladstone. It’s incredible technology. Gas from coal seams is piped to the plant where it’s cooled to minus 161 degrees Celsius – shrinking the volume to one 600th of its original size.
In fact, it is said that if Queensland was a country, its 23 mtpa of LNG exports would rank fourth in the global ranking of LNG exporters, alongside Malaysia and Nigeria. Nationally, the suite of LNG projects under construction represents around $180 billion of investment, contributing about 1.5 percent of Australia’s GDP. Furthermore, the industry is projected to contribute more than $12 billion in tax revenues annually off the back of the resultant production surge.
When fully operational the plant will have the capacity to produce 7.8 million tonnes of LNG per year. Underpinned by long-term offtake agreements with blue-chip Asian buyers, the plant will ultimately supply 11 percent
ISSUE 02 RESOURCING SA Autumn 2016
38 Opinion
BOLD and
beautiful
The Nuclear Fuel Cycle Royal Commission is scheduled to report its findings in early May. Among the 785 submissions received were many bold ideas. Ben Heard discusses an opportunity for South Australia
Nuclear technology has advantages as a reliable, scalable clean energy source. It also has challenges, limitations and shortcomings. So when the South Australian Nuclear Fuel Cycle Royal Commission was announced, I did not support pursuing every aspect of the nuclear fuel cycle. While South Australia must move away from ‘playing small’ we must also be canny and strategic. When we find the right opportunities, we must pursue them. Together with Senator Sean Edwards, we found an opportunity to earn tens of billions of dollars for South Australia while turning waste into clean energy that we give away to the market. How is this possible? We looked for where our advantages meet market needs. In South Australia we have several advantages. We are trusted and respected around our region and the globe and our institutions are strong. We are situated in the strongest region of global nuclear growth. Most importantly, we have a clean slate in nuclear energy deployment, but an established nuclear regulator, safeguards office and science and technology organisation. That’s a near-perfect balance for jump-starting nuclear innovation. Calling on those advantages, we proposed to establish an above-ground, interim storage facility for used nuclear fuel. This would focus on serving the unmet needs of Asian neighbours, with revenues in the tens of billions of dollars that can be earned in the relatively near-term. However, social acceptance of that process, alone, may be low. So, we explored the prompt reinvestment of those revenues in the commercialisation of a fuel recycling facility that can be paired with advanced nuclear reactors. The idea is based on the commercialisation-ready PRISM reactor from ISSUE 02 RESOURCING SA Autumn 2016
GE-Hitachi. Together, these technologies enable clean electricity generation from approximately 95 percent of the remaining material in a used fuel rod. The resultant waste is tiny in volume and lasts just 300 years. This approach overcomes crucial hurdles. Deployed as part of a store-and-recycle proposal, the PRISM reactor makes outstanding commercial sense even at high, first-of-a-kind costs. Our modelling suggests we could build two PRISM reactors (at 622 MWe total) and earn present value of $28 billion. We further assessed the construction of six PRISM units (1866 MWe total) operated with free electricity (ie $0 per MWh, wholesale). Under these conditions our mid-range scenario still returned $18 billion in present value. In both cases, enough fuel would be acquired to power the State’s economy for centuries. Naturally this study has limitations, however it is the most comprehensive and robust effort of its kind. The case for further, determined investigation by the government is compelling. Other nuclear innovators would be attracted by the implementation of this project. Canadian company Terrestrial Energy is developing the inherently safe, liquid-fuelled Integral Molten Salt Reactor. This could use our recycling facility as a fuel source. This organisation expressed strong interest in manufacturing and research and development opportunities in South Australia through its
submission to the Royal Commission. This proposal resolves many traditional objections to nuclear energy. We won’t be making nuclear waste: we will be recycling it. We will be making electricity, reliably, with no mined fuel, no greenhouse emissions and barely any waste. There are no compelling environmental objections, it’s a great solution to a longstanding challenge. We won’t be wracked with debt. This could be achieved through drawing pre-existing international budgets to South Australia with our unique service offering. The introduction of more than 1800 MWe of reliable generation would rebalance electricity in South Australia from overreliance on imports and variable generators (like wind and solar) and back towards price and generation stability within our own borders. In so many ways, we would be looking after our own future. By recognising our advantages and acting with calculated boldness, South Australia can be at the start of something very big and very good – for us, the region and the world. Most of the submissions received are available on line at nuclearrc.sa.gov.au/submissions including Ben’s research (Transforming our economy. Cleaning our energy. Sustaining our future – key word search: Edwards)
Ben Heard is Director of ThinkClimate Consulting, a climate change and sustainability consulting firm. In 2011 Ben delivered a presentation Nuclear Power: From Opponent to Proponent to a strong response and has since become one of Australia’s most prominent nuclear advocates, presenting his work at state, national and international conferences. Ben has written on nuclear power extensively, is a PhD candidate on nuclear energy at the University of Adelaide, and is on the International Advisory Board for Terrestrial Energy.
Feature 39
BEHIND CLOSED DOORS
It’s timely to understand the simple yet interesting circumstances surrounding Australia’s ban on the globally embraced technology of nuclear energy. By Dayne Eckermann and Daniel Zavattiero
Nuclear power is a low emission energy source and one of the safest options available. It supplies around 10 percent of the world’s electricity, 20 percent of the OECD’s and around three-quarters of France’s requirements (giving that country the lowest CO2 emissions per GDP in the G20).
