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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Table of Contents<br />

Letter from the Prime Minister ......................................................................... 4<br />

Commonwealth Linkages in the New Global Economy ................................... 5<br />

Interview with Hon Colin Barnett, Premier of Western Australia ............................ 8<br />

Perth and Western Australia Welcome <strong>CHOGM</strong> 2011 ....................................... 9<br />

Sector Overviews<br />

Oil & Gas .................................................................................................... 15<br />

Western Australia: A Global Resources and Investment Powerhouse ................... 23<br />

Mining ........................................................................................................ 27<br />

Banking & Financial Services .......................................................................... 41<br />

Health ........................................................................................................ 49<br />

Tourism ..................................................................................................... 55<br />

Education .................................................................................................. 63<br />

Agriculture & Fisheries ................................................................................. 73<br />

Western Australia: A Quality Food and Fibre Producer ...................................... 74<br />

Professional Services ................................................................................... 81<br />

Construction & Manufacturing ....................................................................... 87<br />

Western Australia’s Water Challenge .............................................................. 93<br />

Energy ........................................................................................................ 95<br />

Acknowledgements .................................................................................... 103<br />

Publisher – Rupert Birch<br />

Chief Editorial Director – Alisdair Jones<br />

Research Directors – Alisdair Jones & Miyese Özcan<br />

Sales Director – Agostina da Cunha<br />

Project Director – Miyese Özcan<br />

Graphic Design – Özgür Ergüney & Deniz K.<br />

<br />

© Commonwealth Business Council and Global Business <strong>Report</strong>s 2010<br />

The Survey is intended for the use and assistance of recipients. It does not provide investment<br />

advice and should not be regarded as a substitute for the exercise by the recipients of their own<br />

judgement. The Commonwealth Business Council and/or any person connected with it accept no<br />

liability whatsoever for any direct or consequential loss of any kind arising out of the use of this<br />

Survey or any part of its contents. The views expressed in this publication do not necessarily<br />

reflect the views of the Commonwealth Business Council and Global Business <strong>Report</strong>s.


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

<br />

Letter from the Prime Minister<br />

It was with great pleasure<br />

that I recently joined the<br />

Commonwealth Secretary-<br />

General Kamalesh Sharma<br />

in announcing that the<br />

next Commonwealth Heads<br />

of Government Meeting<br />

(<strong>CHOGM</strong>) will be held in Perth,<br />

Western Australia, from 28 to<br />

30 October 2011.<br />

As part of <strong>CHOGM</strong>, Perth will<br />

also play host to other key<br />

Commonwealth meetings in<br />

2011, including the important<br />

Commonwealth Business<br />

Forum from 25 to 27 October.<br />

All members of the Commonwealth –<br />

including of course Australia – share a<br />

strong commitment to the fundamental<br />

principles of democracy and development,<br />

good governance, the rule of law, and<br />

the protection of human rights. We also<br />

share a commitment to building on the<br />

ties between us.<br />

The Commonwealth Business Forum will<br />

be a unique opportunity for business<br />

leaders and government to come together<br />

to look for new opportunities to cooperate<br />

and share experiences and expertise in<br />

the field of commerce.<br />

We all benefit from greater economic<br />

interaction between Commonwealth<br />

countries, which represent around one<br />

quarter of the world’s countries, and one<br />

third of the world’s population.<br />

The Australian Government looks forward<br />

to welcoming the Commonwealth<br />

business sector to Australia to showcase<br />

the strengths of our nation.<br />

We have a strong financial sector, our<br />

businesses are plugged into global supply<br />

chains and we have energy and resources<br />

that are critical to economies around the<br />

world.<br />

We have an investment and business<br />

environment that is recognised as worldclass.<br />

For the second year in a row, the<br />

World Bank’s ‘Doing Business 2010’<br />

report ranked Australia in the top ten<br />

out of 183 economies for ease of doing<br />

business.<br />

Western Australia is the perfect host<br />

for <strong>CHOGM</strong> and for the Commonwealth<br />

Business Forum. It has a unique place<br />

in the Australian business sector. It is<br />

one of the key drivers of our economic<br />

strength and accounts for the majority of<br />

our exports of LNG and iron ore, to name<br />

just two commodities.<br />

I look forward to welcoming you to<br />

Australia, to Western Australia and to<br />

Perth. As your hosts, all Australians are<br />

keen to showcase our rich and vibrant<br />

lifestyle, our stunning landscape and<br />

strong economy to Commonwealth and<br />

business leaders.<br />

The Honourable Kevin Rudd MP<br />

Prime Minister of Australia<br />

Commonwealth Linkages in the<br />

New Global Economy<br />

Australia, and the State of Western Australia in particular, are well<br />

positioned to take advantage of the continuing realignment of the<br />

global economy.<br />

The financial crisis has highlighted<br />

the shift in the balance of economic<br />

power to developing countries,<br />

while many Western economies face an<br />

extended period of weak growth and<br />

are developing plans to deal with above<br />

average deficits in public spending.<br />

The rise of the BRIC countries and<br />

powerful new players with cash rich<br />

sovereign wealth funds continue to<br />

provide significant opportunities for both<br />

finance and investment for the global<br />

market. The scale of the crisis has led to<br />

the widening of international discourse<br />

and the greater participation of emerging<br />

markets in the economic and political<br />

arena, which will be enhanced by the role<br />

the G20 now takes up.<br />

Australia, and the State of Western<br />

Australia in particular, are well positioned<br />

to take advantage of this continuing realignment<br />

of the global economy.<br />

The city of Perth is considered one of the<br />

Indian Ocean Rim’s Capitals, Important<br />

trading relationships throughout the<br />

region’s key markets of China, North<br />

Asia, Africa, India, the Middle East and<br />

ASEAN members such as Malaysia and<br />

Singapore consistently interface with<br />

Western Australia’s vast resource base<br />

and technical expertise.<br />

The countries that share Western<br />

Australia’s time zone represent 40 per<br />

cent of the world’s population and 63 per<br />

cent of the world’s economic output.<br />

As the hosts of the Commonwealth<br />

Heads of Government Meeting and the<br />

Commonwealth Business Forum in 2011,<br />

Australia will have an opportunity to<br />

strengthen these important relationships<br />

and build new ones, drawing<br />

on Commonwealth linkages<br />

between developed and<br />

developing countries.<br />

The modern Commonwealth is<br />

an association of 54 countries,<br />

spanning 6 continents with a<br />

population of over 2 billion<br />

people worldwide. Contrary<br />

to its image as an association<br />

based solely on its history,<br />

the Commonwealth is a<br />

dynamic and vital association<br />

of societies with a vibrant<br />

and growing private sector. Today’s<br />

Commonwealth is very different from the<br />

one created in 1949. Nearly 10% of the<br />

Commonwealth is made up of countries<br />

that were never British Colonies; this figure<br />

is likely to increase over the coming years.<br />

Today the association is represented by a<br />

series of strong values which govern the<br />

club and manage its membership.<br />

In October 1997, following the Edinburgh<br />

Declaration, the Commonwealth developed<br />

a new focus on the economic, financial and<br />

business aspects of the association. The<br />

Commonwealth Business Council was set<br />

up, and the first Commonwealth Business<br />

Forum was held with an aim to promote<br />

trade and investment, whilst increasing<br />

the role of the private sector in national<br />

economies. Today the Commonwealth is<br />

perceived of differently, and the economic<br />

focus has become a key driver.<br />

The Commonwealth is the largest English<br />

speaking bloc in the world and the power<br />

of the language has played a crucial role<br />

in developing economic linkages across<br />

Dr. Mohan Kaul<br />

Director General,<br />

Commonwealth<br />

Business Council


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

<br />

Aerial view of<br />

Fremantle city<br />

and harbour;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

the world. Coupled with Commonwealth<br />

values of multi-party democracy, human<br />

rights, the rule of law, good governance<br />

and an open media, market oriented<br />

economic policies have meant that<br />

the Commonwealth is truly good for<br />

business.<br />

Furthermore, the “Commonwealth<br />

factor”; its shared legal, business and<br />

administrative systems, can bring down<br />

the price of doing business between<br />

Commonwealth countries by more<br />

than 15% when compared with non-<br />

Commonwealth countries. Commonwealth<br />

businesses are well positioned as leaders<br />

in sectors such as ICT, financial services,<br />

energy, agriculture and mineral production.<br />

Increasingly the modern Commonwealth<br />

is defined by dynamic economies such<br />

as India, Nigeria, South Africa, Malaysia,<br />

Trinidad and Tobago. These, amongst<br />

others, are arising as potential centres<br />

of economic excellence; growing in<br />

importance to key markets such as the<br />

UK, Australia, Singapore, New Zealand<br />

and Canada.<br />

The economic potential of the<br />

Commonwealth’s emerging markets and<br />

developing countries is considerable.<br />

Investor confidence in Africa is<br />

demonstrated by a 16 percent rise in<br />

capital flows to a record US$62 billion in<br />

2008, while foreign direct investment fell<br />

20 percent worldwide in the same year.<br />

The success of the expanding Indian<br />

economy is widely acknowledged by<br />

international investors. Confidence has<br />

been reflected, for example, by FDI<br />

Equity inflows from the UK that were an<br />

estimated £864 million in 2008 - 2009.<br />

Australian/Indian bilateral trade achieved<br />

annual growth of 25% over the same<br />

period. Since 1993, almost 1,800 new<br />

joint ventures or foreign collaborations<br />

between Indian and UK companies have<br />

been approved, a rate of approximately<br />

200 ventures a year. The potential<br />

in other parts of South Asia, through<br />

Pakistan, Bangladesh and Sri Lanka is also<br />

significant. The appetite for investment<br />

in emerging markets has remained strong<br />

throughout the financial crisis and is<br />

getting stronger as investors look for<br />

larger returns than those which more<br />

mature markets are currently offering.<br />

Examples such as these demonstrate the<br />

shifting balance of economic importance<br />

towards diversified, global trading<br />

relationships. New international structures<br />

are needed in order to reflect this, and<br />

the Commonwealth meetings, that bring<br />

many of the key players together, can<br />

play an important role.<br />

In this context, it is timely to take a fresh<br />

look at the Commonwealth. Over $3 trillion<br />

in trade happens within the Commonwealth<br />

every year and the Commonwealth has<br />

seen inward investment flows rise to US$<br />

200 billion annually. The Commonwealth<br />

accounts for more than 20% of world trade<br />

and investment. The potential for further<br />

Commonwealth trade and investment<br />

is considerable, especially in the rapidly<br />

growing services sector as well as in<br />

the natural resources and manufacturing<br />

sectors.<br />

In these changing economic circumstances,<br />

there are good opportunities for Australia.<br />

Trade and investment links with Britain<br />

remain strong. The UK is the largest<br />

source of total foreign investment in<br />

Australia. In 2008, total UK foreign<br />

investment in Australia was valued at<br />

AU$427.1 billion and total investment by<br />

Australian interests in the UK was worth<br />

AU$158.1 billion. There are also obvious<br />

opportunities in other regions.<br />

Australian linkages with India, for<br />

example, are developed in the areas<br />

of ICT services such as software<br />

development and outsourcing, as well as<br />

the growing education services sector.<br />

There also exists a huge opportunity in<br />

the massive infrastructure development<br />

that is required to modernize the sub<br />

continent. An estimated US$70 billion per<br />

year is required over the next five years<br />

to complement GDP growth in India,<br />

and government funding will need to be<br />

matched by private investment. Indo-<br />

Australian trade was worth AU$20.7<br />

billion in 2009.<br />

The domestic market driven Indian<br />

economy offers a different dynamic<br />

for Australia’s production and services<br />

based industries. The recently concluded<br />

Australia-India Free Trade Agreement<br />

(FTA) Joint Feasibility Study recommends<br />

the negotiation of a comprehensive<br />

bilateral free trade agreement and predicts<br />

a net increase in Australia’s GDP of up to<br />

US$32 billion and India’s GDP by up to<br />

US$34 billion over a period of 20 years<br />

would result from such a deal.<br />

There is also growing interest in Australia<br />

for doing business with African nations.<br />

Australia’s trade with Africa has grown<br />

steadily over the last ten years at an annual<br />

average of over 9 per cent. Australia’s total<br />

merchandise trade with Africa was valued<br />

at US$5.5 billion in 2008-09. Around 40<br />

per cent of Australian mining companies’<br />

overseas projects are in Africa, and actual<br />

and prospective investment by Australian<br />

resource companies in Africa are estimated<br />

to be around US$20 billion, spread across<br />

38 African countries. It is now widely<br />

recognised that Australian expertise<br />

and their approach to business are very<br />

welcome in Africa. Again, infrastructure<br />

development is a major requirement<br />

for countries now experiencing growth<br />

levels of more than 5% per year, offering<br />

further opportunities. Agriculture and<br />

agro-processing also present significant<br />

opportunities within the Commonwealth<br />

community.<br />

Given a shifting global economy and<br />

Australia’s location and expertise,<br />

2011 will be an auspicious time for the<br />

Commonwealth to be gathering in Perth.<br />

The world class mining and resources<br />

based industries, its construction sector<br />

and its agricultural expertise, mean that<br />

the country’s private sector is ready to<br />

seize the opportunities offered by the<br />

emerging markets. The Commonwealth<br />

Business Council is glad to be a partner in<br />

this process and act as a bridge between<br />

the developed and the developing markets<br />

of the Commonwealth.


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

<br />

Interview with the Honourable Colin Barnett,<br />

Premier of Western Australia<br />

Q – What does it mean<br />

for Perth and Western<br />

Australia to be hosting<br />

<strong>CHOGM</strong> in 2011?<br />

CB – This is a unique and<br />

fortuitous opportunity<br />

for Western Australia<br />

to promote itself<br />

internationally through<br />

the Commonwealth. I<br />

am very conscious that<br />

Australia is the host<br />

and that Perth is Australia’s city on the Indian<br />

Ocean. To have 52 heads of state at one time<br />

visit Western Australia has to be a great plus for<br />

increasing awareness about the state.<br />

Q – From a business perspective, what is the<br />

significance of Western Australia?<br />

CB – From a business perspective, Western<br />

Australia is the future. Western Australia has<br />

just over 10 per cent of Australia’s population,<br />

but accounts for more than a third of national<br />

exports. In terms of distance, ease and time of<br />

travel, Perth is closest to the main economic<br />

hubs of Asia. Sydney and Singapore are pretty<br />

much equidistant from us. Western Australians<br />

are not only emotionally and physically<br />

orientated towards Asia, our economy is also<br />

directed that way.<br />

Western Australia provides around 70 per cent<br />

of Australia’s exports to China, more than 50 per<br />

cent of national exports to India and around 40<br />

per cent to Japan. With 500 commercial mining<br />

and petroleum projects currently underway,<br />

Western Australia dominates the Australian mining<br />

industry. It has an extraordinary percentage of<br />

world market share of many commodities and is<br />

undisputedly the world’s leading mining economy.<br />

Q – What sectors of the Western Australian<br />

economy outside of mining and resource<br />

extraction are of greatest importance?<br />

CB – There is a huge amount of world class<br />

technology and science behind Western<br />

Australia’s massive mining sector. This state<br />

produces around half of the world’s mining<br />

software and plays an important part in other<br />

market niches such as subsea technology<br />

development, engineering and environmental land<br />

care. We are involved in some processing and<br />

downstream manufacturing industries, but we<br />

have not developed these enough. Our approach<br />

is to encourage the customers of our mining<br />

companies to re-locate to Western Australia.<br />

Agricultural output is currently worth AU$8 billion<br />

across the state; we think this has the potential to<br />

increase. Western Australia competes in a global<br />

economy, so our business and finance sectors are<br />

world class. We have high standards of education<br />

and medical services and important education,<br />

training, research and innovation businesses have<br />

grown in these sectors.<br />

Q – How important is the broader Commonwealth<br />

community to the economy of Perth and Western<br />

Australia?<br />

CB – In addition to traditional links with Britain,<br />

Australian companies are increasingly involved in<br />

Africa, and many are building strong relationships<br />

with Indian companies. They gravitate towards<br />

Commonwealth countries because there is a<br />

consistency of language, legal systems and<br />

government systems; this is important.<br />

Currently, we are helping Tanzania develop its<br />

mining law and we have been very successful in<br />

exporting gold and other mining technologies to<br />

African Commonwealth members.<br />

In the future, I am very keen to see young<br />

professionals from Commonwealth countries, from<br />

geologists to engineers and chemical analysts,<br />

coming to Western Australia to improve their skill<br />

levels. Also, we have very sophisticated industries<br />

employing highly skilled individuals, but our<br />

population is only 2.2 million. In the coming years,<br />

you will see a strong inflow of skilled migration,<br />

including from the Commonwealth. Through their<br />

remittances and the skills they acquire, such<br />

workers could be a stronger force for development<br />

in their own countries than foreign aid.<br />

Q – Do you have any final messages for the<br />

Commonwealth community?<br />

CB – I hope that the people that come here for<br />

<strong>CHOGM</strong> take the time to see other beautiful<br />

parts of the State: Margaret River with wonderful<br />

wines; Ningaloo, the world’s largest fringe coral<br />

reef; the Kimberley, one of the world’s great<br />

wildernesses; and the Burrup Peninsula, with a<br />

million ancient rock carvings, between eight and<br />

forty thousand years old.<br />

Perth and Western Australia<br />

Welcome <strong>CHOGM</strong> 2011<br />

In 2011, Western Australia will welcome business and government<br />

representatives from more than 50 nations for the Commonwealth<br />

Heads of Government Meeting (<strong>CHOGM</strong>) and associated<br />

Commonwealth Business Forum.<br />

When arriving by air, visitors’ first<br />

impressions may well be of the<br />

isolation of the State capital,<br />

Perth, and of Western Australia’s vast<br />

size. Western Australia is the largest<br />

of Australia’s states and territories: a<br />

landmass stretching across 2.5 million<br />

square kilometres (965,000 square miles).<br />

It covers a third of continental Australia,<br />

spanning 2400 km (1500 miles) from<br />

north to south, and has more than 12,000<br />

kilometres (8000 miles) of coastline. Perth<br />

is located more than 2000 kilometres<br />

from the nearest Australian state capital,<br />

and is closer to Jakarta, Indonesia, than<br />

it is to Sydney.<br />

Western Australia is home to 2.25 million<br />

people, more than 1.6 million (74 per<br />

cent) of whom live in the metropolitan<br />

area around the capital city, Perth, making<br />

it comparable in size to Lusaka in Zambia,<br />

Montreal in Canada, or Chandigarh in<br />

India.<br />

Western Australia’s geography – its size,<br />

its sparse population, its location and its<br />

isolation – has presented many challenges<br />

for economic and social development, but<br />

it has also created exciting opportunities.<br />

The state’s land and sea resources<br />

have provided rich bounties in minerals,<br />

agriculture, forestry and fisheries. These<br />

rewards have only been earned through<br />

the innovation and enterprise applied in<br />

dealing with challenges, including harsh<br />

climates, difficult terrains and vast<br />

Author:<br />

State Government<br />

of Western<br />

Australia<br />

Above:<br />

Perth city skyline<br />

and Swan River;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Convoy of vehicles<br />

for the Canning<br />

Stock Route<br />

Project, July 2007<br />

(FORM); Photo<br />

courtesy of Tim<br />

Acker<br />

distances. The challenges of isolation and<br />

a relatively small population have brought<br />

a sharp focus on global competitiveness to<br />

both industry and the state government.<br />

Western Australia’s location is proving<br />

another advantage: it shares its time<br />

zone (UTC + 8 hours) with about 60 per<br />

cent of the world’s population, including<br />

China and much of Asia, making it easier<br />

to do business. The state’s major iron ore<br />

and petroleum ports, more than 1000<br />

kilometres north of Perth, are closer to<br />

major Asian markets and industrial centres<br />

than those of its competitors.<br />

Western Australia’s ability to take<br />

advantage of these opportunities means<br />

that the state, already Australia’s leading<br />

economy and driving national prosperity,<br />

is confidently looking forward to continued<br />

economic expansion in the 21st century.<br />

A State of Prosperity<br />

Over the last 10 years, Western Australia<br />

has consistently been the state with the<br />

highest gross state product (GSP) per<br />

capita. In 2008–09, Western Australia’s<br />

GSP per capita was AU$71,052 – well<br />

above Australia’s gross domestic product<br />

(GDP) per capita of AU$55,195 – and<br />

its export earnings of more than AU$86<br />

billion equalled 38 per cent of the national<br />

total.<br />

Over the coming decade, many more<br />

billions of dollars will be invested in new<br />

mining and processing projects, building<br />

ports and transport infrastructure and<br />

constructing community and tourism<br />

facilities, further adding to the state’s<br />

exports and its wealth.<br />

While Western Australia owes its current<br />

prosperity primarily to its mineral wealth<br />

and strong growth in demand from<br />

Asia, its economy is diverse and well<br />

developed.<br />

Almost 70 per cent of the workforce is<br />

employed in services industries, which<br />

include sophisticated engineering and<br />

construction, finance and public services,<br />

well developed retail, commercial and<br />

tourism businesses and world-class<br />

education and scientific and medical<br />

research sectors.<br />

In addition, Western Australia has a<br />

growing manufacturing base that includes<br />

a global leader in fast light shipbuilding,<br />

chemicals and mineral products. It also<br />

has a diverse agriculture, food and<br />

forestry sector.<br />

By any standard, most Western Australians<br />

enjoy a high standard of living with access<br />

to quality housing and world-class health<br />

and education systems.<br />

A State of Harmony<br />

Western Australia, with a population<br />

growing at more than three per cent<br />

annually, is a lively, diverse and<br />

harmonious society. Western Australians<br />

can trace their origins to more than 200<br />

countries, primarily from Europe, but<br />

also from Asia, Africa, the Middle East<br />

having been born overseas. Indigenous<br />

people, Western Australia’s traditional<br />

landowners, make up three per cent of<br />

the state’s population.<br />

While English is the common language,<br />

between them Western Australians speak<br />

about 270 different languages and they<br />

practise more than 100 religious faiths.<br />

Immigration continues to play a vital role<br />

in the state’s economic development,<br />

and helps foster an open society that<br />

accommodates diversity and offers<br />

opportunity for enterprising and hardworking<br />

people, whatever their origin.<br />

This is reflected by a lively cultural life<br />

that encompasses and nurtures a wide<br />

range of contemporary and traditional<br />

art, music, dance and theatre, including<br />

indigenous performance and film, a worldclass<br />

orchestra and ballet company, and<br />

a vibrant nightlife. It is also reinforced<br />

by high levels of participation and<br />

achievement across many fields of team<br />

and individual sports, at local, national<br />

and international levels.<br />

For Western Australians, community<br />

harmony and individual opportunity are<br />

also underpinned by access to quality<br />

education, health, housing and the<br />

protection of law enforcement and<br />

emergency services. Most community<br />

services are provided through a<br />

combination of government, private<br />

sector and non-government organisations<br />

and systems, but all conform to standards<br />

set and monitored by relevant local, state<br />

and national authorities.<br />

The Western Australian government<br />

invests in and emphasises innovation<br />

in seeking to improve the services it<br />

provides, and responds to changing<br />

community needs and expectations.<br />

Participation in approved education,<br />

training or employment is compulsory to<br />

age 17 in Western Australia, with more<br />

than 350,000 students enrolled in preprimary,<br />

primary and secondary classes.<br />

Australian educational institutions<br />

attracted enrolments from more<br />

than 56,000 overseas students from<br />

140 countries, including from many<br />

Commonwealth member states.<br />

The state’s tertiary education sector,<br />

along with private organisations and<br />

government agencies, has a strong record<br />

in research and development across a wide<br />

range of fields and many international<br />

collaborative linkages.<br />

Two researchers from Royal Perth<br />

<strong>Hospital</strong>, Professor Barry Marshall and Dr<br />

Robin Warren, won the 2005 Nobel Prize<br />

for Medicine for their groundbreaking<br />

research into the causes of gastritis<br />

and stomach ulcers. Professor Marshall<br />

continues to teach and is currently head<br />

of the molecular biology laboratory at the<br />

University of Western Australia.<br />

Advanced medical research is just one<br />

aspect of a comprehensive health system<br />

that delivers to Western Australians a high<br />

standard of emergency and specialised<br />

hospital care and community-based<br />

health services. A major state government<br />

investment in hospital infrastructure is<br />

underway, building Australia’s newest and<br />

best tertiary care hospital and redeveloping<br />

hospitals in regional centres.<br />

The government is also developing new<br />

partnership approaches to attract private<br />

sector involvement in designing and<br />

building public hospitals, and providing<br />

hospital services.<br />

Innovative use of advanced information<br />

and communications technology helps<br />

the Western Australian government<br />

deliver better services across the vast,<br />

sparsely populated state. An example<br />

is the development of broadband<br />

telecommunications infrastructure to<br />

better service some of the world’s most<br />

remote communities in the indigenous<br />

Ngaanyatjarra lands, more than 1500 km<br />

east of Perth.<br />

Through <strong>CHOGM</strong> 2011, Western Australia<br />

Western Australians are also well served Maintaining Western Australia’s social<br />

will share with Commonwealth colleagues<br />

for world-class tertiary and technical harmony through improving access<br />

its experiences in overcoming a wide range<br />

institutions, with five universities and to quality services and community<br />

of challenges and offer opportunities for<br />

a state-wide network of polytechnic infrastructure is a strong priority for the<br />

10<br />

future co-operation and development. and the Americas, with 27 per cent<br />

and trade colleges. In 2009, Western Western Australian government.<br />

11


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Perth, Western Australia’s Capital<br />

In 2009, the London-based Economist<br />

Intelligence Unit placed Perth, Western<br />

Australia’s capital city, fifth among the<br />

world’s most liveable cities. The Perth<br />

metropolitan region spreads over 6000<br />

square kilometres, more than three times<br />

the area of Greater London, and has more<br />

than adequate space to accommodate<br />

future growth.<br />

Stretched between golden beaches on<br />

the Indian Ocean and the foothills of the<br />

Darling Scarp, it is a great place to live,<br />

to visit and to do business. Residential<br />

areas are well planned with good-quality<br />

infrastructure and services, as well as<br />

access to parks and playing fields, cultural<br />

facilities, cinemas and restaurants.<br />

Safe, clean beaches are only 20 minutes<br />

from the central business district (CBD)<br />

and accessible along the entire 110-<br />

kilometre length of the metropolitan area.<br />

Beaches, along with large areas of riverside<br />

foreshore parks and other reserves, linked<br />

by the city’s growing network of cycle<br />

ways, support a lifestyle that combines<br />

work and active outdoor leisure time with<br />

family and friends.<br />

Vehicle ownership is high, and a well<br />

developed road system caters efficiently<br />

both for personal and commercial traffic,<br />

and is monitored and managed centrally<br />

through a state-of-the-art traffic control<br />

centre.<br />

An integrated bus and rail public transport<br />

system, which includes electronic<br />

ticketing and a 105-kilometre rail spine and<br />

serves an area in excess of 5000 square<br />

kilometres, has experienced growth of 40<br />

per cent in just three years.<br />

State government and local government<br />

planning and environmental policies and<br />

administration ensure that residential,<br />

commercial and industrial development<br />

meets high standards and that emissions<br />

and waste are properly managed.<br />

including the Kwinana Industrial Area,<br />

Western Australia’s premier heavyindustry<br />

area. At its eastern edges,<br />

irrigated horticulture and the vineyards of<br />

the Swan Valley provide fresh food, wines<br />

and a wide range of tourist attractions.<br />

Perth’s Central Business District<br />

Perth’s central business district (CBD)<br />

stretches more than five kilometres<br />

alongside the Swan River and the<br />

magnificent 400-hectare Kings Park<br />

and Botanical Gardens. As construction<br />

cranes atop rising office towers and new<br />

residential developments attest, Western<br />

Australia’s current economic growth<br />

is having a strong impact on the city<br />

centre.<br />

The CBD accommodates more than<br />

100,000 visitors and commuters each<br />

day and more than 16,000 residents<br />

live within the City of Perth’s municipal<br />

boundaries. It serves as the centre<br />

for government administration and for<br />

business in the state, and increasingly as<br />

the regional headquarters for resourcesand<br />

petroleum-related companies in the<br />

wider Southeast Asian region.<br />

A diversity of retail outlets, boutique<br />

shopping and cafes provide a lively heart<br />

to the city. To its north is the nightlife<br />

district and cultural precinct, with the<br />

state’s museum art gallery and new live<br />

theatre centre. On its southern side,<br />

the state-of-the-art Perth Convention<br />

and Exhibition Centre and a concert hall<br />

overlook the Swan River.<br />

The completion of <strong>CHOGM</strong> 2011 will<br />

signal the commencement of a major<br />

redevelopment of the city’s waterfront,<br />

which will provide better access to the<br />

river, as well as greater integration of<br />

river and city.<br />

Western Australia’s Regions<br />

Regional Western Australia covers a vast<br />

area and a wide range of landscapes,<br />

livelihoods and lifestyles, offering many<br />

opportunities for investment and business.<br />

Regional cities and towns offer highstandard<br />

government and private sector<br />

services, advanced communications and<br />

The state government carefully manages<br />

the state’s forests, beaches and<br />

waterways and, with a network of National<br />

Parks, protects key environmental values<br />

and natural attractions. To Perth’s south,<br />

through the Peel region’s farmlands and<br />

residential developments, is Mandurah, a<br />

coastal city and holiday centre linked by<br />

commuter rail to Perth. To the east of the<br />

region, the forested Darling Range is rich<br />

in bauxite, an important mineral export.<br />

Bunbury, 185 kilometres south of Perth,<br />

is the industrial and services centre of the<br />

South West region. It is known worldwide<br />

for its wines, forests and surf, as well<br />

as for significant minerals, forestry and<br />

fruit. As a prime tourism and recreational<br />

destination, both for Western Australians<br />

and visitors, the South West offers<br />

natural beauty and the great diversity<br />

of arts, crafts, culinary and adventure<br />

experiences.<br />

The adjoining Great Southern region, with<br />

its spectacularly located city of Albany,<br />

is a significant producer of livestock,<br />

crops and plantation timber and offers<br />

striking scenery, quality wines and<br />

fine foods. Current redevelopment of<br />

Albany’s waterfront is delivering a new<br />

entertainment centre, marina and luxury<br />

hotel, overlooking the beautiful Princess<br />

Royal Harbour.<br />

To Perth’s east, beyond forested hills, the<br />

farmlands of the Wheatbelt, stretching<br />

for hundreds of kilometres to the north,<br />

south and east, have produced wool,<br />

grains and meat for world markets for<br />

more than a century. A highway continues<br />

eastwards alongside the railway that<br />

links to Australia’s Eastern states, and<br />

the 560-kilometre water pipeline that<br />

a century ago took water from Perth’s<br />

hills to Kalgoorlie-Boulder at the heart<br />

of fabled goldfields. Kalgoorlie-Boulder<br />

remains an important mining, processing<br />

and services centre for surrounding<br />

gold and nickel projects, with new<br />

uranium and rare earths projects under<br />

The metropolitan area also incorporates<br />

airports, Fremantle Port – the state’s<br />

major container terminal – and numerous<br />

industrial and commercial estates, reliable road and air linkages.<br />

12 13


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

State Migration Centre<br />

One of Western Australia’s key economic<br />

challenges relates directly to the issue of labour<br />

supply. According to a recent study by Western<br />

Australia’s Chamber of Commerce and Industry,<br />

76 per cent of Western Australian businesses<br />

report labour as scarce. It is estimated that<br />

an extra 400,000 workers will be required to<br />

sustain the economy by 2017, and, at current<br />

rates of growth in the labour force, there will<br />

be a 150,000 shortfall in available labour in WA<br />

by this time. The State Migration Centre works<br />

alongside other key government agencies such<br />

as the Department of Training and Workforce<br />

Development (DTWD) and the Department of<br />

Immigration and Citizenship (DIAC) in order to<br />

develop an integrated human capital strategy for<br />

WA. Together these agencies act as a gateway<br />

for potential skilled migrants and businesses to<br />

enter Western Australia. They also undertake<br />

promotional activities on the international stage to<br />

further boost WA’s reputation as an ideal region<br />

in which to live, study and work. State Migration<br />

CEO Jacky Finlayson maintains: “Western<br />

Australia definitely has a lifestyle element. On<br />

top of this, the economy is doing so well that<br />

Western Australia is naturally attractive for<br />

ambitious people. The government works hard to<br />

promote Western Australia as an excellent place<br />

to come to live and work.”<br />

Western Australia’s economic strength presents<br />

significant opportunities for the Commonwealth<br />

community’s labour force. Commonwealth<br />

countries such as India, Malaysia, UK and<br />

South Africa form the key markets for labour<br />

migration into WA. Jacky Finlayson highlights<br />

the opportunities presented by <strong>CHOGM</strong> 2011 for<br />

bringing the Commonwealth’s labour force closer<br />

together: “<strong>CHOGM</strong> is a fantastic opportunity and<br />

certainly one that the whole of Western Australia,<br />

from government to small businesses, will<br />

embrace. This is an excellent forum for Western<br />

Australia to promote our lifestyle, culture,<br />

economy and opportunities.”<br />

S e c t o r O v e r v i e w<br />

Oil & Gas<br />

development, and exploration continually<br />

revealing new wealth. Esperance, 350<br />

kilometres to the south of Perth, is the<br />

regional port and a significant agricultural<br />

centre. It boasts some of the world’s<br />

most beautiful beaches and spectacular<br />

coastal scenery.<br />

Further north, the iron ore mines in the<br />

Pilbara region and petroleum production<br />

platforms in offshore waters are powering<br />

Western Australia’s – and Australia’s –<br />

economy. The region’s largest population<br />

centres, Karratha and Port Hedland,<br />

more than 1500 kilometres north of<br />

Perth, are growing rapidly, with major<br />

government and industry investment<br />

underway to assist their development as<br />

modern cities.<br />

To Perth’s north, the coastline is home<br />

to the state’s rock lobster fishery, and<br />

to towns that are growing as holiday<br />

destinations. The city of Geraldton-<br />

Greenough, 420 kilometres north of Western Australia’s northernmost region,<br />

