NT Agenda for growth_FINAL

NORTHERN TERRITORY MINING INDUSTRY

AGENDA FOR GROWTH

$2.75bNorthern Territory mining's contribution to the Territory's income in 2014-15. 0.005%

Proportion of the Northern Territory disturbed by mining activities before rehabilitation.

12%NT mining contributed 12 per cent of the Territory's Gross State Product in 2014-15. 3.0%

The mining industry's net water consumption (Australia-wide)in 2013-14.

$426mThe annual saving to Australian businesses by streamlining environmental approvals.$1.2b

Paid in wages and salaries in the Australian mining industry in 2014-15.

4+ yrsMinerals industry estimate of the average time for new environmental approvals.$656k

Mining generates around $656,000 for the economy for every worker employed.

5,700 Direct employment in the Northern Territory mining industry. 5.5%

Industry payroll spent on training Australia-wide – five times official benchmarks.

With more than a dozen new and proposed mining projects in the pipeline, it is critical to position Northern Territory mining to take advantage of the next wave of economic opportunities.

NORTHERN TERRITORY MINING

Planned projects Project typeNolans Arafura Resources Rare earthsJervois KGL Resources CopperChandler Salt Mine Tellus Holdings SaltMt Todd Vista Gold GoldMount Peake TNG Limited Vanadium pentoxide/ Ferrovanadium

Potential projects McArthur River Redback Copper CopperWonarah Phosphate Mine Avenira Limited PhosphateWarrego Tailings Aard Metals Magnetite tailingsAmmaroo phosphate Rum Jungle Resources PhosphatePeko tailings removal Peko Resources Magnetite tailingsKaringa Lakes Rum Jungle Resources PotashTennant Creek Mineral Field Emmerson Resources GoldTanami Upgrades Newmont Mining Gold

Planned/potential projects in the Northern Territory

Manganese $1.052 billionZinc/Lead concentrate $4 11 millionGold $545 millionUranium $270 millionOther minerals $480 million

Northern Territory's most valuable commodities in 2015-16

04 Foreword06 Maximising productivity08 Strategic infrastructure10 The environment12 Exploration agenda14 Community contribution16 Northern Territory development18 The uranium opportunity

NORTHERN TERRITORY MINING INDUSTRY

AGENDA FOR GROWTH

Source: www.icn.org.au/content/northern-territory/northern-territory-projects, viewed 16 June 2016

Source: Department of Mines and Energy Annual Report 2014-15

Photographs courtesy of Glencore, Energy Resources of Australia and Newmont.

There has been a lot of talk about what comes after the resources boom. Often overlooked is a simple fact: Australia-wide, the sector is more than three times larger than it was a decade ago.

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This document sets out the policy priorities that will help to ensure all Territorians continue to reap the benefits of a strong and competitive minerals industry.

A critical industry for Australia and the Northern TerritoryThe minerals industry is a large contributor to the nation’s economy and a critical industry for Australia’s future.

The sector accounts for around half of Australia’s export income and supports hundreds of thousands of high wage jobs across the country. More than 60 per cent of those jobs are in regional and remote Australia where the industry is the largest private sector employer of Aboriginal Australians.

Despite lower commodity prices in recent years, various measures show that the Australian minerals sector is now more than three times bigger than it was at the start of the 21st century.

Untapped potential in the Northern Territory is substantial, with more than a dozen new projects expected to come online in the next three to five years.

Sustaining jobs growth and prosperityThere are more than twice as many jobs in the industry today than there were before the mining boom, and the minerals industry paid an estimated $165 billion in company tax and royalties alone in the decade to 2014-15. Evidence from surveys commissioned by the MCA confirms the industry pays nearly half of every dollar of profit to governments through royalties and company tax.

FOREWORD

2xThere are more than twice as many jobs in the industry today than before the mining boom.

$656kMining generates around $656,000 for the economy for every worker employed.

Agenda for growth Northern Territory Mining Industry

There has been a lot of talk about what comes after the resources boom. Often overlooked is a simple fact: Australia-wide, the sector is more than three times larger than it was a decade ago.

Commodities will always have a place in Australia – that's part of this country's heritage. The natural resources that this country is endowed with are fundamental to life.

