bridging the tyranny of distance: the northern territory’s position in transcontinental rail...
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Shane Condon, Managing Director, East West Line Parks delivered this presentation at the 2012 Northern Territory Transport Infrastructure Summit. The annual conference is the only event that focuses solely on the particularities and difficulties in implementing new transport infrastructure projects at Australia's top end. For more information, please visit the conference website: www.statetransportevents.com.au/nttransportTRANSCRIPT
East West Line Parks Limited
NT Transport Conference Darwin NT 11th December 2012
Presented by Shane Condon - MD & Founder &
Matthew Magin EWLP Regional Director
Disclaimer
• This presentation has been prepared by East West Line Parks Limited (“EWLP”).
• EWLP has prepared this presentation based on information available to us. All statements, other than statements of historical fact, are forward looking statements that involve risks and uncertainties. There can be no assurances that such statements will prove accurate and actual results and events could differ materially from those anticipated in such statements.
• EWLP does not assume the obligation to update any forward looking statement.
PIB NT Benefits 2012
• NT Government Revenue Streams Increased
• Aboriginal & Communities & Business
• Construction 1,600km PIB HH Rail + Spur Lines
• Stranded NT Mine Developments Realised 20-50?
• Transport Logistics & Communications NT a major
beneficiary
• Associated Industrial Developments
• Defence & Remote Tourism
• N - S - E & W :: Rail-City-Port-Connections
The NT PIB 2013 Agenda
2013 NT PIB Development Plan Schedule– Formal detailed meetings with all Government and community
stakeholders.
– Begin to Acquire the PIB Rail Corridor in the NT and across
Australia including within the NT.
– E-W PIB Rail from the Qld Boarder to WA Newman commence our
First Option Rail Corridor Rights programme completed in place by
June 2013.
– Consult with the new NT Government and all NT Stakeholders on
maximising the economic/commercial long-term potential development
benefit opportunities in the vicinity of the PIB E-W HH Rail Corridor.
• Musgrave has a major economic development potential.
– Rail Design Surveys and Planning to begin on the E-W PIB Rail
Corridor.
PIB Master Project Agenda 2013
East West Line Parks’ “EWLP” Project Iron Boomerang “PIB”
• EWLP - PIB – Introduction Concept and Strategy
– PIB Big Picture – We can always do much better, think smarter, globally collaborate as major trading nations, innovate and commit with passion and drive. Our kids and grandkids will think much more globally than we do! Productivity and Progress is the main game!
• PIB 2012 Developments.
• First half of 2013
– EWLP PIB New $30m 30% of Company share capital raising first quarter 2013 -Information Memorandum Available February 2013.
– Hold Global Steelmakers workshops $150m by 10 places in the Business Plan Queue
– Acquire First Option Rights on the 3,300km PIB E-W Continental Rail Corridor.
• Bankable Feasibility Study already begun and continued on steel-parks 2012-13.
• Continental Rail Corridor Lands and Steel Complex Lands Acquisition Programme to commence First quarter 2013.
• Conclusion
NT PIB Support
• Support the PIB Whole-of-Government approach as called for
by Dr Peter Shergold in the Howard Federal Government
Bureaucracy.
• Overseas major trading nations political and economic trade
and investment support.
• Energy supply to the project.
• Special PIB legislation requirements.
Project Iron Boomerang - Overview
Major Logistics Flows (1st Stage Steel Complex Parks: 5 x 4.4 mtpa Plants at
each end)
Newman Smelter
Park
Abbot Point Smelter ParkPort
Hedland
Total 40 mtpa Coal
20 mtpa Coal
33 mtpa Iron Ore
20 mtpaCoal
22 mtpaSteel
Total 66 mtpa Iron Ore
Moranbah Coal Hub
Total 106 mtpa Ores consumed
Total 44 mtpa Steel 22 mtpaSteel
PIB Heavy Haul Railstep-by-step development approach
Newman Smelter
Park
Abbot Point Smelter Park
Port Hedland
Moranbah Coal Hub Bowen Basin
Mt. Isa Galilee Basin
Darwin- Alice Springs
Container Rates To and From Australia 20-30% reduction on current rates
Productivity ChallengesCurrent Situation
High Australian Dollar High costs - world’s highest wages Productivity decline of 0.7% pa from 2005 to 2011* 2 Global Recessions in major economies - last 5 years. PIB Steel Park Concept Labour Efficiency 50% better. Australia’s Productivity ChallengeFor Australia’s key economic drivers of mining and agriculture Supply Chain Productivity and Innovation Efficiencies provide competitive advantage.