Perth, is the services centre and port the Kimberley, is world renowned for its<br />

for the state’s Mid West region. The spectacular landscapes and coastlines.<br />

Mid West is set to become a major iron The region’s largest town, Broome, is a<br />

ore region and industrial centre with a global tourism destination famed for its<br />

AU$4 billion port, rail and industrial land pearls. In the east, Kununurra, near Lake<br />

development project underway at Oakajee Argyle Dam, is at the centre of a major<br />

to service new mining projects. Further expansion of irrigated agriculture and<br />

north, through the arid rangelands of investment in community infrastructure.<br />

the Gascoyne region, the regional centre<br />

Carnarvon services fisheries, pastoralists New petroleum fields are being developed<br />

and a well established and expanding in offshore waters and promise further<br />

irrigated horticultural sector. Along the opportunity for LNG processing and export,<br />

Gascoyne coastline, the dolphins of to strengthen the regional economy.<br />

Monkey Mia and the white beaches and<br />

underwater corals of the 260-kilometre Western Australia’s regions are at<br />

Ningaloo Reef attract visitors from around the forefront of the state’s economic<br />

14<br />

the world.<br />

development.<br />

15


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Oil & Gas<br />

Western Australia’s oil and gas sector has grown from relatively<br />

humble beginnings, from drilling on the Exmouth Peninsula in<br />

1953 to a sector of breathtaking industrial magnitude.<br />

10 per cent. West Australian oil and gas<br />

production activity is centred upon the<br />

North West Shelf coastal region, offshore<br />

from the Pilbara. As investment in the<br />

region continues to increase, projects are<br />

spreading further west into the Indian<br />

Ocean and north into the Timor Sea.<br />

As demand in Western Australia’s key<br />

oil and gas markets (Japan, Korea, China<br />

and Taiwan) continues to increase,<br />

the potential returns are huge. Led by<br />

Chevron’s Gorgon LNG project, in which<br />

AU$44 billion will be invested over 20<br />

years, investment into Western Australia’s<br />

oil and gas sector is set to increase by<br />

AU$100 billion by 2016.<br />

The scale of investment coming into the<br />

oil and gas sector has galvanised a wave<br />

of services companies and specialist firms<br />

coming to set up office in Perth. Western<br />

Australia is now anticipating a boom in oil<br />

and gas over the coming years.<br />

Western Australia has two state<br />

departments responsible for the<br />

development of Western Australia’s<br />

resources sectors. One is the Department<br />

of State Development, which comes<br />

under the jurisdiction of the Premier.<br />

The DSD is involved with major projects,<br />

which then become State Development<br />

Acts, whereby projects become an Act of<br />

Parliament. These agreements are viewed<br />

as very positive by the private sector in<br />

terms of raising capital. The Department<br />

of Mines and Petroleum is more of<br />

a regulator; its job is fundamentally<br />

to regulate the mines and petroleum<br />

industries. The Department of Mines and<br />

Petroleum allocates the acreage onshore<br />

and offshore; it then provides the approvals<br />

for exploration to take place. It monitors<br />

ongoing activities, as well as ensuring that<br />

projects are decommissioned sustainably.<br />

The Department of Mines and Petroleum<br />

also collects royalties on behalf of the<br />

Treasury.’<br />

Section Cover<br />

(previous page):<br />

LNG Karratha Gas<br />

Plant North West<br />

Shelf Venture;<br />

Photo courtesy of<br />

Ministry for Mining<br />

and Petroleum<br />

Above:<br />

Kwinana refinery;<br />

Photo couresty of<br />

BP Australia<br />

As the importance of Western<br />

Australia’s oil and gas reserves<br />

to emerging Asia continues to<br />

increase, so too does the attention paid to<br />

the region by some of the world’s leading<br />

energy giants. Capital investments into<br />

Western Australia’s oil and gas sector are<br />

currently setting national records.<br />

This industrial sector is now directly<br />

competing with the mining sector to be<br />

Western Australia’s most exciting area of<br />

business activity.<br />

Overview<br />

projects; Gorgon alone requires 10,000<br />

staff during peak construction.<br />

Western Australia accounts for 66<br />

per cent of Australia’s crude oil and<br />

condensate production, as well as 71<br />

per cent of national gas production. Oil<br />

and gas accounted for 27 per cent of the<br />

AU$3.2 billion in royalties received by the<br />

state from Western Australia’s resources<br />

sectors. Western Australia’s total gas<br />

reserves are estimated to be 160 trillion<br />

cubic feet, attracting some of the largest<br />

international petroleum firms.<br />

Regulatory Regime<br />

Following a change of state government<br />

in 2009, Western Australia’s approach to<br />

regulating the state’s resources sectors<br />

has changed significantly. Following<br />

re-election in 2008, Norman Moore,<br />

Minister for Mines and Petroleum in<br />

Western Australia’s Liberal government,<br />

has restructured management of Western<br />

Australia’s resources projects in order to<br />

speed up the state’s approvals process.<br />

‘We set about establishing a more<br />

conducive environment for investment<br />

by splitting up the former Department of<br />

Industry and Resources that dealt with<br />

all industries across the board,’ explains<br />

Minister Moore. ‘We put the major projects<br />

into the Department of State Development,<br />

smaller-scale manufacturing and industry<br />

into the Department of Commerce, and<br />

the resources approvals went into the<br />

Ministry of Mines and Petroleum. By<br />

doing this we have achieved speedier<br />

approvals that pay due attention to issues<br />

such as environmental sustainability<br />

and indigenous title. We have also used<br />

the internet to make the progress of<br />

companies’ applications available to<br />

them, in order to help them track what is<br />

As a result of Minister Moore’s changes to<br />

the regulatory regime, activity in Western<br />

Australia’s oil and gas sector has spiked<br />

significantly. Oil and gas exploration<br />

activity has grown by AU$770 million<br />

between 2008 and 2009 to a state record<br />

of AU$2.9 billion. Western Australia’s<br />

renewed approach to regulating the<br />

state’s valuable oil and gas resources<br />

lays an excellent foundation for future<br />

investment coming into the sector.<br />

Key Industry Players<br />

The Australian Petroleum Production<br />

and Exploration Association (APPEA)<br />

is Australia’s oil and gas sector’s key<br />

industry body. ‘APPEA is the peak national<br />

body promoting Australia’s oil and gas<br />

exploration and production,’ explains<br />

CEO Belinda Robinson. ‘We have 80 full<br />

member companies that produce and/or<br />

explore for oil or gas – and about 200<br />

associate member companies. These are<br />

companies that provide a range of goods<br />

and services to the industry. This year,<br />

we are celebrating our 50th anniversary.<br />

APPEA’s primary goal is to ensure that<br />

the policy, regulatory and fiscal settings<br />

in Australia are conducive to responsible<br />

and sustainable oil and gas industry<br />

Australia is expected to become the<br />

Western Australia’s oil and gas sector world’s second-largest exporter of<br />

accounted for AU$21.3 billion in 2008– liquefied natural gas (LNG) after Qatar<br />

09, a nine per cent increase from 2007– by the year 2020; this translates into<br />

08. This equates to 14 per cent of gross LNG export earnings increasing by 500<br />

state product (GSP). The industry directly per cent over the same time period.<br />

employed an average of 6922 employees Presently, LNG accounts for 38 per cent<br />

throughout 2009, a number set to of Western Australian petroleum exports,<br />

16<br />

increase dramatically with future major crude oil for 35 per cent and condensate<br />

happening with approvals applications. growth.’<br />

17


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Offshore oil rig;<br />

Photo courtesy of<br />

Ministry for Mines<br />

and Petroleum<br />

APPEA is active throughout the industry,<br />

maintaining high standards through a<br />

variety of awards and events.<br />

Western Australia’s oil and gas sector<br />

is dominated by four major operators:<br />

Woodside, Apache, BHP Billiton and<br />

Chevron. Despite there being a number of<br />

relatively new entrants into the market,<br />

such as ENI and Total, as well as a range<br />

of incumbent majors involved at an<br />

investment level, production operations<br />

are dominated by the aforementioned<br />

four major players.<br />

Krzywosinski explains the importance of<br />

Western Australia to Chevron’s global<br />

operations: ‘At an upstream level,<br />

Western Australia is one of four focus<br />

areas that we have around the world. We<br />

have a great portfolio, great confidence<br />

and a fantastic opportunity to move that<br />

forward. We are applying a great deal of<br />

human resource to develop the projects<br />

we have now undertaken.’<br />

Chevron has a close relationship with<br />

Western Australia’s research institutions,<br />

investing AU$15 million in 29 different<br />

projects through 2008-09. Innovative<br />

techniques form the cornerstone of<br />

what Chevron is able to achieve in<br />

Western Australia as highlighted by Roy<br />

Krzywosinski: ‘On Gorgon there’s got to<br />

be at least half a dozen technologies that I<br />

would call cutting edge. The water depths<br />

that we are working with combined with<br />

the sub-sea technology we are using<br />

has galvanised cutting edge welding and<br />

installation techniques.<br />

‘We are working closely with the<br />

universities to understand what new<br />

ideas our engineers can apply. Without<br />

innovation, Gorgon would not be<br />

happening. Innovation has been a key<br />

enabler for Gorgon. Perth is beginning to<br />

establish itself as an intellectual centre<br />

for talent in oil, gas and mining. Some of<br />

the best technical minds are in Perth, and<br />

more and more coming every day.’<br />

Between the Gorgon and Wheatstone<br />

projects alone, Chevron is set to invest<br />

AU$59 billion dollars in Western<br />

Australia’s oil and gas industry.<br />

international operations in Algeria and the<br />

Gulf of Mexico are fledgling; we are trying<br />

to develop businesses in these regions.<br />

Clearly the LNG strategy we have in<br />

Western Australia is the lynchpin of our<br />

company.’<br />

Highlighting Western Australia’s potential<br />

as a hub for LNG production, Voelte<br />

says, ‘Over the course of the next 10<br />

to 15 years, Western Australia will be<br />

challenging Qatar as the world’s leading<br />

supplier of liquefied natural gas for export.<br />

Australia has huge potential to become<br />

a major player on the international LNG<br />

market.’<br />

Woodside also has a series of megaprojects<br />

scheduled for development<br />

or currently under development in<br />

North Western Australia. Of greatest<br />

significance are the Pluto, Browse and<br />

Sunrise projects.<br />

With 16 oil and gas production facilities<br />

throughout Western Australia, Apache<br />

is the state’s second-largest oil and gas<br />

operating producer behind Woodside.<br />

Apache holds 4.3 million acres throughout<br />

the North West coast in 31 exploration<br />

permits, 14 production licenses and three<br />

retention leases. The John Brookes,<br />

Van Gogh and Stag wells are some<br />

of Apache’s most significant Western<br />

Australian producers. Apache plays a<br />

key role in Western Australia’s domestic<br />

gas market, providing a significant<br />

proportion of output to power Western<br />

Australia’s commerce and industry.<br />

Apache is currently involved in a number<br />

of significant projects, such as the BHP<br />

Billiton-operated Pyrenees project and<br />

the Chevron-operated Wheatstone LNG<br />

project.<br />

Although synonymous with Western<br />

Australia’s mining sector, BHP Billiton is<br />

also a significant player in the state’s oil<br />

and gas industry. BHP Billiton has been a<br />

longstanding joint venture partner on the<br />

North West Shelf Venture, as well as a<br />

significant operator on the Stybarrow and<br />

recently completed Pyrenees projects. The<br />

Pyrenees project was one of significant<br />

complexity to deliver, and now has a<br />

production capacity of 96,000 barrels<br />

of oil per day. Pyrenees has a reinjection<br />

capacity of 60 million cubic feet of gas<br />

per day; gas is pumped into the adjacent<br />

Macedon well for later recovery – a<br />

remarkable technical achievement.<br />

ENI, Inpex, Shell, Santos and ConocoPhillips<br />

are some of the more prominent<br />

international oil and gas companies also<br />

operating in Western Australia. Entering<br />

the Western Australian oil and gas<br />

sector in the 1960s, ConocoPhillips now<br />

operates the Bayu-Undan project in the<br />

Timor Sea. Such projects are governed<br />

under the Joint Petroleum Development<br />

Authority (JPDA), a joint commission<br />

with representation from both Australia<br />

and Timor Leste.<br />

‘‘<br />

Australia is Japan’s<br />

fourth largest<br />

source of imports<br />

and the third<br />

largest exporter<br />

of LNG in the Asia<br />

Pacific region<br />

Seiya Ito,<br />

Managing Director<br />

of Inpex<br />

‘‘<br />

Chevron first came into Western Since entering Western Australia’s oil<br />

Australia over 60 years ago as part of and gas sector in 1963 as a pioneering<br />

the drilling consortium exploring the exploration company, Woodside has<br />

Exmouth Peninsula in 1953. Chevron grown into Australia’s largest independent<br />

currently operates Western Australia’s producer of oil and gas. Woodside is the<br />

oldest oil field on Barrow Island at 45 operator of the North West Shelf Venture,<br />

years old. Western Australia has been which represents approximately 40 per<br />

identified by Chevron as one of four cent of overall Australian oil and gas<br />

key exploration areas throughout the production. Woodside CEO Don Voelte is<br />

firm’s global operations. Chevron is all too aware of the importance of Western<br />

Australia’s largest holder of natural gas Australia to Woodside’s operations.<br />

resources and is at the centre of some ‘Western Australia is paramount for<br />

of Australia’s most exciting oil and gas Woodside,’ he admits. ‘Frankly it is all<br />

projects such as Gorgon and Wheatstone. about Western Australia; 95 per cent of<br />

18<br />

Chevron Australia Managing Director Roy our assets are in Western Australia. Our<br />

19


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Austal trimaran<br />

utilising the<br />

Floating Dock<br />

during the<br />

development phase<br />

of the advanced<br />

hull form; Photo<br />

courtesy of<br />

Australian Marine<br />

Complex (AMC)<br />

Outlining the importance of Western<br />

Australia for the firm, ConocoPhillips<br />

Australia President Joe Marushack<br />

says, ‘Australia is a key area of growth<br />

for ConocoPhillips. We have very good<br />

relationships with the government here,<br />

and conditions for doing business in<br />

Australia are very good.’<br />

Major Projects<br />

The North West Shelf Venture was the<br />

first oil and gas mega-project to have been<br />

undertaken in Western Australia. With<br />

construction having begun in 1980, the<br />

North West Shelf Venture now accounts<br />

for AU$27 billion worth of investment.<br />

The project has undergone significant<br />

development since first production in<br />

1984, and now has an annual production<br />

capacity of 16.3 million tons of LNG. The<br />

North West Shelf Venture accounts for 65<br />

per cent of Western Australia’s domestic<br />

gas consumption, and has so far delivered<br />

more than 2800 LNG cargos to Asian<br />

markets. The North West Shelf Venture<br />

has six key participants: Shell, BP, BHP<br />

Billiton, Chevron, Japan Australia LNG<br />

and Woodside as the operator.<br />

enough equivalent gas to power a city<br />

of one million inhabitants for around 800<br />

years. Gorgon has roughly a five year<br />

construction window, so we expect to<br />

see first gas for export in 2014.<br />

‘In terms of benefit for the region,<br />

Gorgon is expected to provide around<br />

10,000 direct and indirect jobs during<br />

construction, and to sustain 3500 direct<br />

and indirect jobs throughout the project<br />

lifecycle.<br />

‘Gorgon will result in around 33 billion<br />

dollars in local expenditure for goods and<br />

services in Australia. The government<br />

will also win in terms of expanding their<br />

revenue base and tax base to the tune of<br />

about 40 billion dollars.<br />

‘The estimates are that Gorgon will have<br />

a 60 billion dollar impact on GDP over the<br />

course of the project’s first thirty years.<br />

Our focus is on building the three train,<br />

15 million tonnes per annum project but<br />

there is also scope to expand to four or<br />

five trains in the future if required.<br />

‘Gorgon will include the world’s leading<br />

carbon sequestration project in the<br />

“Carbon Dioxide Injection Project”. With<br />

AU$2 billion invested, the project aims to<br />

be one of the world’s most greenhouse<br />

gas efficient LNG projects, reducing<br />

emissions by approximately 40 per cent<br />

when compared with industry standards<br />

Woodside’s Pluto project is one of the<br />

world’s fastest-ever LNG developments:<br />

approval for construction was received in<br />

July 2007, and first production is expected<br />

towards the end of 2010. Pluto’s fields<br />

contain around 5 trillion cubic feet of oil<br />

and gas reserves, providing significant<br />

energy resources to Western Australia’s<br />

domestic market and international markets<br />

throughout Asia. Articulating what Pluto<br />

means for Woodside, Don Voelte says,<br />

‘When Pluto comes on stream in 2011, it<br />

will be the world’s fastest-ever transition<br />

from discovery to production for a gas<br />

project. We are very proud of what<br />

Woodside has achieved. We compete<br />

against the major companies, and usually<br />

win.’<br />

The Gorgon project is, at AU$43 billion,<br />

Australia’s largest single resource project<br />

ever. Roy Krzywosinski of lead operator<br />

Chevron outlines the projects highlights:<br />

‘Gorgon is a three train project, with<br />

the capacity to produce 15 million tons<br />

20<br />

per annum. The project will provide for LNG processing plants.’<br />

21<br />

Services<br />

Western Australia’s oil and gas sector has<br />

a vast range of positive multiplier effects<br />

throughout the state economy, from<br />

royalties paid to government through<br />

to work for key subcontracting service<br />

companies such as Worley Parsons and<br />

TSmarine, as well as specialised law firms<br />

involved with the sector, such as Minter<br />

Ellison. Some of the key players involved<br />

from a service perspective are detailed<br />

below.<br />

The Australian Marine Complex (AMC) is<br />

a unique common-user facility based to<br />

the south of Perth. It provides industrial<br />

capacity for the development of machinery<br />

and components for major projects to be<br />

undertaken in Western Australia.<br />

Wholly owned by Western Australia’s<br />

state government, the AMC is now<br />

facilitating the construction of Western<br />

Australia’s major resources projects, such<br />

as Gorgon.<br />

Outlining the importance of the complex,<br />

AMC General Manager Mike Bailey<br />

explains, ‘The AMC is starting to become<br />

vital because we have laid down the<br />

expectation that much of the work for<br />

upcoming projects will be done locally. If<br />

this facility suddenly disappeared, there<br />

would be serious questions about where<br />

much of this work would be carried out.<br />

The AMC is also vital to helping diversify<br />

and improve the depth of Western<br />

Australia’s resources industries.’<br />

Worley Parsons<br />

Worley Parsons is one of Western<br />

Australia’s leading professional engineering<br />

and subcontracting firms, serving Western<br />

Australia’s oil and gas sector. Worley<br />

Parsons is currently working on major<br />

oil and gas projects, such as Woodside’s<br />

Pluto, helping to design and construct<br />

much of the cutting-edge infrastructure<br />

essential to the project’s success. Worley<br />

Parsons Operations Manager Western<br />

Australia Bradley Andrews knows what<br />

brings success in such a highly competitive<br />

industry.<br />

‘‘<br />

Australia has huge<br />

potential to become<br />

a major player on<br />

the international<br />

LNG market.<br />

Don Voelte,<br />

Managing<br />

Director & CEO of<br />

Woodside<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘It is about adding value, taking a long<br />

term view, understanding our customers’<br />

business requirements and ensuring<br />

delivery of results that are in full<br />

accordance with their expectations,’ he<br />

says.<br />

TS Marine<br />

Originally an Aberdeen-based company,<br />

following a November 2009 management<br />

buyout TSmarine is now a fully-fledged<br />

West Australian oil and gas services<br />

provider, operating in one of the world’s<br />

most exciting offshore resources regions.<br />

Established on the back of a five-year<br />

contract with major domestic operator<br />

Woodside, TSmarine’s growth prospects<br />

are extremely promising given their unique<br />

approach to complex offshore engineering<br />

and maintenance.<br />

TSmarine’s top-tier fleet of Norwegiandesigned<br />

clean comfort class vessels<br />

are able to perform a diverse range of<br />

activities, from initial exploration and<br />

development work through to construction<br />

and decommissioning of infrastructure.<br />

Where TSmarine really sets itself apart as<br />

an oil and gas services provider is in its<br />

niche market speciality of rigless subsea<br />

well intervention.<br />

TSmarine’s unique placing in the<br />

market is best summarised by Regional<br />

Sales Manager Ian Rowson, who says,<br />

‘Woodside are more than happy with<br />

the range of work and service we have<br />

already done for them. The diversity of<br />

operations is well over and above what<br />

was anticipated. Our vessels are very<br />

much multi-purpose, so we can do multiple<br />

tasks at once without demobilising and<br />

remobilising. This saves a fortune for our<br />

customers. One of the problems on the<br />

North West Shelf that we have overcome<br />

has been a lack of quality vessels that are<br />

able to fulfil multiple complex tasks at a<br />

cost-effective price.’<br />

Minter Ellison<br />

as an international centre for oil and gas<br />

production, Minter Ellison’s Perth office<br />

has now developed a core speciality in<br />

the legal management of major resource<br />

project lifecycles, from conceptual stages<br />

to decommissioning.<br />

Unique features of the Western Australian<br />

approvals process, such as Native Title<br />

and rigorous environmental regulations,<br />

provide a complex proposition for new<br />

entrants to the Western Australian oil and<br />

gas sector. This also provides an excellent<br />

operating environment for well-informed,<br />

delivery-focused legal teams, such as<br />

those at Minter Ellison.<br />

Managing Partner John Poulsen believes<br />

that Minter Ellison’s key competitive<br />

advantages are the firm’s people and<br />

their focus on building relationships. ‘Our<br />

clients tell us that we are easy to work<br />

with,’ he says. ‘We are not arrogant,<br />

we understand their businesses and we<br />

don’t throw huge teams unnecessarily at<br />

projects we undertake on their behalf. We<br />

make the right connections with the right<br />

people and always strive to be smarter,<br />

sharper and more focused.’<br />

Minter Ellison is extremely well placed to<br />

assist international businesses entering<br />

Western Australia’s buoyant oil and gas<br />

sector, having offices throughout the Asia<br />

Pacific region in key hubs such as Hong<br />

Kong, Singapore and Beijing, as well as<br />

in international financial centres such as<br />

London and New Zealand. Minter Ellison<br />

already boasts an excellent track record,<br />

advising international clients on Western<br />

Australia’s largest oil and gas projects,<br />

such as the North West Shelf Venture<br />

and Gorgon.<br />

Industry Outlook<br />

As global demand for gas continues to<br />

increase by around 2 trillion cubic feet<br />

per annum, and is set to exceed supply<br />

by 2015, Western Australia’s oil and gas<br />

sector seems set to enjoy a period of longterm<br />

sustainable growth. Mega-projects<br />

such as Gorgon, Pluto and Wheatstone<br />

are driving Western Australia towards<br />

becoming a pivotal player on international<br />

gas markets. Investment opportunities<br />

abound throughout Western Australia’s<br />

Western Australia: A Global<br />

Resources and Investment<br />

Powerhouse<br />

Western Australia is a secure place to invest, with sophisticated<br />

legal and financial systems, an independent judiciary that<br />

ensures commercial rights are protected, and very low levels of<br />

sovereign risk.<br />

The state’s economy is growing<br />

strongly, and its medium and longterm<br />

prospects appear good due to<br />

growing demand for its mineral resources<br />

from nearby Asian markets, especially<br />

China.<br />

New resources projects worth many<br />

billions of dollars are under construction<br />

and others are at advanced stages of<br />

planning. These include investment in<br />

LNG production (foremost the AU$43<br />

billion Gorgon LNG project) and increases<br />

in iron ore production, as well as new<br />

and expanded projects extracting and<br />

industrial minerals and rare earths. In<br />

addition, development of the state’s vast<br />

uranium resources and exploration of<br />

highly prospective geothermal resources<br />

is underway.<br />

In 2008–09, the state’s mineral and<br />

petroleum production was valued at<br />

more than AU$71 billion and accounted<br />

for 62 per cent of national mineral<br />

production (excluding coal), 73 per cent<br />

of natural gas and 64 per cent of crude<br />

oil and condensate. Total private fixed<br />

capital formation in Western Australia, at<br />

AU$126 billion, was 44 per cent of the<br />

Author:<br />

State Government<br />

of Western<br />

Australia<br />

Above:<br />

Blacktip natural<br />

gas project<br />

condensate tanks<br />

being transported<br />

to the Northern<br />

Territory; Photo<br />

courtesy of<br />

Australian Marine<br />

Complex (AMC)<br />

Operating in Western Australia for more<br />

than 110 years, Minter Ellison is one<br />

of the Asia Pacific region’s leading fullservice<br />

commercial law firms, engaged<br />

in a diverse range of sectors from energy<br />

and resources to agriculture. Given<br />

Western Australia’s increasing standing oil and gas value chain as a result.<br />

processing a wide range of base metals, national figure.<br />

22 23


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Iron Ore Port of<br />

Western Australia;<br />

Photo courtesy of<br />

Ministry for Mines<br />

and Petroleum<br />

New capital investment in Western<br />

Australia was worth more than AU$30<br />

billion, almost 30 per cent of the national<br />

total.<br />

investment. Consequently, a local culture<br />

has developed that is accommodating<br />

to foreign investment. A highly skilled<br />

workforce and innovative local industries<br />

and businesses are accustomed to<br />

meeting the demanding standards of a<br />

globally competitive resources sector.<br />

However, Western Australians also<br />

require that resources development<br />

occurs responsibly. Resources projects<br />

are therefore assessed to ensure that<br />

safety standards and impacts on the<br />

environment, on indigenous traditional<br />

land owners and on the community<br />

are properly managed, before they are<br />

approved.<br />

Infrastructure Support<br />

The state government has a key role<br />

in ensuring that land and industrial<br />

infrastructure are available to support<br />

resources-related development. It is<br />

currently developing a multi-user LNG<br />

processing precinct and a supply base<br />

to enable the opening of a vast new<br />

petroleum field in the Browse Basin, off<br />

the state’s northern coast.<br />

In the Pilbara, close to Karratha and the<br />

Port of Dampier, on the Burrup Peninsula,<br />

the state government has developed<br />

serviced land suitable for heavy industry.<br />

It is working with industry proponents to<br />

develop new ports and industrial land in<br />

the Pilbara, at Ashburton North for new<br />

LNG processing and at Anketell for iron<br />

ore and other mineral exports.<br />

The state government is negotiating<br />

development of the Oakajee Industrial<br />

Estate and Port Project, which will open<br />

up the Mid West mining province by<br />

establishing an integrated port, rail and<br />

industrial estate and is supporting the<br />

development of the resources sector<br />

in the region. Joint state and federal<br />

funding will provide common-use port<br />

infrastructure at Oakajee and the state<br />

government will develop an appropriately<br />

serviced and buffered heavy industry site<br />

adjoining the port.<br />

At Shotts, near Collie, and at Kemerton,<br />

near Bunbury in the South West, the state<br />

government is developing project-ready<br />

land suitable for heavy industry use, so<br />

that project-specific approvals processes<br />

can be accelerated.<br />

Information drawn from the results of<br />

thousands of private-sector exploration<br />

and mining programmes and from the<br />

extensive work of the Geological Survey<br />

of Western Australia is made available<br />

through a detailed online mapping and<br />

information database system.<br />

The government also provides financial<br />

support and incentives for geophysical<br />

and geochemical surveys and drilling<br />

programmes in underexplored areas. It<br />

administers exploration and mining titles,<br />

which secure the titleholder’s exclusive<br />

entitlements to resources in a specified<br />

area and set requirements for activity, as<br />

well as stipulating the conditions under<br />

which the area can be developed. Online<br />

information allows proponents to lodge<br />

exploration and mining proposals for<br />

assessment, make relevant payments and<br />

track their progress through the approvals<br />

process of various government agencies.<br />

Western Australia offers a sophisticated,<br />

efficient and secure environment<br />

for mineral and petroleum explorers,<br />

producers and investors participating in<br />

the state’s development.<br />

Selected* Western Australian Mineral<br />

Commodities as a Proportion of Global<br />

Production, 2009<br />

There is a strong incentive to actively<br />

encourage and support large-scale<br />

Nickel<br />

13%<br />

resources development, with the resources<br />

Encouraging Future Resources<br />

sector paying more than AU$3 billion in<br />

LNG<br />

9%<br />

Development<br />

annual royalties to the state, in addition<br />

Iron ore<br />

22%<br />

to other direct and indirect contributions<br />

Despite the considerable scale of its<br />

to state and federal government revenues.<br />

resources sector, Western Australia Ilmenite<br />

10%<br />

However, Western Australia faces<br />

remains relatively unexplored for Gold<br />

6%<br />

strong global competition in attracting<br />

minerals, petroleum and potential sources<br />

investment, and proponents of major new<br />

of geothermal energy. The Western Garnet<br />

11%<br />

investment projects require certainty to<br />

Australian government works closely Diamonds<br />

7%<br />

strengthen their investment in production,<br />

with industry to help identify resources<br />

processing and infrastructure.<br />

To build investor confidence in its<br />

and encourage exploration. This includes Alumina<br />

23%<br />

As a community, Western Australians decision-making, the state government<br />

providing explorers and investors with<br />

*More than 50 minerals are currently in production<br />

are aware that large projects, which gives a high priority to ensuring the<br />

information about the state’s geology<br />

have underpinned the state’s economic efficiency, timeliness and transparency of<br />

and prospectivity, in order to help focus Source: WA Department of Mines and Petroleum<br />

