paul goiak - growth opportunities in the mets sector

PACE Supply Chain Development Program

IDENTIFY Brief – 9 February 2016

www.statedevelopment.sa.gov.au

Paul GoiakDirector, Industry Development


DisclaimerThe information contained in this presentation has been compiled by the Department of State Development and originates from a variety of sources. Although all reasonable care has been taken in the preparation and compilation of the information, it has been provided in good faith for general information only and does not purport to be a professional advice. No warranty, express or implied, is given as to the completeness, correctness, accuracy, reliability or currency of the materials.

The Department of State Development and the Crown in the right of the State of South Australia does not accept responsibility for and will not be held liable to any recipient of the information for any loss or damage however caused (including negligence) which may be directly or indirectly suffered as a consequence of use of these materials. The Department of State Development reserves the right to update, amend or supplement the information from time to time at its discretion.

Background

3Department of State Development

Paul GoiakDirector, Industry DevelopmentDepartment of State Development

Supply Chain Development: Minerals, Energy, Information and Communication Technologies (ICT), Defence (Defence SA)

Administration of economic development programs aimed at growing South Australian supply chain capability and capacity

Sector Experience: Automotive, Ophthalmics (lens manufacture), Uranium Mining, ICT Wholesale Distribution, Public Service

What will be covered


• Why are METS so important?

• Success drivers (and constraints) for METS companies.

• Role of Government

• Where is the opportunity for growth?

• Why the PACE Supply Chain Development Program?

METS supply a very wide range of services

What are METS?Mining Equipment Technology and Services


Exploration Development/Operation Decommission/ RehabilitateFeasibility & Approvals

Information Communications Technology (ICT)Geophysical SurveysDrilling

Equipment manufactureMetal fabricationCivil ContractingAutomation/ ControlOil & Gas well servicesAccommodation campsMaintenanceWater treatmentLogistics & support

Environmental servicesRemoval of facilitiesLand Rehabilitation

Front End Engineering DesignProfessional services eg Land Access, Asset Evaluation

Typi

cal

activ

ities


Activity Examples of SA CompaniesInformation Communications Technology (ICT)

Maptek, SRAAPC Technology, Codan/Minelab, Speedcast

Environmental Services Coffey, Golder, Parsons Brinckerhoff, URS, Water Data Services, Cooe, Australian Groundwater Technologies

Professional services GPA, Fyfe, Jacobs, WorleyParsons, GHD, Aurecon, Exact Mining, Kempe Engineering

Specialised equipment (mining)

Specialised equipment (petroleum)

Liebherr, CavpowerThermo Fisher, Scantech

X Drilling, Gearhart, Transco

Automation Sage, Logicamms, Atsys

METS in South Australia


Activity Examples of SA CompaniesOil & Gas - Drilling & Completion Saxon Energy, Baker Hughes, Ensign, Condor, Farley Riggs

Water Osmoflo, Century Products, Veolia, Hydrus Technology, Baleen FiltersBasetec, RPC Pipe

Metal fabrication Ahrens, Manuel, Samaras, SA Structural,Ottoway Fabrication/Ottoway Engineering, Pipetech, Smart Fabrication

Civil Contracting Exact Mining, Lucas TCS, Bardrill

Electrical Cowell Electric, RJE, Mayfield, Nilsen

Accommodation camps (manufacture & camp services)

KJM, Ausco, Australian Portable Camps

METS in South Australia

METS State and National objectives

8

Oil, gas and energy resources

Mining, equipment, technology and services

Medical technologies and pharmaceuticals

Food and agribusiness

Advanced manufacturing

Industry Growth Sectors

METS are a priority for State and Federal governments

South Australia’s share of Australia’s key mineral resources

Department of State Development

METS supply a very wide range of services

Why grow the METS sector?


