Report highlights impediments to growth

Infrastructure suffers from a cancer of neglect, according to Minerals Council of Australia CEO Mitchell Hooke.

The Australian Minerals Industry’s Infrastructure Path to Prosperity report, released yesterday at Minerals Week 2009, held in Canberra, has outlined the biggest impediments to growth in Australia’s major minerals regions.

Releasing the findings of the report, Minerals Council of Australia CEO Mitchell Hooke said new physical and social infrastructure will be needed, and much of the existing export capital will need to be repaired or expanded, to ensure Australia is equipped to come through the current economic malaise.

“This comprehensive examination of existing and projected infrastructure needs in Australia’s key minerals regions sounds a warning to both governments and industry that a failure to address key shortfalls in the nation’s infrastructure could see a repeat of past failings,” Hooke said.

“The findings suggest some of Australia’s export infrastructure has suffered from a cancer of neglect and is in a critical state of inadequacy.”

Hooke said governments in the past have abrogated their responsibility to local communities, constraining the investment that private sector has wanted to make.

The report catalogues existing road, rail, port, energy, water, telecommunications and community infrastructure in 21 minerals growth regions and identifies what needs to be done to boost exports and maintain or grow Australia’s position as a premium global supplier of minerals and energy.

Major impediments to growth in Australia’s 21 minerals growth regions, according to the Australian Minerals Industry’s Infrastructure Path to Prosperity report.

In Western Australia the regions are Kimberley, Pilbara, Mid-West, Goldfields-Esperance and South-West including Peel. The report finds principal infrastructure shortcomings are:

• Inadequate community infrastructure and services in remote regions, particularly to support families with children, educate and train workforces of the future, and support the community profile;

• Port infrastructure inadequate to meet mineral export demand;

• Impending shortages of water both for industrial and community use;

• Energy production and supply networks inadequate for growing demand;

• Rail infrastructure inadequate in several regions to meet future demand;

• Inadequate airport infrastructure in several regions and Perth; and

• Telecommunications infrastructure is inadequate in WA’s regions.

In Queensland, the growth regions are Mount Isa-Townsville, Newlands-Abbot Point Bowen, Northern Bowen Basin/Mackay, Fitzroy (Gladstone) including links with western Cape York, Surat Basin and Ipswich/Moreton. The “gaps” identified here include:

• Export supply chains for minerals products (coal, base metals and other minerals) being hamstrung due to legacy issues associated with inadequate planning, poor co-ordination between infrastructure service providers, multiple definitions of capacity based on different and at times unrealistic assumptions, and an absence of performance-based contractual frameworks;

• Shortages of water in mining regions both for industrial and community use, and uncertainty as to how expected future demand for water will be met, with the risk is that the infrastructure for new water will lag demand;

• Inadequate community infrastructure and services, particularly those relating to health, education, and housing

• Inadequate road and air transport infrastructure that restricts access and mobility; and

• Inadequate telecommunications infrastructure and competition (particularly in high speed broadband) in parts of Queensland, constraining both small business and community communications.

In NSW, there are three regions: Hunter, Southern and Central and Far West. The impediments to growth here include:

• Rail and road networks that are unable to meet the minerals industry’s current or projected transport needs;

• Energy production and supply networks that are inadequate for meeting growing demand;

• Port infrastructure that is unable to meet current or projected demand for minerals export services; and

• Underdeveloped management arrangements for water for both for industrial and community use.

South Australia is made up of three regions: Northern, Eyre Peninsula and the Fleurieu/Mid North/South East/Riverland. The gaps in infrastructure include:

• Transport infrastructure that is unable to meet projected growth in minerals industry transport task, particularly ports;

• Energy production and supply networks inadequate for meeting growing demand;

• Access to adequate water supplies both for industrial and community use; and

• Community infrastructure, particularly accommodation and health care.

Victoria consists of two regions: Gippsland and Western Victoria: Among the impediments to growth are:

• Inadequate transport networks, including using a mixture of broad and standard rail gauges;

• The need for new bulk port facilities outside of metropolitan Melbourne and direct rail and road links from production regions;

• Energy supply networks inadequate for growing demand in regional Victoria; and

• Common-user carbon capture and storage (CCS) infrastructure.

In the Northern Territory the principal shortcomings are:

• Darwin port needs to be upgraded to handle increases in throughput of mineral products from the Northern Territory

and South Australia;

• Additional railway spur lines, sidings, loading facilities and passing loops are required to service new mines and mineral transport requirements;

• Electricity supply reliability in parts of Darwin is poor, and generation, transmission and distribution capacity is inadequate for growth;

• Land for housing and industry in Darwin needs to be developed;

• All classes of community infrastructure are inadequate for projected growth; and

• Telecommunications services in rural and remote areas are poor.

In Tasmania:

• Single lane road networks are inadequate for the growing volume of users from multiple sectors — mining, forestry and tourism;

• Rail networks and port facilities with insufficient capacity for expected growth in minerals traffic;

• Lack of gas supplies to the West Coast; and

• Lack of broadband telecommunications competition.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.