NSW briefing to Chinese Consulate-General & Banks

Agenda

� Welcome and opening remarks:– Caroline Seagrove, Senior Coordinator, Department of Premier & Cabinet– Professor Kerry Brown, Executive Director, China Studies Centre, The University of

Sydney– Mr Peng Gang, Economic and Commercial Consul, Consulate-General of the

People’s Republic of China in Sydney– Gary Offner, Executive Director, Investment & Export Services

� Presentations– Regional NSW - Chris Hanger – Agriculture – Chris Hanger (for Ian Sanders)– Energy & Resources – Charles Dowsett

� Discussion� Concluding remarks

REGIONAL NSW

NSW regions

• West• Far West• Central West• Orana

• North• Northern Rivers• Northern Inland• Mid North Coast

• South• Southern Inland• Murray• Riverina

• East• Central Coast• Hunter• Illawarra / South Coast• Western Sydney

NSW regions – competitive advantages

South� Skilled agricultural

and manufacturing workforce

� International reputation for food manufacturing

� Availability of quality water and irrigation infrastructure

� Good transport infrastructure with most major highway and rail corridors crossing the region and three airports (Wagga Wagga, Griffith and Narrandera)

West� Significant

mineral wealth� Climate that

allows early harvest of produce

� Good transport infrastructure

� Located close to the major market of South Australia’s capital city, Adelaide

� Potential for organic food production .

East� Easy access to

Sydney� The Hunter is

Australia’s biggest regional market

� Newcastle is world’s largest coal export port

� Highly skilled and motivated workforce

� Port Kembla and Eden ports for sea freight options

North � Skilled & flexible

workforce� Strong transport

links� Lifestyle &

liveability� Diverse

educational facilities including a regional University

� Good mix of natural resources, including quality soils & available water

NSW regions – agribusiness and resources overview

South� Agri: over 25 per

cent of NSW fruit and vegetable production; 90 per cent of NSW citrus products; 80 per cent of NSW wine/grape production; forrestry.

� Resources: not significant.

West� Agri: cereal

crops, beef, cotton, wool, horticulture, dairy farming and viticulture.

� Resources: Cobar (copper, zinc and gold) and Mudgee (coal), are experiencing new investment. New prospects are also being developed for high value ‘rare earth’ minerals near Dubbo.

East� Agri: wine,

horticulture, timber/paper products, aquaculture, food processing.

� Resources: coal (Hunter and Illawarra), steel production.

North � Agri: dairy,

tropical fruits, cattle, poultry, plantation forests, soya bean and sugar cane, cotton, wheat and other cereals, cattle, wool, poultry, grain legumes, sheep and lambs, and oilseeds.

� Resources: The Northern Rivers has an emerging gas industry. The region has the largest coal seam methane gas reserve in NSW.

Illawarra / South Coast - overview

� Key Facts– Population: 417,901– Area: 15,234 sq. km

� Major cities and centres– Wollongong (pop. 192,000)– Shellharbour (pop. 63,000)– Kiama (pop. 20,000)– Nowra (Shoalhaven) (pop. 95,000)– Batemans Bay (Eurobodalla) (pop. 11,000)– Bega (pop. 4,500)

� Competitive advantages– Highly skilled and motivated workforce– Relatively low staff turnover rates– Broad range of industrial and commercial

property options– Affordable commercial rent– Location and lifestyle– One hour south of Sydney international airport– Located within major road/rail freight corridors– Regional airports at Albion Park, Moruya and

Merimbula– Port Kembla and Eden ports for sea freight

options

Illawarra / South Coast - industry

� Some key industries– Mining : The region has a wealth of natural

resources including coal and blue metal. Coal mining is a major economic activity within the area.

– Steel : The region is the leading producer of steel and steel products, slab and plate as well as coated and welding products, in the South East Asian region.

– Tourism : The region has a thriving tourism industry (4.1 million visitors to the South Coast and 3.8 million to the Illawarra regions in 2009/10) to its natural attractions, historical villages and events. The spectacular Grand Pacific Drive links Sydney to the region.

– Manufacturing/Engineering : The region has a growing number of world class manufacturers. With expertise in advanced CAD/CAM and CNC technologies, the local engineering sector has the capabilities to tackle even the most complex projects. From fabricated metal products to medical devices, Illawarra/South Coast companies are recognised leaders in design, engineering, R&D and quality assurance.