So nuclear power was banned in Australia - with practically no discussion or debate, in a Bill which focused on the amalgamation of two radiation protection and safety bodies
Yet nuclear power was banned quickly and quietly by the Australian parliament in the late 1990s with no scientific reference… slipped into a piece of legislation that was intended to address other matters. How could this occur? In 1998, the Australian parliament voted on legislation to centralise the task of radiation protection and safety to an independent regulatory body. Before this, there were two regulatory agencies that later became the Australian Radiation Protection and Nuclear Safety (ARPANS) Agency. It is in this piece of legislation that the outright prohibition occurs. The ARPANS Bill entered parliament in 1998 without any prohibition on nuclear power and passed through the House of Representatives several months later, with its main focus around the replacement of the Lucas Heights reactor. At the time, there was a strong undercurrent of anti-nuclear activity in Australia and it was perceived to be a poisoned chalice in Australian politics. The ARPANS Bill entered parliament on 8 April 1998 without any prohibition on nuclear power and passed through the House of Representatives in November that year after a break in sitting occurred due to a Federal Election. The debate in the House of Representatives mainly focused on the
replacement of the Lucas Heights reactor and its perceived implications. Planning for the replacement of the old reactor was well underway. A new reactor would eventually be commissioned in 2006 so in 1998, regulatory renewal was timely. Before amendments were made to the Bill, the Senate sent it to committee to hear from stakeholders and experts with a vested interest. After two days, the committee tabled a report with proposed amendments. An additional report was provided from minority parties – the Australian Democrats and Greens – who held balance of power in the Senate and wanted the Bill to include a prohibition of nuclear power. The amendment was swiftly passed, on voice vote alone. And so nuclear power was banned in Australia. With practically no discussion or debate, the ban was passed a Bill that primarily focused on the amalgamation of two radiation protection and safety bodies. Australia prohibited nuclear power based on the ideological position of a minority and a misperceived stigma. Today, nuclear power is well established with 436 operable reactors in more than 30 countries. Soon the Royal Commission will hand down its findings and with the IPCC calling for a tripling of low carbon energy, the current investigation into nuclear energy is overdue – yet timely.
ISSUE 02 RESOURCING SA Autumn 2016
40 Innovation
When only the best will do Collaborative projects led by the Mining and Petroleum Services Centre of Excellence are enabling South Australia’s resource companies to access cutting edge technology in the relentless quest for better efficiencies and capabilities.
Two years into a five-year, $10 million commitment by the South Australian Government, the Mining and Petroleum Services Centre of Excellence (CoE) is getting results as it seeks to foster increased competitiveness, reduce costs and grow a globally capable service sector for the minerals and energy industry. With an emphasis on supporting innovative ideas through funding and linking resource companies to research institutions and service companies, the CoE aims to make South Australia a leading international hub for services to the resource sector. The CoE is perhaps best known for its onshore oil & gas training facility. South Australia’s largest oil & gas producers – Santos, Beach Energy and Senex Energy – in collaboration ISSUE 02 RESOURCING SA Autumn 2016
with TAFE and the State Government, established the oil & gas training facility at Tonsley in February last year. Training staff for SA’s expanding onshore petroleum industry, the facility is equipped with a simulated production environment, thanks to support from industry collaborators and a host of service providers. Aside from the training hub, the CoE has developed and marketed an additional 16 projects to date. LAB SA is one of these success stories. A South Australian laboratory traditionally providing services to the civil construction and concrete industry, the company identified an opportunity to diversify its capabilities into the oil & gas sector in 2014, by providing testing services for materials used during oil & gas well stimulation.
In an effort to learn about the newest technologies applied, LAB SA joined a delegation led by the CoE to Houston, Texas. With assistance from the CoE, the company went on to develop South Australia’s first proppant testing laboratory and now provides local, high quality, cost effective testing of silica proppants for the oil & gas sector. Interest in the supply of proppant appears to be sparking a new local industry with several sources of quality silica sand identified on the Fleurieu Peninsula. LAB SA is working with these sources to establish a new business stream, which will see less reliance on overseas materials and services. Another project the COE has contributed to is the ARC Research Hub for Australian CopperUranium, a consortium led by the University
Innovation 41 of Adelaide bringing research and industry scientists, engineers, and regulators together to develop new safe and cost effective methods to purify copper concentrates. With South Australia home to one of the largest copper deposits in the world, Olympic Dam, and other globally significant copperuranium deposits, outcomes from the initiative will improve the quality of locally produced copper concentrate and help position Australia as a world leader in copper production and processing. A large percentage of the State’s vast minerals and energy deposits are located in remote areas and very deep below the surface, so being able to analyse geological data quickly and accurately is of increasing importance to local explorers. The focus of the Real Time Drill Site project is on ‘real time delivery’ of data from a drill site, enabling geologists to monitor and make decisions away from a remote drilling location. Partners on this initiative include the Deep Exploration Technologies Cooperative Research Centre, Australian Information Industry Association, SRA, Data to Decisions CRC and the Geological Survey of South Australia. Information such as depth and time series charts of drilling data, two-way communication,
Several projects are in the early stages, but are set to bring high impact results – not only for South Australia, but potentially much broader simple statistics and comparisons will be available to use and download, including images and plots in formats compatible with other software packages (such as geochemistry, GIS and 3D modelling) for further analysis. Another of the CoE’s projects destined for the global stage is South Australian company IMPTEC’s super-fine crushing technology, which can reduce grinding energy costs by a huge 30 percent. With five percent of global energy costs used for traditional grinding methods, this is an excellent example of new technology that reduces costs, time and energy consumption. This project received global industry support at the International Mineral Processing Congress in October 2014 and the technology is currently undergoing commercial trials.
including the potential for significant cost and production improvements by reducing the capital costs of comminution from 20mm down to <10µ size in just one pass; reducing energy costs by 30 percent; and eliminating grinding media. It also has potential application for energy production (ultra clean coal diesel and gas turbine fuel), waste recycling, agriculture and food processing. At the time of writing, $4.2 million has been committed towards these and more promising new developments, plus a further $21 million of industry and Australian Government co-funding. Several projects are in the early stages, but are set to bring high impact results – not only for South Australia, but potentially much broader. These include a study led by WSP Parsons Brinckerhoff focused on advanced modulisation, an iron ore sinter blending study led by Arrium, a comprehensive environmental compliance tool with global technology firm SRA and a partnership between the CSIRO and Innodev taking a new, high tech approach to mineral processing using ‘big data’. With government, industry and academia on board to position South Australia as a thriving hub of high tech research and innovation, this is one space to watch.