growth, have depended largely on foreign its approvals processes.<br />

exploration activity and reduce risk.<br />

24 25<br />

Commodity<br />

Zircon<br />

Tantalum<br />

Salt<br />

Rutile<br />

Western Australia<br />

19%<br />

15%<br />

4%<br />

17%


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

World-Class Expertise, Services<br />

and Equipment<br />

Western Australia’s history of mining<br />

and minerals processing has seen the<br />

state develop as a significant provider<br />

of services, equipment and technology<br />

to the resources sector. As well as<br />

supporting local industry, competitive<br />

Western Australian companies are actively<br />

involved in resource projects across the<br />

globe, including in many Commonwealth<br />

countries, with capabilities in geosciences,<br />

mining and processing engineering,<br />

construction, information technology and<br />

project finance and management.<br />

The state’s tertiary and technical<br />

institutions provide high-quality<br />

resources-related education and training<br />

both to local students and to others from<br />

across the globe. Along with industry and<br />

government organisations, they conduct<br />

world-leading research and development.<br />

The scale of the state’s resources<br />

industry has also helped to make Perth an<br />

attractive location for international service<br />

and equipment companies to establish<br />

their operations, including servicing<br />

projects in the wider Indian Ocean and<br />

South East Asian region. Throughout<br />

Western Australia, the state government,<br />

local governments and private developers<br />

provide land and facilities to accommodate<br />

the wide range of service, supplies and<br />

equipment providers that support the<br />

state’s considerable resources sector.<br />

The Australian Marine Complex<br />

(AMC)<br />

The growth of Western Australia’s<br />

petroleum sector has significantly boosted<br />

the offshore and subsea equipment and<br />

services capacity, both through local<br />

companies acquiring new expertise and<br />

many global players relocating to the<br />

state.<br />

To support the continued development<br />

of the resources and petroleum sectors,<br />

the state government has made a major<br />

investment in developing the Australian<br />

Marine Complex (AMC) at Henderson,<br />

south of Perth.<br />

The AMC is a world-class centre<br />

for manufacturing, fabrication,<br />

assembly, maintenance and technology<br />

development, aiming to service the<br />

marine, defence, oil and gas, and<br />

resource industries.<br />

Common-user facilities at the AMC<br />

include a deepwater harbour, wharves<br />

and berthing pockets, a ship lifter with<br />

12,000-tonne capacity, extensive<br />

fabrication halls with workshops and<br />

offices, and a 40-hectare sealed and<br />

serviced laydown and construction area.<br />

More than 100 organisations are based<br />

at the AMC, covering a wide range of<br />

activities, and many others make use of<br />

these facilities for their major projects.<br />

S e c t o r O v e r v i e w<br />

Mining<br />

26 27


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Mining<br />

Since the beginning of the resources boom in the early 1960s,<br />

Western Australia’s mining sector has grown to world leading<br />

proportions. Traditionally Western Australia’s economic strength<br />

has flowed in tandem with global commodities markets.<br />

Section Cover<br />

(previous page):<br />

Reclaimer at BHP<br />

Billiton Iron Ore’s<br />

Port Hedland<br />

operations; Photo<br />

courtesy of BHP<br />

Billiton<br />

Above:<br />

Ore stacker at<br />

BHP Billiton Iron<br />

Ore’s Port Hedland<br />

operations; Photo<br />

courtesy of BHP<br />

Billiton<br />

As the world’s largest wave of<br />

urbanisation takes place in<br />

emerging Asia, Western Australia’s<br />

key challenge is to ensure long-term<br />

sustainable growth from the state’s<br />

leading industrial sector.<br />

Overview<br />

Western Australia’s mining sector<br />

accounted for AU$61.2 billion worth of<br />

exports in 2008–09 and 68,000 jobs in<br />

the state over the same period.<br />

Mining accounts for the majority of<br />

Western Australia’s industrial activity<br />

and it is estimated that one in five jobs in<br />

Western Australia is linked either directly<br />

or indirectly to the mining sector.<br />

funding constraints on projects underway<br />

or scheduled during the global financial<br />

crisis (GFC).<br />

Western Australia’s key mineral resources<br />

are iron ore, gold, alumina, nickel, mineral<br />

sands and base metals. Western Australia<br />

currently accounts for 38 per cent of<br />

Australia’s total merchandise exports,<br />

and 68 per cent of Western Australia’s<br />

merchandise exports come from the<br />

mining sector.<br />

Overall, Western Australia’s mining sector<br />

is of extraordinary strategic value to the<br />

entire Australian economy and has played<br />

a major role in the country’s relatively<br />

benign experience of the GFC. Western<br />

Australia’s mining sector is almost entirely<br />

export focused, with key markets being<br />

China (31%), Japan (20%), UK (9%) and<br />

Iron ore is Western Australia’s dominant<br />

mining export, accounting for 43 per<br />

cent of exports, followed by gold (22<br />

per cent), alumina (5 per cent) and nickel<br />

(3 per cent). Western Australia’s highly<br />

efficient and productive mining sector has<br />

played an extremely important role in the<br />

urbanisation and industrialisation of the<br />

emerging economies of Eastern Asia.<br />

Increasingly, India will be of growing<br />

importance for key commodities such as<br />

iron ore and gold. Western Australia’s<br />

close trade links with some of China and<br />

Japan’s leading industries lay an excellent<br />

foundation for the state to ensure longterm<br />

sustainable growth, supplying key<br />

metals to some of the world’s fastestgrowing<br />

economies.<br />

State Premier Colin Barnett describes<br />

Western Australia as ‘the world’s leading<br />

mining economy’. Within the context<br />

of <strong>CHOGM</strong> 2011, there are enormous<br />

opportunities for members of the broader<br />

Commonwealth community to better<br />

understand best-practice methodologies<br />

and technologies employed in Western<br />

Australia and to enter joint-venture<br />

arrangements with some of the state’s<br />

leading industrial players, such as BHP<br />

Billiton, Rio Tinto and Fortescue Metals<br />

Group.<br />

Indeed, a number of Western Australianbased<br />

mining firms, including BHP Billiton<br />

and Palladin Resources, already have<br />

numerous operations throughout the<br />

Commonwealth, in countries such as<br />

South Africa and Namibia.<br />

Regulatory Regime<br />

Western Australia’s mining sector<br />

has enjoyed recent improvements to<br />

the approvals process on the back of<br />

state-level restructuring of government<br />

involvement in the industry.<br />

Minister for Mines and Petroleum Norman<br />

Moore has ensured the speedingup<br />

of approvals by streamlining state<br />

involvement and encouraging a businessfocused<br />

approach to approvals, as well<br />

as implementing information technology<br />

upgrades to make the process more<br />

To give an indication of how such reforms<br />

have worked at a practical level, 60 per<br />

cent of mineral-exploration environmental<br />

applications were processed within their<br />

30-day timeline target in 2008. This<br />

increased to 94 per cent in the first nine<br />

months of 2009.<br />

Of particular interest from a regulatory<br />

perspective is a recent administrative<br />

change in state policy, permitting the<br />

exploration and production of uranium.<br />

This change has stimulated a significant<br />

amount of activity with regards to this<br />

metal, with BHP Billiton at an advanced<br />

stage with the Yeelirrie Project.<br />

Highlighting the impact of this policy<br />

change, Norman Moore says, ‘Western<br />

Australia’s state government has now<br />

implemented a policy change on this issue<br />

and permitted uranium mining. There<br />

are now four private-sector companies<br />

that are very excited about this, the<br />

biggest being BHP Billiton with Yeelirrie.<br />

There is also Toro with Lake Way, and a<br />

Canadian company called Mega with Lake<br />

Maitland.<br />

‘Uranium is a highly political issue, so<br />

we are insistent that everything is done<br />

according to the world’s highest best<br />

practices. The Department for Mines and<br />

Petroleum will be working with these<br />

companies on the transportation and<br />

export of yellowcake out of either Darwin<br />

or Adelaide. We expect there to be a<br />

uranium mine in Western Australia within<br />

the next two to three years. World demand<br />

for uranium is experiencing an upward<br />

trend as many groups see uranium and<br />

nuclear power as a solution to concerns<br />

over energy security and sustainability.’<br />

Iron Ore<br />

Western Australia’s iron ore industry has<br />

experienced a period of extraordinary<br />

growth in recent years. Massive<br />

urbanisation projects underway in China<br />

are largely responsible for the sustained<br />

demand underpinning this sector.<br />

China accounts for 65 per cent of Western<br />

Australian iron exports, followed by Japan<br />

and South Korea representing 21 per cent<br />

Employment in the mining sector dropped<br />

by four per cent between 2007–08 and<br />

28<br />

2008–09. This reflected the increased Korea (8%).<br />

efficient.<br />

and 10 per cent of demand respectively.<br />

29


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30 31


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

Western Australia<br />

is of pivotal<br />

importance to BHP<br />

Billiton’s overall<br />

business model.<br />

Ian Ashby,<br />

President Iron Ore<br />

of BHP Billiton<br />

‘‘<br />

Western Australia’s output<br />

of iron ore grew by 8.5 per<br />

cent between 2008 and<br />

2009, up to a record 316<br />

million tons. The value of<br />

iron exports grew by 53 per<br />

cent over the same period,<br />

increasing to AU$33.56<br />

billion; this places iron<br />

ore at the forefront of<br />

Western Australia’s mining<br />

economy.<br />

Of Western Australia’s<br />

iron exports, 90 per cent<br />

are controlled by two key<br />

companies: BHP Billiton<br />

and Rio Tinto. As Western<br />

Australia’s international<br />

iron ore sales are set to<br />

increase from 887 million<br />

tons in 2009 to 998 million<br />

tons in 2010, and as pricing structures<br />

change in favour of producers, Western<br />

Australia’s outlook for iron ore mining is<br />

exceptionally positive.<br />

Key Iron Ore Players<br />

BHP Billiton<br />

In 2010 BHP Billiton is celebrating the<br />

company’s rich and diverse history with<br />

its 150 anniversary and three significant<br />

milestones: Billiton’s establishment on 28<br />

October 1860, BHP’s incorporation on 13<br />

August 1885, and BHP Billiton’s listing<br />

on the Australian and London Stock<br />

Exchanges on 29 June 2001. Having<br />

entered Western Australia’s mining<br />

sector in the mid twentieth century, BHP<br />

Billiton, through a series of acquisitions<br />

and organic expansions, has grown into<br />

the largest diversified resources company<br />

in the world, with approximately 41,000<br />

employees and 100 operations throughout<br />

25 countries. With interests spanning ten<br />

different resources groups of which five<br />

operate in Western Australia including<br />

aluminium, iron ore, petroleum, stainless<br />

steel materials (nickel) and uranium.<br />

importance of Western Australia to<br />

BHP Billiton’s global operating model as<br />

follows; “Western Australia is of pivotal<br />

importance to BHP Billiton’s overall<br />

business model, particularly in iron ore.<br />

BHP Billiton has been operating in Western<br />

Australia for more than 40 years now,<br />

building significant infrastructure and<br />

output capacity to supply growing global<br />

demand.”<br />

Western Australia’s enormous reserves<br />

of iron ore form the cornerstone of BHP<br />

Billiton’s operations in the region. BHP<br />

Billiton currently operates seven world<br />

class iron ore mines in the Pilbara,<br />

including the world’s largest single pit<br />

open cut iron ore mine in Mt Whaleback.<br />

Mt Whaleback currently stands at more<br />

than five kilometres in length and one and<br />

a half kilometres in width and contributes<br />

significantly to BHP Billiton’s annual iron<br />

ore output from its Western Australia<br />

operations in the Pilbara.<br />

This colossal level of production is<br />

supported by one of Australia’s largest<br />

privately owned rail networks and some<br />

of the world’s busiest bulk commodity<br />

ports such as Port Hedland. BHP Billiton’s<br />

world class transportation infrastructure<br />

in the Pilbara currently involves almost<br />

1,000 kilometres of railway track,<br />

comprising some 114 locomotives and<br />

4800 ore cars. These are supported by<br />

the port facilities in Port Hedland.<br />

BHP Billiton’s plans to further leverage<br />

their infrastructure base to expand<br />

production are outlined by Ian Ashby:<br />

“Moving forward, we have rapid growth<br />

projects designed to meet ever increasing<br />

global demand, notably from China and<br />

emerging regions of Asia. In FY09, we<br />

produced 125 million tonne from our<br />

Western Australian iron ore operations<br />

in the Pilbara and we are ramping up to<br />

155 million tonnes per annum following<br />

the completion of Rapid Growth Project<br />

4. We have plans to increase capacity<br />

to 350 million tonnes per annum in the<br />

longer term.<br />

of calendar year 2011. The company’s<br />

proposed Rapid Growth Project 6 will<br />

increase installed capacity to 240 million<br />

tonnes, but the project is not yet approved<br />

the BHP Billiton Board.<br />

However, a proposed production joint<br />

venture of Western Australia operations<br />

with fellow Pilbara behemoth Rio Tinto<br />

Iron Ore is expected to deliver synergies<br />

and economies of scale representing<br />

savings in the billions of dollars, providing<br />

the deal is approved by the appropriate<br />

regulators and shareholders.<br />

BHP Billiton has invested more than<br />

US$18 billion in developing Western<br />

Australian resources projects since 2001.<br />

Of greatest importance to BHP Billiton<br />

beyond iron ore in Western Australia is its<br />

alumina, petroleum, nickel and uranium<br />

projects and operations.<br />

BHP Billiton’s Worsley Alumina operation<br />

in the South West of Western Australia<br />

is one of the world’s largest and most<br />

efficient refineries, currently producing<br />

approximately 3.5 million tonnes per<br />

annum of alumina, with a scheduled<br />

“Efficiency and Growth Project” due to lift<br />

capacity to 4.6 million tonnes per annum.<br />

BHP Billiton’s oil and gas operations in<br />

the Pilbara region of Western Australia<br />

represent a significant proportion of<br />

overall production at 41 million barrels per<br />

annum, with BHP participating as both an<br />

operator and syndicated investor. BHP<br />

Billiton’s fully integrated West Australian<br />

nickel operations in the Goldfields region<br />

represent the world’s third largest<br />

producer of nickel in concentrate.<br />

As the Western Australian state<br />

government approach to the mining of<br />

uranium has changed in order to permit<br />

production of this valuable resource, BHP<br />

Billiton’s positioning to take advantage<br />

of this is second to none, as is pointed<br />

out by Ian Ashby: “BHP Billiton currently<br />

has licenses on Western Australia’s<br />

most exciting uranium prospect in the<br />

Yeelirrie deposit. Our aim is to develop<br />

this and begin production of uranium<br />

oxide concentrate.” BHP Billiton’s current<br />

plans to mine at Yeelirrie envisage first<br />

production of uranium oxide concentrate<br />

As one of Western Australia’s most<br />

prominent companies, BHP Billiton is fully<br />

aware of the company’s importance to<br />

the community beyond creating a wealth<br />

of employment opportunities. BHP Billiton<br />

is a substantial contributor to the state<br />

government’s “Royalties for Regions”<br />

program, whereby 25 per cent of<br />

resources related royalties are reinvested<br />

in local communities’ infrastructure and<br />

services. Furthermore, BHP Billiton is an<br />

active participant in the university sector,<br />

working to drive innovation in Western<br />

Australia’s resources sector through<br />

partnerships with the University of Western<br />

Australia’s Business School, and Curtin<br />

University’s Resources and Chemistry<br />

Centre. Perhaps of greatest importance<br />

is BHP Billiton Iron Ore’s commitment<br />

to community programs. In FY09, the<br />

company’s iron ore business invested<br />

more than AU$30 million in community<br />

programs in Western Australia, focusing<br />

on health, the arts, education, indigenous<br />

well being and employment and township<br />

amenity.<br />

The global headquarters of both BHP<br />

Billiton’s Iron Ore and Stainless Steel<br />

Materials (Nickel) businesses in Perth<br />

demonstrates both the company’s<br />

commitment to the region and Perth’s<br />

growing importance as the world’s leading<br />

centre of resources excellence in oil and<br />

gas as well as minerals.<br />

BHP Billiton<br />

Iron Ore’s port<br />

operations in Port<br />

Headland; Photo<br />

courtesy of BHP<br />

Billiton<br />

The magnitude and scale of BHP Billiton’s<br />

operations in Western Australia provide<br />

an excellent indication of the importance Rapid Growth Project 5 is BHP Billiton iron<br />

of Western Australia’s resource wealth ore’s current growth project in the Pilbara<br />

to the broader global economy. President which will increase installed capacity to<br />

32<br />

of Iron Ore, Ian Ashby, highlights the 205 million tonnes by the second half<br />

in 2014.<br />

33


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Argyle Diamond<br />

Mine; Photo<br />

courtesy of Rio<br />

Tinto<br />

Rio Tinto<br />

Founded in 1873, Rio Tinto has grown<br />

into one of the world’s leading diversified<br />

mining companies, with operations<br />

throughout six continents. Rio Tinto’s<br />

operations are focused in Australia<br />

and Canada, but the company also has<br />

operations throughout Latin America,<br />

Africa and Asia. Rio Tinto is a strategic<br />

global producer of iron ore, aluminium,<br />

copper, uranium, diamonds and coal.<br />

Following the company’s 1966 entry<br />

into Western Australia’s mining sector,<br />

Rio Tinto has grown rapidly into one of<br />

the sector’s two leading companies,<br />

alongside BHP Billiton. Rio Tinto’s most<br />

important product in Western Australia is<br />

iron ore, followed by salt, diamonds and<br />

talc. Western Australia’s rich endowment<br />

of iron ore is of vital importance to Rio<br />

Tinto’s global operations.<br />

Western Australia are one of the most<br />

concentrated sets of assets that Rio Tinto<br />

has anywhere in the world. As a result,<br />

Western Australia is of pivotal importance<br />

to Rio Tinto as a business.’<br />

Given continuing demand for iron ore<br />

from China in particular, Rio Tinto is<br />

now committing to a massive capital<br />

expenditure programme in the Pilbara.<br />

‘Rio Tinto is currently operating at 220<br />

million tons of iron ore in the Pilbara,’<br />

says Sam Walsh, outlining Rio Tinto’s<br />

strategy. ‘We have plans to increase<br />

that to 330 million and then 440 million<br />

tons. These plans will require huge capital<br />

investments. The Pilbara is an ideal<br />

location for such expansion, both because<br />

of the resource endowment in the region<br />

and the Pilbara’s close proximity to key<br />

markets in emerging Asia.’<br />

sector is the company’s firm commitment<br />

to innovation and the development of<br />

world-class technologies.<br />

‘Rio Tinto’s stand-out feature is our<br />

remote operations centre out near Perth<br />

Airport,’ says Walsh, highlighting some<br />

of the company’s achievements so far.<br />

‘It is a bit like the NASA control room.<br />

From that we control 12 mines, a 1400-<br />

kilometre railway, a port and our power<br />

operations. We are doing that with 400<br />

people some 1500 kilometres away from<br />

the actual sites. That is a phenomenal<br />

achievement. Rio Tinto does this through<br />

skilled staff and a series of computer<br />

networks and cameras.<br />

‘We have another programme looking at<br />

automating our train locomotives, haul<br />

trucks and drill rigs. All of this is leadingedge<br />

– very little of this is happening<br />

anywhere else in the world. There is<br />

nobody in the world with an automated<br />

heavy-haul railway; these trains are two<br />

and a half kilometres long and up to<br />

24,000 tons. This is very challenging<br />

engineering and we have run many more<br />

successful trials.<br />

‘As we expand, we will need more and<br />

more operators. It is getting harder to find<br />

people with the right skills, as well as to<br />

retain them in such remote areas. Being<br />

able to set up automated equipment and<br />

a remote operating centre is something of<br />

a solution to the labour issue in Western<br />

Australia. Rio Tinto is leading the world<br />

with this technology right now. I am sure<br />

that many will follow once our patents<br />

run out. We are finding huge efficiency<br />

gains, such as 20 per cent fuel efficiency<br />

when using automated haulage trucks.’<br />

Rio Tinto’s commitment to Western<br />

Australia’s mining industry, and the<br />

continued progression of techniques<br />

used in the region is exemplified in the<br />

company’s approach to decommissioning<br />

mine sites.<br />

‘It is important to ensure that Rio Tinto<br />

has the smallest footprint that we<br />

possibly can from an environmental<br />

viewpoint,’ explains Walsh, ‘as well as<br />

energy usage and water consumption. It<br />

is important to go in and backfill wherever<br />

we have decommissioned<br />

where you would not be<br />

able to tell we had been<br />

there. We use local seeds<br />

and plants to rehabilitate<br />

regions that we have<br />

operated in. Water usage<br />

is an extremely important<br />

issue in the Pilbara. We<br />

are looking at transferring<br />

water from some of our<br />

sub water table mines into<br />

water-scarce regions on<br />

the coast. These are big<br />

projects, with big visions.’<br />

Rio Tinto is one of<br />

Western Australia’s<br />

longest-standing mining<br />

firms still operating in the<br />

state. The firm has made<br />

extraordinary contributions<br />

towards the development of some of the<br />

world’s richest iron ore resources, serving<br />

international markets throughout Europe<br />

and Asia.<br />

Rio Tinto continues to innovate in order<br />

to cope with some of Western Australia’s<br />

leading economic challenges, such as<br />

labour shortages and the operation<br />

of major projects in extremely remote<br />

regions. This contribution from a leading<br />

company puts Western Australia’s overall<br />

mining sector in a very good position<br />

moving forward.<br />

Fortescue Metals Group<br />

Established in July 2003, Fortescue Metals<br />

Group has grown from a visionary idea<br />

with three staff to Western Australia’s<br />

third major player in the export of iron<br />

ore in the short space of seven years.<br />

Fortescue is one of Western Australia’s<br />

great business stories, embodying the<br />

pioneering spirit found throughout the<br />

economy.<br />

Explaining the process that encapsulates<br />

the company’s rapid evolution, Fortescue<br />

CEO Andrew Forrest says, ‘Once Fortescue<br />

understood the size and scale of the<br />

operations we would require to succeed<br />

sustainably, we then thought through the<br />

size of properties and infrastructure we<br />

would require to make such an operation<br />

‘‘<br />

We will construct<br />

the rail and ports<br />

infrastructure, to<br />

ensure Fortescue<br />

can produce iron<br />

ore for export<br />

competitively and<br />

sustainably.<br />

Andrew Forrest,<br />

CEO of Fortescue<br />

Metals Group<br />

‘Rio Tinto’s 2009 annual full-year results Rio Tinto currently operates nine iron<br />

showed that iron ore accounts for mines in the Pilbara, through subsidiaries<br />

approximately 60 per cent of Rio Tinto’s Hammersley Iron and Robe River Iron.<br />

revenues,’ explains President of Iron Ore The stand-out feature of Rio Tinto’s<br />

34<br />

Sam Walsh. ‘The scale of operations in participation in Western Australia’s mining<br />

we can. There are numerous sites that succeed.<br />

35<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘Fortescue then went into the Pilbara and<br />

purchased enough properties, making<br />

enough discoveries of iron ore to facilitate<br />

the financing of necessary infrastructure,<br />

such as rail and deepwater ports to ensure<br />

the success of our business.<br />

‘We acquired over time 60 to 70,000<br />

kilometres squared in the Pilbara, we<br />

brought on geologists that were not<br />

influenced by the iron ore industry, who<br />

were happy to try new theories which<br />

other people had dismissed as having no<br />

value.<br />

‘This led to an initial small discovery called<br />

Mount Nicholas that nearly bankrupted us.<br />

However, this discovery gave us enough<br />

intellectual clues. The discovery was<br />

wrong, but the geology was right. We<br />

then went on to test the theories that we<br />

had established and discovered Christmas<br />

Creek and soon afterwards discovered<br />

Cloudbreak; and really the rest is history.<br />

‘The value of those massive iron ore<br />

discoveries enabled us to put into action<br />

the plans we had originally come up with<br />

as per constructing the rail and ports<br />

infrastructure, to ensure Fortescue could<br />

produce iron ore for export competitively<br />

and sustainably.’<br />

Fortescue Metals Group has now<br />

achieved incredible success with the rapid<br />

development of fully operational mines at<br />

Cloudbreak, combined with the concurrent<br />

development of a 256-kilometre-long<br />

heavy-haulage railway from the mine to<br />

Fortescue’s Herb Elliot deepwater port at<br />

Port Hedland.<br />

Stories such as Fortescue’s are the<br />

reason why so many of the international<br />

mining industry’s leaders regard Western<br />

Australia as the world’s leading mining<br />

economy.<br />

ensure their competitive positions on the<br />

international market.<br />

‘This will enable Rio Tinto to ensure<br />

that our business remains competitive<br />

long into the future,’ says Sam Walsh,<br />

emphasising the value of merging the<br />

Pilbara operations. ‘We are competing on<br />

the global stage with countries such as<br />

Brazil. It is important for both companies<br />

to leverage synergies where possible, to<br />

ensure that we each retain a competitive<br />

position.’<br />

Aside from Rio Tinto and BHP Billiton,<br />

numerous smaller operators in the Mid<br />

West and Pilbara regions are undertaking<br />

expansion and development projects on<br />

their iron ore resources. Fortescue Metals<br />

Group, Atlas Iron, Mount Gibson Mining,<br />

CITIC Pacific Ltd and Aquila Resources<br />

are just some of the operators based in<br />

these two regions working to further<br />

increase Western Australia’s international<br />

prominence in international iron ore<br />

markets.<br />

Of greatest interest in the Mid West<br />

region is the Oakajee Port and Rail project,<br />

currently underway under the control of<br />

the Western Australian state government<br />

and Crosslands Resources Ltd. Set for<br />

completion in either 2013 or 2014,<br />

Oakajee Port and Rail will open the iron<br />

ore rich Mid West state to international<br />

markets and a raft of further investment<br />

into Western Australia’s iron ore sector.<br />

Gold<br />

The global financial crisis has had a<br />

positive impact on the price of gold, as<br />

the commodity is seen as a stable store<br />

of wealth by investors when faced with<br />

volatile global currency markets. The<br />

average price of gold through 2008–09<br />

was AU$1,171, 28 per cent higher than<br />

in 2007–08.<br />

2008–09, and 62 per cent of Australia’s<br />

total gold production. Gold production<br />

has declined in Western Australia as a<br />

result of declining production from large<br />

established mines, and the closure of<br />

older mines.<br />

A number of key projects scheduled for<br />

development over 2010 are set to rectify<br />

this trend, however. Western Australia’s<br />

key markets for gold are the UK, with 41<br />

per cent consumption; India, with 34 per<br />

cent; and Thailand, with 8 per cent.<br />

Giving his views on the prospects for<br />

gold prices, Bruce McFadzean, Managing<br />

Director of Catalpa Resources, says, ‘My<br />

view is that gold will continue to increase<br />

throughout 2010 and that next year it will<br />

rocket. The next level of understanding<br />

coming from the global financial crisis is<br />

the exposure to countries sovereign debts<br />

now. Gold will re-establish itself as the<br />

commodity that doesn’t lose value. The<br />

global financial crisis has re-established<br />

gold as a key store of wealth. Whilst<br />

things can go crazy with everything else,<br />

gold will hold its value.’<br />

Key Gold Players<br />

Newmont Mining Corporation<br />

Following Newmont’s entry into Western<br />

Australia’s gold market in 2002, this<br />

Denver-based gold mining company has<br />

grown into the state’s most significant<br />

producer of gold.<br />

With a 50 per cent joint-venture stake in the<br />

annual 20-ton-producing Kalgoorlie Super<br />

Pit, alongside the Boddington and Jundee<br />

mines, Newmont represents Western<br />

Australia’s largest gold producer.<br />

Newmont is one of the world’s leading<br />

gold producers, with approximately<br />

30,000 staff and contractors.<br />

Newmont’s Asia Pacific assets are of<br />

greatest value to the company, reflecting<br />

the inherent value in Western Australia’s<br />

rich endowment of gold.<br />

Newcrest Mining<br />

Newcrest Mining is Australia’s secondlargest<br />

gold producing company and one<br />

of the world’s top 10 leading mining<br />

companies.<br />

After entering Western Australia’s gold<br />

mining sector in July 2005, Newcrest<br />

has redeveloped the Pilbara’s Telfer Mine<br />

into Western Australia’s second-largest<br />

gold producing mine at 18.1 tons for<br />

2008–09.<br />

Major Gold Projects<br />

Western Australia’s gold mining sector<br />

is undergoing a period of significant<br />

development in line with the decline of<br />

long-established mines and the upward<br />

trend on global gold prices. Kalgoorlie<br />

Super Pit joint-venture partners Newmont<br />

Major Iron Ore Projects<br />

Despite gold production in Western<br />

Of greatest significance to Western Australia declining by 136 tons throughout<br />

Australia’s overall iron ore output are BHP this same period, revenues from sales<br />

Billiton and Rio Tinto’s aforementioned hit a state record with AU$5.2 billion,<br />

rapid expansion programmes. As well as a 25 per cent increase on the previous<br />

these two growth programmes, Rio Tinto year. Western Australian gold exports<br />

and BHP Billiton are in the process of accounted for 26 per cent of overall mining<br />

36<br />

merging their operations in the Pilbara to exports from Western Australia through<br />

37


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AngloGold<br />

Ashanti’s facility<br />

at Sunrise Dam;<br />

Photo courtesy of<br />

AngloGold Ashanti<br />

and Barrick have received environmental<br />

clearance for the deepening of Australia’s<br />

largest gold producing mine by 600<br />

metres. This development will extend the<br />

life of the mine by up to 10 years.<br />

Following construction, it is expected that<br />

Edna May will produce 100,000 ounces<br />

per annum.<br />

AngloGold Ashanti and joint-venture<br />

partner Independence Group are<br />

commencing feasibility studies on a<br />

gold prospect at Tropicana, northeast<br />

of Kalgoorlie. Expected investment of<br />

AU$500 million is expected to achieve a<br />

production capacity 400,000 ounces per<br />

annum.<br />

Key Alumina Players<br />

Alcoa Australia<br />

Alcoa operates the world’s largest<br />

integrated bauxite mining, alumina refining<br />

and aluminium smelting operation out of<br />

Western Australia. Alcoa’s Huntly Mine,<br />

established in 1970 near Dwellingup, is<br />

the world’s largest bauxite mine.<br />

Alcoa has contributed significantly<br />

in terms of adding value to Western<br />

Australia’s raw materials by developing<br />

downstream processing capacity in the<br />

company’s three alumina refineries at<br />

Kwinana, Pinjara and Wagerup.<br />

Alcoa’s three Western Australian alumina<br />

refineries have a combined annual output<br />

of approximately 10 million tons of<br />

alumina per annum.<br />

Worsley Alumina<br />

Worsley Alumina is a joint venture<br />

between BHP Billiton (86 per cent stake),<br />

Japan Alumina Association (10 per cent)<br />

and Sojitz Alumina (4 per cent).<br />

China dominates Western Australia’s<br />

nickel exports, accounting for 39 per<br />

cent of consumption in 2009, followed<br />

by Finland (19 per cent), Singapore (17<br />

per cent) and the Netherlands with 5 per<br />

cent.<br />

Key Nickel Players<br />

Established in September 2008, Catalpa<br />

Resources is a relatively new entrant to<br />

Western Australia’s gold mining sector.<br />

Worsley Alumina is Western Australia’s<br />

Elucidating on the gold sector’s growth<br />

second-largest producer of alumina, with<br />

potential, Catalpa Resources’ Bruce<br />

its Boddington bauxite mine and refinery Western Areas’ Forrestania Project,<br />

McFadzean says, ‘In March 2009,<br />

near Collie in the southwest of Western located 400 kilometres east of Perth,<br />

Catalpa was a $15 million company, and<br />

Australia. Worsley Alumina produces 3.1 contains one of the world’s highest-grade Iron Ore<br />

now we are a $200 million company, an<br />

million tons of alumina per annum. nickel mines. Western Areas plans to<br />

Alumina<br />

Transportation;<br />

interesting bit of growth for us. We have<br />

construct five mines in the area for an Photo courtesy of<br />

raised $40 million; we managed to get Australia is the world’s largest bauxite<br />

Major Alumina Projects<br />

estimated production capacity of 35,000 Ministry for Mines<br />

$70 million-worth of debt in the middle and alumina producer, accounting for 25<br />

tons of nickel per annum.<br />

and Petroleum<br />

Worsley Alumina has Western Australia<br />

of the financial crisis at the beginning of per cent of global production. Western<br />

expansion strategies in place for 2010,<br />

last year. ‘We were able to put a hedge Australia accounted for 63 per cent of<br />

with the continuation of the firm’s AU$2.5<br />

in place, which is at $1,560 per ounce, total Australian bauxite and alumina<br />

billion Efficiency and Growth expansion<br />

which is well over $300 an ounce higher production through 2008–09.<br />

project. By completion in 2011, Worsley’s<br />

than today’s prices. We started building<br />

alumina production capacity will have<br />

our plant, which is a $92 million spend Alumina is Western Australia’s fifth-largest<br />

increased from 3.5 to 4.6 million tonnes<br />

in July last year, and we have nearly sector, accounting for AU$4.6 billion in<br />

per annum.<br />

finished. On top of this, we did a merger sales over 2008–09. Despite US dollar<br />

with our biggest shareholder and picked prices of alumina declining by 16 per cent,<br />

up 30 per cent of another producing mine prices in Australian dollars remained stable<br />

Nickel<br />

in Queensland. ‘So 2009 has been a at AU$371 per tonne, as the Australian<br />

Demand for nickel is very closely linked with<br />

whirlwind year, which has continued into dollar depreciated against the US dollar.<br />

global GDP growth, thus the commodity<br />

2010. When I joined here in June 2008, Demand for alumina is driven globally<br />

declined in price by 53 per cent in US<br />

I was the third person in this office; we by the automotive industry. Western<br />

dollar terms throughout 2008–09.<br />

now have 80 people, moving up to 145 in Australia’s key export markets are China,<br />

the next two months.’ Catalpa Resources with 21 per cent of exports; South Africa,<br />

Nickel sales revenues for Western<br />

are currently in the process of developing Bahrain and UAE, with 14 per cent each<br />

Australia dropped by 42 per cent in 2009<br />

their Edna May Mine, with estimated of exports; and Mozambique, with 10 per<br />

from the previous year, to just under<br />

38<br />

capital expenditure of AU$92 million. cent of exports.<br />

AU$3 billion.<br />

39<br />

BHP Billiton<br />

Through wholly-owned subsidiary Nickel<br />

West, BHP Billiton is Western Australia’s<br />

key nickel producer, thanks to the firm’s<br />

nickel mines at Mt. Keith and Leinster,<br />

which form the beginnings of Nickel<br />

West’s fully integrated nickel production<br />

cycle in Western Australia.<br />

This integrated production system also<br />

consists of Nickel West’s Kalgoorlie<br />

smelter and Kwinana refinery. Nickel<br />

West is the world’s third-largest producer<br />

of nickel in concentrate.<br />

Major Nickel Projects<br />

Western Areas NL is presently the most<br />

active Western Australian nickel producer<br />

in terms of new project construction and<br />

development.