Illawarra / South Coast – knowledge services� The region has a reputation as a centre for innovative research

and development. This is led by the University of Wollongong that has a leading international profile in a range of key research fields including:

� Future Materials : Nanotechnology, intelligent polymers, superconductors, battery technology and solar.

� BioFutures : Medical bionics, biomechanicals, public health planning and administration, biomolecular science, smart foods and medical school.

� Engineering Solutions : Precision manufacturing and intelligent mechatronics, electricity and power, sustainable resources, medical radiation physics and infrastructure.

� Digital Media : Image and video coding, content based image and video retrieval, dense immersive communications environment, games technology, biometrics, telematics, animation, film and television.

� The recently opened Innovation Campus in Wollongong provides opportunities for businesses to undertake collaborative research activities with the UOW and other Innovation Campus tenants.

Illawarra / South Coast – major projects� The following projects are listed by Advantage Wollongong :

– The University of Wollongong's $500 million Innovation Campus

– Expansion of trade and logistics facilities at Port Kembla harbour

– Establishment of the $30 million Illawarra Health and Medical Research I nstitute

– A planned $350 million upgrade of the city's main shopping pr ecinct by Wollongong Central owners the GPT Group.

– The $350 million TRUenergy Gas-fired Power Station at Tallawarra, on the shores of Lake Illawarra. The development includes Tallawarra Business Park, a 100-hectare greenfields site being developed by TRUenergy for light industrial, general industrial and enterprise industries

– The SMART Infrastructure Facility, a $60 million research and training centre at the Uni versity of Wollongong .

All information courtesy of Advantage Wollongong

Port Kembla� The $170 million redevelopment of the Inner Harbour

is complete.

� That project transformed Port Kembla from a port that mainly handled bulk cargoes such as coal, iron ore and grain to the vehicle importing hub for NSW.

� Improvements to facilities in the Inner Harbour have also allowed it to diversify into containers and break-bulk cargoes.

� The transfer of the vehicle-importing trade from Sydney Harbour to Port Kembla in November 2008 has driven the development of vehicle pre-delivery and inspection facilities, warehousing, distribution an d other support services .

� The NSW Government approved the establishment of a $140 million biodiesel plant at the port, while long-term plans include reclaiming 52 hectares from the Outer Harbour and the construction of seven new berths.

� The Outer Harbour Master Plan provides for the staged development of container and break-bulk cargo-handling facilities in tandem with customer needs.

All information courtesy of Advantage Wollongong

PRIMARY INDUSTRIES

Primary industries in NSW� NSW primary industry sector is worth

$12B and produces some of the world’s finest food, wine, wool and grain.

� This state has 42,000 farmers who sustainably manage 70% of NSW land.

� Sustainable farming systems with strong management of natural resources like water and soil are the basis for the state’s thriving agricultural sector.

� NSW maintains an excellent biosecurity status to ensure continued access to crucial trade markets.

� $100M is invested annually on a research portfolio carried out by 600 scientific staff across regional NSW.

� Research areas are focussed around - agricultural productivity and food security

research- biosecurity research- fishery and ecosystems

The main agricultural exports to China from NSW

Cotton $147,375,589 $589,383,721 $732,149,035

Wool $460,345,291 $546,299,544 $468,378,639

Hides & skins $118,861,513 $153,332,754 $166,740,826

Sheep meat $23,196,930 $27,924,276 $53,150,170

Wheat $32,958,634 $41,724,180 $49,805,365

Canola $893,573 $22,091,142 $36,344,306

Cotton seeds $591,859 $22,091,142 $36,344,306

Wine $30,871,645 $33,124,844 $35,703,104

Beef $9,469,403 $11,795,001 $31,479,610

Offal $11,403,210 $13,224,518 $20,098,338

2010 2011 2012

A snapshot of NSW agricultural productsSheep & Beef � NSW has large and fertile grazing areas, ideal

for cattle, sheep and goats. The meat produced has a reputation around the world for being clean, green and sustainably produced.

� Australia exported over A$357 million in beef to China in 2012-13, an increase of 226%

� China’s consumption of sheep and goat meat is expected to increase by 72% between 2009 and 2050 which will involve a 1844% increase in imports. (ABARES).