• Source: Beyond the boom: Australia’s productivity imperative, McKinsey Global Institute, August 2012
Yes we can make Iron & Steel in Oz under the PIB Model.PIB Provides the 50-75 year plus Sustainable Scale Competitive Steel Production Solution for Global Steelmakers as major trading nations.
PIB Big Picture Economics Nov - 2012
Value-Added Revenue Generation for Federal State/Territory Treasures!
EWLP PIB National Contributing Production Value Comparison Slab Steel.
• One year 44m tpy x $720 FOB = $31,680,000,000 or $31.68Bn p/a
• 20 year x 44m tpy @$720t FOB = $6.33 trillion
• QLD & WA P/A = $15.84Bn ea p/a production value.
• Against Primary Steel-Making ores fob value PIB consuming 106m tpy
• 106m tpy IO & C-Coal & Limestone approximate values = $14.84 Bn
• Indicates a 50% value-added increase for the Australian Economy.
Detailed and Deeply Researched Independent Economic Studies are available over 6 years of work.
Plus the EWLP PIB Fully-Optimised 40t axle HH Continental Rail will maximise stranded mine developments across the continent - $Billions p/a
NT Economic PIB Delivery Example The PIB Rail /QLD Economic Delivery Value
For Heavy Haul EWLP Rail Products – at 2012 fob p/a values - by 2018-19.
• Mt Isa-2m tpy = $1.6bn
– Ores; Copper/silver/lead/zinc-IO & Phosphate Mines.
• N-Galilee-30m tpy T-Coal = $2.7bn
– Thermal Coal -Mac Mines; ADANI; AMCI etc.
• Bowen Basin - Moranbah-20m tpy =$2.5bn
– Coking/Thermal BHP-BMA & Xstrata Coal + others?
• + 2018/19 EWLP Slab Steel 9m tpy. = $6.4bn. (2012 fob slab w-cost)
+ Subsidiary EWLP/PIB QLD end HH Rail Freight annual revenue generated from above estimated at >$1.2bn p/a.
2018/19 Total =$13.2bnEWLP Production Slab by 2022 : 22m tpy. =$15.8bn.(2011 fob slab cost)
2022 Est Total =$22bn p/a.• The 2020 PIB HH Rail figure is understated with conservative delivery expectations
• For reference details please contact EWLP HO Brisbane, Australia!
Project Aim
PIB “To establish first stage industrial steel parks with five standard steel making units located at each steel park precinct.”
PIB will design build own administer and operate the continental E/W rail and steel-making complex industrial parks appoint best contract operators and extract best optimal value and efficiencies on behalf of the steel-makers consortium.
Global Iron and Steel producers are invited to form a PIB steelmakers led consortium, after equally and collectively contributing to the bankable feasibility study. PIB to hold 10%
Steel park lands connected by 3,370 km of world class transcontinental standard gauge heavy haul railway.
PIB’s 40t Axle Coal Wagon & HH Trains “World’s Most Efficient ”
The Iron Boomerang Slab/Container Ship “World wide Patent Pending 2012-13”
PIB Slab & Container Ship
• Key Self-Loading Ship Independent Features:
• Inside Main Floor Area Dimensions
• Length 170m x Width 30m x 12 m High
Ideal for huge roll-on/off mining equipment and/or modular unit delivery.
• Ship has in-built Gantry Cranes 75t for fully automated loading and unloading.
• RORO dual tracked floor moves sideways for under – floor cargo loading/storage.
• Tracked Floor is mechanised for self-loading/unloading of slab wagons.
• Automated Self-Righting Water Ballast balanced loading/unloading adjustment system - wharf and ship height adjustments.
• Inner & Outer Strong Hulls for water ballast and to minimise Great Barrier Reef Risk Impact management.
• Schedule & Turnaround Time Saving 2-days each in loading & unlading instead of 6 days ea. – 8 days saved in turnaround time– greatly consolidates major CAPEX Equipment Expenditures on Ships Wharfs & Cranes.
• The Iron Boomerang Independent Self-Loading Slab Ship - World Wide Patent Pending. From Australia / E-Coast Asia: 65,000t PIB slabs to a total 44m tpy + empty Containers 2-4,000t per trip.
To Australia / E-Coast Asia: Full Containers inside and top-deck 40,000t for a total capacity of 30m tpy.
