Australian Mining Industry Outlook Market Opportunities and Entry Strategies, Analyses and Industry Forecast Report BRICdata John Carpenter House 7 Carmelite Street London EC4Y 0BS United Kingdom Tel: +44 (0) 20 7936 6400 Fax: +44 (0) 20 7336 6813 Reference code: MN0040MR Published: March 2012 www.bricdata.com www.bricdata.com
EXECUTIVE SUMMARY 1 Executive Summary Australia is one of the leading producers of several minerals within the global mining industry. Australia possesses substantial deposits of a variety of minerals, including iron ore, nickel, bauxite, copper, gold, silver, uranium, diamonds, zinc and coal. BRICdata expects that the volume of minerals produced from the Australian mining industry will increase from XXX.X million tons in 2011 to X.X billion tons in 2016, at a compound annual growth rate (CAGR) of X.XX% over the forecast period (2012 2016). This growth will be influenced by the relatively low value of mining in 2011, since flooding in the country postponed mining activities. However, the growth in mining production volume will also benefit from the completion of new mining projects across the country, most notably projects by Rio Tinto, BHP Billiton and Xstrata. Iron ore and bauxite production volume growth Australia s iron ore production output is expected to record the highest growth rate, at a CAGR of X.XX% over the forecast period, with the country s iron ore production increasing from XXX million in 2011 to XXX.X million tons in 2016. Since iron ore accounts for the largest proportion of around XX% of the mining industry's output value, this rising iron ore production volume will have a positive impact on the Australian mining industry value. The growth in iron ore production will be driven by the mining project expansion activities of BHP Billiton and Rio Tinto. BHP Billiton is expected to increase its iron ore output in its Western Australian operations from XXX million tons per annum (mtpa) to XXXmtpa in 2014. Meanwhile, Rio Tinto is anticipated to increase its production in its Pilbara operations from XXXmtpa to XXXmtpa in 2015. BRICdata also expects that Australia will remain the world's largest bauxite producer by recording average annual output growth rates of X.X% over the forecast period, to increase output from XXmtpa in 2010 to 99.7mtpa in 2016. The vast majority of this growth is due to expansion plans at Rio Tinto's Weipa mine, the world's largest bauxite mine, which is expected to increase production volume from XXmtpa to XXmtpa in 2013. Changing coal dynamics Australia s coal production output is expected to record average annual growth rates of X.X% over the forecast period, from XXXmtpa in 2011 to XXXmtpa in 2016. The BRICdata forecast for coal production in Australia was revised down from XXXmtpa to XXXmtpa in 2011, due to the effects of flooding which postponed mining production in Queensland at the start of the year. BRICdata expects there will be significant changes in the global coal production dynamics over the forecast period, which could have a substantial impact on global shipping and infrastructure. It is anticipated that Australia s coal exports to China and India will reduce over the forecast period, as Indonesia plans to increase its domestic coal consumption and Australia's taxes on carbon emissions and coal mining profits are likely to deter investment. Meanwhile, Australia s coal imports are expected to be replaced by the increased coal production in Southern Africa and the US. Several coal production projects have been announced in Mozambique and South Africa, and the vast majority of coal produced in these products will be exported as there is currently little demand for coal in the local region. Changing regulatory environment Australia's mining industry is one of the most attractive for investments in the world, and there are both domestic and foreign mining companies operating in the country. Australia is expected to remain a highly attractive destination for foreign investment, despite the proposed XX% tax on mining companies' profits in coal and iron ore production. The proposed tax is not expected to have a significant impact on investments in the Australian mining industry, as investors concerns regarding the tax are expected to be outweighed by the country's large mineral wealth. Moreover, the proposed tax could be reduced as the ruling coalition only has a one seat majority, and it may be difficult to get the bill passed through parliament without compromise. If the bill is implemented, it is expected to become effective from July 2012. Investments announced despite proposed tax