Wine� NSW produces some of the finest wines in

Australia and has over 450 wineries across 14 official wine regions. The NSW wine industry contributes more than A$500 million to the economy and remains a significant player on the national scene, representing around 35 % of Australian wine produced.

� NSW has nine of the Top 20 wine exporters and some of the finest winemakers in the world.

� Wine represents both an import opportunity for China and an opportunity to invest in expansion of NSW wineries to secure an ongoing supply of fine wines.

A snapshot of NSW agricultural productsCitrus� NSW is an ideal

location for growing oranges, mandarins and other citrus fruit.

� Australia exported more than 165,000 million tonnes of citrus valued at over A$185 million up to December 2012.

� Hong Kong took A$23.4 million of Australian citrus while A$265 million was exported to China.

Grains� NSW is a major

producer and exporter of a range of grains including wheat, barley, rice, canola, soya bean and oilseeds.

� NSW produces 99 per cent of the Australian rice crop valued at more than A$175 million.

� In total, the Australian agrifood industries export more than A$33 billion with NSW contributing around A$3.5 billion to this total.

Other sectors� Australian cotton is mainly

produced in NSW. In 2013 cotton lint production totalled more than A$1.4 billion and all of this is exported.

� The macadamia industry exports around 60,000 tonne to China annually. About half of this goes for contract cracking and the remainder is consumed in China.

NSW agriculture – investment opportunitiesDairy� There is considerable

capacity for investment in powder, infant formula, UHT, cheese and butter in NSW. This could occur in the following areas:

– Mid North Coast around Taree

– Hunter around Muswellbrook

– Central West around Forbes

– South Coast & Southern Highlands around Nowra.

� Investment options exist in the order of A$40 million for a 100 million litre UHT facility and A$60 million for a 100 million litre powder facility.

Red meat� Secure supply is

difficult to obtain. This may be addressed by investment in:

– greenfield and mothballed abattoirs

– helping domestic plants become export accredited

– feedlots to overcome seasonal variation

� The biggest opportunities exist in goats then sheep then beef .

Other sectors� Barley exports to China are worth

$281million ($44 million from NSW). There are opportunities for contract growing and variety research.

� Investment in edible oils such as canola, mustard seed, olive oil.

� Sorghum, maize, cotton and soybean production in irrigation areas.

� High value fruit & vegetable , especially in organics.

� Biofuel research using lignocellulosic (wood & agricultural residues)

� Aquaculture , notably oysters.� Research in biosecurity , water

efficiency.

ENERGY & RESOURCES

Current NSW Coal Production

NSW Saleable Coal Production : 163.5 Mt

NSW Coal ExportsTotal 122 MtThermal 94.5 MtCoking 33.5 Mt

CY2011, Source: Newcastle Port Corporation

Port Kembla Port Corporation, Coal Services Pty Limited

Current NSW Minerals Occurrences

Current Mineral Exploration Licences

Current Minerals Resource Projects

Current Renewable Energy Projects

ENERGY & RESOURCES -OPPORTUNITIES

Resources opportunities - coal

PROJECT NAME (COMPANY NAME) OperationEstimated Capital $M PROJECT STATUS

Ashton South East Open Cut (Ashton Coal Operations) Open cut 85 Development ApplicationBaal Bone Continuation (Xstrata Coal Australia) Underground 45 Development ApplicationBengalla Extension (Bengalla Mining Company) Open Cut 400 Development ApplicationBulga Optimisation (Bulga Coal Management) open Cut 450 Development ApplicationCobbora (Cobbora Management Company Pty Ltd) Open cut 960 Development ApplicationCoalpac Consolidation Project Open cut/underground 200 Development ApplicationDrayton South (Anglo Coal) Open cut/underground 130 Development ApplicationMt Owen Continuation (Xstrata) Open Cut 150 Development ApplicationNRE No.1 Preliminary Works (Gujarat NRE) Underground 114 Development ApplicationRocky Hill (Glouster Resources Limited) Open Cut 300 Development ApplicationStratford Extension Open Cut 75 Development ApplicationVickery (Whitehaven Coal) Open Cut 400 Development ApplicationWallarah 2 (Wyong Coal Joint Venture) Underground 805 Development ApplicationWatermark (Shenhua Watermark Coal Pty Ltd) Open cut 200 Development ApplicationCaroona (BHP Billiton) Underground 1500 Advanced ExplorationFerndale (Coalworks) Exploration 200 Advanced ExplorationOaklands (Coalworks Ltd) Open cut 350 Advanced ExplorationSpur Hill (Spur Hill U.T. Pty Ltd and Spur Hill No. 2 Pty Limited) Underground 200 Advanced ExplorationTotals (broad estimates only) 6564