““

Andrew MackenzieChief Executive OfficerBHP Billiton

5Foreword

The minerals sector makes a substantial contribution to training and development of workers. A 2013 vocational research report indicated that nationally, the training budget is five times more than government benchmarks, as a proportion of payroll (5.5 per cent).

Most mining companies in the Northern Territory have programs to attract and train Aboriginal workers, including Indigenous employment strategies, mentoring, flexible work arrangements, and workplace literacy and numeracy training. Many also support students from local communities through work experience and school-based apprenticeships.

The industry is the largest private employer of Aboriginal employees, with an overall rate of 16 per cent across all minerals industries in the Territory, with some companies and special skilled jobs (e.g. haul truck drivers) exceeding 20 per cent.

Positioning the sector for the next wave of growthThe challenge in 2016 is to build on this legacy of strong mining growth and to position Northern Territory mining for the next wave of economic opportunities.

This will require further improvements in productivity and competitiveness to attract investors. There needs to be a commitment to ensure domestic regulation does not unnecessarily delay and push up costs on mining projects.

With an efficient regulatory system and energetic marketing, the resources industry is the Territory’s best path to future growth. Policy reforms outlined in this document are critical to ensuring the strength, fairness and prosperity of the Northern Territory.

6 Agenda for growth Northern Territory Mining Industry

MAXIMISING PRODUCTIVITY Streamlining environmental approval processes to remove duplication, delays and complexity can be done without compromising environmental standards. This will increase business certainty and encourage investment.

Regulatory settingsCompetition for markets, investment and talented people is intense in a world where mineral resources are widely available. Increased domestic costs cannot simply be passed on to customers.

Regulatory requirements have a profound impact on cost competitiveness and the industry’s capacity to adapt to changing market conditions.

Streamline approvalsIn Australia the average time to obtain new approvals is more than five years.

A one year delay can reduce the net present value (NPV) of a major mining project by up to 13 per cent. For large greenfields mining projects of $3 billion to $4 billion in value, the loss can be up to $1 million per day.

Better alignment between Territory and federal approval processes would provide regulatory certainty and reduce approval timeframes.

Maintain environmental standardsThe Productivity Commission concluded in 2013 that overlap and duplication can be reduced without diminishing environmental outcomes.

The Northern Territory’s environmental regulatory processes should be accredited under the Environment Protection and Biodiversity Conservation (EPBC) Act to create a single assessment and approval process to ensure high environmental standards with risk-based monitoring and reporting arrangements.

The Northern Territory Government should encourage the federal parliament to approve changes to the EPBC Act to allow these reforms.

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A 'one-stop shop' for Northern Territory and Commonwealth environmental and approval processes

Efficient and effective project approval processes in the Northern Territory

Risk-based monitoring and reporting requirements to minimise costs while maintaining environmental standards.

POLICY AGENDA

Streamlining environmental approval processes to remove duplication, delays and complexity can be done without compromising environmental standards. This will increase business certainty and encourage investment.

Maximising productivity

Productivity surveyMCA member companies found that environmental approvals processes and ‘green tape’ in general is the area of greatest policy concern, followed by workplace relations, taxes and royalties.

Addressing these concerns will grow the mining industry in the Northern Territory.

Areas nominated as 'important' or 'very important' to improving productivity (%)Survey of MCA member companies

Source: Minerals Council of Australia

35International trade relations

50Occupational health and safety

75Development of appropriate skills

75Environmental requirements

80Taxes and royalties

80Workplace relations framework

90Approvals processes

The average time to achieve new approvals has increased from 12 months to more than four years.

“ “

MCA member company

Agenda for growth Northern Territory Mining Industry8

Developing infrastructure maximises opportunities to attract investment across a range of industries and will unlock further growth in regional and remote locations.

Unlocking regional and remote potential Infrastructure in Northern Australia is a major barrier to minerals industry growth. The impact of inadequate public infrastructure flows through to the broader economy and society.

Inefficient transport infrastructure increases the cost of doing business and limits exports. Inefficient public infrastructure makes it difficult to attract and retain workers and their families in remote and regional areas of the Northern Territory.

The role for governmentThe government has a role to play in public, common-user and shared infrastructure. Long-term investments in commerce-enabling infrastructure can promote other investment, including from the private sector.