There are many benefits of the crusher,
The University of Adelaide’s Institute for Phototonics and Advanced Sensing is a world class advanced research hub, one of the university’s specialist areas involved with the CoE’s ARC Research Hub for Copper-Uranium. Image: University of Adelaide ISSUE 02 RESOURCING SA Autumn 2016
42 News Calling all innovators SACOME has launched a new awards initiative to recognise the achievements of South Australia’s world class minerals and energy industry. The South Australian Resources Industry Awards will commence this year, with nominations now open for two inaugural categories, the Statewide Super Innovation in Resources Award and the Commercial Achievement Award (yet to be sponsored). Winners will be announced at SACOME’s annual dinner on 20 April. The awards complement the Premier’s Community Excellence Awards in Mining and Energy, now entering their sixth year, which celebrate the contribution of mining and energy companies to South Australian communities. Winners of the Premier’s awards will continue to be announced at SACOME’s annual dinner. Jason Kuchel, Chief Executive SACOME said the South Australian economy was heavily dependent on minerals and energy industries and their achievements impacted everyone in the State. In times of low commodity prices, innovation in the resources sector is critical, he said, and can provide a competitive global advantage. Innovation and commercial success in the important mining equipment technology
New snapshot of resources sector A new snapshot of the regulatory performance of South Australia’s mineral resource sector is now available. The first Annual Mining Regulation Report summarises both the regulatory activities of the Department of State Development and the performance of the State’s mining and quarrying industries.
South Australian Resources Industry Awards 2016 services sector (METS) also helps underpin safety and performance in the industry and could be exported around the globe, growing another revenue stream for Australia. “It is important that the companies, innovators and entrepreneurs of the resources industry are celebrated for their passion, persistence and successes that we all benefit from. It’s an industry of potentially high reward, but defined by unpredictable global cycles, high risk and lengthy project times,” he said.
developers, producers and providers of goods or services to the minerals and energy industry. A judging panel comprising esteemed resources industry leaders has been selected, with entries to be assessed using a comprehensive matrix based on the areas indicated on the nomination forms. Nomination is via the SACOME website sacome.org.au (under ABOUT/AWARDS.)
Entries for the awards are invited from explorers,
Win for Wilkinson Lachlan Wilkinson from JBS&G Australia was presented with the Certified Environmental Practitioner of the Year Award at the Environment Institute of Australia and New Zealand’s annual dinner in October.
award recognises outstanding contributions to environmental practices. JBS&G is currently working within Iron Road to manage the environmental approvals for the Central Eyre Iron Project (CEIP).
With more than 600 certified environmental practitioners in Australia and New Zealand the
The report can be accessed at: sarigbasis.pir. sa.gov.au/WebtopEw/ws/samref/sarig1/image/ DDD/RB201500026.pdf
What’s in a name Royal Resources Limited is no more, following a name change to Magnetite Mines Limited. Approval for the name change was given at the company’s AGM in November, with the new name taking effect on the ASX on 16 December 2015. The ASX listing code has also changed, from ‘ROY’ to ‘MFE’. Lachlan Wilkinson accepts his award from Jon Womersley, then President of the Environment Institute of Australian and New Zealand (left), and Alan Chenoweth, Chair of the Certification Board (right). ISSUE 02 RESOURCING SA Autumn 2016
on the move
Hillgrove head office for SA As part of a formal partnership with the State Government, Hillgrove Resources is relocating its corporate office from Sydney to Adelaide. The company said all its head office activities, including the majority of externally sourced expertise, will now be sourced from South Australia.
“The high quality, moderately priced services available in South Australia and the significant reduction in rent, travel and accommodation, will lead to lower overheads,” the company said.
News 43
New CEO for Beach
$850,000 towards the construction of a pipeline to deliver untreated water to the Kanmantoo Copper Mine. This pipeline will supplement the existing supply of treated effluent water from the District Council of Mount Barker. South Australia aims to triple copper production by 2030, as outlined in the long term and comprehensive Copper Strategy. As one of the three copper producers within the State, Hillgrove Resources is strategically positioned with existing infrastructure, near mine exploration potential and significant operational capability.
The partnership will also involve a grant of Lachlan Wallace, General Manager (left) and Steve McClare CEO and Managing Director (right), Hillgrove Resources.
Matthew Kay
Beach Energy has announced the appointment of Matthew Kay as its new Chief Executive Officer. Matthew comes to Beach from Oil Search, where he currently holds the position of Executive General Manager, Strategy and Commercial. Prior to this he held various senior leadership positions for 12 years at Woodside Petroleum Limited and previously at Santos. Matthew will commence in the role by 17 July.
Santos welcomes new CEO
Two new faces at EBS EBS Heritage has recently expanded its team in South Australia by welcoming two new Cultural Heritage Consultants. Steve Damhuis will join the team as a Senior
Cultural Heritage Consultant and Claire Keating as a Cultural Heritage Consultant. Both have many years’ experience and look forward to working in the South Australian landscape.
Steve Damhuis
Santos’ new Managing Director and Chief Executive Officer, Kevin Gallagher, officially commenced duties on 1 February.
Claire Keating
At the time of the announcement of his appointment in November, Santos Executive Chairman Peter Coates said he was looking forward to Kevin “driving strong operational performance and long-term shareholder value” in the company. ISSUE 02 RESOURCING SA Autumn 2016
44 News SA energy storage trial
Tasked with steel
Solar energy could be key for South Australia’s energy usage
South Australian electricity distribution network, SA Power Networks, will work with US-based Enphase Energy to conduct residential energy storage trials of the Enphase Storage System. This system includes the Enphase AC Battery, a scalable, modular energy storage system that seamlessly integrates with the Enphase Home Energy Solution. SA Power Networks is the sole operator and manager of South Australia’s distribution network, which has a residential solar penetration of about 25 percent.
