OVERVIEW OF SOUTH AUSTRALIA’S RESOURCES SECTOR AND INITIATIVES

Dr Paul Heithersay

Deputy Chief Executive, Resources and Energy, DMITRE

and

Chief Executive, Olympic Dam Task Force

2

Minerals & Energy

Agriculture Renewable Energy

Advanced Manufacturi

ngDefence

1 Resourcestocks 2012 World Risk Survey2 EIU: A Summary of Liveability Ranking and Overview August 2012

Education Health

State populationAdelaide population

1.6 million1.2 million

THE STATE OF SOUTH AUSTRALIA

• KEY LOCATION FOR SUSTAINABLE BUSINESS

• A robust, resilient, knowledge based economy – with capacity to grow.

• World leading minerals and energy assets – ranked as Australia’s top destination for resources investment.1

• Leading agricultural region producing premium quality food and wine for global export markets.

• A strong manufacturing base, including automotive, submarines and warships and high-value advanced manufacturing.

• Home to Australia’s wind and solar power industries.

• A world-class education system; leader in research and development; flexible and skilled workforce; and the fifth most liveable city in the world.2

Source: ABS 5220, 5368, 6202, Department of Treasury & Finance

Export Destinations

East Asia (excl. China) (33%)

China (20%)

United States (9%)

Middle East (8%)

European Union (8%)

India (7%)

Rest of the world (16%)

Gross State Product $91 billion

Services (44%)

Construction, housing and utilities (19%)

Retail & wholesale trade (9%)

Manufacturing (9%)

Agriculture, forestry & fishing (6%)

Mining (5%)

Major Developments $94 billion

Minerals & Energy (42%)

Defence (20%)

Urban Development (16%)

Manufacturing & Industrial Development (7%)

Health, Education & Other Services (5%)

Infrastructure (5%)

Water Management (4%)

Exports $11 billion

Metals (34%)

Wheat (14%)

Wine (10%)

Meat (6%)

Other (35%)

3

ECONOMY OF STRENGTH

Progressive and steady growth• Over two decades of uninterrupted economic growth• Linked to fast growing Chinese, Indian and other Asian

economies• Major developments nearing $100 billion fuelling future

growth• 6.0% unemployment – seasonally adjusted (September

2013)

Industry highlights• 7% of Australia’s population• 80% of Australia’s uranium reserves• 70% of Australia’s copper resources• 60% of Australia’s wine exports• 50% of Australia’s wind power capacity• 40% of Australia’s automotive manufacturing• 30% of Australia’s defence industry• 25% of Australia’s onshore gas resources• 20% of Australia’s grain production

4Source: ABS 6302, 6416, AECOM: The Blue Book 2012, KPMG: Competitive Alternatives 2012, EIU: A Summary of Liveability Ranking and Overview August 2012, Property Council of Australia: Australian City Liveability Index 2011, Mercer: Worldwide Cost of Living Survey 2012, Suncorp Bank: Family Friendly City Report

South Aus-tralia

Aus-tralia

ACT NT WA NSW QLD VIC TAS

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1,400Average Weekly Earnings ($)

Adelaide: The most liveable city• The 5th most liveable city in the

world by the Economist Intelligence Unit.

• The most liveable city in Australia by the Property Council of Australia.

• The cheapest of the Australian mainland capital cities according to Mercer’s Cost of Living Survey.

• The safest city in Australia by Suncorp Bank’s Family Friendly City Index.

ADVANTAGES OF SOUTH AUSTRALIA

Low cost Australian business location• Labour Costs – South Australian labour costs are 10% below the Australian

average (including 20% below Western Australia, and up to 10% below New South Wales, Queensland and Victoria).

• Property Prices – Adelaide’s residential, commercial and industrial property prices are amongst the lowest of Australia’s mainland capital cities.

• Construction Price – Adelaide is competitive in terms of construction costs for the development of new multi-residential, commercial and industrial properties.

•

Location• South Australia is located at the centre of Australia’s road, rail and air logistics

networks; with time and cost advantages for air and sea freight transport to key Asian markets.

• The South Australian time zone (Greenwich Mean Time +9.30 hours, or +10.30 during Daylight Savings time) is within two hours of major Asia Pacific centres.

Government open for business• The South Australian Government is pro investment, supporting business

including:• Direct access to key government decision-makers.• A dedicated Invest in South Australia team and renowned case management

service to streamline investors’ establishment and approvals processes.• An ambitious and successful red tape reduction program.• A commitment to create 100,000 training places within broader activity to

meet industry demand for skilled workers.• Pro-investment programs including the Plan for Accelerating Exploration

(PACE), which has resulted in extraordinary growth in the State’s minerals and energy sector.