on mining The proposed XX% tax on mining company profits has not significantly affected investments in the Australian mining industry, since several new coal and iron ore mining projects were announced in the country after the tax was first proposed. Xstrata and CBH Resources plan to add another XXmtpa to their coal product by 2013, while Rio Tinto and Fortescue Metals have announced large-scale plans to increase their iron ore output by a total of XXXmtpa by 2015. Since the announcement of the new tax, Rio Tinto has proceeded with investments worth US$X.X billion in new Australian mining projects, and Xstrata has committed US$X.X billion in new coal mine investments. As such, the tax rise has not yet significantly deterred investment in the Australian mining industry. Page 2
EXECUTIVE SUMMARY Competitive landscape Due to its strong growth potential and high-quality infrastructure, Australia contains some of the leading companies within the global mining industry. The multinationals operating in the Australian mining industry include Australian companies, such as BHP Billiton and Newcrest Mining, and large foreign mining companies, such as Rio Tinto, Norilsk Nickel and Xstrata. It is expected that Australia's mining industry will remain dominated by large miners, with the exception of coal, which could become slightly more fragmented as Hancock Coal develops a XXmtpa Alpha coal mine project and Waratah Coal develops a XXmtpa Galilee coal mine. These mines will begin to produce coal output from 2013. These projects are the largest planned in the country s coal production, which will enable the two companies to become significant coal miners in Australia over the forecast period. Page 3
TABLE OF CONTENTS TABLE OF CONTENTS 1 Executive Summary... 2 2 Mining Industry Outlook in Australia... 9 2.1 Mining Industry Market Size and Growth Potential... 9 2.2 Market Share and Production Trend Analysis by Mining Category... 10 3 Mining Industry Key Trends, Growth Drivers and Challenges... 15 3.1 Key Trends and Growth Drivers... 15 3.2 End User Market Dynamics... 18 3.3 Macroeconomic Drivers... 21 3.6 Challenges... 26 4 Mining Equipment Market Size and Growth Potential... 27 5 Regulatory Framework... 28 5.1 Regulation of Foreign Investments... 28 5.2 Organization Health and Safety (OHS) Standards... 29 5.3 Market Entry Route... 29 6 Benchmarking with Key Global Markets... 31 6.1 Copper... 31 6.2 Diamond... 32 6.3 Iron Ore... 33 6.4 Nickel... 34 6.5 Bauxite... 35 6.6 Gold... 36 7 Industry Structure and Dynamics of Coal, Metallic and Non-Metallic Mining... 37 7.1 Five Forces Analysis: Coal... 37 7.1.1 Bargaining power of supplier: medium... 38 7.1.2 Bargaining power of buyer: medium to high... 38 7.1.3 Barrier to entry: medium... 38 7.1.4 Intensity of rivalry: medium... 38 7.1.5 Threat of substitution: medium to high... 38 7.2 Five Forces Analysis: Metallic Minerals... 39 7.2.1 Bargaining power of supplier: medium to high... 39 7.2.2 Bargaining power of buyer: low to high... 40 7.2.3 Barrier to entry: medium... 40 7.2.4 Intensity of rivalry: low to medium... 40 7.2.5 Threat of substitution: low to medium... 41 7.3 Five Forces Analysis: Non-Metallic Minerals... 42 7.3.1 Bargaining power of supplier: low to medium... 42 7.3.2 Bargaining power of buyer: low... 42 7.3.3 Barrier to entry: low... 42 7.3.4 Intensity of rivalry: high... 43 7.3.5 Threat of substitution: low... 43 7.4 Five Forces Analysis: Mining Equipment... 44 7.4.1 Bargaining power of supplier: low to medium... 44 Page 4
TABLE OF CONTENTS 7.4.2 Bargaining power of buyer: low to medium... 44 7.4.3 Barrier to entry: medium... 44 7.4.4 Intensity of rivalry: medium to high... 45 7.4.5 Threat of substitution: low... 45 8 Coal... 46 8.1 Overview of Coal Mining Category... 46 8.2 Reserves, Production and Consumption... 46 8.2.1 Total reserves... 46 8.2.2 Total production... 47 8.2.3 Total consumption... 51 8.3 Imports and Exports... 52 8.3.1 Coal import... 52 8.3.2 Coal export... 53 8.4 Top Active Projects... 54 8.5 Key Processing Units... 55 8.6 News and Deals... 56 8.7 Competitive Landscape... 57 9 Iron Ore... 58 9.1 Overview of Iron Ore Mining Sub-Category... 58 9.2 Reserves, Production and Consumption... 58 9.2.1 Total reserves... 58 9.2.2 Total production... 59 9.2.3 Total consumption... 63 9.3 Imports and Exports... 64 9.3.1 Iron ore import... 64 9.3.2 Iron ore export... 65 9.4 Top Active Projects... 66 9.5 Key Processing Units... 67 9.6 News and Deals... 68 9.7 Competitive Landscape... 69 10 Phosphate Rock... 70 10.1 Overview of Phosphate Rock Mining Sub-Category... 70 10.2 Reserves, Production and Consumption... 70 10.2.1 Total reserves... 70 10.2.2 Production... 71 10.2.3 Consumption... 75 10.3 Imports and Exports... 76 10.3.1 Phosphate rock imports... 76 10.3.2 Phosphate rock export... 77 10.4 Top Active Projects... 78 10.5 Key Processing Units... 78 10.6 News and Deals... 78 10.7 Competitive Landscape... 79 Page 5