• Diverse nature of METS will grow economic complexity of SA

• Technology driven sector – long term jobs

• Global growth will continue to drive demand

• Global market – jobs/capabilities remain after primary commodity exhausted

• Complementary to our comparative advantage – Oil & Gas, Copper, Uranium, Graphite, Iron Ore

METS

METS in South Australia (more significant than previously thought)

Gross sales $3.9B

Total Employment1 17,830 FTE

GSP contribution1 $2.4B (2.6%)

Revenue/employee = $220,000

Source: Econsearch METS analysis, 2012/13 input/output tables1 Tier 1 and Tier 2

National average METS contribution to GDP 4.7%

MINERALS & PETROLEUM

Gross sales $6.2B

Total Employment2 15,800 FTE

GSP contribution3 $3.3B (3.7 %)

Sources: Gross Sales, DSDABS 5220.0 and Data Cube2 Direct only3 exclude taxes, royalties and subsidies.

How do we grow?Successful METS do their homework


Globally competitive

Connect and build relationships

Understand the Issues

Provide innovative solutionsGrowth

Are there constraints ?


Source: 2015 Austmine National Survey

SA/NT not leveraging international opportunities like other States

Base: Total Sample (n=432)Q23. Does your company export equipment, products, services or technology to other countries?

Companies Currently Exporting:by State, 2015

Total NSW & ACT WA VIC & TAS QLD SA & NT0%

20%

40%

60%

80%

100%

66% 64%74%

66%82%

36%

Top Growth Opportunities:by State, 2015 (selected)

Growth Opportunity

Total QLD SA & NT

International / Export

42% 58% 20%

Industry Collaboration / Partnership

17% 10% 26%

What is the role of government?

14Department of State Development Source: A Scorecard for Growing South Australian METS, 2015

• Provide a compelling set of programs for encouraging increased investment

• Expose local mining services companies to global supply chains as a measure to build relationships

• Provide an environment where technology can be integrated from universities and the ICT sector into the mining services sector

What is the government doing?


•Connect and build relationships•Understand the Issues

PACE Supply Chain

Development Program

• Provide innovative solutions

Mining & Petroleum

Services Centre of Excellence Globally

competitive

Where are the opportunities?


Tapping external markets is the key to growth

SA Australia Global0

50

100

150

200

250

300

Development Phase Minerals ProjectsCapital Cost US$Billion

Feasibility Stage Projects

Committed Projects

257

7

92

Source: BREE April 2015; SNL Metals and Mining July 2015

Where are the opportunities?


Source: A Scorecard for Growing South Australian METS, 2015

1989

-90

1991

-92

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

2007

-08

2009

-10

2011

-12

2013

-14

0

50

100

150

200

250

Labour Pro-ductiv-ity

Capital pro-ductiv-ity

Mining Industry Multifactor Productivity, AustraliaIndex 2013-14 = 100

Productivity Growth 2014-15, By Industries, Australia Hours worked basis

Average

Arts and recreation

Professional & technical

Transport & warehousing

Administrative

ConstructionRetail trade

ManufacturingRental, hiring & real estate

Wholesale trade

Agriculture, forestry & fishingAccommodation & food

Utilities

Other services

Financial & insurance services

Media & telecommunicationsMining

-10 -5 0 5 10 15 20 25

LP2 MFP2

• Develop relationships, understand value drivers

• Transition companies from other sectors into the resources sector

• Delivered by industry experts

• Supported by the State Government

Why the PACE Supply Chain Development Program?



What’s in the PACE Program?

► Stage 1 – Identifyincreasing market intelligence and awareness

► Stage 2 – Developdeveloping sales and marketing capabilities

► Stage 3 – Extend

preparing companies for export market opportunities

Final word - The world is investing in METS …


TSX, the primary stock exchange globally for exploration companies and junior miners, is transferring its capital raising to the Technology and Innovation space which:

• is the fastest-growing sector on TSX/TSXV since the start of 2013

• is now collectively valued at over $250 billion • has raised nearly $12 billion in equity capital since the start of 2014

For more key facts visit http://www.bctia.org/Blog/2015/7/3/Canadas-Thriving-Tech-Sector

http://www.bctia.org/Blog/2015/7/3/Canadas-Thriving-Tech-Sector




… are you on board?

Thank you


PAUL GOIAKDirector, Industry DevelopmentT: 08 8303 [email protected]

paul goiak - growth opportunities in the mets sector

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