South Australia will lead the charge to secure steelmaking’s future in Australia with a new Steel Taskforce to work with Arrium and local fabricators to create a highly competitive and sustainable industry.
The Steel Taskforce’s $4.3 million funding over four years includes $320,000 to establish a third party audit, in collaboration with the Australian Steel Institute, to ensure State Government projects adhere to the new mandate.
Mineral Resources and Energy Minister Tom Koutsantonis announced in November that the Steel Taskforce team would coordinate action across government to give Arrium’s mining, smelting and manufacturing every chance to thrive.
Arrium’s Chief Executive Steel Steve Hamer welcomed the government’s announcement and its ongoing support.
He also announced that all future State Government projects would be required to use steel that meets Australian Standards and certification, giving the local steel industry a competitive advantage against lower quality imports.
The technology was developed by DET CRC participants, CSIRO, Imdex and Olympus Scientific Solutions Americas to provide a means of measuring drill hole geochemistry and mineralogy at the drill site within minutes
The taskforce is led by Bruce Carter, who was part of a team that secured Port Pirie’s future through an agreement with Nyrstar.
Mt Gunson sold
Tech Reflex Deep Exploration Technologies Cooperative Research Centre (DET CRC) has signed an agreement with REFLEX for its top-of-hole analysis technology, Lab-at-Rig.
“Our Whyalla steel business is under enormous pressure and we still have a long way to go towards making it viable and competitive. We look forward to working with the state and federal governments with speed to achieve this,” he said.
of the drilling process. Real-time delivery of Lab-at-Rig data allows mineral explorers to log downhole geology and validate exploration targets during the drilling process, assisting decisions such as whether to terminate or extend drill holes or modify the location or trajectory of subsequent holes. If made in a timely manner, these decisions can result in significant cost savings.
Perth based Torrens Mining has bought the Mt Gunson copper project, in the north of South Australia, with plans to set up a copper mine by 2018. Strandline Resources accepted Torrens Mining’s offer of $1.2 million in deferred payments and a stake in the company in return to take over Mt Gunson. Located between Port Augusta and Woomera, Mt Gunson is in the middle of the Olympic copper-gold province. The company said it was currently conducting hydrometallurgical tests with the CSIRO, however the immediate priority was bringing Windabout and MG14 to production. It said it was aiming for a 2018 start up, when it believed prices would start to recover.
ISSUE 02 RESOURCING SA Autumn 2016
News 45 Opening new markets Minister for Investment and Trade, Martin Hamilton-Smith, said the formal signing of the TPP by Federal Trade and Investment Minister Andrew Robb in the United States, had cleared the path for South Australian industry to expand internationally.
“The Trans Pacific Partnership has presented opportunities for South Australian businesses to strengthen their investment and trade relationships in the Pacific Rim, and create jobs growth prospects,” he said.
“This historic agreement will further integrate South Australia into the fast growing Asia Pacific region by removing barriers to trade and investment.”
The Trans Pacific Partnership (TPP) will liberalise trade and streamline investment rules between 12 countries. South Australia is well placed to benefit from the signing of the TPP.
GPA design in the pipeline GPA Engineering has been selected by Jemena to design the 623km, $800 million North East Gas Connector (NEGI), which will stretch from Tennant Creek in the Northern Territory to Mt Isa in Queensland. Alf Sanzo, Managing Director GPA Engineering, said this was a significant development for the gas industry and would potentially lead to unlocking further gas developments in the Northern Territory.
Two wells for Easternwell GPA is currently undertaking several projects in South Australia, including the design and supply of the process control system for the Nyrstar transformation project at Port Pirie, as well as numerous projects for SA Water, AGL Torrens Island power station, Beach Energy, Santos, Origin Energy and Heathgate Resources.
GLNG contract Santos has announced that the GLNG project participants have signed an agreement with AGL Energy for the purchase of 254 petajoules of gas for supply to the GLNG project. The gas will be delivered at Wallumbilla over a period of 11 years commencing in January 2017, with pricing based on an oil-linked formula. The gas will be sourced from coal seam gas fields in Queensland. Vice President Downstream GLNG Rod Duke said the agreement with AGL adds to GLNG’s diverse gas supply portfolio, comprising supply from GLNG’s own coal seam gas fields,
Santos portfolio gas, underground storage and third party supply. “When combined with GLNG’s quality LNG off-take contracts with project partners PETRONAS and KOGAS, this supply portfolio delivers significant value to the project.” “Since our first LNG cargo in October, rampup of LNG train 1 has progressed well with the train having already produced well above nameplate capacity. Six LNG cargoes have already been shipped to our customers.”
Easternwell wins $1 million contract
Transfield Services’ subsidiary, Easternwell, was awarded a $1 million contract by Senex Energy to provide drilling services at two wells in the Cooper Basin. The contract commenced in October 2015 and includes an option for two additional wells. Easternwell’s Executive General Manager, Tim Phelan, welcomed the opportunity to work collaboratively with Senex and said Easternwell’s prime rig was designed to drill deep and complex wells such as those in the program.
ISSUE 02 RESOURCING SA Autumn 2016
46 News Upping the PACE A new $20 million initiative to encourage further exploration and investment in South Australia’s Copper Belt over the next two years has been launched by the State Government. PACE Copper is the government’s response to the challenges facing the resources sector. It will aim to generate more than $400 million in private mineral exploration return for the State and create and retain up to 1000 direct and indirect jobs within the minerals industry and services sector. The initiative links directly to one of the State Government’s key economic priorities to unlock the full potential of South Australia’s resources, energy and renewable assets.
required to meet South Australia’s production goal of one million tonnes a year by 2030. “There is a critical issue facing the resources sector right now – a significant decline in exploration investment and project advancement which has led to job losses in the sector,” the Minister said. “The time is right for South Australia to deliver a new geoscientific initiative that will help the exploration industry recover from the challenging global economic cycle of the past five years and confidently face the next surge in exploration for strategic metals such as copper.