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

Skywest is very<br />

proud of the unique<br />

value proposition<br />

we carry to the<br />

regions of Western<br />

Australia.<br />

Mark Shelton,<br />

CEO of Skywest<br />

‘‘<br />

Services<br />

Western Australia’s<br />

dominant industry has<br />

positive ramifications<br />

through the state and<br />

national economy through<br />

the broad-based multiplier<br />

effects that come out of<br />

the mining sector. Western<br />

Australia has developed<br />

a world-class resources<br />

services sector in recent<br />

decades as mining’s<br />

economic significance has<br />

increased.<br />

Perth’s software and mining<br />

companies now account for<br />

50 per cent of the world’s<br />

mining software. From<br />

boutique investment banks<br />

to airlines, Western Australia’s services<br />

sector is where the mining industry’s<br />

multiplier effects are felt most tangibly.<br />

Azure Capital is a Perth-based boutique<br />

investment bank specialising in the<br />

resources sector. Having completed an<br />

array of mergers and acquisitions, debt<br />

advisory and capital raisings for many of<br />

Western Australia’s leading mining firms,<br />

Azure has helped to bring significant<br />

investment into Western Australia’s<br />

mining sector and is very well placed to<br />

continue doing so.<br />

Worley Parsons is a world-class resources<br />

and civil engineering company, working<br />

on some of Western Australia’s largest<br />

industrial capital investments, such as<br />

Oakajee Port and Rail and Karara Iron<br />

Ore. Worley Parsons is one of Western<br />

Australia’s most respected contractors in<br />

the resources sector and, with a global<br />

presence throughout the Commonwealth,<br />

is well positioned in the global market to<br />

work alongside Commonwealth member<br />

states on resources and civil engineering<br />

projects.<br />

Australia’s mining sector in that it is the<br />

only airline in Western Australia that flies<br />

directly into mine sites. ‘Skywest provides<br />

a vital service in that many communities<br />

would be cut off and industrial projects<br />

rendered unviable without the services<br />

that we provide,’ explains Skywest CEO<br />

Mark Shelton.<br />

‘We engage with the community all the<br />

time. Skywest is very proud of the unique<br />

value proposition we carry to the regions<br />

of Western Australia.’<br />

Skywest provides a vital service for<br />

Western Australia’s key mining firms,<br />

operating direct flights to Rio Tinto’s<br />

Argyle Diamond Mine and Fortescue<br />

Metal’s Cloudbreak iron ore mine,<br />

among many others throughout Western<br />

Australia.<br />

Industry Outlook<br />

Western Australia’s world-class mining<br />

sector is renowned internationally for the<br />

industry’s productivity, efficiency, best<br />

practice and environmental awareness.<br />

Western Australia’s proximity to Asia’s<br />

emerging economies – such as China,<br />

India and Vietnam – renders the region’s<br />

iron ore sector extremely competitive on<br />

the international market.<br />

The state’s gold and alumina industries<br />

are also of global strategic significance,<br />

representing a sizeable proportion of<br />

global output.<br />

<strong>CHOGM</strong> provides an excellent opportunity<br />

for the Commonwealth community to<br />

better understand Western Australia’s<br />

cutting-edge mining technologies and<br />

techniques.<br />

Western Australia’s vast landscape still<br />

offers a wide range of opportunities<br />

for further prospecting and mining<br />

production.<br />

S e c t o r O v e r v i e w<br />

Banking & Financial Services<br />

Skywest<br />

As one of the world’s most open<br />

Skywest is Western Australia’s leading markets to come and do business,<br />

state airline, flying to remote regions of Western Australia provides an excellent<br />

the state and serving mining communities proposition for Commonwealth states<br />

throughout the regions. Skywest and businesses interested in mining and<br />

40<br />

provides an invaluable service to Western mineral commodities.<br />

41


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Banking & Financial Services<br />

Following the first establishment of banks in the mid to late<br />

1800s in Western Australia, financial services is one of the<br />

region’s long-standing industries and a cornerstone of economic<br />

development throughout the state.<br />

Section Cover<br />

(previous page):<br />

Perth Central<br />

Business District;<br />

Photo courtesy of<br />

GBR<br />

Above:<br />

Australia’s<br />

smallest bank<br />

in Shackleton;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

Western Australia’s economy has<br />

registered an almost 50 per<br />

cent increase in gross value<br />

added over the past decade, during which<br />

period the financial services sector’s<br />

contribution has increased by 33 per<br />

cent from AU$5.6 billion in 2000–01 to<br />

AU$7.5 billion in 2008–09. As cumulative<br />

capital investment in the resources sector<br />

is set to grow from around AU$50 billion<br />

in 2010 up to AU$170 billion in 2012,<br />

Western Australia’s financial services<br />

sector has enormous potential to play an<br />

ever increasing role and realise Perth’s<br />

evolution into one of Asia Pacific’s finance<br />

hubs.<br />

Overview<br />

in employment between 2007 and 2009<br />

reflects Western Australia’s finance<br />

sector’s relative strength through the<br />

global financial crisis.<br />

From a regulatory perspective, Australia’s<br />

financial services sector is governed by<br />

the Australian Securities and Investments<br />

Commission (ASIC), who issue financial<br />

licenses, and the Australian Prudential<br />

Regulation Authority (APRA), who<br />

maintain regulatory standards.<br />

Australia’s financial services sector has<br />

been widely praised for the balanced<br />

regulatory regime focused on maintaining<br />

an equilibrium between efficiency,<br />

regulation and innovation. The strength<br />

of Australia’s financial sector through the<br />

financial crisis has been seen as an ideal<br />

opportunity to press the country’s status<br />

Perth’s educated and highly productive<br />

workforce, combined with the city’s<br />

proximity to Asia, makes Western<br />

Australia’s capital an ideal financial<br />

services centre moving forward.<br />

Western Australia’s status as an exciting<br />

growth economy is best described by<br />

Bankwest Managing Director Jon Sutton,<br />

who says, ‘I am a big believer that<br />

Western Australia is on a long-term path<br />

to sustained economic growth. China and<br />

India will be key markets for this region<br />

for many years. We also have a thriving<br />

services industry supporting the resources<br />

sectors. ‘There are excellent engineering<br />

companies in Western Australia. It is also<br />

very important not to forget that Western<br />

Australia is a huge centre of agricultural<br />

production. As per-capita incomes in<br />

Asia increase, so will the profile of<br />

food consumption in these regions.‘The<br />

agricultural industry in Western Australia<br />

is extremely well placed to take advantage<br />

of this shift in demand.’<br />

In a competitive market economy such as<br />

Western Australia’s, economic strength<br />

such as this will naturally translate into<br />

growth opportunities for the financial<br />

services sector. Western Australia’s<br />

financial services sector has a clear focus<br />

upon Perth, with all major financial players<br />

operating in the region headquartered in the<br />

city. The banking sector is dominated by<br />

Australia’s four major banks: ANZ, NAB,<br />

Commonwealth Bank and Westpac, who<br />

between them control the vast majority<br />

of retail, business and corporate banking,<br />

either directly or through wholly-owned<br />

local subsidiaries such as Bankwest (in<br />

the case of Commonwealth Bank).<br />

Of increasing significance to both Perth’s<br />

financial services sector and broader<br />

economic activity throughout Western<br />

Australia are a small collection of highly<br />

specialised top-tier corporate-advisory,<br />

boutique-investment banks such as Azure<br />

Capital and Argonaut Ltd, both of whom<br />

specialise in advisory and capital-raising<br />

services for the international resources<br />

industry. The key opportunity for Perth<br />

and the banking sector within the city is to<br />

increase the proportion of capital used to<br />

finance major Western Australian projects<br />

raised from Perth. Currently a great deal<br />

of capital originates from Australia’s east<br />

coast, or global financial centres such as<br />

London. Perth is also home to a nascent<br />

wealth-management industry, servicing<br />

the growing wealth in Western Australia<br />

and emerging Asia.<br />

Financial services in Western Australia<br />

accounted for 4.8 per cent of gross state<br />

product in 2008–09, and approximately<br />

42<br />

33,000 jobs. An increase of 12 per cent as a regional financial hub.<br />

43<br />

Banking<br />

Western Australia’s banking sector plays<br />

a vital role throughout most sectors of<br />

the economy, with limited involvement<br />

in mega resource projects at this stage.<br />

National Australia Bank (NAB) and<br />

Westpac are the two dominant major<br />

banks in the corporate banking arena,<br />

while Bankwest is the most important


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

I am a big believer<br />

that Western<br />

Australia is on a<br />

long-term path to<br />

sustained economic<br />

growth.<br />

Jon Sutton,<br />

Managing Director<br />

of Bankwest<br />

‘‘<br />

retail bank, benefiting from<br />

a strong local affiliation with<br />

the brand and a widespread<br />

branch network throughout<br />

the region.<br />

Bankwest<br />

Bankwest was established<br />

in 1894 as a prime<br />

industries bank supporting<br />

Western Australia’s<br />

nascent agricultural and<br />

mining industries. Since<br />

then, Bankwest has evolved<br />

into Western Australia’s<br />

leading retail and SME<br />

bank in the region’s<br />

extremely competitive<br />

market. Bankwest’s iconic<br />

brand very much sets the<br />

bank apart from competitors in Western<br />

Australia.<br />

Describing market conditions and<br />

Bankwest’s positioning, Managing<br />

Director Jon Sutton says, ‘Bankwest’s<br />

view is that credit growth in Western<br />

Australia will be far greater than in other<br />

states of Australia. As an incumbent bank<br />

with an iconic brand throughout the state,<br />

Bankwest is very well placed to benefit<br />

from this.’<br />

As a brand very much synonymous with<br />

Western Australia, Bankwest has a clear<br />

focus upon local communities, allowing<br />

a budget to all branch managers for<br />

investment in local projects. Jon Sutton<br />

insists upon the importance of businesses<br />

being involved in the local community,<br />

commenting, ‘It is very important to<br />

participate in thought leadership. As<br />

a business, you need to participate in<br />

debates and throw ideas into resolving<br />

some of the challenges we all face<br />

together. ‘I think it is incumbent on local<br />

business leaders to get involved with<br />

these debates and participate with the<br />

community.’<br />

Western Australia to showcase one of the<br />

fastest-growing state-based economies in<br />

the world. People don’t really understand<br />

the enormous growth levels that are<br />

coming out of Western Australia right<br />

now; we are very confident that they<br />

will be very pleasantly surprised. <strong>CHOGM</strong><br />

2011 will be a great opportunity not just<br />

for Western Australia, but for the whole<br />

of Australia as well.’<br />

National Australia Bank and Westpac have<br />

both been active in Western Australia for<br />

over 150 years, and both occupy around<br />

30 per cent of the business and corporate<br />

banking market. Western Australia’s<br />

leading corporate banks benefit from a<br />

very close relationship with the region’s<br />

business community. As Jay Watson,<br />

Westpac’s State General Manager<br />

Commercial Banking, explains, ‘Both NAB<br />

and Westpac have very close links with<br />

the business community and compete<br />

with each other rigorously to bank with<br />

Western Australia’s businesses.’<br />

One of the key ways for corporate<br />

banks to distinguish themselves from<br />

the competition is to develop specialised<br />

competencies in specific industries.<br />

‘NAB is the leading small and medium<br />

business bank in the country and services<br />

all industries, however it has specialised<br />

businesses in the agriculture, health,<br />

education and government sectors,’<br />

says NAB State General Manager<br />

Andrew Whitechurch. ‘We have bankers<br />

with substantial experience and wellestablished<br />

knowledge bases in relation<br />

to these industries.’<br />

Both NAB and Westpac are very well<br />

placed to help new businesses coming<br />

into Western Australia for investment,<br />

working on strategies of consolidating<br />

their Australian presence as opposed to<br />

expanding into the Asia Pacific region.<br />

The GFC, although having an impact on<br />

each bank’s ability to access wholesale<br />

funding on the international markets, was<br />

seen more as an opportunity to build up<br />

staff numbers with quality new people.<br />

A remarkable trend when one looks at<br />

the severe impact the GFC had on other<br />

developed market economies throughout<br />

‘The main impact of the GFC was in terms<br />

of access to funding and liquidity,’ says<br />

Jay Watson of the sentiment and impact of<br />

the GFC on Western Australia. ‘Australia<br />

relies heavily on wholesale markets for<br />

lending. Over the past 18 months, we have<br />

increased our staff base by 50 per cent,<br />

from 210 to 310, in business banking. The<br />

economy is growing here massively at the<br />

moment; there are huge opportunities for<br />

banks. Westpac sees Western Australia<br />

as a very important business market that<br />

we have to be performing well in. Western<br />

Australia is perfectly placed in the Asia<br />

Pacific market, which is of huge benefit to<br />

the local economy.’<br />

ANZ Bank, another member of Australia’s<br />

illustrious big four banks, entered the<br />

Western Australian market in 1837 and<br />

has adopted a very different strategic<br />

approach from NAB and Westpac. ANZ has<br />

a clear focus upon international expansion<br />

given the opportunities presented by<br />

Western Australia’s northern hinterland.<br />

‘The region that we sit in reflects huge<br />

opportunities for ANZ Bank in Western<br />

Australia,’ says ANZ Western Australia<br />

Chairman John Atkins. ‘We sit in a time<br />

zone where 40 per cent of the world’s<br />

population sit and 63 per cent of the<br />

world’s GDP is created. Our regional<br />

strategy is based upon extending ANZ’s<br />

links with emerging Asia. ANZ bank is<br />

active in China and we are growing our<br />

business throughout emerging Asia. As a<br />

result we are a natural partner for many<br />

investors coming into Western Australia.<br />

‘Our Acquisitions from RBS and ING are a<br />

clear indicator of our strategy to increase<br />

our presence in Asia. ANZ Bank is the<br />

fourth-largest institutional business in<br />

the Asia Pacific region, following HSBC,<br />

Standard Chartered and Citibank. ANZ<br />

Bank’s focus is to be a super-regional<br />

bank, not a global bank.’<br />

Given the extraordinary attention being<br />

paid to Western Australia from emerging<br />

Asia’s investment community, ANZ bank<br />

Bankwest is excited about the prospect<br />

of the international community coming<br />

to Western Australia for <strong>CHOGM</strong> 2011,<br />

having a chance to see what is happening in<br />

the state. Jon Sutton captures Bankwest’s<br />

anticipation when he declares, ‘It is an<br />

absolutely fantastic opportunity for the world.<br />

44 45


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

is very well placed with relation to growth<br />

markets in the region.<br />

In the long term, Perth’s diversified<br />

banking sector and status as a financial<br />

services centre has huge potential to grow<br />

into a regional hub. Outlining the immense<br />

opportunities of the region, NAB’s Andrew<br />

Whitechurch says, ‘The growth prospects<br />

over the next three to five years are very<br />

good, given the number and value of<br />

projects that are planned and underway in<br />

the region. I don’t think many companies<br />

will leverage themselves the way that they<br />

had done in the past. We are more likely<br />

to see a steady build-up of lending and<br />

investment over the course of the next<br />

18 to 24 months. ‘We are expecting to a<br />

see a housing bubble in Western Australia<br />

again, thus home lending will take off as<br />

Western Australia’s population increases<br />

and demand on housing goes up. I think<br />

that Perth has the potential to become<br />

Australia’s financial hub over the next<br />

20 years.<br />

‘One of the fastest-growing elements<br />

of our business is our Asian banking<br />

business, where high-net-worth expats<br />

and Asian-based investors are starting to<br />

bank with NAB in Perth. The amount of<br />

investment this group wants to make in<br />

Australia is growing rapidly, and Perth is<br />

increasingly the point of entry for such<br />

investors, given our natural advantages<br />

in terms of geographical proximity and<br />

time zone. Increasingly, NAB is funding<br />

acquisitions on the east coast from Asian<br />

investors using Perth as their investment<br />

base. I expect to see a natural capability<br />

build-up come on the back of this shift<br />

in how capital flows out of Asia into<br />

Australia.’<br />

Corporate Advisory Services<br />

As Western Australia’s prominence<br />

increases throughout regions such<br />

as north Asia and India, with an ever<br />

increasing hunger for natural resources,<br />

the emergence of independent corporate<br />

advisory services or boutique investment<br />

banks, such as Azure Capital, Argonaut<br />

Ltd and Euroz, has become a feature<br />

of the evolution of Perth’s financial<br />

services sector. Employing some of the<br />

highest-qualified and best-connected<br />

financiers, lawyers and engineers in the<br />

global resources industry, firms such as<br />

Azure have built close links with some of<br />

Western Australia’s emerging resources<br />

powerhouses, such as Moly Mines and<br />

Fortescue Metals Group.<br />

Azure Capital<br />

Azure Capital is widely acknowledged<br />

as the most prominent corporate adviser<br />

headquartered in Perth. It has been lead<br />

adviser on a number of ground breaking<br />

transactions over the past few years and<br />

Azure’s rapid growth has mirrored the<br />

resources sector that the firm serves so<br />

well. It is particularly active in cross broader<br />

M & A transactions involving clients and<br />

projects in Australia, Asia, Africa and<br />

North America. Azure’s equity capital and<br />

debt market success is reflected in the<br />

substantial outperformance of its clients<br />

when compared to the ASX 300.<br />

CEO Geoff Rasmussen best describes<br />

Azure’s strategy for such success: ‘When<br />

identifying potential clients to support<br />

we look for three things: a quality Traditionally Western Australian firms John Poynton,<br />

management team and experienced board have found raising money from institutions Executive<br />

of directors; a world class resource or in Sydney and Melbourne a challenge, but Chairman of Azure<br />

the capacity to deliver one and thirdly, a this is changing as companies recognise Capital<br />

willingness to grow. We have been able to the value of using highly-credentialed<br />

forge very strong relationships on the basis Perth-based firms. Argonaut is one of the<br />

that we have exceptional people, who are region’s leading companies and has built<br />

able to take on complex transactions and relationships with financial institutions<br />

deliver.’ Given Azure Capital’s remarkable throughout the Asia Pacific Region.<br />

record in Western Australia and the firm’s Argonaut’s local grounding and expertise<br />

excellent underpinning within the region’s enables the firm to build long-term<br />

business culture, there are very few other relationships with some of the world’s<br />

options for major resource players with leading resource companies with their<br />

a demand for reliable, delivery focused head offices in Western Australia, while<br />

corporate advisory services interested in at the same time enhancing the region’s<br />

entering the Western Australian market. exposure to global investment houses.<br />

Chairman John Poynton articulates<br />

Azure’s ambitions: ‘In the short term As quality relationships increasingly<br />

we are focused on continuing to underscore what Perth’s resource industries<br />

deliver outstanding service in our core prioritise in their financial arrangements,<br />

competencies to our many local and financiers such as Argonaut – who<br />

international clients. In the immediate have demonstrated their commitment<br />

future we will grow our current service to Perth throughout the economic cycle<br />

offerings to other jurisdictions and – are best placed to work with both<br />

expand into funds management, property established businesses and new players<br />

46<br />

advisory and M & A.’<br />

to the market. Managing Director Edward<br />

47<br />

Argonaut<br />

Established in 2002,<br />

Argonaut has drawn on<br />

top-tier investment banking<br />

experience from the<br />

world’s leading financial<br />

centres to consolidate a<br />

partnership of the utmost<br />

quality. All of Argonaut’s<br />

partners are Perth-born<br />

and raised but after<br />

spending time elsewhere,<br />

have returned to Western<br />

Australia with a unique<br />

mix of local expertise and<br />

global experience.<br />

Argonaut operates as an<br />

integrated investment<br />

house, combining stock<br />

broking, corporate advisory<br />

services and private equity business in its<br />

overall portfolio. Unashamedly proud of<br />

being a resources-industry-based financial<br />

services firm, Argonaut has taken the<br />

unique step of employing experts from<br />

the field, such as geologists and mining<br />

engineers. Such experts are best placed<br />

to evaluate the viability of each deal<br />

Argonaut is involved with.<br />

‘‘<br />

We will grow our<br />

current service<br />

offerings to other<br />

jurisdictions.<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Rigg best describes both Argonaut and<br />

Western Australia’s business philosophy<br />

when he says, ‘Western Australia is a<br />

great environment to work in; particularly<br />

because of the “can-do” attitude here. If<br />

we don’t help ourselves, then nobody’s<br />

going to help us. We have a pioneering<br />

spirit here.’ Argonaut is committed to<br />

Western Australia, developing a team<br />

that is best equipped to add value to<br />

clients with an interest or connection in<br />

the region.<br />

Firms such as Azure and Argonaut are<br />

the most exciting features of Perth’s<br />

financial services sector, consolidating<br />

their influence and specialisations in<br />

Western Australia while continuing to<br />

build links throughout the world. Both<br />

firms are extremely well placed to assist<br />

with resources projects throughout the<br />

Commonwealth, as well as to facilitate<br />

new entrants into Western Australia’s<br />

resources sector.<br />

Wealth Management<br />

Perth’s relatively new wealth<br />

management sub-sector of the financial<br />

services industry is led by Plan B Group<br />

Holdings, the Southern Hemisphere’s<br />

only internationally-accredited fiduciary<br />

wealth management service.<br />

Fiduciary is best explained by Plan B<br />

Managing Director, Denys Pearce, who<br />

says, ‘I differentiate what Plan B does<br />

from simply selling products on behalf of<br />

third-party institutions to a far more longterm<br />

strategic view. We try to understand<br />

our clients’ ambitions as best as possible;<br />

our fiduciary approach means that we<br />

truly act in our clients’ best interests.’<br />

Plan B reported a 32 per cent increase<br />

in returns over the last six months when<br />

compared to the six preceding months,<br />

a remarkable achievement given current<br />

volatility on global financial markets.<br />

Denys Pearce is optimistic about the<br />

opportunities that <strong>CHOGM</strong> 2011 will<br />

bring for Perth and Western Australia’s<br />

economy, and believes ‘from a state point<br />

of view, the opportunities are enormous.<br />

One thing that Western Australia needs is<br />

capital investment to fulfil the economy’s<br />

potential. <strong>CHOGM</strong> 2011 can definitely<br />

raise awareness about this.’<br />

Industry Outlook<br />

As Western Australia’s economy<br />

continues to achieve annual growth rates<br />

of around 5 per cent, the financial services<br />

sector is extremely well placed to benefit.<br />

From both a domestic and international<br />

perspective, there is an exciting array<br />

of opportunities within Perth’s financial<br />

services sector. International investors<br />

would do particularly well by entering into<br />

Western Australia’s capital markets. The<br />

city’s ambition to become an Asia Pacific<br />

finance hub is realised more and more<br />

each year.<br />

S e c t o r O v e r v i e w<br />

Health<br />

48 49


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Health<br />

Widely acknowledged as one of the world’s leading healthcare<br />

centres of excellence, Australia’s healthcare sector is predicted<br />

to more than double in coming decades as populations increase,<br />

populations continue to age, technologies improve, and lifestyle<br />

choices continue to change among consumers.<br />

Section Cover<br />

(previous page):<br />

Pathology lab<br />

technician working<br />

with samples;<br />

Photo courtesy<br />

of Department of<br />

Health<br />

Above:<br />

Aged care nurse<br />

and patient;<br />

Photo courtesy<br />

of Department of<br />

Health<br />

Western Australia is at the<br />

forefront of this change, with<br />

Australia’s fastest population<br />

growth and geographical proximity to<br />

emerging Asia’s lucrative international<br />

health-tourism market. A wide range of<br />

investment, employment and knowledgesharing<br />

opportunities prevail for the<br />

broader Commonwealth community<br />

throughout this rapidly shifting market<br />

place.<br />

Overview<br />

past 15 years at an average annual rate<br />

of 7.5 per cent, significantly higher than<br />

Western Australia’s economy overall. The<br />

health sector’s rate of growth appears<br />

to be increasing each year as Western<br />

Australia’s demographics and population<br />

continue to evolve. Health sector<br />

employment grew by 12 per cent through<br />

2008–09 to 122,000 employees.<br />

The health sector is generally predicted by<br />

economists to be one of the world’s leading<br />

drivers of economic growth throughout<br />

the 21st century. Western Australia is in<br />

a unique position as a developed market<br />

economy, in that the state faces the dual<br />

challenges of an ageing and increasing<br />

population, two of the key drivers behind<br />

the health sector’s importance moving<br />

forward. It is expected that the Perth<br />

by 28 per cent to 1.87 million inhabitants<br />

by 2021, and that average life expectancy<br />

will grow from 85 to 94 years old by<br />

2050. Although such figures may appear<br />

abstract, these trends are the fundamental<br />

drivers behind paradigm shifts in how<br />

healthcare is managed, administered and<br />

consumed in developed market economies<br />

such as Western Australia.<br />

<strong>Bethesda</strong> <strong>Hospital</strong> CEO, Yazmin Naglazas,<br />

underlines this point: ‘Australia currently<br />

spends around 9.1 per cent of GDP on<br />

health, which is around 1.4 billion dollars<br />

annually. Over the course of the next<br />

four decades, health care spending is<br />

set to double. Health will be one of the<br />

major drivers of the next phase of world<br />

economic development in years to come<br />

in Western Australia due to trends such<br />

as an ageing population and an increasing<br />

life expectancies.’ As medical technology<br />

continues to advance, lifestyle trends<br />

and consumer choices are also evolving<br />

to place further demands upon the<br />

health sector as pointed out by Yazmin<br />

Naglazas: ‘Longevity medicine is gaining<br />

momentum and within ten years people<br />

will routinely be living over 100 years<br />

old with new technologies such as<br />

nanotechnology, based medical therapies<br />

and DNA profiling.’<br />

The combination of shifting consumer<br />

expectations, demands and ever<br />

increasing advances in medical technology<br />

are re-shaping the profile of private<br />

health provision in particular, creating<br />

a myriad of opportunities for investors<br />

and aspirational medical practitioners<br />

in Western Australia’s rapidly growing<br />

health care sector.<br />

Public health policy in Australia is<br />

established at a federal government level,<br />

with state governments, such as Western<br />

Australia, managing hospitals’ day-to-day<br />

operations and staffing. Primary healthcare<br />

(such as general practitioners) is regulated<br />

at a federal level, with minimal state<br />

government intervention in operations. All<br />

Australians are entitled to free universal<br />

access to public healthcare, funded at a<br />

federal level through programmes such as<br />

Medicare. From a hospital’s perspective,<br />

Australia has two different systems:<br />

licensed at a state level and accredited at<br />

federal level through a quasi-governmental<br />

organisation, the Australian Council for<br />

Health Care Standards (ACHCS). Through<br />

the Rudd government’s National Health and<br />

<strong>Hospital</strong>s Reform Commission (NHHRC)<br />

report, the status quo could be subject to<br />

change with such proposals as streamlining<br />

regulation and allowing a greater role for<br />

the private sector in public health, which<br />

are currently subjects of debate.<br />

Describing the current system, Dr Kim<br />

Hames, Western Australian State Minister<br />

for Health, says, ‘We have two types of<br />

health: public and private. Everyone has<br />

to pay a healthcare levy to Medicare; this<br />

is a percentage of their income – so if they<br />

don’t work, they don’t pay. Everyone is<br />

given universal access to free healthcare<br />

in government-run hospitals, as well as<br />

access to private hospitals up to a limited<br />

cost. This has traditionally been 85 per<br />

cent of the cost. If a patient decides<br />

to use a private doctor, the patient will<br />

pay the bill and then claim a percentage<br />

of the bill refund from Medicare via the<br />

Commonwealth government.’<br />

Over the past 10 years, there have been<br />

significant moves by Australia’s federal<br />

government to increase the proportion<br />

of citizens with private health insurance.<br />

These include premium subsidies for<br />

insurance cover and the Medicare levy<br />

surcharge alluded to above. This policy<br />

direction lays the foundation for greater<br />

involvement of the private sector in<br />

Australia’s public health system, in line<br />

with potential outcomes of the NHHRC<br />

report.<br />

The private healthcare sector in Western<br />

Australia is widely acknowledged, as per<br />

a recent Productivity Commission <strong>Report</strong>,<br />

as being ‘less costly, more efficient and<br />

safer’ when compared to public sector<br />

counterparts. The private healthcare<br />

sector is a major contributor to Western<br />

Australia’s healthcare system<br />

Healthcare in Western Australia is<br />

capacity to raise significant capital, raise<br />

broadly defined by the Australian Bureau<br />

standards, drive innovation and increase<br />

of Statistics (ABS) as ‘The provision<br />

capacity in Western Australia’s overall<br />

of healthcare and social assistance by<br />

portfolio of healthcare infrastructure.<br />

practitioners with specific qualifications<br />

Outlining the private sector’s contribution<br />

and expertise.’ The industry has<br />

to Western Australia’s infrastructure and<br />

50<br />

experienced pronounced growth over the Metropolitan Area’s population will grow<br />

public and private. Private hospitals are healthcare capacity, Dr Shane Kelly, CEO<br />

51<br />

in its<br />

‘‘<br />

Western Australia<br />

also has a balance<br />

between private<br />

and public patients<br />

with increasing<br />

private public<br />

partnerships<br />

developing across<br />

the state of<br />

Western Australia.<br />

Yasmin Naglazas,<br />

CEO of <strong>Bethesda</strong><br />

<strong>Hospital</strong><br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

Western Australia<br />

has the fastest<br />

population growth<br />

in Australia, as well<br />

as the strongest<br />

economy.<br />

Justin Walter,<br />

General Manager<br />

of Mount <strong>Hospital</strong><br />

‘‘<br />

of St John of God <strong>Hospital</strong>, says, ‘We<br />

are the first and only hospital in Western<br />

Australia to introduce robotic surgery; our<br />

urological surgeons are able to perform<br />

“robotic prostatectomies” for prostate<br />

cancer which provides a number of<br />

advantages over other surgical treatment<br />

methods. This technology is only available<br />

in a handful of sites in Australia, albeit<br />

it is more widespread in the US and<br />

elsewhere.’<br />

Western Australia has the second-largest<br />

proportion of privately insured citizens,<br />

at 50 per cent of the total, due to the<br />

region’s relatively high per-capita incomes<br />

in comparison to Australia as a whole.<br />

This translates into a significant role for<br />

the private sector in Western Australia’s<br />

world-class health sector.<br />

A total of 23 private hospitals are located<br />

in Western Australia. Private healthcare is<br />

effectively broken down into two different<br />

systems at a hospital level. There is the<br />

‘not for profit’ private or benevolent<br />

institution model, and the ‘for profit’<br />

private model. Benevolent institutions<br />

such St John of God and <strong>Bethesda</strong> <strong>Hospital</strong><br />

take no profits and reinvest all revenues.<br />

‘All of the surpluses from operations at<br />

St John of God are reinvested back into<br />

our health services and the community,’<br />

says Dr Shane Kelly. On the other hand,<br />

the ‘for profit’ private sector is driven by<br />

generating shareholder value and takes a<br />

margin from healthcare revenues. Overall<br />

the sector is extraordinarily competitive<br />

and widely regarded as world class.<br />

Western Australia has a quality of care<br />

in tertiary hospitals equal to anywhere in<br />

the world,’ comments Minister Hames.<br />

‘The statistics show that in areas such<br />

as medical procedure, survival rates and<br />

mortality rates, Western Australia is as<br />

good as anywhere. Western Australia has<br />

a number of famous doctors that have<br />

won Nobel Prizes for their endeavours in<br />

the medical sciences.’<br />

profit’ private institution with over a<br />

century’s tradition of care in Western<br />

Australia. Smaller stand-alone private<br />

hospitals, such as <strong>Bethesda</strong> <strong>Hospital</strong>,<br />

make up the rest of Western Australia’s<br />

private healthcare portfolio.<br />

Similar to much of Western Australia’s<br />

industry, the key point of competition<br />

amongst private sector hospitals is for<br />

skilled labour, surgeons and doctors<br />

in particular. Outlining the competitive<br />

advantage that the ‘not for profit’ sector<br />

has in the labour market, Justin Walter,<br />

State Manager of Health Scope’s Mount<br />

<strong>Hospital</strong>, says, ‘Benevolent institution<br />

status presents a number of benefits for<br />

the “not for profit” sector, such as not<br />

having to pay payroll taxes. This gives<br />

a significant competitive edge for such<br />

institutions in terms of the salaries they<br />

can offer. The market is skewed with an<br />

unlevel playing field and the only way<br />

that this can change is if the government<br />

takes the lead.’<br />

This cycle of competition for staff<br />

continues to drive further investment<br />

in technology and facilities in Western<br />

Australia’s hospitals, further increasing the<br />

region’s status as a centre for healthcare<br />

excellence. A number of opportunities are<br />

presented for aspirational Commonwealth<br />

doctors and surgeons to come into Western<br />

Australia in order to mitigate labour<br />

pressures. ‘St John of God is focused<br />

upon working with international doctors<br />

to help them along with their training,’<br />

comments Dr Shane Kelly. ‘These doctors<br />

come from a variety of locations, such as<br />

Canada, India, Pakistan, South Africa and<br />

Malaysia. Labour shortages are a definite<br />

issue within the health sector; it is our<br />

number-one challenge. It takes up to 15<br />

years to train medical students to become<br />

specialists.’<br />

International Profile<br />

Western Australia’s key strengths as<br />

a centre for healthcare relate to the<br />

extremely high standards in quality and<br />

safety, as well as a highly skilled and<br />

professional workforce. A continued focus<br />

upon innovation and close links with the<br />

university sector are fundamental drivers<br />

behind continuous improvements in<br />

medical institutions such as the University<br />

of Western Australia, Notre Dame,<br />

Murdoch University and Curtin all have<br />

close ties with the state’s health sector.<br />

‘Our facilities are far more modern than<br />

most places around the world,’ explains<br />

Justin Walter. ‘We are also very well<br />

placed in terms of our geography and time<br />

zone. The workforce in Western Australia<br />

is very impressive, which is a significant<br />

strength for Western Australia’s health<br />

sector.’<br />

Western Australia’s ideal placing in the<br />

Asia Pacific Region, within a time zone<br />

that occupies 60 per cent of the world’s<br />

population and 40 per cent of the world’s<br />

economic output places the state ideally<br />

in terms of developing as a hub for<br />

treating international patients. Reflecting<br />

on the constraint on health tourism posed<br />

by capacity, Justin Walter says, ‘We<br />

have our own strategy for expansion<br />

into the Pacific Rim and Asia. Our main<br />

challenge at Mount <strong>Hospital</strong> is that we<br />

are space-limited. I think more could be<br />

done to promote health tourism; we need<br />

to develop capacity for that before we do<br />

more.’<br />

Minister Hames points out that treating<br />

international patients is a significant<br />

opportunity for Western Australia.<br />

‘Western Australia has one of the best<br />

healthcare systems in the Asia Pacific<br />

region,’ he says. ‘The private sector in<br />

particular has an excellent opportunity<br />

to benefit from the growing trend in<br />

international health tourism.’<br />

Undoubtedly Western Australia has an<br />

enormous service offering in health that<br />

is of significant value to not just the Asia<br />

Pacific region, but also to the broader<br />

Commonwealth community. Western<br />

Australia is a vast region, with a very low<br />

density population similar to that of many<br />

Commonwealth countries. Innovations<br />

such as the Royal Flying Doctors and<br />

Western Australia’s commitment to<br />

regional infrastructure development<br />

underscore the region’s leadership in<br />

resolving challenging issues associated<br />

with providing vital services throughout<br />

vast wilderness regions. Western<br />

Australia is home to Nobel Prize winners<br />

who were awarded the Nobel Prize for<br />

their groundbreaking work on the origins<br />

of stomach ulcers. Meanwhile, Western<br />

Australian medical practitioners Fiona<br />

Wood and Fiona Stanley have won the<br />

Australian of the Year Award for their<br />

discoveries in the fields of critical skin<br />

care and maternal health respectively.<br />

Industry Outlook<br />

Western Australia’s health sector is<br />

extremely well positioned in terms of<br />

increasing demands from a growing<br />

and ageing population and increasing<br />

international focus upon the sector.<br />

Innovation within the health sector<br />

leads on the global stage, boasting<br />

Nobel Prize winners and the most up-todate<br />

technology, which is consistently<br />

implemented.<br />

Significant investment opportunities<br />

present themselves within a sector<br />

averaging 7.5 per cent growth per annum,<br />

notably in international labour exchanges,<br />

regional infrastructure development and<br />

age care. ‘Age care presents massive<br />

opportunities,’ says Justin Walter.<br />

‘Traditional operators have not been able<br />

to leverage very good returns from age<br />

care. We believe that we could work<br />

far more efficiently and do very well<br />

from this area within the overall health<br />

sector picture.’ As Western Australia’s<br />

state government continues to increase<br />

capacity with major infrastructure projects<br />

such as the AU$1.7 billion Fiona Stanley<br />

<strong>Hospital</strong>, the health sector’s future in<br />

Western Australia seems to be extremely<br />

buoyant.<br />

Aerial view of the<br />

<strong>Bethesda</strong> <strong>Hospital</strong>;<br />

Photo Courtesy of<br />

<strong>Bethesda</strong> <strong>Hospital</strong><br />

The private health sector’s competitive<br />

environment in Western Australia is<br />

dominated by three key organisations:<br />

Health Scope and Ramsay Health Care are<br />

the two ‘for profit’ private sector players<br />

leading the industry in Western Australia;<br />

52<br />

followed by St John of God, a ‘not for Western Australian standards. Exceptional<br />