TABLE OF CONTENTS 11 Salt... 80 11.1 Overview of Salt Mining Sub-Category... 80 11.2 Reserves, Production and Consumption... 81 11.2.1 Total reserves... 81 11.2.2 Total production volume... 81 11.2.3 Total production value... 83 11.2.4 Total consumption... 85 11.3 Imports and Exports... 86 11.3.1 Salt imports... 86 11.3.2 Salt exports... 87 11.4 Top Active Projects... 88 11.5 Key Processing Units... 88 11.6 News and Deals... 89 11.7 Competitive Landscape... 89 12 Competitive Landscape and Strategic Insights... 90 12.1 Competitive Landscape: Overview... 90 12.2 Key Companies... 93 12.2.2 BHP Billiton Ltd: recent announcements and strategic initiatives... 93 12.2.3 BHP Billiton Ltd: products... 94 12.2.5 Rio Tinto Ltd: recent announcements and strategic initiatives... 96 12.2.6 Rio Tinto Ltd: products and services... 97 12.2.7 Fortescue Metals Group Ltd (Fortescue): overview... 98 12.2.8 Fortescue Metals Group Ltd (Fortescue): recent announcements and strategic initiatives... 98 12.2.9 Fortescue Metals Group Ltd (Fortescue): products... 98 12.2.10 BlueScope Steel Ltd: overview... 99 12.2.11 BlueScope Steel Ltd: recent announcements and strategic initiatives... 99 12.2.12 BlueScope Steel Ltd: products... 99 12.2.13 OZ Minerals: overview... 100 12.2.14 OZ Minerals Ltd: recent announcements and strategic initiatives... 100 12.2.15 Alcoa of Australia Ltd: overview... 101 12.2.16 Alcoa of Australia Ltd: recent announcements and strategic initiatives... 101 12.2.17 Alcoa of Australia Ltd: products and services... 101 12.2.18 Xstrata Australia: overview... 102 12.2.19 Xstrata Australia: recent announcements and strategic initiatives... 102 12.2.20 Xstrata Australia: products and services... 103 13 Appendix... 104 13.1 About BRICdata... 104 13.1.1 Areas of expertise... 104 13.2 Methodology... 105 13.3 Definitions... 106 13.4 Disclaimer... 107 Page 6
TABLE OF CONTENTS LIST OF FIGURES Figure 1: Australian Mining Production Volume (Million Tons), 2007 2016... 9 Figure 2: Australian Mining Industry Production Volume by Mineral Category (% Share), 2011 and 2016... 10 Figure 3: Australian Coal Production Volume (Million Tons), 2007 2016... 11 Figure 4: Australian Iron Ore Production Volume (Million Tons), 2007 2016... 12 Figure 5: Australian Bauxite Production Volume (Million Tons), 2007 2016... 13 Figure 6: Australian Phosphate Rock Production Volume (Million Tons), 2007 2016... 14 Figure 7: Australian Salt Production Volume (Million Tons), 2007 2016... 14 Figure 8: Australian Electricity Production (Billion Kilowatt Hours), 2007 2016... 18 Figure 9: Australian Automobile Production Trend (Units), 2007 2016... 19 Figure 10: Australian Construction Net Output at Current Prices (US$ Billion), 2007 2016... 20 Figure 11: Australian GDP at Constant Prices (US$ Billion), 2007 2016 (Base Year 1999 2000)... 21 Figure 12: Australian Inflation Rate (%), 2007 2016... 22 Figure 13: Australian Manufacturing Net Output at Current Prices (US$ Billion), 2007 2016... 23 Figure 14: Australian Electricity Consumption (Billion Kilowatt Hours), 2007 2016... 24 Figure 15: Australian Crude Steel Production (Million Metric Tons), 2007 2016... 25 Figure 16: Australian Mining and Construction Equipment Industry (US$ Billion), 2007 2011... 27 Figure 17: Global Copper Production and Reserves in Volume Terms (% Share), 2010... 31 Figure 18: Global Industrial Diamond Production and Reserves in Volume Terms (% Share), 2010... 32 Figure 19: Global Iron Ore Production and Reserves in Volume Terms (% Share), 2010... 33 Figure 20: Global Nickel Production and Reserves in Volume Terms (% Share), 2010... 34 Figure 21: Global Bauxite Production and Reserves in Volume Terms (% Share), 2010... 35 Figure 22: Global Gold Production and Reserves in Volume Terms (% Share), 2010... 36 Figure 23: Australian Mining Industry Dynamics: Coal Category... 37 Figure 24: Australian Mining Industry Dynamics: Metallic Minerals Category... 39 Figure 25: Australian Mining Industry Dynamics: Non-Metallic Minerals Category... 42 Figure 26: Australian Mining Industry Dynamics: Mining Equipment Industry... 44 Figure 27: Australian Coal Production Volume (Million Tons), 2007 2011... 47 Figure 28: Australian Coal Production Volume (Million Tons), 2012 2016... 48 Figure 29: Australian Coal Production Value (AUD Billion), 2007 2011... 