Mineral Resources and Energy Minister Tom Koutsantonis said the initiative will be critical in driving the exploration investment and discovery of the new high-quality copper resources
“South Australia is already home to the vast majority of the nation’s known copper resources, but we instinctively know there is much more to be found deep under cover. We need to support our explorers to continue to go out there and find it.”
Ment to be
Mineral assets unearthed
Mentees and mentors attend the launch of the pilot mentoring program
Dr Rian Dutch and Ms Stacey McAvaney on granite outcrop at Bascombe Rocks, northern Eyre Peninsula near Kimba.
Grants available to develop SA’s leaders
SA businesses have the opportunity to see their leaders become more successful through top ranking leadership courses, with grants from the Industry Leaders Fund. The fund is a private sector funded, non-government body that offers grants of up to $50,000, and the opportunity to join an exclusive Industry Leaders Fund network. Members of the Network include Alf Ianniello (CEO of Detmold Group); Andrew Downs (Managing Director Sage Automation); Grant Wilkens (CEO Discovery Holiday Parks); Jon Seeley (Executive Director Seeley International); Ben Radford (Barossa Winemaker of the Year 2015); Anthony Kittel (Managing Director Redarc) and Jeremy Hawkes (Managing Director Bowhill Engineering) – several of these since being recognised in Telstra business awards. Mining industry members include Neil Gibbins, Acting CEO for Beach Energy and Kelly Keates, MD and Owner of Zonge Engineering. Geoff Voight, CEO of the Industry Leaders Fund says “The best way to build a strong South Australian economy is to have great local business leaders. This fund provides financial support to enable the development of our current and potential business leaders.” Applicants must work in businesses located in SA and employ South Australians in work that may be located interstate or overseas. The aim of the grant is to support individuals whose employment history or work within the community demonstrates leadership potential.
In September last year, SACOME’s Women in Resources South Australia (WinRSA) and the AusIMM’s Women in Mining Network (WIMnet) launched South Australia’s first state-wide pilot mentoring program for women in the resources industry. The joint initiative is designed to support women in the mining and energy sectors by offering a low-cost, semi-structured opportunity to connect with more experienced individuals. The program, which will initially run over six months, enables mentees to build and foster strong relationships with a mentor who supports them from both a professional and personal development perspective. Organisers from WinRSA and WIMnet were impressed by the calibre of mentors and mentees who applied for the program, with many mentors holding senior positions including group managers, managing directors and CEOs. The 2016 program will commence around March this year, keep an eye on the WinRSA web page at sacome.org.au.
ISSUE 02 RESOURCING SA Autumn 2016
The world’s mineral exploration community now has more information about the geology beneath South Australia’s Gawler Craton following the release late last year of new geological data.
Last year 21 people shared in grants worth a record $235,000 and the 2016 pool should be similar. Applications close 31 May 2016, interested leaders should go to industryleaders.com.au, or contact Geoff at ceo@industryleaders.com.au or (08) 8394 0016.
The State Government’s Geological Survey of South Australia and collaborative partner Geoscience Australia has issued seismic images of the earth’s crust along a 350km stretch. This new information forms part of a massive 834km cross-border survey that extends from Tarcoola to Haig in Western Australia. The seismic data, which is free to download online, follows the area geologically known as the western Gawler Craton from Tarcoola in central South Australia to the eastern edge of the Nullarbor. This area is known for its previously discovered gold mineralisation. Geological Survey of South Australia Geologist, Rian Dutch said the international exploration community could now get better information about the area. “The first-stage release provides two versions of seismic data,” he said.
Kelly Keates
CEIP’s EIS in
Services ffered to c& lients include: Terry Kallis is Principal of oKallis Co Pty Ltd, a • Strategic advice on power supply options, privately owned consultancy that conventional company and renewable sources including gas wind, s olar a nd b iomass Terry Kallis is Principal of Kallis & Co Pty provides expert advice on a wide range of power • Strategic advice on NEM regulatory and market Ltd, a privately owned consultancy matters company that industry provides expert advice to clients in matters the mining, resources on a wide range of power industry • Strategic advice on mergers and acquisitions and energy industries that are developing power matters to clients in the mining, • Project development management in areas coverin resources and energy industries that o Development approvals – federal and stat projects and/or seeking power supply solutions. are developing power projects and/or o Connection agreements
seeking power supply solutions.
o Off-‐take agreements
o Community consultation Terry’s private power development projects o Stakeholder management include equity projects include equity interests in the interests in the 600 MW CERES Key areas include: 600 MW CERES Wind Farm on the Wind Farm on the Yorke Peninsula, an allied • Transmission and distribution connection Yorke Peninsula, an allied 20 MW 20 MW biomass projectagreements and a large wind / biomass project and a large wind / • Conventional energy – gas fired power generation compressed air energy storage project compressed air energy • storage adjacent Renewable project energy – wind, solar and biomass A geosciences student gaining industry experience - investigating the properties adjacent to the Galilee Basin in central of CEIP ore • Electricity n etwork i nfrastructure to the Galilee Basin in central Queensland. and markets Queensland. Terry’s private power development
In November 2015, Iron Road submitted its Mining Lease application and supporting Mining Lease Proposal to the South Australian Department of State Development (DSD), together with an Environmental Impact Statement (EIS) to the South Australian Department of Planning, Transport and Infrastructure (DPTI) for their Central Eyre Iron Project (CEIP).