Dr Barry Marshall and Dr Robin Warren,<br />

53


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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

This page: The<br />

Swan Bells Tower;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

S e c t o r O v e r v i e w<br />

Tourism<br />

54 55


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Tourism<br />

To the average international traveller, tourism in Australia casts<br />

immediate images in the mind’s eye of the Sydney Harbour Bridge<br />

and Great Barrier Reef. Western Australia is perhaps Australia’s<br />

least-known international travel destination. This is not, however,<br />

for the lack of sites or things to do, but on account of the<br />

remoteness of Australia’s best-kept travelling secret.<br />

Section Cover<br />

(previous page):<br />

Coastal scenery<br />

looking west<br />

across Quoin<br />

Head, in Fitzgerald<br />

River National<br />

Park; Photo<br />

courtesy of<br />

Tourism Western<br />

Australia<br />

Above:<br />

Greens Pool in<br />

the William Bay<br />

National Park;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

Tourism has such a diverse set of<br />

multiplier effects throughout the<br />

economy that quantifying the<br />

sector’s contribution to the economy in<br />

terms of employment and wealth creation<br />

is a difficult task.<br />

From international airlines such as Qantas<br />

to remote restaurants in the Kimberley,<br />

the touch of tourism is felt throughout<br />

Western Australian society. Western<br />

Australia is home to approximately<br />

2000 businesses involved in the tourism<br />

sector.<br />

Overview<br />

Western Australia’s tourism industry<br />

is governed through the Ministry of<br />

Education and Tourism, and promoted by<br />

Tourism Western Australia. National policy<br />

measures that impact upon the tourism<br />

sector, such as immigration policy, are<br />

set at a federal level. Western Australia’s<br />

key origin markets for tourism are from<br />

Western Australia itself, representing<br />

75 per cent of total visitors, while the<br />

country’s other six states represent<br />

another 15 per cent of visitors. The<br />

remaining 10 per cent are international<br />

visitors.<br />

the UK. Australia’s strong currency and<br />

limited air access routes into Western<br />

Australia are some of the key challenges<br />

that the industry presently faces.<br />

Western Australia’s tourism profile is best<br />

understood when broken down into the<br />

state’s five key tourism regions. These<br />

are Perth and the Swan Valley, the South<br />

West, the Golden Outback, the Coral Coast<br />

and the North West. Overall, Western<br />

Australia is a region in which one can find<br />

a vast array of diverse experiences, an<br />

area that is truly stunning in its wildlife<br />

and natural environment.<br />

Tourism Western Australia<br />

Tourism Western Australia is a quasigovernmental<br />

body that is at the centre<br />

of managing and promoting Western<br />

Australia’s tourism sector.<br />

Tourism Western Australia has six<br />

fundamental strategic objectives:<br />

improving the quality of visitor experiences;<br />

securing the future of regional tourism;<br />

growing visitor expenditure faster than<br />

visitor numbers; accelerating the growth<br />

of Aboriginal tourism; influencing major<br />

infrastructure priorities and attracting<br />

private investment; and building<br />

recognition that tourism and events<br />

enhance the unique Western Australian<br />

lifestyle, as well as supporting the natural<br />

environment.<br />

Tourism Western Australia has now<br />

embarked upon a major advertising<br />

campaign, branding Western Australian<br />

tourism as ‘Experience Extraordinary’.<br />

‘The facts of scale inherent within<br />

Western Australia are extraordinary,’<br />

says Kate Lamont, Tourism Western<br />

Australia Chair, of the branding. ‘You just<br />

have to look at the scale of the coastline<br />

or the vast nature of the Kimberley. We<br />

are communicating this message as a<br />

compelling reason for potential tourists to<br />

visit Western Australia. We are confident<br />

that we can deliver an extraordinary<br />

experience for anyone that visits here.<br />

For a place to be compelling, it has to<br />

have a very true sense of place. Western<br />

Australia is compelling in its depth on that<br />

Perth and the Swan Valley<br />

Perth is where most visitors to Western<br />

Australia will arrive. By no means<br />

a sprawling metropolis, Perth is a<br />

beautiful city blessed with a wonderful<br />

Mediterranean climate. Perth is dissected<br />

by the Swan River, to the North of which<br />

lies the urban centre and the Southern<br />

Hemisphere’s largest urban park in King’s<br />

Park, which is rich in flora and fauna.<br />

Sitting on the south bank of the Swan River<br />

is the Burswood Entertainment Complex,<br />

a casino, hotel, conference centre and<br />

live music venue. Burswood is Western<br />

Australia’s largest single employer on a<br />

single location, hosting a range of guests<br />

from international high rollers flown in<br />

on private jets, to weekend visitors from<br />

across Australia.<br />

Perth has numerous beautiful city beaches<br />

to the western end of the city, such as<br />

Cottesloe and Scarborough, as well as a<br />

vibrant cultural centre in Fremantle to the<br />

south.<br />

Rottnest Island, just 19 kilometres to the<br />

west of Fremantle, is the Perth area’s<br />

answer to the Seychelles. Rottnest is<br />

a beautiful island, with crystal-clear<br />

Indian Ocean waters and unique species<br />

of marsupial, such as the Quokka.<br />

Rottnest Island is currently Western<br />

Australia’s largest tourist destination,<br />

oversubscribed by aspiring visitors to the<br />

tune of 5000 applicants to every available<br />

bed. Rottnest is a model of sustainable<br />

development, unwilling to sacrifice the<br />

island’s ecological balance for short-term<br />

profitability.<br />

‘In terms of sustainability, we are<br />

very strong,’ explains Rottnest Island<br />

Authority’s CEO Paolo Amaranti. ‘Our<br />

desalinisation plant is powered by wind<br />

turbines. All of our waste is disposed of<br />

outside of the island in Canning Vale.<br />

‘We continue to monitor the island in terms<br />

of the numbers of people that we are able<br />

to accommodate. We are tendering for a<br />

five-star hotel to be built on the island.<br />

That will be the final development here;<br />

it is essential for us maintain Rottnest<br />

‘‘<br />

We are confident<br />

that we can deliver<br />

an extraordinary<br />

experience for<br />

anyone that visits<br />

Western Australia.<br />

Kate Lamont,<br />

Chair of Tourism<br />

Western Australia<br />

The tourism industry is of greatest<br />

importance to remote communities at Key international markets for tourism<br />

the periphery of Western Australia’s in Western Australia are New Zealand,<br />

56<br />

geography.<br />

Japan, Korea, Singapore, Germany and<br />

front; it truly has a heart and soul.’ Island’s sustainably.’<br />

57<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Winery; Photo<br />

courtesy of<br />

Tourism Western<br />

Australia<br />

Perth is one of the rare cities in the world<br />

to have a sumptuous wine-growing region<br />

on its doorstep in the Swan Valley. Home<br />

to internationally renowned wineries such<br />

as Sandalfords, the Swan River Valley is<br />

an ideal place for Perth’s tourists to visit,<br />

for a taste of Western Australia’s rich<br />

wine-producing culture.<br />

Western Australia’s South West<br />

Western Australia’s South West region is<br />

akin to the south west of France, with its<br />

array of beaches, forests and world-class<br />

wineries. Western Australia’s Margaret<br />

River region is where the link between<br />

tourism and wine is at its strongest. Home<br />

to numerous internationally renowned<br />

wineries, such as Leeuwin Estate and<br />

Mosswood, Margaret River attracts wine<br />

lovers from around the world, eager to<br />

sample Western Australia’s finest wines in<br />

some of the most beautiful surroundings.<br />

Leeuwin Estate now puts on an annual<br />

concert in the winery, one of Western<br />

Australia’s key social events.<br />

Margaret River is also an internationally<br />

renowned surfing venue, attracting<br />

surfers from around the world to some of<br />

Australia’s best waves. The vast expanse<br />

of uninterrupted ocean between South<br />

Africa and Western Australia creates ideal<br />

waves for surfing.<br />

Western Australia’s Golden<br />

Outback<br />

Western Australia’s outback region<br />

stretches from the south coast up to the<br />

Pilbara, a significant proportion of Western<br />

Australia’s land mass, encompassing a<br />

diverse range of sites and activities for<br />

tourists to get involved with. From beach<br />

experiences on the south coast to fun<br />

farm experiences in the Wheatbelt, the<br />

Golden Outback offers excellent familyorientated<br />

adventure, as well as more<br />

challenging activities in the Goldfields<br />

and Gascoyne-Murchison for the more<br />

intrepid travellers.<br />

Mount Augustus in the Gascoyne-<br />

Murchison region is Australia’s largest<br />

rock and an excellent location for hiking<br />

and exploring. Mount Augustus is also<br />

known as Wajjari by local Aboriginal<br />

people, with numerous cave engravings<br />

found on many parts of the rock. Mount<br />

Augustus is an ideal location for finding<br />

out more about Western Australia’s<br />

ancient indigenous cultures.<br />

Another highlight of the region is the<br />

Canning Stock Route self-drive route, a<br />

2000-kilometre track through beautiful,<br />

isolated landscapes first surveyed over<br />

100 years ago by Albert Canning.<br />

The Super Pit forms part of the Golden<br />

Mile, rumoured to be home to the richest<br />

square mile of gold-bearing soil in the<br />

world. One can access Kalgoorlie by<br />

plane, train or road, with regular public<br />

services from Skywest, the Prospector<br />

Train and Goldrush Tours respectively.<br />

Western Australia’s Coral Coast<br />

Western Australia’s Coral Coast is home<br />

to the Ningaloo Reef, one of the largest<br />

in the world and a showcase for an<br />

extraordinary array of marine wildlife.<br />

Ningaloo’s coral stretches up to within<br />

five metres of the beach on many areas<br />

of the coastline. For snorkelling and<br />

diving enthusiasts, the Ningaloo Reef is a<br />

must-visit. One can swim with dolphins,<br />

turtles, manta rays and whale sharks, to<br />

name but a few species on offer.<br />

Monkey Mia, Shark Bay, Exmouth and<br />

Coral Bay are among the highlight towns<br />

of the Coral Coast, all of which offer<br />

spectacular white beaches and crystalclear<br />

ocean waters teeming with wildlife.<br />

Fishing is one of the most popular activities<br />

for enthusiasts visiting the region, with<br />

towns such as Cervantes and Geraldton<br />

having a longstanding angling culture.<br />

Shark Bay was Western Australia’s first<br />

world heritage listed area, recognised<br />

for its white beaches, turquoise waters<br />

and rich variety of marine wildlife in<br />

1991. Tourists are presented with an<br />

array of experiences in Shark Bay, from<br />

the region’s 17 species of mammals, 98<br />

species of reptile and 230 species of bird<br />

to be found on land, to the vast diversity<br />

in marine wildlife. Those with a passion<br />

for the natural world are in their element<br />

in and around Shark Bay.<br />

Western Australia’s North West<br />

and Kimberley<br />

From Broome on the North West coast<br />

over to Kununurra to the North East, the<br />

Kimberley region is an awe-inspiring place<br />

that, through its rugged terrain and ancient<br />

forms of wildlife, very much embodies<br />

the historic spirit of Western Australia.<br />

Hundreds of kilometres separate towns<br />

and cities in the Kimberley, and a fourby-four<br />

vehicle is almost essential to see<br />

the most interesting sites that the region<br />

has to offer.<br />

Broome was first established as a coastal<br />

town in 1883 by John Forrest, soon<br />

becoming home to much of Western<br />

Australia’s pearling industry, as well as<br />

a submarine cable between the town<br />

and Singapore, which was completed in<br />

1889. Broome’s most important tourist<br />

location, Cable Beach, derived its name<br />

from this construction. Broome is an<br />

excellent small coastal town for visitors<br />

to relax in, eat well and spend time at<br />

the beach. For the more adventurous<br />

travellers, four-wheel drive tours and<br />

camel rides are available.<br />

The East Kimberley is for many West<br />

Australians the heart and soul of their<br />

state. Rock formations throughout the<br />

region, such as the world-renowned<br />

Bungle Bungle Range, are home to rocks<br />

that are billions of years old. Boab trees,<br />

an iconic feature of the landscape unique<br />

to this region and Madagascar, live for<br />

thousands of years. It is usual for visitors<br />

Whale Shark;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

Leeuwin Estate has been the most<br />

proactive winery with regards to tourism,<br />

having identified tourism’s close link with<br />

wineries at an early stage. ‘Because we<br />

are such an isolated winery, it makes<br />

Beyond the Coral Coast’s world-class<br />

sense for us to attract people to come Western Australia first discovered gold<br />

marine environment and coastal activities,<br />

down here and see what we are doing,’ in the 1890s, heralding a gold rush and<br />

one can discover the region’s selection<br />

explains CEO Denis Horgan. ‘From this, sudden population explosion as fortune<br />

of wildflowers with a walk through over<br />

we came up with the concept of linking seekers from around the world descended<br />

17,000 hectares of heathland at Nambung<br />

fine wine, food and art. In 1985, we had on the region.<br />

National Park.<br />

the London Philharmonic Orchestra here<br />

and we have put art on our labels. We Kalgoorlie is an excellent city for travellers<br />

The Coral Coast is also an excellent region<br />

also have a fantastic environment here for to get a flavour of Western Australia’s<br />

to learn more about Western Australia’s<br />

tourists in Margaret River. The concerts pioneering spirit. Not far from the city is<br />

geological history, with 3.6-billion-yearold<br />

that we put on are an excellent way to the Super Pit, one of the largest open-cut<br />

fossils such as those found at the<br />

58<br />

get publicity.’<br />

mines in the world.<br />

Pinnacles near Jurien Bay.<br />

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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

to the Kimberley to find themselves<br />

surrounded by thousand-year-old trees,<br />

growing from billion-year-old rocks.<br />

El Questro Wilderness Park, approximately<br />

100 kilometres from Kununurra in a<br />

four-wheel drive, is perhaps the East<br />

Kimberley’s greatest location to come<br />

and explore the finest sites and natural<br />

features that the region has to offer. El<br />

Questro is a million-acre site, home to<br />

some of the Kimberley’s most spectacular<br />

rivers, waterfalls, gorges, flora and<br />

fauna. One can find boab trees up to<br />

2000 years old throughout the park, as<br />

well as saltwater crocodiles, barramundi<br />

fish and numerous species of snake and<br />

lizard. El Questro offers visitors boat<br />

tours down the ancient Chamberlain<br />

River, where they can see rock wallabies,<br />

crocodiles and barramundi. A number of<br />

four-wheel drive tours will also deliver<br />

hiking enthusiasts to a range of gorges<br />

and waterfalls that vary according to<br />

hiking ability. El Questro’s numerous park<br />

rangers also act as guides for groups that<br />

want to hike accompanied, as opposed to<br />

those more courageous visitors that want<br />

to go it alone. El Questro’s highlights are<br />

its beautiful gorges, such as Emma Gorge<br />

and Armalia Gorge, and hot springs such<br />

as Zebedee Springs. As an experience,<br />

El Questro offers an affordable, rustic<br />

outdoor experience for those that enjoy<br />

camping – or, alternatively, an extremely<br />

luxurious experience in the homestead<br />

for those that can afford it. El Questro<br />

Wilderness Park is famous throughout<br />

Western Australia, and is not to be missed<br />

for those that are fortunate enough to<br />

experience the Kimberley.<br />

Transportation In and Around<br />

Western Australia<br />

Without a doubt, the greatest challenge<br />

for those travelling around Western<br />

Australia is access to remote locations<br />

great distances from Perth. As Western<br />

Australia’s aviation market continues to<br />

develop, airlines such as Skywest provide<br />

an invaluable service to local communities<br />

dependent upon mining and tourism, by<br />

delivering visitors and workers to their<br />

regions.<br />

‘Skywest provides a vital service,’<br />

comments Skywest CEO Mark Shelton,<br />

‘in that many communities would be<br />

cut off and industrial projects rendered<br />

unviable without the services that we<br />

provide. We engage with the community<br />

all the time and hear this message echoed<br />

constantly. Skywest is very proud of the<br />

unique value proposition we carry to the<br />

regions of Western Australia.’<br />

Skywest was established in 1963 and has<br />

since developed a comprehensive service<br />

throughout Western Australia, flying<br />

to remote locations such as Exmouth,<br />

Monkey Mia, Broome and Kununurra.<br />

Skywest’s business model of integrating<br />

routes has enabled the airline to provide<br />

such an invaluable service at a very<br />

reasonable cost to the consumer.<br />

‘Our key routes are from Perth to regional<br />

hubs such as Karratha and Broome,’ says<br />

Shelton. ‘However, we operate integrated<br />

routes so that we can stop off at several<br />

mine sites along the way. This provides<br />

us with an excellent level of scale that<br />

enables us to service Western Australia’s<br />

industrial regions and remote communities<br />

so effectively. The key challenge that<br />

airlines face in Western Australia is<br />

servicing very remote locations where<br />

there is such a thin spread of population.<br />

At Skywest, we have been able to<br />

devise a model that allows us to do that<br />

sustainably.’<br />

and Kimberley. Aboriginal art is rapidly<br />

becoming a global phenomenon, with<br />

curators from the world’s top galleries<br />

in Tokyo, New York, London and Berlin<br />

all expressing a growing interest in this<br />

emerging genre.<br />

Visitors to <strong>CHOGM</strong> 2011 will be treated<br />

to one of the most exciting Aboriginal arts<br />

projects ever to have been undertaken,<br />

with the Canning Stock Route Project<br />

set to be exhibited at <strong>CHOGM</strong> in Perth.<br />

The Canning Stock Route Project<br />

developed as a collaboration between<br />

Western Australia’s independent cultural<br />

organisation Form and a series of<br />

Aboriginal arts centres throughout the<br />

Pilbara. It is a fascinating artistic appraisal<br />

of one of Western Australia’s key historic<br />

sites through the imagination of the<br />

state’s aboriginal communities.<br />

Perth is also home to the annual Perth<br />

International Arts Festival, a monthlong<br />

arts bonanza held at the peak of<br />

summer between February and March.<br />

Perth International Arts Festival serves<br />

as an excellent tourist attraction, as well<br />

as a means of raising Perth’s profile on<br />

the international arts scene. The festival<br />

plays host to a diverse array of acts, from<br />

theatre and live comedy to cinema and<br />

live music.<br />

Industry Outlook<br />

As more and more domestic and<br />

international tourists become aware of<br />

Western Australia’s incredible diversity<br />

and quality as a tourist destination,<br />

opportunities within the sector will<br />

continue to grow.<br />

Aerial view of the<br />

Bungle Bungles;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

The East Kimberley is home to a variety<br />

of other interesting sites and experiences,<br />

such as the Ord River and Lake Argyle,<br />

both of which are critical waterways for<br />

the East Kimberley’s booming horticultural<br />

In particular, investment opportunities<br />

sector. The Kimberley is one of Australia’s<br />

Ninety-six Aboriginal artists went camping abound in Perth’s hotel market and<br />

best regions for visitors to come and learn<br />

along the Canning Stock Route for six services sector, with demand high for<br />

more about Aboriginal culture and art,<br />

weeks, painting the stories and images hotels, cafés, bars and restaurants. Perth<br />

with numerous art centres and galleries<br />

that were of greatest importance from currently has the highest hotel occupancy<br />

The Arts in Western Australia<br />

throughout the region. Visitors are also<br />

the region’s indigenous heritage. Form, an rate, at around 90 per cent, of any major<br />

able to find out a great deal more about For a first-time visitor to Western<br />

extremely exciting cultural organisation, city in the world. As Tourism Western<br />

the fascinating relationship that Western Australia, one of the region’s key standout<br />

is promoting the collection throughout Australia’s ‘Experience Extraordinary’<br />

Australia’s indigenous communities have<br />

features is the array of extraordinary<br />

Australia in the run up to <strong>CHOGM</strong>, as well campaign continues to roll out, tourism<br />

with the land, with a number of tours and bright artworks that use colours reflecting<br />

as to international markets in cities such arrivals in Western Australia are<br />

60<br />

stays with aboriginal guides on offer. the state’s regions, such as the Pilbara<br />

as Tokyo and Berlin.<br />

increasingly expected to roll in.<br />

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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

S e c t o r O v e r v i e w<br />

Education<br />

62 63


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Education<br />

Western Australia’s education sector is of vital importance to the<br />

state economy in terms of jobs, skills and innovation. Western<br />

Australia’s key challenge as an economy is labour shortages<br />

across a variety of industry sectors. Western Australia’s five fullyfledged<br />

universities, working closely with industry, are pivotal to<br />

overcoming this obstacle to the state’s economic growth.<br />

Section Cover<br />

(previous page):<br />

Murdoch University<br />

student centre;<br />

Photo courtesy<br />

of Murdoch<br />

University<br />

Above:<br />

Edith Cowan<br />

University (ECU)<br />

Chancellery<br />

Building; Photo<br />

courtesy of ECU<br />

As Western Australia’s universities<br />

continue to raise their international<br />

profile and operate on a global level,<br />

the state’s reputation as an outstanding<br />

place for international students is<br />

increasing. The university sector is vital to<br />

Western Australia’s ambition to become<br />

the global centre for excellence in mining<br />

and resources-based education.<br />

Overview<br />

Despite annual growth of around 5<br />

per cent over the past 20 years, the<br />

sector’s relative importance to Western<br />

Australia’s economy has declined as<br />

other sectors associated with resources<br />

development have grown faster. Worldclass<br />

universities, such as the University<br />

of Western Australia and Murdoch<br />

University, make a vital contribution to all<br />

of Western Australia’s industries with their<br />

focus on innovation and the development<br />

of talent for professional labour markets.<br />

entrants into the labour market for the<br />

economy to maintain optimal production<br />

capacity.<br />

Outlining the labour shortage facing<br />

Western Australia, CCIWA Chief<br />

Economist Jon Nicolaou says, ‘Labour<br />

shortages are a significant challenge for<br />

us, and have been over the past five<br />

years in particular. In the near future,<br />

labour shortages will again return to limit<br />

business in Western Australia.’<br />

Western Australia’s universities have a<br />

key part to play in attracting international<br />

talent to come to the region for study and<br />

work.<br />

Western Australia’s Universities<br />

Western Australia currently has five<br />

universities, all of which were established<br />

during the 20th century.<br />

Edith Cowan University (ECU) is Western<br />

Australia’s oldest university and alma<br />

mater of Australian actor Hugh Jackman,<br />

opened initially as a traditional teachers’<br />

college in 1902. ECU evolved into a<br />

fully operational university following a<br />

legislative change in the 1980s, and now<br />

caters to 23,000 students from around<br />

90 countries attending graduate and<br />

undergraduate courses.<br />

ECU has academic specialisations in the<br />

sports sciences, nursing, nanotechnology<br />

and the performing arts. Edith Cowan<br />

University prides itself on the institution’s<br />

community focus, as highlighted by<br />

institutional focus upon community<br />

engagement. Edith Cowan University<br />

works throughout Western Australia’s<br />

regions, sending trainee nurses to remote<br />

communities in the Pilbara, as well as<br />

having a regional campus in the southern<br />

town of Bunbury.<br />

The University of Western Australia<br />

Established in 1911 following an act of<br />

parliament, the University of Western<br />

Australia (UWA) has grown from 184<br />

undergraduates in 1913, to over 21,000<br />

today. Widely acknowledged as one of<br />

Australia’s leading academic institutions,<br />

UWA is consistently ranked within<br />

Australia’s top five universities; and as<br />

Western Australia’s leading centre of<br />

academic excellence.<br />

UWA is Western Australia’s leading<br />

research institution, conducting 70 per<br />

cent of total research in the state. With key<br />

specialisations in agriculture, biological<br />

sciences, medicine and engineering,<br />

UWA’s research programme is very closely<br />

linked to Western Australia’s economic<br />

strengths in the resources, agricultural<br />

and health sectors. As an academic<br />

institution whose core mission is to<br />

achieve international excellence, UWA’s<br />

flagship research programmes such as the<br />

International Centre for Radio Astronomy<br />

Research (driving Australia’s bid to host<br />

the US$2 billion International Square<br />

Kilometre Array project) and institutes<br />

including the Energy and Minerals<br />

Institute, the Oceans Institute and the<br />

Institute of Agriculture, lead the world’s<br />

understanding of issues fundamental<br />

to many of the challenges experienced<br />

throughout the broader Commonwealth<br />

community today.<br />

As UWA’s international profile continues<br />

to grow, collaborative research and<br />

teaching efforts throughout the world,<br />

such as in India, China and Southeast<br />

Asia, are maturing. UWA’s global reach<br />

is best demonstrated in the range of<br />

80 countries from which the university<br />

welcomes incoming students, and the<br />

increasing prominence of UWA within<br />

international networks such as the<br />

Worldwide University Network. ‘We<br />

have an ambition to be ranked within the<br />

world’s top 100 universities by 2013,’<br />

says Vice-Chancellor Alan Robson of the<br />

university’s ambitious international plans,<br />

‘and within the top 50 by 2050. In this<br />

way, we can ensure our teaching and<br />

research best serves the communities<br />

that we work with as well as ensuring<br />

Western Australia remains fully engaged<br />

ECU is particularly excited about<br />

The education sector contributes around<br />

leveraging the university’s specialism in<br />

3 per cent to Western Australia’s gross<br />

nanotechnology in order to contribute<br />

state product (GSP), generating AU$4.7 Labour Shortages<br />

towards Western Australia’s bid for the<br />

billion in 2008–09, and is Western<br />

Square Kilometre Array (SKA). The SKA<br />

Australia’s fifth-largest employer with It is estimated by the Chamber of<br />

will be the world’s most powerful radio<br />

92,000 employees. The number of Commerce and Industry in Western<br />

telescope, comprising a linked array of<br />

employees in the sector has grown by 9 Australia (CCIWA) that, by the year<br />

thousands of antennas, stretching across<br />

64<br />

per cent between 2008 and 2009. 2016, the state will require 400,000 new<br />

a 3000-kilometre area.<br />

internationally.’<br />

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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

In terms of<br />

international<br />

students on campus<br />

here in Perth, the<br />

highest number<br />

comes from<br />

China, followed by<br />

Malaysia, Indonesia<br />

and India.<br />

The University of Western<br />

Australia also plays host to<br />

a number of the state’s most<br />

interesting and prestigious<br />

conferences, such as the<br />

In The Zone conference,<br />

which looked at Western<br />

Australia’s placement in a<br />

time zone that represents<br />

60 per cent of the world’s<br />

population and 63 per cent<br />

of the world’s economic<br />

output.<br />

Speakers from throughout<br />

this time zone, from<br />

Hong Kong to Indonesia,<br />

were in attendance,<br />

discussing ways in which<br />

countries and regions in<br />

this time zone can work in<br />

partnership to take advantage of common<br />

opportunities.<br />

Established in 1967, Curtin University<br />

was Western Australia’s third university.<br />

Initially recognised as a university<br />

of technology, Curtin was awarded<br />

full university status in 1987. Curtin<br />

University has grown into Australia’s fifthlargest<br />

academic institution by student<br />

numbers, with over 43,000 graduates and<br />

undergraduates in attendance. Curtin’s<br />

key academic specialisations are in<br />

science and engineering, health sciences,<br />

the humanities and business, and it<br />

houses the Curtin Business School.<br />

We constantly review our programmes<br />

based upon the advice of our advisory<br />

committees, thus we believe that we<br />

understand the requirements of business<br />

moving forward and have tailored our<br />

programmes to meet these requirements.<br />

We work with Skills Australia to<br />

understand skills development, as well as<br />

with professional associations to further<br />

understand industry requirements.’<br />

Curtin University is internationally<br />

orientated, with 19,000 of the<br />

institution’s 44,000 students originating<br />

from overseas. Curtin also has three<br />

external campuses, one in Sydney<br />

CBD and the others in Singapore and<br />

Malaysia. Speaking about the importance<br />

of the university’s international activities,<br />

Professor Hacket says, ‘Curtin is making<br />

a huge contribution to the regional<br />

development of the Southeast Asian<br />

region in terms of developing engineering<br />

graduates, as well as providing direct<br />

teaching in countries such as Hong Kong,<br />

Vietnam and Mauritius, where we have<br />

1000 students. In terms of international<br />

students on campus here in Perth, the<br />

highest number comes from China,<br />

followed by Malaysia, Indonesia and India.<br />

However, Curtin is very strong throughout<br />

the whole Asia Pacific region.’<br />

Curtin University has very strong links<br />

with the Commonwealth community,<br />

and Professor Hacket is also well aware<br />

of the importance of the Commonwealth<br />

to education in Western Australia. ‘Our<br />

Commonwealth links through the English<br />

language and shared background in terms<br />

of law and education are vital to much of<br />

the success of our overseas engagements.<br />

These shared links enable us to work<br />

together extremely well. Commonwealth<br />

countries have underscored the quality of<br />

our offering extremely well. For example,<br />

we have struggled to a certain extent to<br />

engage with Chinese institutions, as we<br />

don’t have the shared history in language<br />

and education that we have through<br />

the Commonwealth. We are working in<br />

Curtin makes a key contribution to<br />

Professor Jeanette<br />

Western Australia, with the university’s<br />

Hacket,<br />

strong focus upon applied education and<br />

Vice-Chancellor<br />

and President of<br />

collaboration with the private sector.<br />

Curtin University<br />

By adopting this approach, Curtin<br />

has ensured that graduates from the<br />

university are immediately ready for the<br />

labour market, helping to sustain Western<br />

Australia’s economic growth. ‘For each<br />

of our course sectors, we have an<br />

industry advisory committee,’ says Vice-<br />

Chancellor Professor Jeanette Hacket.<br />

‘The purpose of these groups is to identify<br />

the challenges moving forward in terms of Mauritius to offer a range of business and<br />

human resources, science and research, construction-management programmes.<br />

as well as the overall development of the The Commonwealth relationship opened<br />

industry. This enables us to shape our up awareness for all of us to develop a<br />

academic programmes in a way that best mutually beneficial shared relationship<br />