Ship Owners Per Trip Ship Income Estimates + /– 15%:
o From Oz Slabs @ $15t & Empty Containers @ 10t = $1m
o To Oz Full Containers @ $15t Cargo Wt. 40,000t = $600k
o Total Return Ship Trip Income = $1.6m
Return Trip Turnaround & Loading Time estimated at 35-40 days.
o Economic Efficiency/Productivity Improvements
o ROI +/- 15% = 20-30% for ship owner/operator
PIB 1st Stage 5-Steel Mill Complex Plan – 22mtpa Conceptual based on Tata Steel Consulting Engineering PIB Steel Complex Design
This Project proposes to dramatically effect and cut the current operating system inefficiencies to economic cost, to social and emission/climate advantage!
1. Fossil Fuels @ no1 world emitter.
2. Coal Fired Power @ no2 world emitter.
3. Steelmaking @ no3 world emitter.
4. Cement Making @ no4 world emitter - to 60% less
5. Bunker fuels @ no7 world emitter.
– PIB Carbon Capture Research Center Incorporation Proposal – worlds biggest trial site.
Green Steel Global Collaboration A Better Way
PIB’s Value-Adding the Mine & Farm Productivity Gain Efficiencies
In order to be competitive and world class, industry needs to invest and plan the most efficient supply chain and smartest steel production location sites and steel-making technologies/strategies.
Some PIB examples: Purpose built PIB steel parks can share service facilities, standardized designs and be more than 15-20% more efficient than world best practice.
PIB Continental E-W Heavy Haul Rail Corridor - Payload each way U-Rail CAPEX amortized at twice the rate >15-20% freight gain
40 t Coal axle load wagons and rail infrastructure 20-25% gain!
Aerodynamic wagon design with lids
• for a 30m t mine 500 km to port $12-15m of fuel saved!
• Faster returns - Less Rolling-stock Capex for lower freight rate.
Back-loading for all transport logistics Ships & Trains$Billions p/a saved in the PIB scale! Smart ship design to export slab and return to Australia with containers complementary N/S primary cargoes for better freight rates .
Iron ore (60%Fe) export seems efficient, but huge ships move approximately 40% of waste
material - dirt (non Fe) and return empty 60/200 - only a 30% efficiency factor!
The PIB Spur Solution for the Galilee Infrastructure Rail Corridor
1. One PIB 40t axle Rail Single Solution for all 5 mines – 300m tpy 2025.
• 32t axle 240 trains per week less
• 26t axle 500 trains per week less
2. Fully Optimised PIB HH Rail Efficiencies on marginal export thermal coal lowers risk for project financial closures.
3. World’s most efficient 40t coal axle lidded wagon saves $3-6 per t freight against 26t & 32t axle current operating comparisons -difference between finance and investment project closure or none!
4. The wagon is the most expensive piece of equipment mine-rail or port in the Galilee production supply chain 500-600km to port empty return.
5. Efficiency = Sustainable Business Competitive Productivity Gain
Ref: Xstrata Copper Presentation “Ernest Henry Mine (EHM) Magnetite Project – information Pack” (26 March 2009)
Queensland Perspective
PIB-Progress Update
• Key Feasibility Study Outcomes (2012).
1. The PIB Concept and Strategy - Australia will be the best place on earth to manufacture scalable “Green Steel” sustainably for the next 50 -75 years +
• Steel manufacturing - PIB Production & Operations Indicate 15-20% Net Productivity Gains on world best practice benchmarks
• Materials rail freight door-to-door advantage - PIB Supply Chain and Logistics offer 15-20 % Net Productivity Gains – includes “Green Steel” correction to benchmark practices.
• A major nation building Australian-led Global Project
• Prototype design for the world’s most efficient 40t coal axle wagonand Heavy Haul Rail Systems.
2. Boomerang Ship serves 2-primary N/S cargoes To & From the tyranny-of-distance Australia continent complementing each others better freight rates.
2012 Key Developments
• Commencement of PIB HH Rail Corridor and 1st Stage Steel Making Complex Land Title acquisition Processes – Project Feasibility team engaged.
– First 500km - dual 40t axle from Abbot Point to N-Galilee
– Industrial 1st Stage PIB Steel Parks Lands at Abbot Point
• TATA Steel Consulting UK - PIB 1st Stage Steel Complex Economic 200p Study – indicate net 15-20% sustainable productivity gains on production/operation/environmental efficiencies.
