While being the most under populated state or territory in Australia, the Northern Territory also has the dubious honour of the being the least developed infrastructure wise when compared to those fellow strong mining states on its borders, Queensland and Western Australia.
With the resources sector again on the upswing, those within the mining and resources industry have called on the Territory Government to further develop its existing infrastructure to support both the growth of the industry as well as the Territory itself.
According to the Northern Territory’s Department of Resources – Minerals and Energy, with revenues from the mining sector representing approximately a quarter of the Northern Territory’s gross state production, as compared to only 7% for the rest of the nation as a whole, ensuring the ability of its mines to operate at full capacity as well as construction of new mines and projects is an imperative.
This need for increased development is on the back of the Territory’s forecast economic growth rate of 3.6% for 2009-2010, with it predicted to retain the highest rate of growth in the country for the next five years.
The productivity of the Northern Territory is set to rise while other states within the country fall.
While a number of mines operating in the region such as Rio’s Alcan Gove mine and Xstrata’s McArthur River Mine have operating port infrastructure near the mines, others rely on the road and rail network of the Territory.
Producing miners such as Territory Resources at the Frances Creek iron ore mine; OM Holdings’ Bootu Creek manganese mine; Energy Resources Australia (ERA)’s Ranger Mine, which is the second largest uranium mine in the world; and Groote Eylandt’s Gemco Mine which is the largest manganese project in Australia, all utilise the Territory’s rail and port networks.
Other explorers such as Adelaide Resources, Emmerson Resources, Excalibur Resources and Westgold Resources all have projects within the Territory, located near the Tennant Creek Mineral Field, and the rail infrastructure that runs nearby.
Some of the problems faced in this region are the remote nature of many mines and the corresponding logistical and operating expenses in a harsh environment.
In a recent submission to the Territory Government by the Northern Territory Resources Council (NTRC), it outlined the need to rapidly develop and upgrade the port bulk loading facilities, increase the capacity of the Adelaide to Darwin railway and to investigate the feasibility of an Mt Isa to Tennant Creek rail link, and the role of the Government in making this happen by 2030.
Speaking to Australian Mining, NTRC chief executive Scott Perkins said “it is a fact that the lack of decent infrastructure in the Northern Territory is a serious inhibitor to the development of mining in the region.
“The resources industry needs supporting infrastructure and a view beyond merely producing bulk ore for
export,” Perkins added.
While a number of operational mines in the region have access to private ports in particular those close to the coast line, Perkins explained “rather than having a lot of smaller ports around the Territory, it would be better to concentrate on the development of a major port as well as rail and infrastructure.”
It would provide the maximum benefit if the majority of production went through the port, he added.
However, while the Territory Government has pledged $322 million to upgrade the existing road infrastructure, many miners believe that while the existing infrastructure can handle current levels of outputs and production, the rail network could easily be overwhelmed if more miners were to utilise it.
Northern Territory based miner Territory Resources managing director Andy Haslam told Australian Mining that while “the infrastructure is good for us, there will probably need to be an expansion of infrastructure.”
If the mining and resources sector develops and more mines were to open, the rail lines will be put under pressure and need more passing points as between the Frances Creek mine and Darwin, a distance of 200 kilometres, there are none, Haslam said.
If there is a train already on the line then everyone has to wait, he added.
One of the mining operations that potentially face this problem are those of OM Holdings, which are located 800 kilometres south of Darwin along the main rail line.
Both Territory Resources and OM Holdings also utilise the Port of Darwin.
Similar to the rail lines, while the Port can support the existing levels of export and stockpiling, which sees Territory stock pile around 300 000 tonnes as well as OM using the port for stock piling, Haslam said that the Port needs further dredging and the installation of conveyors as the current method uses trucks to dump the ore into the ship loaders.
The resources industry was hoping that when the global finance crisis hit that the Federal and Territory Government would look at the funding the upgrades and expansion but it seems to have been pushed aside to a degree, and while it has been looked at no money has been committed as yet, Haslam said.
“If any new player were to come in, there would need to be additional infrastructure,” he told Australian Mining.
Fellow Northern Territory miner Energy Resources Australia (ERA) is having a similar experience to Territory.
“While we have a well established route from the mine to the port, if there is a large resources boom there
will be pressure points in the logistics line,” ERA’s chief executive Rob Atkinson said.
Currently ERA moves approximately 5000 to 6000 tonnes per year.
Others such as South Australian based coal miner Altona Energy, are relying on the expansion of the South
Australian/ Northern Territory mining corridor which is expected to lift demand for its diesel products.
Currently the Northern Territory imports the majority of its diesel requirements, with Altona expecting the opening of the corridor should assist in the replacement of the region’s complex fuel supply.
Other miners such as Xstrata’s McArthur River Mine (MRM), which is located near the remote McArthur river, has invested in the development of its own port facilities.
MRM uses the Bing Bong port as “it was and still is, the most efficient way of transporting MRM product to export markets,” a spokesperson told Australian Mining.
However, all decisions were made independently of investment in the Port of Darwin, the spokesperson added.
While the Territory has a number of hurdles ahead, the strides it has made, in particular the setting out of a solid strategy for the development of the infrastructure and training support for the growth of the resources sector in the Northern Territory, will aid in highlighting the potential within the territory.
With the number of producing mines and its rise in exploration, the Northern Territory has definitely been a sleeper state but will be one to watch in this resurgence of the mining sector.