49 Figure 30: Australian Coal Production Value (AUD Million), 2012 2016... 50 Figure 31: Australian Coal Consumption Volume (Million Tons), 2007 2011... 51 Figure 32: Australian Coal Import Volume (Million Tons), 2006 2010... 52 Figure 33: Australian Coal Export Volume (Million Tons), 2006 2010... 53 Figure 34: Australian Leading Coal Producers (% Share), 2011... 57 Figure 35: Australian Iron Ore Production Volume (Million Tons), 2007 2011... 59 Figure 36: Australian Iron Ore Production Volume (Million Tons), 2012 2016... 60 Figure 37: Australian Iron Ore Production Value (AUD Million), 2007 2011... 61 Figure 38: Australian Iron Ore Production Value (AUD Million), 2012 2016... 62 Figure 39: Australian Iron Ore Consumption Value (Million Tons), 2007 2016... 63 Figure 40: Australian Iron Ore Import Volume (Million Tons), 2006 2011... 64 Figure 41: Australian Iron Ore Export Volume (Million Tons), 2006 2011... 65 Figure 42: Australian Leading Iron Ore Producers (% Share), 2011... 69 Figure 43: Australian Phosphate Rock Production Volume (Thousand Tons), 2007 2011... 71 Figure 44: Australian Phosphate Rock Production Volume (Thousand Tons), 2012 2016... 72 Figure 45: Australian Phosphate Rock Production Value (AUD Million), 2007 2011... 73 Figure 46: Australian Phosphate Rock Production Value (AUD Million), 2012 2016... 74 Figure 47: Australian Phosphate Rock Consumption Volume (Thousand Tons), 2007 2011... 75 Figure 48: Australian Phosphate Rock Import Volume (Thousand Tons), 2007 2011... 76 Figure 49: Australian Phosphate Rock Export Volume (Thousand Tons), 2007 2011... 77 Figure 50: Australian Salt Production Operations... 80 Figure 51: Australian Salt Production Volume (Million Tons), 2007 2011... 81 Figure 52: Australian Salt Production Volume (Million Tons), 2012 2016... 82 Figure 53: Australian Salt Production Value (AUD Million), 2007 2011... 83 Figure 54: Australian Salt Production Value (AUD Million), 2012 2016... 84 Figure 55: Australian Salt Consumption Volume (Million Tons), 2007 2011... 85 Figure 56: Australian Salt Import Volume (Million Tons), 2007 2011... 86 Figure 57: Australian Salt Export Volume (Million Tons), 2007 2011... 87 Figure 58: Australian Leading Mining Companies Revenue Comparison (US$ Million), 2007 2011... 91 Page 7
TABLE OF CONTENTS LIST OF TABLES Table 1: Investments and Announcements of Capacity Expansions by Key Australian Mining Operators in 2008 2009... 16 Table 2: Australian GDP at Constant Prices (US$ Billion), 2007 2016 (Base Year 1999 2000)... 21 Table 3: Australian Inflation Rate (%), 2007 2016... 22 Table 4: Australian Mining Industry Entry Strategy of Foreign Companies,... 29 Table 5: Australian Coal Production Volume (Million Tons), 2007 2011... 47 Table 6: Australian Coal Production Volume (Million Tons), 2012 2016... 48 Table 7: Australian Coal Production Value (AUD Billion), 2007 2011... 49 Table 8: Australian Coal Production Value (US$ Billion), 2007 2011... 49 Table 9: Australian Coal Production Value (AUD Billion), 2012 2016... 50 Table 10: Australian Coal Production Value (US$ Billion), 2012 2016... 50 Table 11: Australian Coal Consumption Volume (Million Tons), 2007 2011... 51 Table 12: Australian Coal Import Volume (Million Tons), 2006 2010... 52 Table 13: Australian Coal Export Volume (Million Tons), 2006 2010... 53 Table 14: Key Australian Coal Mining Projects, 2011 2016... 54 Table 15: Key Australian Coal Mines*... 55 Table 16: Australian Iron Ore Production Volume (Million Tons), 2007 2011... 59 Table 17: Australian Iron Ore Production Volume (Million Tons), 2012 2016... 60 Table 18: Australian Iron Ore Production Value (AUD Million), 2007 2011... 61 Table 19: Australian Iron Ore Production Value (US$ Million), 2007 2011... 61 Table 20: Australian Iron Ore Production Value (AUD Million), 2012 2016... 62 Table 21: Australian Iron Ore Production Value (US$ Million), 2012 2016... 62 Table 22: Australian Iron Ore Consumption Volume (Million Tons), 2007 2011... 63 Table 23: Australian Iron Ore Import Volume (Million Tons), 2006 2011... 64 Table 24: Australian Iron Ore Export Volume (Million Tons), 2006 2011... 65 Table 25: Key Projects... 66 Table 26: Key Australian Iron Ore Processing Units... 67 Table 27: Australian Phosphate Rock Production Volume (Thousand Tons), 2007 2011... 71 Table 28: Australian Phosphate Rock Production Volume (Thousand Tons), 2012 2016... 72 Table 29: Australian Phosphate Rock Production Value (AUD Million), 2007 2011... 73 Table 30: Australian Phosphate Rock Production Value (US$ Million), 2007 2011... 73 Table 31: Australian Phosphate Rock Production Value (AUD Million), 2012 2016... 