CHOGM - Full Report - Bethesda Hospital
CHOGM - Full Report - Bethesda Hospital
CHOGM - Full Report - Bethesda Hospital
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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 />
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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 />
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 />
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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 />
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 />
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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 />
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 />
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‘‘<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 />
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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 />
‘‘
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‘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 />
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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
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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 />
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
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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 />
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 />
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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 />
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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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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S e c t o r O v e r v i e w<br />
Education<br />
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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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‘‘<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 />
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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 />
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 />
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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 />
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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 />
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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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 />
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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 />
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 />
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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 />
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 />
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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 />
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 />
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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 />
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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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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