The MCA NT applauds recent commitments by both the Commonwealth and Northern Territory governments to seal and upgrade a number of remote roads that service a range of industries.

Government investment in transport, water, energy and other critical infrastructure will significantly enhance the attractiveness of the Northern Territory to investors in tourism, agriculture, pastoralism as well as mining.

STRATEGIC INFRASTRUCTURE

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Develop a priority list of investments, maximising return on investment across industries

Pursue Commonwealth funding through the Northern Australia Infrastructure Facility and other initiatives

Pursue jointly funded infrastructure projects, through private-public partnerships across industries with similar needs.

Developing infrastructure maximises opportunities to attract investment across a range of industries and will unlock further growth in regional and remote locations.

Better connected regions will facilitate growth and provide people with more opportunities to live and work in our regions.

“

“Philip DaviesChief Executive Officer Infrastructure Australia

Strategic infrastructure

POLICY AGENDA


Resource management reforms and multiple land use coexistence should be encouraged and supported to maximise the benefits to all Territorians.

Water access and managementWater availability and security of supply are critical business risks for a range of industries including the minerals sector.

Mine operators frequently supply, operate and maintain their own water infrastructure and provide a reliable water supply to other stakeholders including neighbouring remote and indigenous communities, farmers and pastoralists.

Water planning and access arrangements should account for the specific needs and characteristics of all water users, including the minerals industry.

Protecting biodiversityThe industry undertakes extensive biodiversity assessments and establishes conservation areas to offset impacts that cannot be completely avoided or mitigated.

The industry contributes to biodiversity conservation programs in partnership with government and non-government organisations, including the Bush Blitz program in the Northern Territory.

Land rehabilitationThe MCA NT supports a flexible and responsive security bond system that incentivises good environmental performance and progressive rehabilitation by reducing the size of the bond. Operators can reinvest these savings in innovative technologies and ongoing rehabilitation.

The mining industry acknowledges that there are legacy sites that need to be rehabilitated and contributes significantly to these through the Rehabilitation Security Levy.

THE ENVIRONMENTSustainable multiple land useLand access is critical to industry growth. A fair and strategic approach to developing compatible and complementary uses benefits land-owners, mineral and pastoral lessees and other land managers.

Land access processes should be efficient, transparent and consider all land use values including cultural connection, conservation, agriculture and mineral production.

ERA Ranger Mine spent $27 million on rehabilitation [in 2015], making excellent progress in regards to Pit 1, Pit 3, water management and the revegetation of Jabiluka.

“

“

Andrea SuttonChief Executive OfficerEnergy Resources of Australia

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Transparent and consistent regulation for water access that recognises the needs of the mineral sector

Responsive and flexible security bond system that reduces the bond size in line with progressive rehabilitation and strong environmental performance

Strategic land use approaches that consider landholder and industry interests to maximise benefits from multiple land use.

Resource management reforms and multiple land use coexistence should be encouraged and supported to maximise the benefits to all Territorians.

The environment

POLICY AGENDA0.02%Proportion of Australia's land mass temporarily disturbed by mining activities.

$426mThe annual saving to Australian businesses by streamlining environmental approvals.

3.0%The mining industry's net water consumption in 2013-14.


To stimulate greater industry investment in exploration, governments must invest in geotechnical studies to narrow the search for prospective deposits, water and energy sources.

Exploration opportunitiesGeoscience Australia estimates around 80 per cent of Australia remains under-explored, in particular the Northern Territory, Queensland, Western Australia and South Australia.

In May 2016 the Commonwealth Government committed an extra $100 million to stimulate exploration through mapping mineral, energy and groundwater potential.

Narrowing the searchThe Northern Territory Geological Survey’s Creating Opportunities for Resource Exploration (CORE) program provides interpreted data on the prospectively of various regions of the Northern Territory.

Investment such as this recognises the critical importance of the minerals industry to future economic growth and prosperity.

By providing data that suggest highly prospective areas for mineral exploration, governments can promote prospective projects and increase investor confidence by narrowing their search.

Dollar benefit of explorationA 2015 ACIL Allen Consultants report indicated that for every dollar invested in pre-competitive programs, the rate of return on investment is 20 to 1.