66<br />

suits the industries of Western Australia. based upon education.’<br />

67<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Award winning<br />

library building;<br />

Photo courtesy<br />

of Edith Cowan<br />

University<br />

Murdoch University<br />

The fourth tertiary education institution<br />

to be established in Western Australia<br />

was Murdoch University. Established<br />

in 1973 as Western Australia’s second<br />

university and a specialist veterinary<br />

sciences institute, Murdoch University<br />

has evolved into a thriving, diversified<br />

research institution since welcoming its<br />

first undergraduates in 1975. Teaching<br />

quality has formed the cornerstone of<br />

Murdoch’s development as a university,<br />

frequently achieving top rank scores in<br />

this sphere.<br />

‘There are a variety of different ranking<br />

systems,’ explains Vice-Chancellor<br />

John Yovich, ‘but, in terms of student<br />

satisfaction, Murdoch University ranks<br />

number one. We have had the highest<br />

student-satisfaction rankings for any<br />

Australian university consistently for 13<br />

out of the past 15 years.’<br />

and renewable energies to media<br />

marketing and branding onto the campus.<br />

Murdoch’s Veterinary school is accredited<br />

at an international level by London’s Royal<br />

College, as well as its North American and<br />

Australasian counterparts.<br />

Of particular interest to the Commonwealth<br />

community is Murdoch’s specialisation<br />

with regards to biotechnology and<br />

agricultural sciences. Murdoch is set to<br />

have the Southern Hemisphere’s largest<br />

biotechnology and agricultural consortium<br />

located on its enormous 224-hectare<br />

campus, following the physical relocation<br />

of Western Australia’s Department of<br />

Food and Agriculture.<br />

Further opportunities for building scale in<br />

Murdoch’s research interests are on the<br />

horizon, with the proposed construction of<br />

the Fiona Stanley <strong>Hospital</strong> just to the east<br />

of the university campus. Vice-Chancellor<br />

Yovich has pointed out Murdoch’s<br />

‘significant excitement at the prospect of<br />

working with the Fiona Stanley <strong>Hospital</strong><br />

on a variety of biotechnology research<br />

activities.’<br />

From a commercial perspective, Murdoch<br />

University is involved with significant<br />

multimedia and marketing activities, with<br />

the institution’s Interactive Television<br />

Research Institute having contracts with<br />

multinational brands such as Nike and<br />

Coca-Cola. Furthermore, Murdoch has<br />

leveraged its status as the only research<br />

institute in Australia accredited to test<br />

the viability of renewable technologies<br />

through partnerships with companies<br />

such as Carnegie Wave and Western<br />

Power, both of whom are at the forefront<br />

of Western Australia’s 2020 renewable<br />

energies challenge.<br />

On top of this, Murdoch works closely<br />

with Western Australia’s resources giants,<br />

investigating methods for processing<br />

minerals through the university’s<br />

longstanding affiliation with the Parker<br />

Centre. Vice-Chancellor Yovich is very<br />

clear on maintaining relevance to Western<br />

Australia’s economic requirements through<br />

Murdoch’s research agenda, saying, ‘We<br />

are very enterprising at Murdoch; we<br />

have an active commercialisation unit on<br />

to bring our findings to market. We were<br />

the first Australian university to develop<br />

a partnership with a superannuation fund<br />

that has a portfolio of investments based<br />

around Murdoch’s research activities.<br />

‘This gives us an overlay of understanding<br />

when working with other commercial<br />

entities in a variety of our research<br />

activities. We are very careful to ensure<br />

that our research units are closely linked<br />

with industry partners, thus ensuring<br />

commercial viability throughout the<br />

research cycle.’<br />

With 18,000 students from over 80<br />

countries and campuses throughout<br />

the Commonwealth in countries such<br />

as Malaysia and Singapore, Murdoch<br />

University’s international profile is<br />

without question. Murdoch is increasingly<br />

establishing itself as an outward-looking<br />

institution with an international focus.<br />

Asked for a reaction to <strong>CHOGM</strong> 2011<br />

coming to Perth, Yovich epitomised<br />

Western Australia’s excitement.<br />

‘Sensational!’ he declared. ‘We would like<br />

to take the opportunity to get involved<br />

as much as we can. We would like to<br />

host sessions or seminars that are of<br />

particular interest to the Commonwealth<br />

research and investment communities.<br />

Murdoch sees <strong>CHOGM</strong> 2011 as a<br />

significant opportunity to increase the<br />

knowledge base of what we can offer<br />

internationally.’<br />

University of Notre Dame<br />

Western Australia’s most recent university<br />

to be established is the University of Notre<br />

Dame, established in 1994. University of<br />

Notre Dame in Fremantle was established<br />

after a group of local Catholics identified<br />

the need for facilities to teach Catholic<br />

schoolteachers in Western Australia.<br />

Through a chance meeting with the<br />

President of the University of Notre Dame<br />

in Indiana, University of Notre Dame in<br />

Western Australia became a reality.<br />

University of Notre Dame has expanded<br />

throughout Australia following its initial<br />

establishment, with campuses in Broome<br />

and Sydney established in 1994 and<br />

2004 respectively. University of Notre<br />

Dame has a unique philosophy towards<br />

education, based upon a comprehensive<br />

programme of learning.<br />

‘Education is supposed to be about opening<br />

the minds of the people involved with it,’<br />

explains Vice-Chancellor Professor Celia<br />

Hammond. ‘University of Notre Dame has<br />

a fundamental curriculum for all students<br />

of theology, philosophy and ethics. That<br />

is designed to open our students’ minds<br />

to the world that we live in and their place<br />

within it. This is vitally important to our<br />

philosophy behind education. Education<br />

should be about broadening people’s<br />

minds and contributing to society. We<br />

would always describe our approach to<br />

education as the education of the whole<br />

From a research perspective, Murdoch is<br />

the only university ranked in Australia’s<br />

top 10 research institutions that doesn’t<br />

have a medical school. Such research<br />

intensity, combined with Murdoch<br />

University’s commercial acumen and<br />

agility, has drawn a wealth of world-class<br />

68<br />

research contracts, from biotechnology campus working with our research units<br />

69


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

A total of 60 per<br />

cent of the world’s<br />

population lives in<br />

the same time zone<br />

as Perth. We are<br />

looking towards the<br />

North to engage<br />

internationally.<br />

Professor Alan<br />

Robson,<br />

Vice-Chancellor of<br />

The University of<br />

Western Australia<br />

‘‘<br />

person, which goes back<br />

to the idea of enabling<br />

people to participate in a<br />

profession and in society.’<br />

University of Notre Dame<br />

works closely with the<br />

Catholic Church in order to<br />

improve access to education<br />

for Western Australia’s<br />

indigenous communities.<br />

Highlighting University of<br />

Notre Dame’s approach<br />

to this vital local issue,<br />

Professor Hammond says,<br />

‘The Catholic Church has<br />

had a big role in education<br />

since Western Australia<br />

was born. Indigenous<br />

education made up an<br />

important part of that. Ever<br />

since University of Notre<br />

Dame was established in 1994, indigenous<br />

education has formed a very important<br />

part of our mandate. We implement<br />

pathways for indigenous school-leavers<br />

to go into higher education. Our two key<br />

courses for undergraduates are medicine<br />

and education in Broome; however we are<br />

currently working with the private sector<br />

to introduce courses relating to natural<br />

resources management.’<br />

University of Notre Dame is working to<br />

increase the institution’s international<br />

profile, with a target of 10 per cent of<br />

students to come from an overseas<br />

location. Presently University of Notre<br />

Dame has strong links with the USA,<br />

with exchange programmes partnering<br />

University of Notre Dame in Indiana and<br />

the University of Portland. Of particular<br />

interest to potential international students<br />

from the Commonwealth is University<br />

of Notre Dame’s ambition to increase<br />

entrants to the university from Latin<br />

America, Africa and India.<br />

Innovation and Industry Links<br />

programme to an investment fund in order<br />

to ensure sustainability in the research<br />

cycle. Furthermore, by building close links<br />

with industry through institutions such as<br />

the Parker Centre and business schools<br />

such as UWA’s, Western Australia’s<br />

leading institutions of knowledge and<br />

research ensure that those graduating<br />

from them retain relevance for the local<br />

economy.<br />

Elaborating upon UWA’s links with the<br />

private sector, Professor Alan Robson<br />

explains, ‘University of Western Australia<br />

has very close relationships with a major<br />

industry players: Woodside funds two and<br />

a half professorial chairs on the university<br />

professorial board, Chevron funds one<br />

and a half chairs, Alcoa funds a chair as<br />

does BHP Billiton. The engineering firm<br />

Monadelphus is funding an integrated<br />

learning centre in our engineering faculty.<br />

Our business school board comprises of<br />

leading corporate figures including Don<br />

Voelte (Woodside CEO), Richard Goyder<br />

(Wesfarmers CEO), John Poynton (Azure<br />

Capital Chairman) and Ian Ashby (BHP<br />

Billiton President Iron Ore).’<br />

Key research programmes such as UWA’s<br />

Geothermal Centre of Excellence, Energy<br />

and Mineral Institute and Institute of<br />

Agriculture are very closely linked with the<br />

strengths and challenges associated with<br />

Western Australia’s economy today.<br />

By ensuring this approach is followed,<br />

Western Australia’s universities are<br />

able to ensure that graduates find local<br />

employment opportunities plentiful,<br />

and that a sustainable cycle of research<br />

and innovation is maintained. Murdoch<br />

University has taken proactive steps<br />

to ensure the university’s proximity to<br />

commerce, engaging with Wesfarmers<br />

Energy and the Department of Food and<br />

Agriculture, in order for their divisions<br />

to relocate to Murdoch’s campus. Curtin<br />

University has taken similar steps, with<br />

the development of Bentley Technology<br />

Park adjacent to Curtin’s main campus.<br />

Curtin University, University of Western<br />

Australia and the Western Australian state<br />

government, with the AU$100 million<br />

International Centre for Radio Astronomy<br />

Research (ICRAR).<br />

The ICRAR forms a key element of Western<br />

Australia’s bid for the Square Kilometre<br />

Array (SKA). The Square Kilometre Array<br />

is expected to gather more information<br />

about the universe in its first 10 minutes<br />

of operation than has been gathered<br />

throughout man’s history of space<br />

exploration. The Square Kilometre Array is<br />

due to be constructed either in Southern<br />

Africa or Western Australia, ensuring that<br />

this momentous project’s home will be in<br />

the Commonwealth.<br />

International Profile<br />

Western Australia’s universities share the<br />

business community’s strong international<br />

focus in their awareness of the benefits<br />

of engaging on the international stage.<br />

Edith Cowan, Murdoch and Curtin<br />

Universities in particular have a remarkable<br />

international profile, with each institution<br />

educating students from over 90 different<br />

countries.<br />

Education makes up 4 per cent of Western<br />

Australia’s export revenues, a significant<br />

contribution in a region with such a strong<br />

export profile. By drawing on the world’s<br />

most talented young people, Western<br />

Australia’s universities are ensuring that<br />

the local economy benefits over the<br />

longer term.<br />

One of the world’s leading education<br />

companies emerged out of Western<br />

Australia’s international focus regarding<br />

education. Established in 1994, Navitas<br />

sets out to help international students<br />

adapt to new cultures and conditions.<br />

‘Navitas really grew out of a recognition<br />

that many international students coming<br />

to Australia were failing in the first year<br />

of their degree,’ says Managing Director<br />

Rod Jones of the company’s origins.<br />

‘This had nothing to do with academic<br />

ability; this was more to do with cultural<br />

changes that international students went<br />

through as part of studying abroad. The<br />

transition proved very difficult for many<br />

international students. What Navitas set<br />

out to do was assist with this transition<br />

in order for international students to be<br />

more successful.’<br />

Navitas’ approach to international<br />

education has been remarkably<br />

successful, with the company now<br />

present throughout the world. ‘Navitas<br />

has maintained over the past 12 years a<br />

25 per cent cumulative increase in student<br />

numbers,’ explains Jones. ‘Navitas has<br />

grown from one college in 1995 to 28<br />

colleges internationally today. Over 15<br />

years, we have grown to become a global<br />

company.’<br />

Western Australia’s universities<br />

distinguish themselves by how closely Western Australia’s universities also have<br />

they work with industry to the overall a rich tradition of collaboration, working<br />

benefit of Western Australia’s economy. together in order to leverage particular<br />

Leading universities such as Murdoch areas of expertise and produce benefits<br />

have innovated in very advanced ways, overall for the region. A very good<br />

70<br />

such as linking the institution’s research example of such collaboration is between<br />

71


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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

S e c t o r O v e r v i e w<br />

Agriculture and Fisheries<br />

John Curtin<br />

Forum; Photo<br />

courtesy of Curtin<br />

University<br />

Western Australia’s universities’<br />

international focus is not limited to<br />

attracting international students. Numerous<br />

international campuses throughout Asia<br />

also belong to Western Australia’s leading<br />

institutions. Curtin has campuses in<br />

Singapore and Malaysia; whilst Murdoch<br />

has campuses in Singapore, Dubai and<br />

Kuala Lumpur. Although it does not<br />

have any international campuses, UWA<br />

is active with teaching programmes in<br />

Shanghai, Hong Kong and Singapore.<br />

remote sensing programme in partnership<br />

with Rio Tinto, as well as working with<br />

BHP and Alcoa.’<br />

Western Australia’s academic<br />

infrastructure and industry participation<br />

related to the mining industry lays an<br />

excellent foundation for Perth’s rapid<br />

growth towards becoming the leading<br />

centre for academic excellence, training<br />

and expertise with regards to mining and<br />

resources worldwide.<br />

Western Australia as a Centre for Commonwealth Opportunities<br />

Resources Industry Excellence Given Western Australia’s proximity to<br />

Western Australia’s long-held ambition many of the Commonwealth’s fastestgrowing<br />

of being internationally recognised as<br />

economies throughout the<br />

a global centre of excellence in the Indian Ocean Rim and South East Asia,<br />

resources sector is increasingly becoming the state’s education sector presents<br />

a reality, as links between the state’s fantastic opportunities for ambitious<br />

universities and leading industrial sector international students and collaborative<br />

continue to develop. Curtin University research programmes across borders.<br />

has recently opened a Resources and<br />

Chemistry Precinct, Murdoch works ‘<strong>CHOGM</strong> is a great opportunity for us to<br />

closely with widely recognised metallurgy show people around our campus,’ says<br />

research house the Parker Centre, and Professor Alan Robson, capturing UWA’s<br />

University of Western Australia is home excitement at the opportunities presented<br />

to the longstanding Energy and Mineral by <strong>CHOGM</strong>. ‘Sixty per cent of the world’s<br />

Institute. ‘Curtin University works together population lives in the same time zone as<br />

with Australia’s largest mining schools, Perth. We are looking towards the North<br />

developing a shared curriculum that is to engage internationally. <strong>CHOGM</strong> gives<br />

benchmarked across industry standards,’ us a great opportunity to engage more<br />

says Professor Jeanette Hacket. ‘For in the international arena. I think that is<br />

example, we have a programme with the great that <strong>CHOGM</strong> is coming to Perth.<br />

Colorado School of Mines. We also have a UWA is very keen to interact more with<br />

campus in Borneo in partnership with the Africa, India, China and the Middle East;<br />

Sarawak government and we partner with this gives us a great opportunity to get<br />

Shell in order to develop executives for to know potential partners from these<br />

72<br />

the oil and gas industry. We also have a regions more effectively.’<br />

73


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Western Australia: A Quality Food<br />

and Fibre Producer<br />

High-quality, locally produced food and fine wine are firmly a part<br />

of the Western Australian lifestyle. This is a bounty that Western<br />

Australians enthusiastically share, with exports accounting for 80<br />

per cent of the state’s annual food and agricultural production.<br />

Author:<br />

State Government<br />

of Western<br />

Australia<br />

Section Cover<br />

(previous page):<br />

Aerial view of<br />

the Diversion<br />

Dam, with Lake<br />

Kununurra and<br />

the Ord River;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

This page:<br />

Agricultural crop<br />

on part of the<br />

Ord Irrigation<br />

Project, located<br />

in Kununurra;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

Within Western Australia, the<br />

AU$8 billion agricultural and<br />

food sectors provide fresh<br />

and processed products for enjoyment<br />

at home or in a rich selection of cafés<br />

and restaurants offering cuisine from<br />

around the globe. The value of the state’s<br />

agrifood exports grew 28 per cent to a<br />

record AU$6.3 billion in the 2008–09<br />

financial year, driven particularly by<br />

growing demand from the Middle East<br />

and the continued strength of Northeast<br />

Asian markets.<br />

Western Australia’s agrifood production<br />

is extensive and diverse, from tropical<br />

latitudes through to Mediterranean and<br />

temperate climates. Irrigated lots, broad<br />

acre, dry land farms and rangeland grazing<br />

produce cereals, pulses and oilseeds,<br />

meat, milk, fruit and vegetables. Wines<br />

judged as among the world’s best, highquality<br />

dairy products and a wide range<br />

of chilled, milled and processed foods are<br />

among the state’s value-added products.<br />

Fisheries along a 12,500-kilometre<br />

coastline, which include highly prized rock<br />

lobster, prawns, shellfish and finfish, are<br />

carefully managed to protect them both<br />

for commercial and recreational uses.<br />

The state is also a significant producer and<br />

exporter of pearls, fine wool, timber and<br />

woodchips from forests and plantations,<br />

and animal feed.<br />

The state’s isolation, vast size and<br />

relatively small population ensures<br />

unpolluted agricultural land, freedom from<br />

many pests and diseases, and clear ocean<br />

waters – resources that are highly valued<br />

and protected.<br />

Western Australian food producers are<br />

recognised globally as among the most<br />

innovative and technologically advanced,<br />

working with researchers in both the<br />

public and private sectors to ensure the<br />

sustainability and profitability of their<br />

industries. Traditional varieties and<br />

techniques are adapted to create crops<br />

and livestock better suited to resist<br />

diseases and pests, to improve yields<br />

and efficiencies, and to produce foods<br />

and other products suited to diverse<br />

market tastes. New research projects are<br />

underway to increase the preparedness<br />

and resilience of farm businesses in the<br />

face of climate change. Researchers<br />

collaborate with tertiary institutions, other<br />

agencies and industry in Australia and in<br />

many countries, including Commonwealth<br />

members, across the world.<br />

As well as actively supporting targeted<br />

research and development, the Western<br />

Australian government oversees quality<br />

assurance and traceability programmes to<br />

ensure the production of safe, quality food.<br />

It also operates an extensive surveillance<br />

programme to ensure and demonstrate<br />

freedom from plant and animal pests,<br />

diseases and weeds.<br />

Sophisticated and extensive infrastructure<br />

supports Western Australia’s agriculture,<br />

forestry and fishing industries and the<br />

people who work in it. Well developed<br />

public roads, a grain rail network, efficient<br />

ports, airports and boat harbours help<br />

ensure that the state’s crops, catch and<br />

livestock reach markets and customers.<br />

A major Western Australian government<br />

investment in irrigated agriculture will<br />

help meet growing demand for quality<br />

horticultural produce, and improve<br />

the sustainable use of precious water<br />

resources. In the state’s tropical North<br />

East, near Kununurra, a significant<br />

Major Western Australian Agriculture:<br />

Food and Fibre Exports in 2008–09<br />

Rank<br />

Commodity<br />

1 Wheat AU$2.7 billion<br />

Canola AU$535 million<br />

Livestock AU$487 million<br />

Meat AU$464 million<br />

Wool AU$418 million<br />

6 Wood AU$322 million<br />

7 Seafood AU$302 million<br />

Source: State Government of Western Australia<br />

expansion of the Ord River Irrigation<br />

Area to 22,000 hectares is underway.<br />

The thriving irrigation area, fed by the<br />

10,800-gigalitre Lake Argyle, currently<br />

produces pulse, seed, fruit, vegetable and<br />

tree crops worth about AU$100 million<br />

annually, and production is predicted to<br />

grow by AU$50 million over the next five<br />

years.<br />

In the state’s Gascoyne region, state<br />

government investment in expanding<br />

Carnarvon’s irrigation precinct aims to<br />

help double the value of production,<br />

which includes tropical and temperate<br />

fruit and vegetable crops worth AU$75<br />

million in 2009.<br />

Global demand for quality products is<br />

creating many opportunities for investment<br />

in the expansion of Western Australia’s<br />

food and agricultural industries.<br />

Export Value<br />

74 75


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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Agriculture and Fisheries<br />

Western Australia’s rich and diversified agricultural sector has<br />

traditionally been a significant contributor to the state economy,<br />

with a vast range of products, from rock lobster and barramundi<br />

to better-known products such as wheat and cattle.<br />

Above:<br />

Aerial view<br />

of Geraldton<br />

Wheatbins; Photo<br />

courtesy of<br />

Tourism Western<br />

Australia<br />

Western Australia’s 2.5-millionsquare-kilometre<br />

land mass<br />

presents an extraordinary range<br />

of climatic conditions suitable for a<br />

variety of agricultural products. From the<br />

temperate South West and Great Southern<br />

to the tropical Kimberley in the North,<br />

Western Australia has the capability to<br />

satisfy international demand throughout<br />

the year for a plethora of diverse products.<br />

Given Western Australia’s relatively small<br />

population, the region’s heritage as a<br />

centre for agricultural production and<br />

excellence is rooted in a clear outward<br />

focus on international export markets.<br />

Overview<br />

12,000-kilometre coastline continues to<br />

grow in prestige throughout the world’s<br />

most valued international export markets,<br />

including East Asia, the European Union<br />

and the Middle East.<br />

Having experienced a 28 per cent<br />

increase in exports throughout 2009,<br />

agriculture in Western Australia is set<br />

to grow in prominence as Australia’s<br />

population continues to grow and key<br />

export markets in emerging Asia continue<br />

to see per-capita incomes and associated<br />

consumption increasing. Terry Redman,<br />

the Minister for Agriculture, Food and<br />

Forestry, is confident of the strength<br />

and potential endowed within Western<br />

Australia’s agricultural industry.<br />

the sector grows to around $13 billion.<br />

This represents around 10 per cent of<br />

the mining and petroleum industries.<br />

Agriculture has a strong export focus.<br />

The industry is very significant for<br />

Western Australia’s economy and will<br />

remain significant for some time to come.<br />

Western Australia is presented with an<br />

opportunity in its geographical proximity<br />

to key markets such as Southeast Asia<br />

and the Middle East.’<br />

Western Australia’s farmers are extremely<br />

efficient operators, given Australia’s low<br />

subsidy regime when compared with<br />

competitor regions such as the EU, USA<br />

or Canada. According to the Producers’<br />

Support Estimate, Australian farmers<br />

receive a fraction of the support that<br />

farming communities in contending<br />

OECD nations are entitled to. Such a<br />

regulatory regime has driven innovation<br />

and expansion in productive capacity<br />

across many agricultural sectors, such as<br />

horticulture and grain production.<br />

Western Australia’s key challenges as a<br />

region of international significance with<br />

regards to agriculture are the strong<br />

Australian dollar in global export markets,<br />

the logistical challenges presented by<br />

operating in such a vast region, labour<br />

shortages in a booming regional economy,<br />

and continuing dry conditions associated<br />

with the growing impact of global<br />

warming across Australia. Ironically,<br />

Australia’s relative strength throughout<br />

the global financial crisis has eroded<br />

profit margins for agricultural exporters<br />

trading in Australian dollars, competing in<br />

international markets against depreciated<br />

major currencies such as the US dollar<br />

and euro.<br />

Technological development and<br />

innovation in Western Australia is one of<br />

the agricultural sector’s key competitive<br />

advantages. Agricultural Research<br />

Western Australia (ARWA) was established<br />

in 2005 as an alliance of academic<br />

institutions, government and industry,<br />

set up to share knowledge and resources<br />

in order to further drive innovation in key<br />

areas of strength. These include breeding<br />

technologies, genetic analysis and<br />

plant biotechnology. Notable members<br />

institutions such as Curtin University,<br />

the University of Western Australia and<br />

Murdoch University, all of whom are<br />

widely regarded on the international stage<br />

for their contributions to the agricultural<br />

sciences and biotechnology.<br />

As a leading centre for agricultural<br />

research and best practice, Western<br />

Australia is well placed to capitalise upon<br />

growing global demand for safe, quality<br />

food. Western Australia has some of the<br />

strictest quarantine requirements in the<br />

world, ensuring the state’s agricultural<br />

sector is not hindered by pests prevalent<br />

in some of the world’s key agricultural<br />

producing regions.<br />

Western Australia is capitalising on its<br />

rich diversity in agricultural production<br />

through a rapidly growing suite of<br />

processed food products such as<br />

beverages, dairy products, olive oil, wine<br />

and animal feeds. Emerging processing<br />

industries linked into Western Australia’s<br />

agricultural value chain are of growing<br />

importance to the state government and<br />

economy in terms of adding value. They<br />

also present a significant opportunity for<br />

international investors.<br />

Diversified agribusiness operator Craig<br />

Mostyn Group embodies the benefits<br />

derived from diversifying into agricultural<br />

processing, demonstrating significant<br />

growth in recycling and rendering of<br />

agricultural waste into animal feeds and<br />

fertilisers.<br />

‘Craig Mostyn Group processes around<br />

100,000 tons per annum of waste<br />

material,’ says CEO David Lock of the<br />

value within such niche sectors. ‘This is<br />

an essential service for the state. If we<br />

don’t operate, then the abattoirs cannot<br />

operate. We have invested millions of<br />

dollars into ensuring our environmental<br />

compliance is at a world-class level.’<br />

Western Australia’s diverse array of<br />

agricultural products is dominated by<br />

grains such as wheat, barley and canola,<br />

followed by meat and livestock products,<br />

pulses and oil seeds, horticultural produce,<br />

fisheries and wool. The majority of<br />

Western Australia’s production for export<br />

‘‘<br />

We have invested<br />

millions of dollars<br />

into ensuring our<br />

environmental<br />

compliance is at a<br />

world-class level.<br />

David Lock,<br />

CEO of Craig<br />

Mostyn Group<br />

Accounting for 7 per cent of Western<br />

Australia’s exports (over AU$6 billion),<br />

agricultural produce originating from ‘Agriculture alone is worth around $8<br />

regions such as the Kimberley, Great billion,’ he says. ‘However, if you bring<br />

Southern and Western Australia’s the added value of food on top of that,<br />

of ARWA are prestigious academic is characterised by significant numbers of<br />

76 77<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Grain Harvest in<br />

Western Australia;<br />

Photo courtesy<br />

of Department<br />

of Food and<br />

Agriculture<br />

small member producers selling produce<br />

to cooperatives such as Cooperative Bulk<br />

Handling for grains, WAMMCO (Western<br />

Australian Meat Marketing Co-operative)<br />

for lamb and Geraldton Fisherman’s<br />

Cooperative for fisheries products such<br />

as rock lobster.<br />

Following the deregulation of a number<br />

of formerly state controlled agricultural<br />

sectors, such as wheat and livestock<br />

throughout the mid-1990s and early<br />

2000s, competition among processors and<br />

bulk exporters has increased significantly,<br />

presenting numerous challenges and<br />

opportunities for both incumbents and<br />

potential new entrants into Western<br />

Australia’s lucrative agricultural sector.<br />

A brief overview of Western Australia’s<br />

various agricultural products offers<br />

the best means of communicating the<br />

industry’s present status and investment<br />

opportunities as follows.<br />

Cereals<br />

Western Australia’s cereals industry is<br />

underpinned by wheat. Wheat exports<br />

from Western Australia accounted for<br />

AU$2.7 billion in 2008–09, followed by<br />

barley (AU$515 million), malt (AU$172<br />

million) and oats (AU$48 million).<br />

Western Australia accounts for 45 per<br />

cent of Australia’s cereals production as<br />

a whole, exporting to markets such as<br />

Indonesia, Japan, Iran, China and South<br />

Korea. Western Australia’s wheat and<br />

oats exports account for 50 per cent of<br />

Australia’s total, while barley accounts<br />

for around 37 per cent of the total.<br />

Western Australia’s cereals industry is<br />

of a very low labour intensity, with the<br />

vast majority of crops being rain-fed.<br />

This translates into a highly competitive<br />

product on international markets. The key<br />

private sector player in Western Australia<br />

is Cooperative Bulk Handling, through its<br />

wholly owned subsidiary Grain Pool. Grain<br />

Pool’s exports from Western Australia<br />

accounted for AU$2.4 billion in 2008–<br />

09.<br />

Even though there are 26 competitors in<br />

Western Australia’s cereals market, Grain<br />

Pool acquired 50 per cent of production<br />

in 2008–09.<br />

Outlining the key reasons for Grain Pool’s<br />

success, General Manager Brian Mumme<br />

says, ‘There is a certain affinity towards<br />

Grain Pool as still a farmer-owned entity.<br />

This gives confidence to our growers,<br />

who know that we are viable and that<br />

they will get paid. We believe that our<br />

products, our service and our reputation<br />

with customers differentiate us from our<br />

competitors. We have to continue to be<br />

innovative and show transparency to our<br />

growers, otherwise they will stop working<br />

with us.’<br />

Despite Western Australia’s grain farmers<br />

suffering a challenging year in 2009 due<br />

to an appreciated Australian dollar and<br />

depressed global prices, the opportunities<br />

for new entrants into Western Australia’s<br />

cereals industry are varied and exciting.<br />

Producers continue to work with exporters<br />

in order to tailor Australian cereals for<br />

specific markets, thus achieving premium<br />

prices such as with Japanese Udon<br />

noodles.<br />

Furthermore, as competition among<br />

acquirers such as Grain Pool intensifies,<br />

consolidation and niche innovation within<br />

the market present opportunities for<br />

discerning investors.<br />

the growers, with a far greater emphasis<br />

on transparency. We are also seeing<br />

competitors looking at different supply<br />

chains. CBH has effectively a monopoly<br />

on storage and transportation. New<br />

competitors are looking at establishing<br />

new supply chains with a view to<br />

improving efficiency. There are also<br />

significant moves towards reducing the<br />

space between growers and customers,<br />

with a view to making the supply chain far<br />

more responsive to customer demands.’<br />

Pulses and Oilseeds<br />

Western Australia’s pulse and oilseed<br />

exports increased from AU$496 million<br />

to AU$626 million between 2001 and<br />

2009, and have seen Western Australia<br />

emerge as the world’s largest exporter of<br />

lupins. Western Australia’s pulses exports<br />

are dominated by canola (AU$535 million)<br />

followed by lupins (AU$43 million) and<br />

various other varieties of oilseeds and<br />

pulses valued at AU$20 million and<br />

AU$18 million respectively. Grain Pool<br />

also dominates as an acquirer for Western<br />

Australia’s pulses and oilseeds, exporting<br />

to markets such as the Netherlands,<br />

France, Japan and Pakistan.<br />

Meat and Livestock<br />

Western Australia’s AU$1 billion meat and<br />

live animal export industry is dominated<br />

by the export of lamb and sheep products<br />

valued at AU$510 million in 2008–09.<br />

WAMMCO is the state’s leading processor<br />

and exporter of lamb and sheep products<br />

from Western Australia to the international<br />

market. Key markets for West Australian<br />

sheep products include the Middle East,<br />

USA and EU. Western Australia’s sheep<br />

industry is experiencing a challenging<br />

period as the sector comes to grips with<br />

government deregulation, the strong<br />

Australian dollar and a significant drop<br />

in the number of sheep to around 15.5<br />

million head.<br />

of smaller operators in the market. A<br />

lot of export processors have not made<br />

money this year because of the strong<br />

Australian dollar and shortages in supply.<br />

Western Australia has had a particularly<br />

long drought in 2009. This has impacted<br />

the growth of lambs and the breeding<br />

activity of ewes. This season was around<br />

2 million head below previous seasons.<br />

Usually Western Australia processes and<br />

exports around 8 million head; this year<br />

was around 6 million.’<br />

International markets remain favourable<br />

for lamb and sheep products in terms<br />

of price. Western Australia’s generally<br />

favourable conditions (such as mild winters<br />

and heavier lambs relative to regions such<br />

as New Zealand) present opportunities for<br />

producers to come into the market and<br />

service ever-increasing global demand<br />

proximate to Western Australia.<br />

Horticulture<br />

Western Australia’s diverse climate and<br />

geography, combined with its counterseasonal<br />

orientation to the Northern<br />

Hemisphere, presents significant<br />

opportunities for the development of<br />

horticulture in the state. Western Australia<br />

has a number of ideal regions for the<br />

continued development of horticulture,<br />

from the temperate regions in the South<br />

West (such as Margaret River) to vast<br />

tropical wetlands in the north, such<br />

as the Ord River Irrigation Area in the<br />

Kimberley.<br />

Horticulture offers the greatest<br />

opportunities for value adding within<br />

Western Australia’s agricultural sector.<br />

The overall value of the horticultural<br />

sector in Western Australia is valued<br />

at approximately AU$1.9 billion, when<br />

value-added activities are taken into<br />

account. Of particular interest are Western<br />

Australia’s exceptionally high-quality<br />

wines, which are produced predominantly<br />

in the Margaret River region, a Western<br />

Australian tourism hub. Horticultural<br />

production in Western Australia is valued<br />

at AU$790 million, excluding valueadded<br />

activities, comprising 37 per cent<br />

vegetable production, 29 per cent fruit<br />

production, 11 per cent grape production<br />

and 23 per cent flowers and nursery<br />

‘Right now it is very difficult because<br />

‘There are massive opportunities<br />

supply of lamb is at an all-time low,’<br />

emerging,’ comments Brian Mumme.<br />

explains WAMMCO CEO Coll MacRury.<br />

‘Everything is changing very quickly. We<br />

‘The flock has dropped to around 15<br />

are seeing consolidation and we expect<br />

million head, significantly lower than<br />

to see further consolidation amongst the<br />

around 15 years ago. The processing<br />

26 players in the market. A whole new<br />

sector is also very competitive, with<br />

78<br />

suite of products are now on offer to<br />

two major competitors and a number products.<br />

79


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

S e c t o r O v e r v i e w<br />

Professional Services<br />

Vasse Felix<br />

vineyards,<br />

Cowaramup; Photo<br />

courtesy of Vasse<br />

Felix and Tourism<br />

Western Australia<br />

Horticultural exports in Western Australia<br />

are somewhat unique given their low<br />

relative value to the industry overall.<br />

Key export markets include Singapore,<br />

UAE, Malaysia and the United Kingdom.<br />

Vegetables (AU$52 million) are Western<br />

Australia’s most significant horticultural<br />

export, followed by beverages (AU$37<br />

million), floriculture and nursery products<br />

(AU$27 million), and fruits (AU$20<br />

million). Western Australia’s continued<br />

focus on regional development in provinces<br />

with vast agricultural potential, such as<br />

the Ord River Irrigation Area, represent<br />

significant opportunities for investors to<br />

come into the Asia Pacific region’s most<br />

benign horticultural market.<br />

West Australian Wineries<br />

Widely acknowledged as Western<br />

Australia’s key wine-producing region,<br />

Margaret River is home to some of the<br />

world’s top wine producers, such as<br />

Leeuwin Estate, Mosswood and Vass<br />

Felix. Despite producing only a fraction of<br />

Australia’s overall wine output, Western<br />

Australia accounts for 20 per cent of<br />

premium wine exports.<br />

Fisheries<br />

Western Australia’s coastline is home<br />

to some of the world’s finest and mostsought-after<br />

marine products, such as<br />

scallops, rock lobster, crab and prawns.<br />

Total fisheries exports for 2008–09 were<br />

valued at AU$377 million. A nascent<br />

aquaculture industry in products such<br />

as pearls and lobster offers significant<br />

scope for international investment and<br />

knowledge-sharing.<br />

Industry Outlook<br />

Western Australia’s agricultural sector<br />

continues to innovate in order to overcome<br />

significant challenges surrounding labour<br />

shortages, environmental conditions and<br />

macro-economic constraints associated<br />

with a strong Australian dollar. The outlook<br />

for investment is very strong with regards<br />

to agricultural processing industries and<br />

innovations to mitigate producer risks on<br />

international markets such as currency<br />

and commodity price shifts.<br />

Western Australia’s strong technical base<br />

and prominence on the international market<br />

provides an excellent knowledge-sharing<br />

arena for the broader Commonwealth<br />

community.<br />

Reflecting on the importance of community<br />

spirit in continuing to develop world-class<br />

wines, Leeuwin Estate’s Denis Horgan<br />

says, ‘The wine industry in Margaret River<br />

is competitive on a very friendly level. Western Australia’s growing population,<br />