Resources opportunities - minerals

METALLIC & INDUSTRIAL MINERALS EstimatedPROJECT NAME (COMPANY NAME) Commodity Capital $M Project StatusAtlas/Campaspe Project (Cristal) Mineral sands 200 Development ApplicationBalranald West/Nepean (Iluka) Mineral sands 300 Development ApplicationDubbo Zirconia Project (Alkane Resources) Zirconia, Yttrium, Tantalum, Niobium 800 Development ApplicationHawsons Magnetite Prospect (Carpentaria Exploration ) Magnetite 1500 Development ApplicationKempfield (Argent Minerals) Ag, barite 20 Development ApplicationMcPhillamys/Moorilda (Regis Resources) Au (Zn, Ag) 70 Development ApplicationMallee Bull (Peel Mining) Base metals 100 Development ApplicationMineral Hill/Parkers Hill (Kimberley metals) Cu (base metals) 30 Development ApplicationMineral Hill/Pearse South (Kimberley metals) Au, Ag 15 Development ApplicationNandewar (ADE Environmental) Diatomite 15 Development ApplicationNorth Mine Deeps (Perilya) Base metals 100 Development ApplicationNorthparkes Extension (Rio Tinto) Cu, Au, Ag 800 Development ApplicationNyngan (EMC Metals Corp) Sc 100 Development ApplicationWoodlawn (TriAusMin) Base metals, Au 150 Development ApplicationBowdens (Kingsgate) Silver 75 Advanced explorationBungonia Bauxite (ABX) Bauxite 75 Advanced explorationCobar/Main Lines (Eastern Iron) Channel iron 100 Advanced explorationCopper Hill (Golden Cross Resources) Cu (Au) 330 Advanced explorationKingsgate (Auzex Resources) Mo, Bi 80 Advanced explorationLewis Ponds (TriAusMin) Base metals, Au, Ag 30 Advanced explorationNymagee (YTC Resources) Au, base metals 50 Advanced explorationOwendale (Platina) Pt (Sc) 50 Advanced explorationPeelwood North (Sultan Corporation) Ag, base metals 15 Advanced explorationThackaringa (Broken Hill Prospecting) Co 50 Advanced explorationTottenham (Standard Iron) Fe 100 Advanced explorationTritton/Avoca Tank (Straits Resources) Base metals, Au, Ag 20 Advanced explorationYoung (Jervois Mining) Ni (Co) 45 Advanced explorationFlying Doctor (Perilya Broken Hill Limited) Base metals 40 Recently ApprovedHera (YTC Resources) Au (base metals) 100 Recently ApprovedMt Boppy (Polymetals Mining Services) Au,Ag 40 Recently ApprovedPotosi/Silver Peak (Perilya) Base metals 60 Recently ApprovedTomingley (Alkane Resources) Au 40 Recently ApprovedWonawinta (Cobar Consolidated Resources/CBH Resourc es) Ag 30 Recently ApprovedTotal (broad estimates only) 5530

Resources opportunities - gas

PETROLEUM Estimated Capital $MAGL Gloucester Project (AGL) CSG wells/power station 160 Recently ApprovedAGL Hunter Project (AGL) CSG wells 100 Advanced ExplorationGunnedah Basin Gas (Santos) CSG wells / pipeline 1000 Advanced ExplorationCasino (Metgasco) CSG wells/power station 50 Advanced ExplorationAGL Camden Stage 3 (AGL) CSG wells 100 Suspended Developmnet ApplicationTotals (broad estimates only) 1410

