The report, Minerals and Energy: Major Development Projects – April 2006 Listing, was released by the Australian Bureau of Agricultural and Resource Economics (ABARE) on Wednesday.
ABARE executive director Dr Brian Fisher said the number of advanced minerals and energy projects in Australia would add significantly to the sector’s production and export capacity in the short to medium term.
The report indicated the rate of project completions could accelerate in the short term, with around 40 projects (almost half of which are coal-related developments) scheduled for completion in the final eight months of 2006.
However, Fisher said factors such as the scarcity of skilled labour and increased materials and construction costs had recently caused delays and cost increases for some projects.
“With an exceptionally large number of projects currently committed to or under development, project cost pressures and delays are unlikely to ease in the short to medium term,” he said.
This could mean the scheduled completion dates for some of the projects would not be met and actual completion would not occur until 2007.
Fisher said the large number of coal projects scheduled for completion in Queensland in the short to medium term had provided the impetus for expanded coal terminal capacity.
At the end of April 2006, there were four terminal expansions, either committed or under construction, with an estimated capital cost of $1.6 billion, which will increase total port capacity in Queensland by an estimated 76 million tonnes a year.
The largest of these is Babcock & Brown Infrastructure’s $850 million expansion of the Dalrymple Bay coal terminal, which will increase port capacity from 60Mt a year to 85Mt a year by late 2008.
The report found that the ability of Australia’s minerals and energy sector to sustain its strong recent growth in the medium and longer terms depended critically on the amount of investment in minerals exploration.
“Exploration expenditure on coal is estimated to increase by 24 percent to around $157 million in 2005-06, reflecting high global demand and recent strong price increases, particularly for coking coal,” the report said.
Looking back, ABARE reported five coal projects were completed in the six months leading to April 2006, the largest being Xstrata’s Newlands Northern underground mine, a replacement mine for its depleting southern underground operation.
The Northern underground mine, west of Mackay in Queensland, was developed at a capital cost of $117 million.
In the same region, BHP Billiton Mitsubishi Alliance’s $102 million Broadmeadow underground mine and BHP/Mitsui Coal’s $50 million Poitrel opencut mine, both near Moranbah, were brought into production.
The Broadmeadow mine will produce around 4Mtpa of coking coal, while Poitrel will produce 3Mtpa of coking, PCI and thermal coal.
In total there are a record 256 major projects in the April 2006 listing, including the 90 that are considered advanced projects.
A further 166 projects are at less advanced stages and still undergoing feasibility studies. New to the list are 47 projects since October last year.