74 Table 32: Australian Phosphate Rock Production Value (US$ Million), 2012 2016... 74 Table 33: Australian Phosphate Rock Consumption Volume (Thousand Tons), 2007 2011... 75 Table 34: Australian Phosphate Rock Import Volume (Thousand Tons), 2007 2011... 76 Table 35: Australian Phosphate Rock Export Volume (Thousand Tons), 2007 2011... 77 Table 36: Australian Salt Production Volume (Million Tons), 2007 2011... 81 Table 37: Australian Salt Production Volume (Million Tons), 2012 2016... 82 Table 38: Australian Salt Production Value (AUD Million), 2007 2011... 83 Table 39: Australian Salt Production Value (US$ Million), 2007 2011... 83 Table 40: Australian Salt Production Value (AUD Million), 2012 2016... 84 Table 41: Australian Salt Production Value (US$ Million), 2012 2016... 84 Table 42: Australian Salt Consumption Volume (Million Tons), 2007 2011... 85 Table 43: Australian Salt Import Volume (Million Tons), 2007 2011... 86 Table 44: Australian Salt Export Volume (Million Tons), 2007 2011... 87 Table 45: Key Australian Salt Mining Processing Units... 88 Table 46: Production Capacities of Leading Australian Salt Producers... 89 Table 47: Australian Leading Mining Companies Financial Comparison (US$ Million), 2007 2011... 91 Table 48: Exchange Rate (US$ AUD), 2007 2016... 106 Page 8
INDUSTRY DYNAMICS: FIVE FORCES ANALYSIS 2 Mining Industry Outlook in Australia Australia possesses a large supply of natural resources, and the country s sustainable economic model has attracted a high level of foreign direct investments (FDIs) during the review period (2007 2011). The country contains the world s largest reserves of nickel, silver, zinc and brown coal. In addition, Australia has reserves of bauxite, black coal, copper, gold, diamond and iron ore that rank within the six largest of their kind in the world. Australia is the world s largest producer of bauxite and alumina, and the third-largest producer of zinc, iron ore and gold. Furthermore, the country is a net exporter of numerous mineral categories. Australia s political stability and low levels of political interference make the country s mining industry one of the most attractive for investments in the world. Moreover, due to the country s geographical proximity to the emerging economies of China and India, Australia is expected to register increased demand for natural resources from these economies. Australia recorded strong export and production growth in its key minerals in 2009, despite the adverse impact of the global economic crisis in the same year. This indicates the strength and sustainable economic model being followed in the country. 2.1 Mining Industry Market Size and Growth Potential Australian mining production is expected to record a CAGR of X.XX% over the forecast period Due to Australia s strong mineral exports growth, the country s mining production, which includes coal, two major metallic minerals of iron ore and bauxite and two non-metallic minerals of phosphate rock and salt, grew at a CAGR of X.XX% during the review period, to reach XXX.X million tons in 2011. The production is also expected to register a CAGR of X.XX% over the forecast period, to reach a volume of X.X billion tons in 2016. The majority of Australia s minerals are exported to developed countries, such as Japan and the EU. However, the share of exports to developing countries, such as China and India, increased during the review period. The overall mineral output and exports from Australia will grow over the forecast period, as a result of increased demand due to the global economic recovery and the rapid development of emerging economies. The following figure displays the volume of Australian mining production during 2007 2016. Figure 1: Australian Mining Production Volume (Million Tons), 2007 2016 Page 9
COAL 3 Coal 3.1 Overview of Coal Mining Category Coal is important to the Australian economy, as it is the country s second-largest exported commodity. In addition, black coal exports have increased by more than XX% in the country since 2002. Australia is the fourth-largest coal producer in the world, trailing only China, the USA and India. However, Australia is the world s largest coal exporter. The total production of coal Australia totaled XXX million tons in 2011. There are new challenges for the country s coal production following the introduction of Australia s carbon tax, which was passed in November 2011 and is scheduled to become effective from July 2012. This carbon tax law represents one of the largest economic reforms in this country for a generation and a huge challenge to the coal mining category. As a result of this tax, coal mining will become the country s highest taxed mining category. Consequently, BRICdata projects a XX XX% increase in Australian coal prices over the forecast period. 