Resources opportunities -renewables

Renewable energy Projects PipelineChipping Norton Waste to Energy Biomass MenaiWoodlawn Bioreactor(s) Biomass GoulburnEastern Creek Energy from Waste Facility Biomass Moun t DruittBindaree Beef Abattoir Rendering Plant and Biodiges tor Plant Biomass Northern TablelandsHunter Valley Geothermal Power Project Geothermal Upp er HunterInglegreen biogas and gas Hybrid biogas/gas BarwonBlayney gas/wind hybrid project Hybrid gas and wind Orange, Blayney and CabonneKyoto Energy Park-mini hydro plant Hydro power Upper HunterMilton Water Treatment Plant hydro Hydro power South CoastLucas Heights Alternative Waste Technology Landfill Waste Landfill gas MenaiBroken Hill Solar Farm Solar energy Murray-DarlingCapital Solar Farm Solar energy MonaroCity of Sydney 2MW solar project Solar energy Sydney CityDubbo Solar One Project Solar energy DubboDarlington Point Solar Solar energy Darlington PointMolong Solar One Project Solar energy MolongKyoto Energy Park-solar photovoltaic plant Solar ene rgy Upper HunterManildra Solar Farm Solar energy OrangeMoree BP Solar Farm Solar energy BarwonMoree Solar Farm Solar energy BarwonNyngan Solar Plant Solar energy BarwonMugga Lane Solar Facility Solar energy ACTMount Majura Solar Farm Solar energy ACTRoyalla Solar PV Generating Facility Solar energy ACTOneSun Capital Solar Farm Solar energy ACTCSIRO Solar Thermal Storage Facility Solar thermal Po rt Stephens

Resources opportunities –renewables (continued)

Renewable energy Projects PipelineBlack Springs Wind Farm Wind energy BathurstBoco Rock Wind energy MonaroBodanora Wind Farm Wind energy OrangeCapital II Wind Farm Wind energy MonaroCollector Wind Farm Wind energy Burrinjuck/GoulburnConroy’s Gap Wind Farm Wind energy BurrinjuckCrookwell 3 Wind Farm Wind energy BurrinjuckCrookwell II Wind Farm Wind energy BurrinjuckCrudine Ridge Wind Farm Wind energy BathurstDeepwater Wind Farm Wind energy Northern TablelandsEden Wind Farm Wind energy BegaFlyers Creek Wind Farm Wind energy BathurstGlenn Innes Wind Farm Wind energy Northern TablelandsGullen Range Wind Farm Wind energy BurrinjuckKyoto Energy Park-wind farm Wind energy Upper HunterLiverpool Range Wind Farm Wind energy Barwon, Upper Hunter, OrangePaling Yards Wind Farm Wind energy BathurstRugby Wind Farm Wind energy BurrinjuckRye Park Wind Farm Wind energy BurrinjuckSapphire Wind Farm Wind energy Northern TablelandsSilverton/ Broken Hill Wind Farm Wind energy Murray-DarlingTaralga Wind Farm Wind energy BurrinjuckUungula Wind Farm Wind energy OrangeYass Wind Farm Wind energy BurrinjuckBiala Wind Farm Wind energy BurrinjuckWoolbrook Wind Farm Wind energy Northern TablelandsWhite Rock Wind Farm Wind energy Northern TablelandsJupiter Wind Farm Wind energy Goulburn and MonaroBango Wind Farm Wind energy Burrinjuck

Initiatives to encourage exploration investment in NSW

Uranium

� NSW allows uranium exploration after 26 years� Expressions of interest in applying for ELs for Uranium in NSW under

review� ELs to be granted based on merit of proposed work� Potential U Deposit types:

� Alkaline intrusive or extrusive (Broken Hill, Lachlan, New England)� Sandstone hosted (Gunnedah, Surat, Eromanga)� Palaeochannel hosted (Broken Hill, Eromanga, Murray)

Contacts

� RegionalMr Chris Hanger – Director, Investment & Export ServicesPhone: +61 2 9338 6780. Email: chris.hanger@business.nsw.gov.au

� AgribusinessMr Ian Sanders – Leader, International Engagement , Department of Primary IndustriesPhone: +61 2 6391 3386. Email: ian.sanders@dpi.nsw.gov.au

� ResourcesMr Charles Dowsett – Director, Industry Investment Attraction & Development, Resources & EnergyPhone +61 2 8281 7309. Email: charlie.dowsett@trade.nsw.gov.au

NSW briefing to Chinese Consulate-General & Banks