• Smart Materials Project Japan FRSM wholly owned PIB subsidiary developments.
• Ernst & Young / Everything Infrastructure Economic Study
Confirms Galilee Infrastructure Corridor is the highest productivity, least cost freight option from Galilee to Abbot Point on marginal energy coal.
• Slab Ship – Design world-wide patent pending’ Reduces shipping cost by >50% complementing the projects multiple efficiencies.
• NRI & Tata Steel Consulting Collaboration - Tokyo Press Release Dec 02 2012
2013 Key PIB Programme Developments
• Country by Country PIB Steel Complex Workshops to start March to June 2013.
• Feasibility Study International Collaboration Dec 04 2012 Tokyo signing with NRI Nomura Research Institute & TSC Tata Steel Consulting UK.
• PIB First Option Acquisition Rights Programme commences on the 3,300km Continental Rail Corridor - commencing February 2013
• Federal Communications Licence Granted – for 3,000km PIB Continental Rail Network servicing PIB Steel Parks R Continental Rail and Mine Automations.
• Assets realised on Infrastructures Rail, Ship, Trains and Wagon.
• Galilee Rail and Mt Isa QLD Regional Shires and communities favour the PIB dual 40t axle HH Rail Corridor lower impacts.
Project Communications
• 24 global steel-mills signed - 17 of top 20 global steelmakers have signed the PIB CA along with some of the worlds biggest corporations + 3 of the top 4 biggest world miners.
• Global Finance, Infrastructure/Logistics Service and Engineering companies expressing interest from China, Japan, Korea, UK, NY, HK,, Korea and the Gulf States.
• Major global resource, mining and steel industry equipment and steel associated companies.
• 5 National Governments –Japan, Korea, China, India, Australia
• 5 Australian Governments - The Federal, WA, QLD, SA and NT Governments.
Total shares on issue –
10,000 Ordinary
Fully Subscribed
STAGE 1: Pre-feasibility
Share Structure
Private Company
Pre-Feasibility Report
Completed Jan 2009
East West
Line Parks
Pty Ltd
STAGE 2: Feasibility
Share Structure
Private Company
February 2011 to 2012
Offering 10-positions 5-ea
end AU$15M each.
Group 1: Founders &
Associates
Group 2: Feasibility Study
Consortium Investors
Raise funding for the
Feasibility stage
(controlled for global
steelmakers) AUD$150M
Incentives
• Priority BF place in the
queue 1-10 Steel investors.
• Exclusive Consortium Share
• Land Site & Regulator
Approval to construct BF/BOF.
STAGE 3: Commercial
Share Structure
Unlisted Public Company
(Construction & Commissioning)
Year 2013 to 2017
Basis 50% Debt & Equity
US$420 million each
East West Line Parks Limited
Capitalisation:
Change the status of the Company from Private
to Public status
Capitalisation of US$12.4 billion 2008
Group 2: Feasibility Study Consortium Investors
Group 3: Investors
Group 3: Equal Share Consortium Investors
(US$420 million each), up to US$6.2B
Group 1: Founders & Associates
Revaluation of equity (10% of the final capital
raised)
Group 2: Feasibility Study Investors
AUD$150 million carried forward to Group 3.
Group 4: Debt Finance (Non-Recourse
Project Finance or 10y Bond Issue)
US$6.2 billion
Group 1: Founders & Associates
STAGE 4: Commercial
Share Structure
Public Company Listed
(Operational)
Year 2017 to 2018/19
Initial Public
Offering
Stock Exchange
Listing
Profit Exit 6-8y
opportunity for
Initial Investors
STAGE 5: Commercial
Share Structure
Listed Public Company
Beyond 2019
East West Line
Parks Limited
EWLP- PIB
Corporate Structure & Business Plan
Group 1: Founders &
Associates
East West
Line Parks Pty
Ltd
Approx. 8-9 steelmakers controlling majority of the final consortium of 10 BF positions 9%ea + PIB 10%.
STAGE 1
Pre-feasibility
STAGE 2
Feasibility
STAGE 3
Construction & Commissioning
STAGE 4
Operation & Completion of 1st
Stage Steel Plants
Feb 2010
to 2012/13
Years 2013/14
to 2017
Years 2019
to 2021
To Jan 2009
STAGE 5
Further DevelopmentsDuplication of 10 Steel mills
Beyond 2021
Conclusion
Our 2012 Seasons Greetings Best Wishes & Thank-you
From the Project Iron Boomerang Team