• NEM institutions liaison (AEMO, AER, AEMC)
• Planning and environmental authorities liaison
Services offered
• Government liaison – federal, state and local
• Strategic advice on power supply options, conventional Terry’s clients have included, national and international Contact: utilities w ith w hom h e h as s uccessfully The large nature of the CEIP meant that the public was given an extra 10 and renewable sources including gas, wind, solar concluded a numbe of major assignments, including SA’s first wind farm, SA’s f weeks to comment on the State Government’s assessment of the mining Terry Kallis (FAICD) and biomass underground HVDC interconnector and acquisitions of Principal and infrastructure elements of the project. • Strategic advice on NEM regulatory market matters Kallis & Co electricity network and and gas businesses. Iron Road’s proposal is one of the largest mining and infrastructure • Strategic advice on mergers and acquisitions terry.kallis@kallisco.com.au projects to be considered by the government, with extensive assessment Email: Phone: 0419 810 • 153 Project development management in areas covering: required of its significant environmental, economic and social benefits and Address: C/-‐ Clarke & Brownrigg 8 Angas Street o Development approvals – federal and state impacts across the Eyre Peninsula. Kent Town SA 5067 o Connection agreements Iron Road’s Managing Director, Mr Andrew Stocks, said that the company o Off-take agreements is looking forward to the submissions being made public and open for scrutiny and resulting comment by all stakeholders. o Community consultation Kallis & Co Pty Ltd Ι ABN 42 149 113 664 Ι www.kallisco.com o Stakeholder management Mineral Resources and Energy Minister Tom Koutsantonis added that the development presented “a range of potential impacts and benefits for our State and local communities on the Eyre Peninsula”. “Those communities can be assured that all aspects of the assessment and public consultation process will be open and transparent and the company will be required to respond to submissions lodged by the community. Public submissions closed on 2 February.
Cu & U at the hub The University of Adelaide has opened a new copper and uranium research hub. The centre is part of the State’s copper strategy, which seeks to grow the region’s copper output to one million tonnes per annum. Director of the new ARC Research Hub, Professor Stephen Grano, explained that much of SA’s copper deposits were actually very fine intergrowths of a range of different metals and minerals and this introduced additional challenges. The hub is funded until 2020 by the Australian Research Council, BHP Billiton, OZ Minerals and the Department of State Development.
Key areas Half Page • • • • • • •
Transmission and distribution connection agreements Conventional energy – gas fired power generation Renewable energy – wind, solar and biomass Electricity network infrastructure and markets NEM institutions liaison (AEMO, AER, AEMC) Planning and environmental authorities liaison Government liaison – federal, state and local
Terry’s clients have included national and international utilities with whom he has successfully concluded a number of major assignments, including SA’s first wind farm, SA’s first underground HVDC interconnector and acquisitions of electricity network and gas businesses. Terry Kallis (FAICD) Principal Kallis & Co Email: Phone: Address:
terry.kallis@kallisco.com.au 0419 810 153 8 Angas Street, Kent Town SA 5067
ISSUE 02 RESOURCING SA Autumn 2016
48 Industry events
Industry events 19 February 2016 SACOME Lunch Series Adelaide Convention Centre sacome.org.au
20 April 2016 SACOME Annual Resources Industry Dinner Adelaide Convention Centre, South Australia sacome.org.au
1-3 August 2016 Diggers & Dealers Kalgoorlie, Western Australia diggersndealers.com.au
6-9 March 2016 PDAC Convention Toronto, Canada pdac.ca
19 May 2016 WinRSA State Awards – SACOME Lunch Adelaide Convention Centre sacome.org.au
17-18 August 2016 GMUSG/SACOME Resources Conference & Expo Port Pirie, South Australia usgconference.com.au
8-9 March 2016 Project Evaluation Conference Adelaide, South Australia projectevaluation2016.ausimm.com.au
9 June 2016 SACOME Breakfast Series Adelaide Convention Centre sacome.org.au
8-9 March 2016 19th Annual Global Iron Ore & Steel Forecast Perth, Western Australia globalironore.com.au
5-8 June 2016 2016 APPEA Conference & Exhibition Brisbane, Queensland appea.com.au/event
21-24 AUGUST ASEG-PESA-AIG 25th International Geophysical Conference and Exhibition Adelaide, Australia conference.aseg.org.au
15-16 March 2016 16th Annual Mineral Sands Conference Melbourne, Victoria informa.com.au/conferences
7-8 June 2016 AusIMM International Uranium Conference Adelaide, South Australia
1 September 2016 National Women in Resources Awards Dinner Adelaide Convention Centre sacome.org.au 23 September 2016 SACOME lunch Adelaide Convention Centre sacome.org.au
17 March 2016 SACOME Breakfast Series Adelaide Convention Centre sacome.org.au
15-17 June 2016 The Third AusIMM International Geometallurgy Conference Perth, Western Australia geomet.ausimm.com.au
5-8 April 2016 Mines and Money Hong Kong asia.minesandmoney.com
26-30 June 2016 Australian Earth Sciences Convention Adelaide, South Australia aesc2016.gsa.org.au
28 October 2016 SACOME Breakfast Series Adelaide Convention Centre sacome.org.au
11-15 April 2016 18th International Conference & Exhibition on Liquefied Natural Gas, Perth appea.com.au/event/lng-18
1 July 2016 SACOME Lunch Adelaide Convention Centre sacome.org.au
17 November 2016 SACOME Lunch Adelaide Convention Centre sacome.org.au
20 April 2016 South Australian Resources Investment Conference (SAREIC) Hilton Adelaide, South Australia saresourcesconf.com
28 July 2016 SACOME Breakfast Series Adelaide Convention Centre sacome.org.au
2 December 2016 SA Exploration & Mining Conference Adelaide Convention Centre saexplorers.com.au
20 October 2016 Dirt TV Awards Night dirttv.com.au
Adelaide to host national Earth Sciences Convention The Geological Society of Australia will this year stage the Australian Earth Sciences Convention (AESC) in Adelaide from 26-30 June 2016. This biennial event, encompassing all aspects of the earth sciences, represents the most significant gathering of geoscientists in Australia. On show will be of the latest innovations and developments in geoscience research, providing a hub for professional development and networking activities for members of the geoscience community across Australia and internationally. AESC 2016 is themed ‘Uncover Earth’s Past to Discover Our Future’ and is set to deliver a platform for sharing new knowledge critical to geoscientists working in a number of fields, including minerals, petroleum and renewable energy. ISSUE 02 RESOURCING SA Autumn 2016
The conference will feature themes such as Mineral Endowment: Formation and Exploration of Mineral Deposits and Earth Science for Energy: from Hydrocarbons to Renewables. It will host several specialised one-day symposia, including the 40th Anniversary of Olympic Dam and UNCOVER: the future of under cover exploration.