We are all working together for an overall combined with emerging Asia’s increasing<br />

improvement.’ Despite the impact of a consumption of the region’s agricultural<br />

strong Australian dollar on wine exports output, provides an excellent foundation<br />

from Western Australia, global markets in for inbound international investment<br />

the USA, UK and East Asia continue to to continue to develop Asia Pacific’s<br />

80<br />

demand Margaret River’s finest produce. emerging food basket.<br />

81


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Professional Services<br />

As foreign direct investment and company profits have continued<br />

to grow in Western Australia, the focus of international<br />

corporations is increasingly shifting towards the region. Demands<br />

for professional and business services are high.<br />

Section Cover<br />

(previous page):<br />

St. Georges<br />

Terrace, Central<br />

Business District;<br />

Photo courtesy of<br />

GBR<br />

Above:<br />

Working together<br />

on a planning<br />

application; Photo<br />

courtesy of Minter<br />

Ellison<br />

Gross value added to Western<br />

Australia’s economy from<br />

professional services has<br />

increased year on year from AU$5.7<br />

billion in 2000–01 to AU$7.8 billion in<br />

2008–09.<br />

It is clear that the professional-services<br />

sector is growing in importance to<br />

Western Australia’s economy, and<br />

that Western Australia is increasingly<br />

becoming the focus for international<br />

professional services companies across<br />

the board.<br />

Overview<br />

Standing at AU$7.8 billion of industry<br />

gross value added for Western Australia<br />

in 2008–09, professional, scientific and<br />

technical services now represent Western<br />

Australia’s fifth-largest industry sector,<br />

accounting for just over 5 per cent of<br />

gross state output.<br />

Professional, scientific and technical<br />

services encompass top-tier consultative<br />

professions, excluding those associated<br />

with information technology, healthcare,<br />

education and public administration. In<br />

order to best articulate the specific value<br />

added to Western Australia’s business<br />

environment from each niche sub-sector<br />

within the broader professional services<br />

cluster, a detailed breakdown is helpful.<br />

Of greatest importance are accountancy<br />

and advisory, law and professional<br />

Accountancy and Advisory<br />

Western Australia has a long-established<br />

tradition with some of the world’s<br />

largest accountancy firms, with Price<br />

Waterhouse Coopers (PWC) and KPMG<br />

having operations in Perth and Western<br />

Australia for well over 100 years.<br />

Specialist accountancy firms play a vital<br />

role in Western Australia’s economy,<br />

advising a vast range of clients, from<br />

government through to corporate and SME<br />

client bases, on regulatory matters ranging<br />

from auditory and tax requirements to due<br />

diligence on major transactions.<br />

Specialist firms such as KPMG are<br />

increasingly playing a role in Western<br />

Australia’s infrastructure development,<br />

working with the state government<br />

on complex business models for<br />

development, an example being public<br />

private partnerships (PPP).<br />

‘KPMG has audit, tax and advisory<br />

services,’ explains Steve Scudamore,<br />

Chairman of Partners at KPMG, speaking<br />

about the firm’s capability in Western<br />

Australia.<br />

‘Advisory represents a myriad of<br />

services, such as transaction services<br />

and corporate financing. Advisory also<br />

encompasses a consulting arm with<br />

services such as change management,<br />

as well as a risk advisory arm. We<br />

are working on significant social and<br />

economic infrastructure upgrades with<br />

the government through the PPP model.’<br />

As Western Australia’s resources<br />

sectors in particular continue to attract<br />

huge investments into the state, the<br />

professional-services market continues to<br />

grow, and competition is increasing.<br />

‘The professional-services market is<br />

very buoyant right now, and extremely<br />

competitive,’ says PWC’s Managing<br />

Partner John O’Connor.<br />

and key ingredient to success is getting<br />

the right people on board with the right<br />

skills sets. We recruit from around the<br />

world to achieve that mix.’<br />

Given their traditional role as a training<br />

ground for talented associates moving<br />

into executive roles, accounting firms<br />

such as Ernst & Young, PWC, KPMG and<br />

Deloitte play a vital role in bringing talented<br />

graduates to the broader labour market<br />

with an established set of professional<br />

skills.<br />

Articulating the training regime available<br />

to employees at PWC, John O’Connor<br />

says, ‘PWC is an excellent learning ground<br />

for our people; we offer an opportunity to<br />

work across a whole range of industries<br />

and professional specialities.<br />

‘Our people really do expect to be<br />

challenged in a diverse range of<br />

professional skills. As a national firm, we<br />

also have the ability to expose our people<br />

to a variety of experiences throughout<br />

Australia.’<br />

As the global economy continues to evolve<br />

towards one commercial space, proactive<br />

advisory firms such as PWC, Deloitte and<br />

KPMG are increasingly working to bring<br />

the global investment community closer<br />

to Perth.<br />

Describing the exciting new facet of<br />

international professional-services<br />

activity, Steve Scudamore of KPMG says,<br />

‘KPMG has an Asian Business Group<br />

focused upon helping Asian clients to<br />

assess potential projects for investment.<br />

We work with partner offices throughout<br />

the region to develop new business across<br />

borders.<br />

‘We sometimes work with domestic midcap<br />

companies, in order to raise capital<br />

for their projects. Our key international<br />

markets are India, China, Japan and<br />

Korea. Indian companies are very much<br />

interested in coal, whereas China, Japan<br />

and Korea have major interests in iron ore<br />

and LNG.<br />

A vibrant professional-services sector in<br />

Western Australia serves to further raise<br />

efficiency, productivity and adherence<br />

‘Competition is good; it drives us to<br />

to international best-practice standards<br />

innovate. The environment is very exciting.<br />

while further diversifying the state’s<br />

There are enormous opportunities when ‘The time zone that Perth is in places us<br />

economic base, thus ensuring long-term<br />

you look at the growth in the resources extremely well to work with investors<br />

82<br />

commercial stability.<br />

engineering.<br />

sector, for example. ‘The main challenge from these regions.’<br />

83


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

‘‘<br />

The best point for<br />

us to get involved<br />

with a project is<br />

day one.<br />

Jason Ricketts,<br />

Managing Partner<br />

of Freehills Perth<br />

‘‘<br />

Western Australia’s growing<br />

significance for the world’s<br />

rapidly industrialising<br />

markets presents excellent<br />

opportunities for new<br />

advisory firms with<br />

international networks to<br />

join this growing cycle of<br />

commerce.<br />

As a result of such a<br />

wide-ranging footprint,<br />

specialist accountancy<br />

firms are extraordinarily<br />

well placed to assist new<br />

entrants into Western<br />

Australia’s economy,<br />

as well as to facilitate<br />

outward investment from<br />

Western Australia to<br />

rapidly developing regions<br />

of the Commonwealth,<br />

such as the Indian Subcontinent and<br />

Eastern Africa. ‘PWC works very closely<br />

with numerous companies that have<br />

operations in overseas locations,’ says<br />

John O’Connor of the emerging trend.<br />

‘We work on both inbound and outbound<br />

deals. For example, I personally worked in<br />

Zambia earlier this year assisting a mining<br />

client. Our national and international<br />

network provided PWC a great capacity<br />

to support our local clients wherever they<br />

operate. Clients are far more comfortable<br />

working with global brands such as ours<br />

when they venture offshore.’<br />

Western Australia’s major accountancy<br />

firms continue to exemplify Western<br />

Australia’s professional culture of working<br />

closely with the state’s communities.<br />

KPMG in particular works closely with<br />

indigenous communities on developing<br />

employment opportunities and cultural<br />

exchanges as part of the firm’s reconciliation<br />

plan. Furthermore, KPMG’s people get<br />

out into the community, working on<br />

educational projects with disadvantaged<br />

communities. The philosophy is very<br />

much to build relationships rather than<br />

just give funding.<br />

Law<br />

Western Australia’s legal sector<br />

experienced a rapid evolution in the<br />

early 1990s, from locally focused firms<br />

working almost exclusively with Western<br />

Australian clients to a raft of national<br />

and internationally focused companies<br />

that emerged following a series of<br />

partnerships.<br />

Firms such as Mallesons, Freehills and<br />

Minter Ellison are good examples of this<br />

trend, and today are able to compete on<br />

the international stage.<br />

Mallesons’ Partner in Charge, Beau Deleuil,<br />

explains the challenges associated with<br />

such a rapid shift from the local to the<br />

global market place.<br />

‘The key challenge that we have had,’ he<br />

says, ‘is having to shift our focus towards<br />

a global perspective. Perth is becoming<br />

one of a few global resource hubs now<br />

and this has driven us to develop a new<br />

range of skill sets.<br />

‘We have been able to keep up with these<br />

demands quite well, but an international<br />

staff base is essential. One of our key<br />

strategies for overcoming this challenge<br />

is to work in collaboration with our<br />

international offices, such as Hong Kong,<br />

as well as to exchange staff across<br />

international space.’<br />

Western Australia’s legal sector is now<br />

widely regarded as one of the most<br />

competitive in the world, with several<br />

world-class law firms competing for<br />

clients involved in some of the world’s<br />

largest resources projects.<br />

Such competition inevitably drives up<br />

standards. This enables Western Australia’s<br />

commercial lawyers to increasingly<br />

broaden their horizons towards emerging<br />

Asia and the international stage.<br />

While Western Australia’s resources<br />

sectors are of greatest importance to<br />

the region’s law firms, government,<br />

agriculture, construction and the financial<br />

services sectors remain of significance to<br />

the commercial legal sector. Leading firms<br />

have developed a wide-ranging capacity<br />

‘One of the things that Freehills prides itself<br />

on is being able to take projects from start<br />

to finish,’ says Freehills Managing Partner<br />

Jason Ricketts. ‘Right from the moment<br />

a project requires land for development,<br />

we assist with the regulatory and<br />

environmental approvals. We also assist<br />

with the financing structures, industrial<br />

relations strategy, contracts and approvals<br />

for decommissioning. The best point for<br />

us to get involved with a project is day<br />

one.’<br />

Explaining why such quality service is<br />

important to international businesses<br />

investing into the region, Beau Deleuil says,<br />

‘Resources companies want complete and<br />

utter certainty regarding the returns on<br />

their investments. Some of their key risks<br />

are regulatory, taxation and uncertainty.<br />

Law firms are ideally placed to mitigate<br />

this risk. Many of these companies are<br />

involved with multiple billion-dollar<br />

contracts; legal and regulatory certainty<br />

over such contracts is essential for major<br />

firms. Environmental and indigenous<br />

approvals over land development are<br />

some of our greatest challenges.’<br />

Similarly to the accountancy and<br />

advisory sector, Western Australia’s<br />

law firms are becoming involved with an<br />

increasing number of deals in the global<br />

marketplace. Exports of legal services<br />

from Western Australia stood at AU$80<br />

million for 2009, and continue to rise on<br />

an upward trajectory. International firms<br />

such as Minter Ellison are at the forefront<br />

of meeting demand across international<br />

borders and delivering legal services to<br />

ensure the completion of cross-border<br />

transactions.<br />

Minter Ellison Managing Partner John<br />

Poulsen best describes his firm’s cuttingedge<br />

approach to international trade<br />

when he says, ‘We are one of the only<br />

Australian firms that has an office in<br />

London practising both English and<br />

Australian law. This provides us with<br />

an excellent conduit for international<br />

investment coming into Australia from one<br />

of the world’s leading financial centres.<br />

If you look at China, there has been a<br />

hugely significant change over the past<br />

three years, in terms of investment now<br />

dominated by the 120,000<br />

state-owned enterprises<br />

based out of Beijing. We<br />

have now reopened our<br />

Beijing office to capture<br />

working relationships from<br />

this change in investment<br />

flows. As a firm, we are<br />

increasing our business<br />

visits to China in order to<br />

educate investors about<br />

the business processes<br />

in Australia, as well as<br />

to develop relationships<br />

further.’<br />

Western Australia’s<br />

international law firms<br />

retain their connections<br />

to Western Australia,<br />

preserving the region’s<br />

strong ties with local<br />

communities through a myriad of<br />

social projects. Minter Ellison is widely<br />

acknowledged as a leader in this field,<br />

focusing particularly on education<br />

projects with disadvantaged communities.<br />

Nevertheless, firms such as Freehills and<br />

Mallesons retain a strong focus on the<br />

community also, working with groups such<br />

as the National Breast Cancer Foundation<br />

and Royal Flying Doctors respectively.<br />

Professional Engineering<br />

Western Australia’s vast resources sectors<br />

would not be able to sustain themselves<br />

without the myriad of support services<br />

and engineering firms that sub-contract<br />

throughout the industry.<br />

Western Australia’s professional engineers<br />

are undoubtedly world-class, with firms<br />

such as Worley Parsons, Sinclair Knight<br />

Merz, Hatch and Clough working on the<br />

region’s largest projects, such as Oakajee<br />

Port and Rail, Fiona Stanley <strong>Hospital</strong>,<br />

Gorgon and Pluto respectively. Western<br />

Australia’s engineers are particularly<br />

renowned for their quality in delivery,<br />

innovation and long-term perspective.<br />

Speaking about the firms; ‘ECO-nomics’<br />

initiative, Worley Parsons Operations<br />

Manager Bradley Andrews says, ‘A couple<br />

of years ago, Worley Parsons began to<br />

look at how we could help our customers<br />

‘‘<br />

There has been a<br />

hugely significant<br />

change over<br />

the past three<br />

years, in terms of<br />

investment now<br />

coming from China<br />

into Australia.<br />

John Poulsen,<br />

Managing Partner<br />

of Minter Ellison<br />

‘KPMG’s focus is to get our people<br />

involved with the communities rather<br />

than just writing a cheque,’ explains<br />

84<br />

Steve Scudamore.<br />

to deliver huge projects from the outset.<br />

coming from China into Australia. This is operate more sustainably, in order to<br />

85<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

S e c t o r O v e r v i e w<br />

Construction and Manufacturing<br />

Department<br />

of Economics,<br />

Commerce and<br />

Law at Murdoch<br />

University;<br />

Photo courtesy<br />

of Murdoch<br />

University<br />

have a positive material impact upon the<br />

world. If we could help our customers use<br />

5 per cent less energy throughout their<br />

operation, which would have a significant<br />

impact.<br />

‘ECO-nomics is best defined as profitable<br />

sustainability, helping our customers to<br />

remain profitable in business through this<br />

changing world of increasing constraints.<br />

Worley Parsons has developed a world<br />

leading capability that allows customers<br />

to monetise indirect costs and benefits<br />

that have not generally been considered in<br />

more conventional project assessments.<br />

Worley Parsons has now used this<br />

expertise to analyse over 200 projects<br />

throughout the world.’<br />

Industry Outlook<br />

Western Australia’s professional-services<br />

firms have capitalised upon the region’s<br />

enormous resource wealth to develop<br />

world-class skills across a diverse range<br />

of sector-specific segments.<br />

As Western Australia’s economy continues<br />

to grow, the professional services sector<br />

is in an extremely good position to both<br />

contribute and benefit.<br />

New entrants to the market, such as<br />

Boston Consulting Group and McKinsey,<br />

demonstrate the range of opportunities<br />

for new players.<br />

As significant economic growth<br />

Scientific research has developed off the continues throughout the Commonwealth<br />

back of such innovation, with Chevron’s community, an exciting array of<br />

Global Technological Centre, Alcoa opportunities present themselves for<br />

Alumina’s R&D Centre and Rio Tinto’s members’ business sectors to both<br />

Remote Operations Centre all located in invest in Western Australia and work<br />

Western Australia in coordination with in partnership with Western Australia’s<br />

86<br />

the state’s universities.<br />

exceptional professional-services sector.<br />

87


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Construction and Manufacturing<br />

Western Australia’s building and construction industry has been<br />

a significant beneficiary of the sustained economic growth<br />

throughout the state, and of the resultant increasing demand for<br />

productive capacity.<br />

Section Cover<br />

(previous page):<br />

Construction of<br />

Fiona Stanley<br />

<strong>Hospital</strong> Project<br />

in Murdoch;<br />

Photo courtesy<br />

of Brookfield<br />

Multiplex<br />

Above:<br />

The Jervoise<br />

bay waterfront<br />

in Henderson<br />

with Austal’s<br />

revolutionary 102m<br />

vehicle-passenger<br />

trimaran on the<br />

slipway; Photo<br />

courtesy of Austal<br />

The building and construction<br />

sectors play a vital role in<br />

continuing to develop Western<br />

Australia’s residential, commercial,<br />

industrial and civil infrastructure.<br />

Western Australia’s sustained economic<br />

growth is largely dependent upon the<br />

sector’s continuing ability to complete<br />

infrastructure projects throughout this<br />

vast state’s resource rich regions.<br />

Overview<br />

Beyond the development of vital<br />

productive capacity, building and<br />

construction are of greatest importance<br />

to Western Australia’s economy in terms<br />

of providing employment.<br />

Building and construction contributed<br />

AU$12 billion to Western Australia’s<br />

gross state product in 2009, accounting<br />

for 8 per cent of economic output.<br />

Building and construction has been a<br />

buoyant sector in the state economy<br />

over the past two decades, growing at<br />

an average annual rate of 9 per cent. This<br />

trend looks set to continue as Western<br />

Australia’s portfolio of mega resources<br />

projects continues to increase alongside<br />

the state’s population. The building<br />

and construction industry in Western<br />

Australia is divided into three very clear<br />

sub-sectors: engineering construction,<br />

residential construction and commercial<br />

construction.<br />

Engineering Construction<br />

infrastructure projects, such as those<br />

required for Woodside’s Pluto LNG<br />

project and BHP Billiton’s Rapid Growth<br />

Projects for iron ore. According to<br />

the Australian Bureau of Statistics,<br />

engineering construction commenced<br />

accounted for AU$18.9 billion worth of<br />

expenditure for 2008–09, representing<br />

approximately 70 per cent of overall<br />

building and construction expenditure<br />

commenced in Western Australia<br />

throughout 2008–09.<br />

It is important to note that major<br />

resources projects alone do not make up<br />

the wealth of engineering construction<br />

expenditure in Western Australia. Road<br />

construction and electricity infrastructure<br />

development accounted for AU$2.7<br />

billion and AU$3.1 billion of expenditure<br />

on commenced projects respectively.<br />

The impact of the global financial crisis<br />

(GFC) hit engineering construction<br />

significantly between 2007 and 09, with<br />

a percentage decline in heavy industrial<br />

expenditure of 67 per cent from<br />

AU$21.9 billion in 2007–08 to AU$7.1<br />

billion in 2008–09. Retrenchment in<br />

mining project investment was largely<br />

responsible for this decline. ‘Many<br />

minerals projects were abruptly stopped<br />

when the GFC hit,’ says Bradley<br />

Andrews, Operations Manager Western<br />

Australia for major engineering player<br />

WorleyParsons. ‘However, most oil and<br />

gas projects remained steadfast.’<br />

A further impact of the GFC on<br />

engineering construction with such<br />

a retrenchment in investment is the<br />

decline in apprentice participation in<br />

heavy industry, potentially exacerbating<br />

labour shortages over the medium term,<br />

as heavy industry and resources projects<br />

start to ramp up again.<br />

It is generally agreed among Western<br />

Australia’s key industry players that<br />

the GFC brought industrial activity in<br />

the state back down to sustainable<br />

productive capacity, and that industrial<br />

activity commencing towards the back<br />

end of 2010 is expected to extend<br />

productive capacity once again. This<br />

trend encompasses wide-ranging<br />

domestic and international engineering<br />

firms to either diversify or invest in the<br />

market. Highlighting this trend, Michael<br />

McLean, Director of the Master Builders<br />

Association of Western Australia, says,<br />

‘Civil engineering is a sector of significant<br />

growth, with the announcement of an<br />

increasing number of new resources<br />

projects. This sector will be stretched to<br />

find the labour to meet these projects<br />

over the next three to five years …<br />

There are increasingly more Eastern<br />

States builders and specialist contractors<br />

coming to Western Australia to find<br />

work.’<br />

Echoing Mr McLean’s sentiments, Scott<br />

Criddle, CEO of market-leading civil<br />

engineering firm Decmil, comments, ‘At<br />

the moment, Decmil’s focus is just upon<br />

delivering in Western Australia. We<br />

want to keep delivering the best possible<br />

results for our clients. Over the longer<br />

term we would consider expansion, but<br />

right now our focus is very much on<br />

Western Australia’s economy, and the<br />

growth potential here.’<br />

Beyond Western Australia being a region<br />

for inward investment, the state is home<br />

to a plethora of specialised engineering<br />

firms, such as WorleyParsons,<br />

Georgiou and Decmil, which would be<br />

of significant interest in terms of the<br />

specialist skills they can offer to the<br />

broader Commonwealth community.<br />

On the opportunities presented by<br />

<strong>CHOGM</strong> 2011 for such skills exchange,<br />

Georgiou CEO John Georgiou affirms<br />

that ‘<strong>CHOGM</strong> 2011 is an excellent<br />

opportunity for Western Australia and<br />

Perth to demonstrate their economic<br />

strength and the range of skills and<br />

opportunities available. <strong>CHOGM</strong> is good<br />

for Australia and good for Western<br />

Australia.’<br />

Residential Construction<br />

With expenditure on projects<br />

commenced at AU$5.8 billion through<br />

2008–09, residential construction as<br />

a sub-sector accounts for the secondlargest<br />

proportion of Western Australia’s<br />

building and construction sector, with a<br />

‘‘<br />

We were<br />

employing<br />

throughout the<br />

GFC, we almost<br />

doubled our<br />

workforce.<br />

The sector is Western Australia’s largest<br />

employer, accounting for 126,800 Western Australia’s building and<br />

employees, increasing by 4 per cent construction industry is dominated<br />

through 2008–09.<br />

by engineering construction on major<br />

investment opportunities for both 16 per cent share.<br />

88 89<br />

‘‘<br />

John Georgiou,<br />

CEO of Georgiou


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

View of Bunbury<br />

commercial area<br />

from Marlston<br />

Hill Lookout;<br />

Photo courtesy of<br />

Tourism Western<br />

Australia<br />

Residential construction encountered<br />

a 19 per cent dip in expenditure from<br />

AU$7.2 billion in 2007–08 to AU$5.2<br />

billion in 2008–09 as a result of the<br />

GFC.<br />

Pointing out that demand was not<br />

the constraining factor on residential<br />

development, Brendan Gore, CEO of<br />

residential property developer Peet Ltd,<br />

says, ‘Given the property development<br />

industry’s reliance upon debt as a key<br />

driver for growth, the broader financial<br />

climate had a significant impact upon<br />

our access to funds. The capital markets<br />

have become a lot more competitive<br />

in the wake of the GFC … We are in<br />

undersupply in Western Australia.’<br />

Michael McLean concurs, saying,<br />

‘We expect 21,000 dwelling units,<br />

predominantly detached houses, for<br />

2010. That is very much an undersupply<br />

given the economy’s quick recovery<br />

from the GFC. We estimate that we are<br />

underbuilding to the tune of around 3000<br />

units per annum. We have capacity to<br />

build 25,000 residential units.’<br />

Perth’s 15 per cent increases in<br />

residential property prices between<br />

March 2009 and March 2010 present<br />

a significant opportunity for long-term<br />

financial investors to come into the<br />

regional property market.<br />

Key challenges for residential<br />

construction firms in Western Australia<br />

are focused on three key areas: labour<br />

shortages and associated inflation on<br />

input costs, challenges surrounding the<br />

approvals process for bringing vacant<br />

land to market; and the sustainable<br />

development of social infrastructure to<br />

compliment new neighbourhoods.<br />

‘Moving forward,’ says Brendan Gore,<br />

‘when you look at supply and demand,<br />

there are significant opportunities.<br />

However, there are significant supplyside<br />

constraints mitigating our capability<br />

to bring land to market. We have to<br />

remember to keep property affordable<br />

in order to remain sustainable, both<br />

economically and socially. The<br />

government needs to re-examine the<br />

approvals process, funding issues, taxes<br />

and federal environmental regulations.<br />

Right now you can be delayed for years<br />

with endangered species and antidevelopment<br />

minority groups. We need<br />

to have our operational parameters more<br />

clearly defined.’<br />

In response to such challenges, the state<br />

government is undertaking a broadbased<br />

review of the regulatory regime<br />

surrounding land approvals, in order<br />

to expedite the speed with which land<br />

and residential property are brought to<br />

market in Western Australia.<br />

Commercial Construction<br />

Despite being the most visible sector<br />

upon entry into Perth, Western<br />

Australia’s commercial construction<br />

sector accounts for the smallest<br />

proportion of expenditure within the<br />

region. Commercial construction in the<br />

year 2008–09 accounted for AU$3.1<br />

billion in terms of constructions<br />

commenced, a 12 per cent share of<br />

Western Australia’s overall building and<br />

construction expenditure.<br />

Having come off an investment bull run<br />

in recent years, commercial property<br />

investment has dropped from AU$5<br />

billion in 2007–08 to AU$3.1 billion in<br />

2008–09, representing a 36 per cent<br />

decline.<br />

relatively recent high and we expect it<br />

to drop this year to the tune of 15 to<br />

20 per cent. That is the result of tighter<br />

financial conditions and the availability<br />

of credit for developers.’<br />

Commercial construction in Western<br />

Australia involves a range of<br />

developments such as: office space,<br />

sports arenas, schools, shopping<br />

complexes and car parks. Chris Palandri<br />

of major commercial developer Brookfield<br />

Multiplex is more upbeat with regards to<br />

the sector’s overall prospects.<br />

‘I wouldn’t be surprised if this decline<br />

was the case with commercial office<br />

construction,’ he says. ‘However, there<br />

are numerous other projects outside<br />

of the commercial office sphere that<br />

are coming online, which I would have<br />

thought will backfill any reduction in this<br />

development.’<br />

Brookfield Multiplex is perhaps<br />

Western Australia’s leading commercial<br />

developer, having developed much of<br />

Perth’s central business district as well<br />

as ongoing involvements in major social<br />

infrastructure works such as the $AU1.7<br />

billion Fiona Stanley <strong>Hospital</strong>.<br />

Of particular interest to commercial<br />

developers interested in entering the<br />

Western Australian market are the<br />

federal government’s school-building<br />

stimulus package and Perth’s continued<br />

demand for hotel developments. Perth<br />

has the highest hotel occupancy rates<br />

of any city throughout the world and, as<br />

Bradley Woods of the Western Australia<br />

Hotels Association points out, ‘There<br />

are certainly opportunities for high- end,<br />

five-star developments.’<br />

International Profile<br />

Western Australia is home to some of<br />

the world’s leading construction and<br />

engineering firms, such as Brookfield<br />

Multiplex, WorleyParsons and Leighton<br />

Contractors, all of whom have built<br />

reputations on the international stage.<br />

WorleyParsons in particular is an<br />

extraordinarily advanced engineering<br />

company with diversified operations<br />

throughout the world, ranging from<br />

operations in many of<br />

the Commonwealth<br />

community’s member<br />

states, such as India and<br />

South Africa.<br />

Speaking about the<br />

importance of <strong>CHOGM</strong> and<br />

the Commonwealth for<br />

his firm, WorleyParsons’<br />

Bradley Andrews says, ‘It<br />

is very important for us.<br />

The services we deliver<br />

out of Western Australia<br />

will be, if not already,<br />

extremely useful in a<br />

number of Commonwealth<br />

countries. In particular,<br />

WorleyParsons is<br />

expanding throughout<br />

Africa and Asia and,<br />

given Perth’s proximity<br />

to the Indian Ocean, we are well placed<br />

to transfer our knowledge into such<br />

regions. We have worked hard to build<br />

local presence and resource capabilities<br />

throughout the world and want to<br />

continue to do that. Developing local<br />

capability in every country in which we<br />

work is really key for us and is a big part<br />

of WorleyParsons’ sustainable business<br />

model.’<br />

The opportunities for Western Australia’s<br />

leading construction companies and<br />

Commonwealth community members<br />

to work together on the international<br />

stage are extremely exciting, given<br />

the synergies presented in such<br />

relationships.<br />

Industry Outlook<br />

Western Australia’s varied assortment<br />

of building and construction sub-sectors<br />

have had varied experiences of the<br />

recent fluctuations in broader global<br />

markets, from capital constraints in the<br />

residential and commercial sectors to<br />

a decline in commodities confidence in<br />

heavy industrial engineering.<br />

Demand fundamentals remain strong for<br />

all three key sectors, particularly when<br />

Western Australia’s continued economic<br />

growth rate of 5.5 per cent is taken<br />

into account. Its population continues<br />

‘‘<br />

At the moment,<br />

of all Australian<br />

States that we<br />

operate we have<br />

the greatest<br />

workload in<br />

Western Australia.<br />

Chris Palandri,<br />

Regional Managing<br />

Director of<br />

Brookfield<br />

Multiplex<br />

Elaborating upon market sentiments in<br />

the commercial property market, Michael<br />

McLean comments, ‘The commercial<br />

90<br />

sector has come off the back of a<br />

hydro-electric power in Brazil to mining to increase at Australia’s fastest rate,<br />