KPMG ranked Adelaide as having lower business location costs than Sydney, Melbourne and Brisbane in their 2012 international business location costs study

5

4 mines

in 2003

21 mines in

2013

Copper

Gold

Rare earthsMinerals Sands

Silver

Coal Zinc

67% of Australia’s economically demonstrated

copper resources

Uranium

Iron Ore

30% of Australia’s economically demonstrated

gold resources

78% of Australia’s identified resources

14 billion tonnes in identified resources

Lead

World Class Deposits

Graphite Nickel Tin

A WORLD CLASS DESTINATION FOR RESOURCE INVESTMENTSouth Australia is resource rich with significant deposits of copper, gold, iron ore, uranium and mineral sands.

Over the last decade, major operating mines has increased from 4 to 21, with another 30 major developments underway.

With continued exploration now is an opportune time to become involved in some of these projects, many of which are requiring cornerstone investors to develop their full value.

THE SOUTH AUSTRALIAN RESOURCE SECTOR

South Australia’s Decade of GrowthMineral production valueMineral exploration

Net minerals industry value

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South Australian Minerals Industry Indicators 2001–2012

Mines and Developing Mineral Projects

2004 2013

• 21 Major Mines• ~30 Developing Mineral Projects

• 5 World Class discoveries in last decade

• Prominent Hill• Jacinth-Ambrosia, • Carrapateena• Four Mile• Hillside

December 2013

Mineral Exploration Activity

2004

2013

Mineral Exploration in Australia by Commodity 2012/13

SA $106.3

33%

QLD91.129%NT

9.63%

WA76.624%

NSW $7.3

2%Other28.49%

Source: ABS Cat. 8412.0

$319.3 million

SA10.315%

QLD3.96%

NT10

14%

WA35.151%

Other10.215%

$69.5 mil-lion

Source: ABS Cat. 8412.0

SA47.95%

NT11.31%

WA921.891%

Other30.3000000000001

3%

$1,011.3 mil-lion

Source: ABS Cat. 8412.0

COPPER IRON OREURANIUM

South Australia – increasing share of Iron Ore (largest outside WA) maintaining 33% of Copper & significantly decrease in share of Uranium

3 operational copper mines

4 development projects

40 prospects

Many of the deposits in South Australia’s copper provinces are covered by a

sequence of younger rocks that have effectively hidden many large copper

deposits from the early explorers.

67% of Australia’s economically demonstrated copper resources

10

Copper

4 operational mines

8 development projects

37 prospects

Gold mineralisation is widespread in South Australia and occurs in most

geological provinces.

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30% of Australia’s economically demonstrated gold resources

Precious Metals

3 operational mines and 1 approved mine

78% of Australia’s identified resources

25% of the world’s uranium resources

Olympic Dam – the world’s largest uranium deposit

South Australia has an unusually high incidence of ‘felsic magmatic rocks’, these provide an excellent naturally

elevated source for uranium.

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Uranium

201320142015201620172018201920202021202220232024202520262027202820292030203120312032

0

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40

60

80

100

120Forecast Iron Ore Production (Mtpa)

North Gawler Craton South Gawler Craton Braemar Province

Source: Deloitte Regional Mining & Infrastructure Plan

3 operational iron ore mines

20 development projects

14 billion tonnes in identified resources

Forecast production of 105Mtpa by 2025

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Iron Ore

Cooper BasinExploration & development for 50+ years

Otway BasinMature & immature conventional/unconventional

plays

Arkaringa BasinUnconventional plays with significant shale oil

potential

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Bight BasinBP & Statoil leading offshore exploration

An emerging unconventional oil & gas boom.

Oil and Gas

$10+ billion in announced infrastructure

Path to Market Projects6 port projects, multiple slurry pipelines, rail

upgrades

Mine Infrastructure Projects3 desalination plants, magnetite beneficiation

plants

Electricity transmission upgradesEyre Peninsula, North Gawler Craton, Braemar

Province

Source: Deloitte Regional Mining & Infrastructure Plan

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Resources Infrastructure

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Disclaimer

The information contained in this presentation has been compiled by the Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE) and originates from a variety of sources. Although all reasonable care has been taken in the preparation and compilation of the information, it has been provided in good faith for general information only and does not purport to be professional advice. No warranty, express or implied, is given as to the completeness, correctness, accuracy, reliability or currency of the materials.

DMITRE and the Crown in the right of the State of South Australia does not accept responsibility for and will not be held liable to any recipient of the information for any loss or damage however caused (including negligence) which may be directly or indirectly suffered as a consequence of use of these materials. DMITRE reserves the right to update, amend or supplement the information from time to time at its discretion.