Holloway University of London), whose expertise lies in applying structural geology to the mining and petroleum industries. Abstract submission and registration are now open and available on the AESC website at aesc2016.gsa.org.au.
Workshops on exploration techniques, geoscience analytics and cutting edge technology will complete the program, along with a range of field trips to showcase South Australia’s geology, from Hallett Cove to the Clare Valley to Roxby Downs. Presenters include Dr Richard Goldfarb (University of Colorado), a specialist on the genesis and global distribution of gold deposits and Professor Ken McClay (Royal
Gesocientists from a wide variety of fields enjoying the 2014 conference
Events 49 1. Richard Cowley, Navitas Careers & Internships Adelaide, Clara Roccioletti, Business SA and Sara Li, SACOME 2. Nick Panagopoulos, DSD, Joe Zabrowarny, DSD and Elinor Alexander, DSD 3. Tricia Lamerton, Big Sky Building Society peruses the SNAPPED photo exhibition 4. Steve Moore, Beattie Transport, John Cocks, SACOME and Darren Oatway, B.L. Shipway & Co 5. Arrium Mining’s Jon Missikos and Gavin Hobart look through the lunch series booklet 6. Henry Andryszczak, WIMnetSA, Christiane Brendell, BHP Billiton, Aimee Chadwick, WinRSA Chair, Sonya Szell, Kate Hobbs, WIMnetSA Chair and Lucy McEwen, WinRSA Deputy Chair 7. Ashley Van Kruyssen, CU-River Mining Australia (right) networks at a SACOME lunch 8. Andrew Stocks, Iron Road and Andrew Woskett, Minotaur Exploration 9. Vince Cosmai, KJM Contractors and Larry Ingle, Iron Road.
2 3 1
6 5
4
8
9
7
Mentoring program
Treasurer’s future
The Women in Resources South Australia Committee (WinRSA) and Women in Mining Network South Australia (WIMnetSA) recently launched a mentoring program to support women in the resources sector (see page 38). Around 70 people attended the program launch event at the Science Exchange in September, with keynotes from organisational psychologist Sonya Szell and BHP Billiton’s Christiane Brendell.
More than 230 guests gathered at the SACOME lunch on Friday 11 September to hear from The Hon. Tom Kousantonis MP, Treasurer and Minister for Mineral Resources & Energy. The Treasurer announced the State Government’s Copper Strategy at the event and Iron Road made key announcements, signing five MoUs with groups from the Eyre Peninsula.
Outlook 2016
Bold Carbon Vision
Oil, gas & iron finish the year
Guests at SACOME’s last lunch of the year gathered at the Adelaide Convention Centre in November to hear from Tim Goldsmith, Mining Expert Partner, PwC and Drew Edwards, Head of Oil & Gas Research Analysis, ANZ on the resources outlook for 2016. Fabulous images from the SNAPPED Photo Competition were on display and guests shared over $20,000 in advertising prizes to celebrate the official launch of Resourcing SA.
SACOME held a free member-only seminar with event partners EY and The University College London in October. Speakers were Professor Paul Stevens (A coming of age for renewables?), Terry Kallis (SA Renewablessnapshot, future challenges and opportunities), Professor Magnus Nyden (Optimising local resources to achieve a low carbon future) and Professor Wasim Saman (The transition to low carbon living).
More than 150 SACOME members enjoyed breakfast while hearing from Beach Energy (Neil Gibbins, Acting Chief Executive Officer), BP Developments Australia (Claire Fitzpatrick, Managing Director) and Iron Road Limited (Andrew Stocks, Managing Director) as they shared news of their projects and activities across South Australia.
Record crowd
The 12th Annual SA Exploration and Mining Conference was again a resounding success. Held on December 11 at the Adelaide Convention Centre, the largest mining focused conference in SA broke all records, registering 650 attendees on the day. A total of 68 guests flew in from interstate, two from overseas, and 66 students were amongst the delegates.
ISSUE 02 RESOURCING SA Autumn 2016
50 Community
Andrew and team on site at Kanmantoo (with a polywelder) left to right Peter Donhardt, Andrew McDonald, Steven Baker and Damian Brown
Sharing the joy
An Adelaide Hills family business has expanded its work as a result of opportunities at a nearby mine and is now providing employment for others. By Megan Andrews Andrew McDonald’s small business focused on irrigation and trenching has grown with the local mine, with over half of his work now coming from Hillgrove Resources’ Kanmantoo open pit copper/gold operation in the Adelaide Hills. Living in Murray Bridge with his wife and two young children, Andrew had the opportunity to develop his experience in mining completing poly pipe work for Terramin at its Angas Zinc mine, when it was at the peak of its operation. He started working with Hillgrove four years ago and has seen his business, Ackmac Irrigation and Trenching, grow and flourish over that time. “We do a lot of poly pipe work including installations and repairs, any pipework changes in the plant, changeovers, welding and installation, that sort of thing.“ Andrew explains “We also deal with some of the engineers in regard to de-watering in the pits.” Andrew says he has an excellent relationship with the mine, including General Manager Lachlan Wallace, who he says sometimes calls with an unusual job, and Andrew’s always keen to assist. ISSUE 02 RESOURCING SA Autumn 2016
“We are a bit unique in what we do!” Andrew laughs. “Andrew and his team have demonstrated that they can turn their hands to anything; be it the regular fare of pipework in the process plant and dewatering the pits, or one-off assignments such as the design and construction of an elevated viewing platform” says Lachlan. “Their broad skill set and ability to respond quickly make Ackmac the natural ‘go to’ when we need assistance outside our core competency.” Andrew recalls when Kanmantoo started up and Hillgrove held an open day, encouraging local people and businesses to have a look around and find out what the opportunities may be for them. “Hillgrove’s focus on local engagement has seen the company grow into the single largest employer in the District Council of Mount Barker. Add to this the many local businesses which support the mine, and it is clear that the operation has a significant positive impact on the economy of the immediate region,” says Lachlan.