Australia ranks second in the world at converting exploration into mineral discoveries.

Exploration has multiple benefits in generating valuable data not only on target metal and non-metal resources, but also on ground and surface water, and flora and fauna.

EXPLORATION AGENDA

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To stimulate greater industry investment in exploration, governments must invest in geotechnical studies to narrow the search for prospective deposits, water and energy sources.

Exploration agenda

Secure funding for priority surveys in the Northern Territory through the Commonwealth's ‘Exploring for the Future' initiative

Adequately fund the NTGS so it can continue to generate priority geoscientific datasets to attract greater exploration investment in the Territory

Work with existing mineral companies to identify priority areas and types of surveys to attract further investment.

More than 80 percent of the value of minerals extracted in the Northern Territory comes from mining on Aboriginal-owned land, amounting to more than $1 billion a year ... Approximately 30 percent of Aboriginal land is under exploration or currently under negotiation for exploration.

““

Northern Land Council

POLICY AGENDA

$ 95.7 mNT exploration expenditure in 2014-15. NT’s share of exploration is the fastest growing in the country, but more investment is needed to restore exploration to peak levels.

80%Area of Australia that remains under-explored. Northern Territory is particularly under-explored, according to Geoscience Australia.


NT MINING'S COMMUNITY CONTRIBUTIONThe Northern Territory’s minerals sector is a major source of export income, economic growth and employment, with significant untapped potential for further growth and expansion.

Development of the sector will play a vital role in building sustainable regional communities, population growth, income growth and improved standards of living.

Making a difference

There are many examples demonstrating the sector’s community contribution in the Northern Territory:

MMG provides training and mentoring support to the Borroloola-based Indigenous business, Pandanus Development Group, that prepares Aboriginal workers for fieldwork with the company.

McArthur River Mine’s Community Benefits Trust has provided more than $10 million to 64 economic, social and cultural projects in the Gulf Region including: • The Borroloola Song Peoples Sessions• Li-Anthawirriyarra Sea Rangers • The new Wunala Creche • Local health and sporting programs.

Newmont’s Tanami Operations contributed nearly $375 million to the economy through procurement, payroll taxes, government royalties, land use payments and community projects. It employed 88 Aboriginal workers in 2015, 12 per cent of the workforce. It also provides financial support to:

• A Community Development Officer (three -year appointment) to train women and youth in the Tanami Region

• The Milpirri Festival • Lajamanu School through the provision of

workshop tools, equipment and readers.

Energy Resources Australia paid royalties of $17.9 million in 2015 of which approximately $13.9 million flowed to Northern Territory Aboriginal interests, including local Traditional Owners. ERA is a significant contributor to the Jabiru and Alligator Rivers region economy: • Generating approximately 70 per cent

of jobs in Jabiru• Operating the airport that serves the

Jabiru township and the region’s tourism industry

• Supporting a wide range of community activities including the Gurrung Community Sports Carnival, the Mahbilil Festival in Jabiru and the Stone Country Festival at Gunbalanya.

Renew the Territory’s focus on attracting investment and promoting development through a targeted marketing campaign and updated vision statement

Provide dedicated project facilitators to assist investors in navigating and meeting regulatory requirements

Collaborate and support industry to redress misinformation about the value of the minerals sector to Territorians and its progressive environmental performance.

Rio Tinto Gove Operations committed $2.4 million for a mine training centre to support the first Aboriginal owned and operated mine in the NT. • Has local contracts in place with

Rirratjingu and Gumatj Traditional Owners

• Funds a range of community investment programs and initiatives up to the value of $1 million per annum

• Maintains the Nhulunbuy Township and airport and provides essential services to Nhulunbuy and surrounding communities

• Contributed $2 million seed funding to the Developing East Arnhem initiative and has provided up to 250 housing assets to attract and drive economic diversification in the region.

Sound governance that promotes investment will ensure that the mining sector can continue to deliver a broad range of benefits to Territorians.

POLICY AGENDA

15 Community contribution


Mining's contributionThe Commonwealth Government recognises that the minerals industry is a massive contributor to economic growth and development in the Northern Territory. Its comprehensive strategy for developing Northern Australia notes the minerals sector accounts for approximately 85 per cent of export value from Northern Australian ports.