91<br />

‘‘


W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Austal’s production<br />

facilities in<br />

Henderson<br />

Western Australia;<br />

Photo courtesy of<br />

Austal<br />

ensuring that demand in the residential<br />

sector is set to remain strong.<br />

Significant optimism can also be<br />

taken from the state government’s<br />

renewed activity concerning supply-side<br />

constraints associated with regulation<br />

and approvals. From a commercial and<br />

engineering construction perspective,<br />

Western Australia is welcoming colossal<br />

levels of foreign direct investment<br />

presently, such as the AU$50 billion<br />

expected to be generated by Chevron’s<br />

Gorgon project alone. The multiplier<br />

effects of such significant broad-based<br />

investments are certain to be capitalised<br />

upon by Western Australia’s world-class<br />

commercial and engineering construction<br />

firms.<br />

Evaluating the construction industry’s<br />

prospects, Michael McLean predicts ‘that<br />

within two years the entire industry will<br />

be booming. Once the industry begins to<br />

regain momentum, it is very hard to slow<br />

down that momentum. This occurred<br />

two years ago and many people saw the<br />

global financial crisis as a short moment<br />

of relief. Wherever you look across the<br />

industry, there are great opportunities<br />

over the short to medium term.’<br />

Manufacturing<br />

Western Australia has successfully built<br />

upon the state’s skills base in sectors<br />

such as resources, engineering and<br />

construction to develop a now-thriving<br />

manufacturing sector. Manufacturing in<br />

Western Australia accounts for 98,000<br />

jobs, AU$12 billion and 8 per cent of<br />

gross state product.<br />

Diversifying Western Australia’s<br />

industrial base away from the resources<br />

sectors has been vital to ensuring<br />

economic stability, diversifying the<br />

regional skills base and reducing the<br />

state’s dependence on international<br />

commodities markets.<br />

‘Western Australia was an economy<br />

very much subject to boom and bust<br />

cycles,’ comments Western Australia’s<br />

Chamber of Commerce and Industry<br />

Chief Economist Jon Nicolaou, ‘because<br />

we were very much at risk to price<br />

changes in a particular commodity such<br />

as nickel or iron ore. However, over the<br />

past decade we have seen more and<br />

more diversification in our industrial<br />

base, and that has provided us with a<br />

hedge against movements in a particular<br />

economy.’<br />

Naturally, much of Western Australia’s<br />

manufacturing sector is linked into the<br />

state’s key sectors, such as agriculture<br />

and resources.<br />

Metal products, fossil fuel refining and<br />

food and beverage processing are some<br />

of Western Australia’s key manufacturing<br />

bases, representing 33 per cent, 17 per<br />

cent and 11 per cent of manufacturing<br />

output respectively. Key sites for such<br />

activity are BP’s Kwinana oil refinery,<br />

Worsley Alumina Refinery and the<br />

Margaret River wine-producing region.<br />

Of particularly iconic status within<br />

Western Australia’s manufacturing<br />

landscape is Austal Ships, an aluminium<br />

ship builder.<br />

Western Australia’s<br />

Water Challenge<br />

Western Australia’s Water Corporation, which oversees provision<br />

of safe, drinkable water to communities and industries throughout<br />

the state, is taking a lead in responding to the challenge of climate<br />

change, which is already presenting significant challenges, as it is<br />

in many countries and regions in the Commonwealth.<br />

Rainfall in the state’s most populous<br />

and agriculturally productive areas<br />

is expected to decline significantly<br />

and the Water Corporation is planning for<br />

a scenario that projects:<br />

20% decline in rainfall by 2030;<br />

40% decline in rainfall by 2060.<br />

by more efficient use of the state’s<br />

water resources and the development<br />

of innovative, new supply sources for<br />

communities, business and industry.<br />

Desalination<br />

Author:<br />

State Government<br />

of Western<br />

Australia<br />

Above:<br />

Great Sandy<br />

Desert. Canning<br />

Stock Route<br />

Project (FORM)<br />

Photo by Tim<br />

Acker.<br />

Austal began as a relatively small<br />

The first of two big seawater desalination<br />

company in 1988, constructing vessels<br />

This will have a significant impact on plants, completed in Western Australia<br />

for Western Australia’s crayfish industry,<br />

water availability, with Perth’s water at the end of 2006, was the forerunner<br />

but has now grown into a multinational<br />

supply and the water supplies of most of plans for large new desalination plants<br />

company building vessels for the US<br />

regional communities, sourced from in the rest of Australia. The first plant,<br />

Navy and Saudi royal family throughout<br />

dams or groundwater aquifers that just south of Perth, produces up to 45<br />

Western Australia and the USA. Austal<br />

require replenishment by rainfall. The gigalitres of drinking water per year. The<br />

Ships is very much synonymous with<br />

state government’s response is to seek second plant, about 170 kilometres south<br />

the inventive spirit and endurance found<br />

climate resilience, with a strong focus of Perth, is due to begin production in late<br />

throughout Western Australia’s business<br />

on sustainability and reduced reliance 2011 to produce up to 50 gigalitres per<br />

92<br />

culture.<br />

on annual rainfall. This will be achieved year, with the potential to increase to 100<br />

93


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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

gigalitres. The two plants will together<br />

provide almost one third of the water<br />

supplied through the southern integrated<br />

scheme that provides about 80 per cent<br />

of Western Australia’s water supplies.<br />

Both plants are subject to stringent land<br />

and marine environmental management<br />

programmes, and energy for both is<br />

being purchased from renewable energy<br />

generators.<br />

Groundwater<br />

Groundwater provides about two-thirds<br />

of all water used in Western Australia and<br />

is the only available, readily exploitable<br />

source of water for about 60 per cent of<br />

the state. About 50 per cent of Perth’s<br />

public water supply is provided from the<br />

Gnangara mound aquifer, a groundwater<br />

resource sitting under the metropolitan<br />

area. In total, about 420 gigalitres<br />

of water are drawn from across the<br />

Gnangara mound each year, including<br />

large volumes for agriculture, forestry<br />

and market gardens, as well as for public<br />

open spaces, parks and sporting grounds.<br />

The aquifer is also an important source<br />

for maintaining wetlands and native<br />

Gnangara Groundwater System<br />

vegetation, and supplying the 176,000<br />

private bores that help sustain Perth’s<br />

gardens and outdoor lifestyle.<br />

The Western Australian government<br />

manages groundwater by ensuring that<br />

what is being taken out is balanced with<br />

what is being recharged, and that water<br />

is not contaminated by poorly planned<br />

development or industry activity.<br />

While many of the state’s aquifers have<br />

large volumes of water, there is a risk<br />

that overuse will cause loss of wetlands<br />

and damage other water-dependent<br />

ecosystems. A 15-year state-wide<br />

groundwater investigation is underway<br />

to help Western Australia to better<br />

understand the size and extent of its<br />

groundwater resources and to improve<br />

the management and monitoring of water<br />

levels and groundwater quality.<br />

Recycling and Water Efficiency<br />

The state aims to recycle much more of its<br />

precious water, and initiatives so far include<br />

a trial of groundwater replenishment and a<br />

higher-level treatment of wastewater for<br />

re-use by industry. Efforts<br />

are also being made to<br />

greatly increase the use of<br />

recycled water to irrigate<br />

public parks and playing<br />

fields, and for horticulture.<br />

In addition, a vigorous<br />

public awareness campaign<br />

aims to achieve wateruse<br />

reductions in homes,<br />

businesses and industry,<br />

through practical initiatives<br />

including: water efficiencymanagement<br />

plans for<br />

businesses, promotion<br />

of water-sensitive urban<br />

design, and greater water<br />

efficiencies in garden<br />

supplies, landscaping,<br />

irrigation and plumbing.<br />

S e c t o r O v e r v i e w<br />

Energy<br />

Western Australia is<br />

ensuring that future water<br />

supplies meet the needs<br />

of a strongly growing<br />

Source: State Government of Western Australia<br />

population and expanding<br />

industries.<br />

94 95


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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Energy<br />

Alongside the immense scale and vibrancy in the resources<br />

sectors, Western Australia’s innovation in energy generation<br />

and supply is uniquely placed to lead globally in terms of both<br />

environmental sustainability and service delivery to remote<br />

regions and communities.<br />

Cover (backpage):<br />

Power Station in<br />

Broome owned<br />

by Energy<br />

Developments Ltd.;<br />

Photo courtesy of<br />

Horizon Power<br />

Above:<br />

Horizon Power<br />

employees working<br />

in remote regions;<br />

Photo courtesy of<br />

Horizon Power<br />

Overview<br />

Following the disaggregation of the<br />

sector in 2006, the energy sector is now<br />

subdivided into specific areas of speciality<br />

that are geared towards providing<br />

efficient, long-term value to meet the<br />

growing needs of one of Asia Pacific’s<br />

most vibrant market economies.<br />

of sustainable inputs into energy<br />

generation across the board. Some of the<br />

most interesting innovations within the<br />

marketplace are focused upon demandside<br />

initiatives aimed at increasing<br />

awareness among consumers, concerning<br />

more efficient usage of electricity in order<br />

to reduce costly fluctuations between<br />

base-load capacity, mid-merit and peak<br />

production. Ultimately this translates<br />

into a marketplace whose trajectory of<br />

growth can offer a range of solutions<br />

to the international communities’ most<br />

challenging energy supply questions.<br />

Minister of Energy, as ‘the energy<br />

sector’s greatest challenge’. Termed the<br />

‘Middle East of renewable energy’ by Ray<br />

Wills of Western Australia’s Sustainable<br />

Energy Association, Western Australia is<br />

well placed to rise to this challenge, and<br />

embraces a diverse range of innovative<br />

energy producers at the forefront of some<br />

the renewables sector’s most exciting<br />

technologies.<br />

Western Australia’s energy market is<br />

presently undertaking a wholesale review<br />

led by Minister Collier’s department<br />

under the auspices of the State Energy<br />

Initiative.<br />

‘We want to have a bold vision of where<br />

we are going in terms of energy within<br />

the state,’ explains Minister Collier,<br />

‘which is why I initiated the State Energy<br />

Initiative (SEI). We are going through the<br />

consultation phase right now, but the SEI<br />

will be completed by the end of this year,<br />

and that will be a broad-based plan that<br />

will include input-based consultation. We<br />

are going to rely heavily on the inputs<br />

from industry, the community and other<br />

government sectors. I will feel very<br />

comfortable leaving the office with a bold<br />

plan in place to guide the sector moving<br />

forward. We have received great feedback<br />

from industry at the prospect of this.’<br />

Energy Market Disaggregation<br />

Prior to 2006, energy generation across<br />

Western Australia was dominated by<br />

Western Power, the incumbent stateowned<br />

enterprise. Following the division<br />

of Western Power into its respective<br />

specialist functions, Western Australia’s<br />

portfolio of leading companies has now<br />

taken on a more specialised, niche<br />

complexion.<br />

infrastructure, and Synergy for retailing<br />

electricity to consumers. As the structure<br />

of disaggregation evolves towards a more<br />

sustainable and equitable model, the key<br />

advantages of deregulation (specialisation<br />

and competition) are starting to come to<br />

fruition. Western Power’s vital role as<br />

the owner of transmissions infrastructure<br />

is epitomised by the ever-increasing<br />

development and implementation of<br />

sustainable and reliable technology at the<br />

most effective possible price.<br />

Managing Director Doug Aberle promotes<br />

a culture of ‘passion and commitment<br />

towards increasing the awareness of<br />

customers as to the complexities and<br />

opportunities presented by energy<br />

consumption, whilst maintaining a<br />

clear focus on improving transmissions<br />

technologies in use’.<br />

Synergy is also committed to an ongoing<br />

dialogue with consumers, encouraging a<br />

smarter and more collaborative energy<br />

sector, which delivers the best possible<br />

outcomes for all stakeholders as well as<br />

for the environment. A key innovation<br />

that Synergy is currently rolling out<br />

involves smart reader installations in<br />

customers’ homes, facilitating consumers’<br />

understanding as to when the best times<br />

are to consume energy from both a<br />

financial and environmental perspective.<br />

Verve Energy<br />

Verve Energy is the major energy producer<br />

for the SWIS. Having inherited plant<br />

infrastructure some of which is 40 years<br />

old, Verve Energy has spent the past<br />

three years investing significant sums on<br />

upgrade and refurbishment.<br />

Managing Director Shirley In’t Veld has<br />

ensured that ‘Our plant infrastructure is<br />

now operating much more reliably, with a<br />

forced-outage average well within industry<br />

standards. Reliability and availability is<br />

definitely where we want it now. On the<br />

operational side, we have made extremely<br />

good progress in recent years.’<br />

‘‘<br />

Linear wind and<br />

solar technology<br />

is of particular<br />

interest to Verve<br />

Energy.<br />

Shirley In’t Veld,<br />

Managing Director<br />

of Verve Energy<br />

Western Australia’s unique portfolio of<br />

Connecting Western Australia’s<br />

demand encompasses energy supply to<br />

population hubs, encompassing Geraldton<br />

urban economic centres such as Perth,<br />

to the north, Kalgoorlie to the east, Perth<br />

as well as to remote farming communities<br />

to the west and Albany to the south, is<br />

such as those in the Mid West region’s<br />

the South West Interconnected System<br />

wheat belt, and to extremely complex The energy market has to adapt to<br />

(SWIS), a stand-alone network mandated<br />

mining hubs such as those in the Pilbara. Australia’s 2020 federal target, whereby<br />

to ensure sustainable supply across the Large investments and the relatively low<br />

On top of this, Western Australia is at the 20 per cent of all energy generation input is<br />

region. Within the SWIS, Verve Energy cost of electricity in Western Australia<br />

forefront of adapting to global climate required to come from renewable resources<br />

is responsible for energy generation, have significantly diminished Verve<br />

change in terms of reducing carbon by the year 2020. This is described by<br />

Western Power for maintenance and Energy’s capacity for profitability since<br />

96<br />

emissions and is increasing the proportion Hon. Peter Collier, Western Australia’s<br />

development of the transmission 2006. However, proposed tariff increases<br />

97<br />

‘‘


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‘‘<br />

Our intent is<br />

that we pursue<br />

partnerships with<br />

a view towards<br />

developing an<br />

international<br />

collaborative<br />

cluster.<br />

Rod Hayes,<br />

Managing Director<br />

of Horizon Power<br />

‘‘<br />

in line with the government<br />

policy to move towards<br />

cost-reflective pricing<br />

within the SWIS are set<br />

to significantly improve<br />

Verve Energy’s financial<br />

performance in the future.<br />

Verve Energy’s greatest<br />

challenge is to contribute<br />

significantly to Western<br />

Australia’s share of the<br />

20% renewable energy by<br />

2020 target. Of greatest<br />

significance presently<br />

is conventional wind<br />

technology, and Verve<br />

Energy is enthusiastic about<br />

working in partnership with<br />

universities to develop<br />

various innovative solutions<br />

to the state energy sector’s<br />

renewable shift. Linear wind and solar<br />

technology is of particular interest to<br />

Managing Director Shirley In’t Veld.<br />

Horizon Power<br />

The fourth energy service provider to<br />

emerge from the 2006 disaggregation<br />

is Horizon Power, charged with the<br />

formidable task of providing sustainable<br />

and cost-effective energy services to<br />

Western Australia’s remote and regional<br />

communities outside of the SWIS, as<br />

well as to commercial enterprises such<br />

as miners operating in remote regions<br />

outside of conventional networks.<br />

Horizon Power is a vertically integrated<br />

energy service provider, delivering<br />

energy solutions for regional Western<br />

Australians. Horizon Power operates on an<br />

immense scale, providing energy services<br />

to 46,000 customers across 2.3 million<br />

square kilometres; equal to one customer<br />

per 56.3 square kilometres. The scale of<br />

such an operation presents Horizon Power<br />

with significant challenges that Managing<br />

Director Rod Hayes is converting into<br />

opportunities of remarkable significance<br />

for communities throughout the world.<br />

Horizon Power is positioning itself as<br />

Australia’s market leader in small scale<br />

hybrid renewable energy systems.<br />

By innovating in such technologies,<br />

Horizon Power is able to provide energy<br />

infrastructure and services to Australia’s<br />

most remote communities and mining<br />

projects, proving concepts that can be<br />

applied to a vast array of communities<br />

and industrial operations throughout the<br />

Commonwealth.<br />

Rod Hayes is very much aware of Horizon<br />

Power’s commercial viability in remote<br />

and developing regions of the world,<br />

stating: “Horizon sees a huge international<br />

market and a need for some of the<br />

remote services that we can deliver. We<br />

have been considering how we might be<br />

involved with markets around the world.<br />

What we have identified is that working<br />

as a fully integrated provider delivering a<br />

broad range of services such as power,<br />

water and sewage is very efficient in<br />

remote regions compared with several<br />

providers trying to provide each a different<br />

service. We will see in the future whether<br />

this is something we would be able to<br />

pursue.”<br />

resources and the technologies associated<br />

with them can be as beneficial for the giant<br />

state going into the future as have been<br />

its hydrocarbon and mineral resources in<br />

the past.<br />

‘We have such depth and strength in<br />

renewable resources, I find it mindboggling,’<br />

comments Ray Wills, CEO of<br />

Western Australia’s Renewable Energy<br />

Association. ‘Western Australia has<br />

world-class solar energy resources. We<br />

use 20 per cent of our gas resources<br />

to compress gas for export. We could<br />

substitute this gas usage with solar power<br />

from the Pilbara in order to maximise the<br />

proportion of gas that goes for export.<br />

On top of this, South Western Australia<br />

has the strongest wind resource in<br />

Australia outside of Tasmania. Western<br />

Australia is very flat which means that<br />

there is very little turbulent interference<br />

for wind coming in. It is a critical cost<br />

advantage that we can put efficient<br />

turbines on land. ‘The waves that crash<br />

onto the shore of Western Australia<br />

are very high-quality waves because<br />

there is so much uninterrupted ocean<br />

between here and the coast of Africa.<br />

The swell in the ocean doesn’t fall below<br />

one metre. Carnegie Wave and Ocean<br />

Power Technologies are both looking<br />

at harvesting wave resources that can<br />

deliver base-load power 100 per cent of<br />

the time. Wave energy is the closest we<br />

will get to renewable perpetual energy.<br />

‘The fourth renewable input that we have<br />

are geothermal resources. We have highquality<br />

heat resources in our aquifers.<br />

These are being investigated by UWA and<br />

their Geothermal Centre of Excellence. We<br />

also have a lot of higher-grade geothermal<br />

resources in hot rocks throughout the<br />

state.<br />

‘Finally, we have a great deal of biomass<br />

opportunities with the forestry and<br />

agriculture sectors in Western Australia.<br />

We have technologies that turn bio-mass<br />

into electricity as well as those that can<br />

be used to distil bio-mass into ethanol.<br />

So if you look across the entire range of<br />

renewable energy, there really is nothing<br />

that you cannot do in Western Australia.<br />

Pilbara Region;<br />

Photo courtesy of<br />

Horizon Power<br />

‘The thinness of the population spread<br />

is the major challenge,’ says Managing<br />

Director Rod Hayes. ‘This translates into<br />

a lack of transmission infrastructure. All<br />

of our systems are stand-alone systems,<br />

so we provide local generation and<br />

distribution networks according to the<br />

2020 Renewables Target<br />

scales of these communities. ‘Given Australia’s 2020 target has opened<br />

Western Australia’s geography, logistics up exciting levels of competition<br />

is a major issue. Some of the fuel loads within Western Australia’s renewables<br />

we have to deliver are being trucked sector. New entrants to the market are<br />

2000 kilometres. There are huge logistics increasingly focusing upon developing<br />

supply lines. There is also huge diversity innovative solutions. Western Australia’s<br />

in environmental conditions across the potential as a source of renewable energy<br />

state, for example between the tropical is enormous, with options ranging from<br />

north and temperate south. This causes wind, wave, solar and geothermal to less<br />

a huge diversity in the nature of demands conventional technologies such as biomass<br />

98<br />

that we encounter.’<br />

and bio-fuels. These sustainable<br />

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CETO 2 Units<br />

in operation,<br />

Fremantle Western<br />

Australia; Photo<br />

courtesy of<br />

Carnegie<br />

We have world-class resources in the<br />

region across the board in wave, wind,<br />

solar and geo-thermal.’<br />

As it stands today, less than 5 per cent<br />

of Western Australia’s energy generation<br />

comes from renewable resources.<br />

is around 60 per cent gas, 35 per cent<br />

coal and 5 per cent renewables. Of that<br />

5 per cent that comes from renewables,<br />

the vast majority of it, over two-thirds,<br />

comes from wind.’<br />

Within this deficit of renewable inputs<br />

into the energy market reside significant<br />

opportunities for a rapidly expanding<br />

portfolio of renewable energy start-up<br />

firms based in Western Australia.<br />

‘The most exciting investment opportunities<br />

are, without a doubt, in renewables,’ says<br />

Collier. ‘Coal is rapidly becoming a thing<br />

of the past, not just at a national level,<br />

but at an international level. We have to<br />

look after the planet and coal is not seen<br />

as conducive to that. I am absolutely<br />

convinced that the population at large are<br />

now embracing renewable technologies.<br />

In terms of generation, people are ready<br />

for renewables and they are sympathetic<br />

towards the movement. More and more<br />

households and businesses are on board<br />

with energy conservation. Energy prices<br />

are increasing, but people are not only<br />

concerned with this. Younger people<br />

especially have embraced the notion of a<br />

greener future.’<br />

Carnegie Wave is currently working with<br />

Western Australia’s state government<br />

on an AU$12.5 million wave generation<br />

project just off the coast of Fremantle.<br />

Currently in the development phase, this<br />

five-megawatt venture will be the world’s<br />

largest wave energy project when it is<br />

fully up and running.<br />

Michael Ottaviano. ‘We have focused<br />

upon developing the cheapest, easiest-toinstall<br />

and most reliable technology. This<br />

gives us a clear competitive advantage<br />

within the market.<br />

Pacific Energy is an established energy<br />

company working in partnership with<br />

Australia’s resources firms throughout<br />

the country. The federal 2020 target has<br />

opened a significant opportunity for firms<br />

such as Pacific Energy to diversify into<br />

the renewables sector.<br />

‘The federal government here have<br />

installed a piece of legislation called the<br />

renewable energy act,’ explains CEO Adam<br />

Boyd, ‘whereby the main government<br />

retailer here, Synergy, is obligated to<br />

have 20 per cent of their power that is on<br />

sale coming from renewable sources by<br />

the year 2020. This has presented a huge<br />

opportunity for the renewables sector.<br />

New and innovative renewable energy<br />

solutions are required here as a result.’<br />

Pacific Energy are sourcing Western<br />

Australia’s forestry sector for waste wood<br />

material to go into the company’s power<br />

stations. Waste wood is widely accepted<br />

by law as a renewable fuel throughout the<br />

USA, EU and Australia. Pacific Energy’s<br />

bio-mass generator, due for construction<br />

five kilometres north of Perth CBD, is one<br />

of Western Australia’s most advanced<br />

renewables projects in terms of reliability,<br />

efficiency and proof of concept.<br />

The Collgar wind farm, located 25<br />

kilometres south east of Merredin, is<br />

another of Western Australia’s most<br />

advanced renewable projects.<br />

Scheduled to consist of 111 wind<br />

turbines, Collgar will produce enough<br />

renewable energy to power approximately<br />

125,000 Western Australian homes.<br />

Initially conceived by Windlab Systems<br />

Ltd as a location to construct a wind<br />

farm, Collgar has now been purchased<br />

as a joint-venture deal between Swiss<br />

investment Bank UBS and Australia’s<br />

Retail Employees Superannuation Trust<br />

(REST). Construction on Collgar will begin<br />

in June 2010, with first power production<br />

due in April 2012.<br />

Swan Energy is one of Western Australia’s<br />

leading renewable energies firms in<br />

terms of sourcing the world’s leading<br />

technologies from South Korea and<br />

Germany, as well as further innovating<br />

with such technologies. Swan Energy<br />

specialises in Wind and Solar, as well<br />

as diesel hybrid systems. One of the<br />

most exciting new technologies Swan<br />

is currently looking at is concentrated<br />

photovoltaic (CPV) solar power. CPV solar<br />

uses three different layers of solar cells to<br />

capture a greater amount of sunlight, thus<br />

increasing the technology’s efficiency by<br />

12 to 25 per cent. Swan Energy works<br />

extremely hard to educate society on the<br />

business viability of renewable energies<br />

and to break down traditional scepticism.<br />

Explaining the status quo, Peter Collier, Carnegie’s CETO technology is unique,<br />

Minister for Energy, says, ‘Western whereby the energy of the wave is<br />

Australia is part of a national mandated captured at a sub-surface level and<br />

target to reach 20 per cent renewable harnessed using pumps and hydroelectric<br />

energies by 2020. We are currently sitting technology. CETO places Carnegie as a<br />

at less than 5 per cent, and around 3.1 world leader in wave technology. One<br />

per cent in the SWIS. We face massive of only two wave companies listed on<br />

challenges to meet this target. Our lower an international exchange, Carnegie<br />

relative reliance on coal in Western currently has projects underway in<br />

Australia serves as an advantage. Coal Australia, Canada and Reunion Island.<br />

makes up 80 per cent of the fuel mix in Carnegie’s patented technology is what<br />

the Eastern States, while it contributes sets the company aside from competitors<br />

less than 35 per cent of our fuel mix in in the race to power Western Australia<br />

Western Australia. Gas makes up the vast sustainably.<br />

majority of our energy mix in Western<br />

Australia, given our plentiful supplies. ‘It is definitely our technology [that sets<br />

100<br />

Our power generation in terms of fuel mix Carnegie apart],’ comments CEO Dr<br />

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W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t<br />

Commonwealth Opportunities<br />

Western Australia’s geographic profile,<br />

combined with the state’s remote and<br />

dispersed population, presents energy<br />

suppliers with a range of challenges very<br />

similar to those found throughout the<br />

Commonwealth.<br />

Acknowledgements<br />

GBR would like to thank the following institutions for the time and<br />

efforts dedicated to helping us to produce this report<br />

Esperance nine<br />

mile beach; Photo<br />

courtesy of Verve<br />

Energy<br />

‘There is the traditional view that<br />

renewable energy is expensive, unreliable<br />

and cannot be used as a base-load power,’<br />

says Swan CEO James Rhee.<br />

‘The fact is that there is always somewhere<br />

on the SWIS where wind is blowing. We<br />

also use real-time dual tracking systems<br />

that follow the sun all day, whereas solar<br />

before was only a fixed array with limited<br />

hours of generation. That means that over<br />

70 per cent of peak power generation can<br />

come from the wind and sun. Renewable<br />

energy can be a base-load power solution.<br />

In terms of cost, the price of energy in<br />

Western Australia is currently on average<br />

22 cents per kilowatt. Once we move<br />

to cost-reflective pricing of 32 cents per<br />

kilowatt, solar systems will become very<br />

attractive from a financial perspective;<br />

they will have paid for themselves after<br />

six years. Swan Energy’s solar systems<br />

have a 25-year power output warranty.<br />

You can think about over 20 years of<br />

free energy. The perception remains that<br />

renewable energy is expensive. Even with<br />

wind energy, the price of energy over a sixyear<br />

period is just 12 cents per kilowatt;<br />

this is even cheaper than solar.’<br />

Companies such as Horizon Power<br />

and Pacific Energy are at the forefront<br />

of developing business models and<br />

technological solutions that ensure<br />

the sustainable delivery of power to<br />

communities and industrial projects in<br />

challenging regions, many thousands of<br />

kilometres away from centralised grid<br />

infrastructure.<br />

Within this context, there are huge<br />

opportunities for knowledge-sharing<br />

initiatives and cross-border investment<br />

that could arise from <strong>CHOGM</strong> 2011.<br />

Horizon Power’s Rod Hayes asserts that,<br />

‘By the time <strong>CHOGM</strong> arrives in 2011, we<br />

will be clear on what we think we will<br />

be able to offer. Our intent is that we<br />

pursue partnerships with a view towards<br />

developing an international collaborative<br />

cluster, based upon this core concept<br />

of how you bring essential services to<br />

developing village communities.’<br />

Industry Outlook<br />

As Western Australia’s power sector<br />

adapts to deregulation, broader federal<br />

challenges are driving the sector towards<br />

a more sustainable future. Western<br />

Australia’s extraordinary potential as<br />

a source of renewable energy sets the<br />

foundation for a thriving energy sector,<br />

leading global innovation in vital new<br />

technologies such as wave power.<br />

On top of this, Western Australia’s model<br />

for delivering power to remote communities<br />

and industries sets an exciting precedent<br />

that an array of societies throughout the<br />

Commonwealth and beyond are able to<br />

adapt to their specific needs.<br />

The Government of Western<br />

Australia:<br />

As the year 2020 approaches, Western<br />

Australia’s energy market continues to<br />

adapt with leading renewables companies<br />

Australia India Business Council<br />

such as Carnegie Wave, Pacific Energy,<br />

City of Perth<br />

Wave Energy and Swan Energy all <strong>CHOGM</strong> 2011 presents an excellent<br />

working towards a more sustainable opportunity for the Commonwealth to<br />

Committee for Perth<br />

energy future based upon the immense further its contribution to the international<br />

State migration Centre<br />

potential presented by Western Australia’s community’s 21st-century energy<br />

geography and climate.<br />

challenges.<br />

Water Corporation<br />

Perth Convention Bureau<br />

Form<br />

102 103<br />

The Premier<br />

Department of State<br />

Development: Western Australian<br />

Global Network, Small Business<br />

Development Corporation<br />

Minister for Mines and Petroleum<br />

Minister for Commerce<br />

Minister for Energy<br />

Minister for Agriculture, Food and<br />

Forestry<br />

Minister for Health<br />

Minister for Transport<br />

Skill Force Task<br />

Chamber of Commerce and<br />

Industry Western Australia<br />

APPEA (Australian Petroleum<br />

Production & Exploration<br />

Association)<br />

AMEX (Association of Mining and<br />

Exploration Companies)<br />

Master Builders Association<br />

Western Australia<br />

Western Australian Sustainable<br />

Energy Association<br />

Tourism Western Australia<br />

Tourism Council<br />

Australian Hotels Association<br />

Western Australia<br />

Private Companies:<br />

Westpac<br />

Commonwealth Bank<br />

Bankwest<br />

ANZ<br />

NAB<br />

St George Bank<br />

Azure Capital<br />

Argonaut<br />

Hartleys Limited<br />

Plan B Group Holdings<br />

Ledge Finance<br />

Woodside<br />

Chevron<br />

BP<br />

Inpex<br />

Total E&P Australia<br />

ConocoPhillips<br />

ENI Australia<br />

BHP Billiton<br />

Rio Tinto<br />

Fortescue Metals Group<br />

Murchison Metals<br />

Atlas Iron<br />

Moly Mines Ltd<br />

Catalpa Resources<br />

Cliffs Natural Resources<br />

Wesfarmers Ltd<br />

Westernpower<br />

Synergy<br />

Verve Energy<br />

Horizon Power<br />

Carnegie Wave Energy<br />

Swan Energy<br />

PriceWaterhouseCoopers<br />

KPMG<br />

Mallesons Stephen Jaques<br />

Minter Ellison<br />

Freehills<br />

Clayton UTZ<br />

Murdoch University<br />

The University of Western<br />

Australia<br />

Edith Cowan University<br />

Curtin University<br />

The University of Notre Dame<br />

Australia<br />

Navitas<br />

Perth Education City<br />

Qantas<br />

Singapore Airlines<br />

Skywest<br />

Mount <strong>Hospital</strong><br />

St John of God <strong>Hospital</strong><br />

<strong>Bethesda</strong> <strong>Hospital</strong><br />

CBH Group<br />

Craig Mostyn Group<br />

Wammco International<br />

Rottnest Island Authority<br />

Fremantle Ports<br />

Duxton Hotel<br />

Hyatt Regency<br />

Burswood<br />

The Perth Mint Australia<br />

Leeuwin Estate<br />

Howard Park Wines<br />

Lamont’s Wine Store<br />

Austal<br />

AMC (Australian Marine<br />

Complex)<br />

Worley Parsons<br />

Matrix<br />

Peet Ltd<br />

Peak Well Services<br />

Mermaid Marine<br />

TS Marine<br />

Wartsila<br />

Brookfield Multiplex<br />

Georgiou<br />

Decmil Group Ltd


104<br />

W e s t e r n A u s t r a l i a B u s i n e s s E n v i r o n m e n t R e p o r t

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