Starting his own business a decade ago, Andrew is appreciative of the opportunities the mine has provided for him to grow, with turnover increasing greatly since he began working with the mine. This has also enabled him to provide employment to others, and Ackmac now employs five full timers and one part timer. “Together with a partner, I’ve recently set up an additional business, Hermetic Systems, that will focus on poly lining work for tailings and water storage facilities,” Andrew adds. With the Kanmantoo mine looking at another five or six years’ life with potential to extend, taking advantage of the opportunity to build the mining oriented side of his business seems a good decision. But Andrew’s not putting all his eggs in one basket, continuing to service a variety of local industries including farming and other commercial operations. “I did some work up at Portia late last year” he adds (Havilah Resources’ new gold mine, near the NSW border). “It would be great if our work there develops also.”
Opinion 51
Who’s got the
power By Terry Burgess Concerns about future energy costs have made media headlines as South Australian electricity prices have increased during 2015. The general view is that electricity prices will increase further in the short term. This is a major concern for business in the resources sector and manufacturing being high energy users. Operating costs in these sectors are under close scrutiny and without flexibility to reduce power consumption or operate only at times for of low electricity prices, the negative impact on cashflow and profit is immediate. The Australian Energy Market Commission delivered a report in November 2012 entitled “Power of Choice Review - giving consumers options in the way they use electricity”. One of the main conclusions from the report was that “the efficiency of the electricity market can be improved by more active participation by the demand side”. The report identified opportunities for consumers to make more informed choices and recognised that information, education, technology and flexible pricing were required to make efficient consumption decisions. There is significant information available through the Australian Energy Market Operator (AEMO). AEMO provides information on State electricity price (RRP - Regional Reference Price) and demand on its www.aemo.com.au web site. This includes historical data since 1998 and very detailed current information for the previous 24 hours and forecast demand and price data over the next 36 hours. In the summer months, the peak usage and highest priced electricity usually occurs in the late afternoon. With the 42 degree weather experienced on 13 January, the average South Australia electricity price peaked at $5173/ MWh for the 30-minute period to 4.00pm. For comparison, at the same time in Victoria the price was $7477/MWh and in NSW $197/MWh. This exceptionally high electricity price is typical of those events highlighted in the media, but it is worth looking at all the
available data in more detail since these levels of peak prices are seen less frequently than in previous years.
grid demand mid-morning to evening in summer months and wind power generation contribution from late afternoon to night.
The maximum 30-minute spot electricity price is set at $13,800/MWh and the minimum set at (negative) -$1000MWh with the price set by supply/demand factors.
One of the conclusions of the Roundtable was that there is still a need for customers to be more active in managing price risk.
Each time the spot price exceeds $2000/ MWh or is less than (negative) -$100/MWh AEMO publishes a Pricing Event Report, which also explains any deviations from what was foreshadowed in the 36-hour forecast. The high price event on 13 January had been forecast by AEMO and was a result of the 35.1 degree peak temperature in Adelaide, a technical outage of one of the Northern generators and transmission constraints in Victoria because of lightning. The average monthly South Australia price for electricity (rounded) over the second half of 2015, with corresponding Victorian and NSW prices, is as follows: July $74/MWh ($35/MWh Vic; $39/MWh NSW) August $61/MWh ($35/MWh; $37/MWh) September $59/MWh ($45/MWh; $58/MWh) October $41MWh ($36/MWh; $37/MWh) November $49/MWh ($35/MWh; $46/MWh) December $67/MWh ($48/MWh; $45/MWh) So it is evident that over the last six months the South Australian spot electricity price has been consistently higher than those for Victoria or NSW. At the Energy Industry Roundtable held in Adelaide in mid-December 2015, presentations on electricity demand and price showed that factors affecting price were: the imminent withdrawal of conventional baseload generation in South Australia (Northern, Pelican Point & Torrens Island A); hedging contracts being largely short-term over-the-counter; and greater overall volatility. Reasons given for reduced extreme price events included Solar PV output reducing
No “silver bullets” were offered at the Roundtable in what is seen as a complicated market and one in which higher prices are expected in the short term. The completion of the Victoria-South Australia interconnector upgrade to 650MW could be a near-term (end July 2016) price influencer. In the medium term, energy storage options such as the larger batteries being developed in South Australia at Tonsley by Zen Energy - could take out the volatility associated with cyclical power from renewables. While geothermal power is often cited as being an option it is unlikely to deliver in the medium term. This is despite earlier extensive work by companies such as Geodynamics and Petratherm. The geology in South Australia with deep, dry, unfractured granitic rock is far less amenable to geothermal power than regions with shallow thermal aquifers associated with volcanic activity, such as Iceland, New Zealand and PNG. Nuclear power, which is part of the brief of the Nuclear Fuel Cycle Royal Commission, will have a lengthy gestation period even if there is community support. There is an industry workshop being put together by the Economic Development Board in late February which is designed to follow on from the Energy Roundtable. This workshop is being supported by SACOME and the Ai Group (Australian Industry Group). It will be a further opportunity to provide information and education on the electricity market and consider what solutions might be available to address price and reliability concerns. SACOME realises the importance of this topic for its members and will be an active participant in the debate.
ISSUE 02 RESOURCING SA Autumn 2016
What mining and energy mean to me School Video Competition
OVER $10,000 in cash prizes up for grabs! Enter your video at www.dirttv.com.au
Be smart. Be creative. Express yourself and win!
2014 winners
2015 winners
You?