3.2 Reserves, Production and Consumption 3.2.1 Total production Coal production volume Australia s coal production totaled XXX.X million tons, which represents an increase of X.X% compared with 2010. The country s iron ore production registered a CAGR of X.XX% during the review period. The production growth rate decreased due to heavy flood in the Queensland region in 2010. Table 5: Australian Coal Production Volume (Million Tons), 2007 2011 Coal Production Volume (Million Tons) 2007 2008 2009 2010 2011 CAGR 2007 2011 XXX.X XXX.X XXX.X XXX.X XXX.X X.XX% Figure 27: Australian Coal Production Volume (Million Tons), 2007 2011 Page 10
IRON ORE 4 Iron Ore 4.1 Overview of Iron Ore Mining Sub-Category The Australian iron ore mining sub-category registered impressive growth during the review period. Since 1950, Australia has been one of the world s leading iron ore exporters. The sub-category has benefited from factors such as the country s abundant natural resources and favorable government policies. However, China s rapid development in becoming a leading steel producer and iron ore exporter will provide strong competition for the Australian iron ore mining sub-category over the forecast period. 4.2 Reserves, Production and Consumption 4.2.1 Total production Iron ore production volume Australia s iron ore production totaled XXX.X million tons in 2011, after recording an annual growth rate of X.XX% during the year. The iron ore production registered a CAGR of XX.XX% during the review period. This reflects the significant growth in iron ore demand, especially from the steel manufacturing business. The annual iron ore production growth rate decreased due to heavy flood in the Queensland region in 2010. Table 16: Australian Iron Ore Production Volume (Million Tons), 2007 2011 Iron Ore Production Volume (Million Tons) 2007 2008 2009 2010 2011 CAGR 2007 2011 XXX.X XXX.X XXX.X XXX.X XXX.X XX.XX% Figure 35: Australian Iron Ore Production Volume (Million Tons), 2007 2011 Page 11
PHOSPHATE ROCK 5 Phosphate Rock 5.1 Overview of Phosphate Rock Mining Sub-Category Australia accounted for X.XX% of the global phosphate rock production in 2010 and X.XX% of the global phosphate rock reserves. China was the largest phosphate rock producer in the world in 2010, with a production of XX million tons, while Morocco and Western Sahara accounted for the largest phosphate rock reserves. Phosphate rock is primarily used in the production of fertilizers. The Australian phosphate rock production grew at a strong rate due to the growing global demand for fertilizers during the review period, and is projected to continue to recording robust growth rates over the forecast period. 5.2 Reserves, Production and Consumption 5.2.1 Production Phosphate rock production volume Australia s phosphate rock production increased from X.X million tons in 2007 to X.X million tons in 2011, at a CAGR of X.XX% during the review period. Table 27: Australian Phosphate Rock Production Volume (Thousand Tons), 2007 2011 Phosphate Rock Production Volume (Thousand Tons) 2007 2008 2009 2010 2011 CAGR 2007 2011 X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% Figure 43: Australian Phosphate Rock Production Volume (Thousand Tons), 2007 2011 Page 12
COMPANY PROFILE 6 Salt 6.1 Overview of Salt Mining Sub-Category The Australian salt mining sub-category grew strongly during the review period. Australia s salt production volume reached XX.X million tons in 2011, after registering a CAGR of X.XX% during the review period. This growth was supported by factors such as the country s abundant natural salt resources and favorable government policies for salt mining. BRICdata anticipates that the country s salt production output will record a significant increase in output, from XX.X million tons in 2012 to XX.X million tons in 2016, at a CAGR of X.XX% over the forecast period. The growing demand for salt has encouraged a number of local and international companies to expand their salt mining business operations in Australia. For example, Dampier Salt is leading company in the country in terms of salt production capacity, and the company operates three salt processing units in the country. The international company Mitsui & Co. Ltd also has significant business operations in the sub-category through its subsidiaries: Onslow Salt Pty Ltd and Shark Bay Salt. Other leading companies operating in the country include Cheetham Salt Limited, Larmon Pty Ltd and Sirius Minerals. Figure 50: Australian Salt Production Operations Page 13