Future growth prospects are strong, with Northern Australia accounting for more than 70 per cent of Australia’s known resources for iron ore, lead, zinc, bauxite and silver.

Realising future opportunitiesThe mining sector is keen to work with both the Commonwealth and Northern Territory governments to realise these opportunities and endorses strategies to:

• Invest $1.2 billion, in addition to $5 billion (over five years) to establish a concessional loans fund for major infrastructure development via the Northern Australia Infrastructure Facility (NAIF)

• Reduce regulatory burden by streamlining and simplifying assessment and approval processes

• Provide support for native title bodies and new surveys to resolve all outstanding native title claims within the next decade and simplify land access arrangements.

NORTHERN TERRITORY DEVELOPMENT• ‘Fast track growth’ and unlock the north’s

economic potential, by delivering:

– $600 million of new funding to improve key roads, including the Tanami Road

– $39.6 million to upgrade airstrips and subsidise air services in remote Australia

– $5 million for rail freight analyses, commencing with a pre-feasibility analysis of the proposed Tennant Creek to Mount Isa railway.

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The federal government’s commitment to promoting development in Northern Australia offers the Territory concessional loans and other resources that could further develop the minerals sector.

Northern Territory development

Provide project facilitators, streamline regulatory processes and remove duplication with Commonwealth Government assessment and approval processes

Work with the Commonwealth Government to secure a fair share of funds to further develop the Northern Territory minerals sector, through NAIF concessional loans; road, rail and water infrastructure funding; and the Exploration Development Incentive.

POLICY AGENDAMany parts of northern Australia remain under-explored, with potentially large deposits of minerals and energy resources not yet identified.

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“Australian Trade Commission


The uranium market continues to grow substantially as more countries develop nuclear energy in their electricity mix to meet growing energy demand. Australia needs reform to capture the opportunity this offers.

Despite hosting the world’s largest deposits of uranium – three times more than Canada

– Australia supplies little more than 10 per cent of the global market, down from over 20 per cent just a decade ago.

In terms of global production, Australia has fallen from second to third place, while export earnings have fallen from over $1 billion in 2008-09 to $622 million in 2013-14. Other producers have gained market share from Australia.

Scale of the opportunityNuclear energy is projected to grow by between 60 and 152 per cent by 2040, according to the International Energy Agency.

As one of only two jurisdictions in the country to export uranium, this represents a substantial opportunity for Australia and for the Northern Territory in particular.

Supporting Australian producers at a state and Commonwealth level could see the sector provide 20,000 jobs and $9 billion in annual export revenues by 2040.

Reform requiredAustralia will not reach its potential as a uranium producer without changes to the regulatory and policy environment.

Nationally, there are three priority areas for reform. First, exploration and the mining of uranium are still prohibited in Victoria. Queensland and New South Wales permit uranium exploration but not mining.

Second, uranium mining faces special regulatory obstacles that are not applied to other minerals commodities.

Third, Australia should remove the outright prohibition on nuclear energy and allow future proposals for nuclear power plants to be considered on their merits.

THE URANIUM OPPORTUNITY

CHINAAustralia's trading partner will be the largest nuclear power generating country by 2035.

11%Global electricity from uranium, with nuclear demand to grow 86 per cent to 2040.

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The uranium market continues to grow substantially as more countries develop nuclear energy in their electricity mix to meet growing energy demand. Australia needs reform to capture the opportunity this offers.

Amend the EPBC Act to remove provisions imposing discriminatory, onerous and unnecessary requirements on new uranium mines

Remove the prohibition of nuclear fuel cycle industries, including nuclear energy generation, from the EPBC Act and ARPANS Act. These industries are critical to help meet the climate challenge.

URANIUM AGENDA By restraining and restricting uranium production, the Australian economy as a whole is not performing as well as it otherwise could.

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“Professor Sinclair Davidson RMIT University

The uranium opportunity

Minerals Council of Australia – Northern Territory Division28/90 Frances Bay Drive, Frances Bay, Darwin NT 0800 P. + 61 8 8981 4486 E. [email protected] W. www.minerals.org.au

Find us on: /MineralsCouncilAust @MineralsCouncil mineralscouncilofaustralia

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NT Agenda for growth_FINAL