APPENDIX 7 Appendix 7.1 About BRICdata BRICdata publishes in-depth strategic intelligence reports that help its customers better understand opportunities in emerging markets and industry sectors. Its reports provide an independent, expert view supported by primary research and access to leading data and intelligence sources. BRICdata is a comprehensive source of insights and analysis, and publishes a broad range of reports across a number of different industry sectors, including consumer, retail, financial services, technology, telecoms and construction. BRICdata is headquartered in London with research, analysis and account management teams based across Europe, the US and Asia-Pacific. Its global research footprint is supported by a network of external associates, data partners and industry experts to give the clearest possible perspective on emerging markets. 7.1.1 Areas of expertise BRICdata operates a dedicated, multilingual team of in-house industry analysts with significant experience of global and country-level research. BRICdata also maintains data and research partnerships with other research companies, industry experts and trade associations, along with a network of independent industry consultants and former industry participants contributing research and reports to bring additional insight and expertise in more specialist areas. BRICdata s research offering spans the following industry areas: Construction BRICdata publishes reports covering the entire construction value chain: construction materials, equipment, construction services, architectural services and interior design. It also covers the main value sectors of construction activity: commercial, infrastructure, industrial, institutional and residential. This comprehensive view of the market enables BRICdata to detail key growth sectors and countries and identify the most attractive industry opportunities. Consumer goods Covering a broad range of areas across the consumer goods market, from interior products to fast-moving consumer goods (FMCG), ingredients, and packaging, BRICdata offers a comprehensive insight into key consumer sectors across fast-growing markets, identifying key trends, future innovations and growth opportunities. Comprehensive data sets including unique primary survey-driven research creates accurate market forecasts and understanding of the factors driving consumption behavior. Financial services Providing detailed insights into insurance and banking markets, BRICdata s financial services reports identify key market opportunities, emerging technologies and channel strategies. The reports provide unique data combined with local examples of best practice and expert insights into the market. Retail BRICdata maintains a comprehensive database of forecasts of retail spending, along with a series of unique indicators enabling a forward view of retailers prospects in emerging markets. The reports identify emerging concepts in retail, including the nascent online and mobile retail sectors in the BRIC countries and other emerging markets. Technology BRICdata tracks key trends and innovations, emerging technologies and markets, and the key operators in both emerging markets and technologies. Covering a range of emerging and disruptive technologies including telecoms, social media, online and mobile retailing, and telemedicine, BRICdata examines strategies for success, the state of the competitive landscape and the inherent threats and opportunities in the emerging technological economy. Page 14
APPENDIX 7.2 Methodology All BRICdata reports are rigorously sourced and created according to a comprehensive, two-stage methodology. This includes internal audit and primary research. A) Internal audit Review of in-house databases to gather existing data: o Historic market databases and reports o Company database o projects database B) Primary research Review of the latest company strategy and asset management trends 1) Research A. Sources Collection of the latest market-specific data from a wide variety of industry sources: o Government statistics o Industry associations o Company filings o Broker reports o International organizations B. Expert opinion Collation of opinion taken from leading industry experts Analysis of third-party opinion and forecasts: o Broker reports o Industry associations o Official government sources C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and geographies 2) Research Analysis Market forecasts Feed of forecast data into market models: o Macroeconomic indicators o Industry-specific drivers Analysis of Market Databases to identify trends by sector: o Latest trends o Key drivers of the market 3) Report Writing Analysis of market data Discussion of company and industry trends and issues Integration of survey results Annual review of trends Standardization of market definitions using recognized industry classifications 4) Quality Control A. Templates Detailed process manuals Standardized report templates and accompanying style guides Complex forecasting tool used to ensure forecast methodologies are consistently applied QC checklists B. QC process Peer review Senior-level QC Random spot checks on data integrity Benchmark checks across databases Page 15
APPENDIX Market data cross-checked for consistency with accumulated data from company filings 7.3 Definitions For the purposes of this report, the following timeframes apply: Review period: 2007 2011 Forecast period: 2012 2016 The following table indicates the exchange rates used in the report: Table 48: Exchange Rate (US$ AUD), 2007 2016 2007 2008 2009 2010 2011 Exchange Rate 0.83898 0.85296 0.7924 0.91994 1.03336 2012 2013 2014 2015 2016 Exchange Rate 1.07636 1.07636 1.07636 1.07636 1.07636 The following are the industry specific definitions: Definition by categories Fuel minerals (coal): Includes lignite and excludes petroleum gas and crude oil. Metallic minerals: Contains iron ore, Bauxite ore, zinc concentrate, bauxite, chromite and other minerals. Non-metallic minerals: Comprising diamond, Phosphate, garnet, barytes, dolomite, phosphorite, silica sand, limestone and other minerals. Definition by coal types Anthracite coal: This type of coal has the highest carbon content, varying between XX% and XX%. The type is also called black coal, hard coal or stone coal, and is most frequently associated with home heating. Bituminous coal: Bituminous coal has a carbon content ranging from XX% to XX%. Bituminous coal is used primarily to generate electricity and for the process of coking in the steel industry. This type of coal is also known as black coal. Sub-bituminous coal: This ranks below bituminous coal with XX% to XX% carbon content. It generally has a lower sulphur content than other types, which makes it attractive for use because of its cleaner burning. In addition to being used for electrical generation, it is also used in making coke or coking coal, an essential ingredient in making steel. In many countries, sub-bituminous coal is classified as brown coal. Lignite coal: Lignite is a geologically young coal which has the lowest carbon content, XX% to XX%. Also called brown coal, it is mostly used for electric power generation. Middlings: A by-product of the coal washing and beneficiation process. It is used by domestic fuel plants, brick manufacturing units, cement plants, industrial plants and for power generation. Rejects: The product of the coal washing process after the separation of clean coal and middlings. It is used for power generation, road repairs, briquette making and land filling purposes. Definition by industry types Construction industry: Comprises establishments that primarily construct buildings, both residential and nonresidential, and heavy or civil engineering projects such as highways, utility systems, bridges and others. This may include new work, additions, alterations, maintenance and repairs. Manufacturing industry: Makes products from raw materials by the use of manual labor or machinery. In a more limited sense, manufacturing is the assembly of components into finished products on a large scale. The manufacturing industry includes industries that produce automobiles, chemicals, clothing, computers, consumer electronics, electrical equipment, furniture and heavy machinery. Other definitions Economic demonstrated resources (EDR): Resources judged to be economically extractable, for which the quality and quantity are computed partly from specific measurements and partly from reasonable extrapolation based on geological evidence. Page 16
APPENDIX Sub-economic demonstrated resources (SDR): Similar to economic demonstrated resources in terms of certainty of occurrence and although considered to be potentially economic in the foreseeable future, these resources are judged to be sub-economic at present. 7.4 Disclaimer All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, BRICdata. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that BRICdata delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. BRICdata can, therefore, accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. Page 17