THE IMPORTANCE OF MINING TO CAIRNS

J2630 | 12th June 2013

ADDRESS TO THE

CAIRNS & MINING CONFERENCEW S (Bill) Cummings

Cummings Economics

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SERVICES HUB• Transport• Distribution• Manufacturing• Retailing• Communications• Government administration• Education• Health• Business & professional

services

CAIRNS : MAJOR ECONOMIC ROLECAIRNS : REGIONAL CAPITAL SERVICING QUEENSLAND’S NORTHERN HALF 9°S - 19°S

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LARGEST REGIONAL POPULATION (ESTIMATED RESIDENTIAL) IN NORTHERN AUSTRALIA

CAIRNS & IMMEDIATE HINTERLAND

Cairns (1) Townsville (1) Fitzroy (1) NT Top End (2)

Mackay (1)0

50000

100000

150000

200000

250000 236992 229543 227089

186932 175702

Note (1): SA Level 4Note (2): Darwin SA Level 4 plus Katherine, East & West ArnhemSource: Cummings Economics from ABS data.

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BY FAR LARGEST NUMBER OF REGISTERED BUSINESSES(INCLUDING MANUFACTURING)

Cairns Region Fitzroy Region Townsville Region

Mackay Region

Darwin Region

0

5,000

10,000

15,000

20,000

25,000

Source: Cummings Economics from ABS data.

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o Size of workforceo Number, diversity, range of businesseso North’s major air hubo Northern terminus Australia’s east coast rail, road &

air serviceso Major coastal shipping & marine industries baseo Lifestyle advantages

STRENGTHS IN SERVICING MINING ACTIVITY FURTHER AFIELD

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TROPICAL, PREVIOUSLY UNDER DEVELOPED AREA(RESOURCE POTENTIAL JUST BEING REALISED)

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MINERAL OCCURRENCES IN QUEENSLAND

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VALUE MINERAL PRODUCTION FAR NORTH QUEENSLAND

1982

/83

1983

/84

1984

/85

1985

/86

1986

/87

1987

/88

1988

/89

1989

/90

1990

/91

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

0

100

200

300

400

500

600

700

800

900

Source: Cummings Economics from Queensland Mines & Energy data.

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CAPE YORK BAUXITE

AURUKUN & CAPE ALUMINADEPOSITS WORTH ABOUT $20 BILLION

RIO TINTOCURRENT – $500M PA (1)STAGED INCREASE TO - $1300M PA (1)

(1) NOT INCLUDING TRANSPORT.

CONSTRUCTIONFIFO – 2,000 BED CAMPDIRECT EXPENDITURE TOTAL APPROX $1.3BN

FNQ APPROX $500M

HINTERLAND

POTENTIAL EXPANSION OF PRODUCTION

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MAP OF EQUIDISTANT FLYING DISTANCES

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AIR ROUTES TO MINES & MINING RELATED CENTRESQUEENSLAND & NORTHERN TERRITORY

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WORKFORCE IN MINING IN FAR NORTH QUEENSLAND

2006 2011 GROWTHBY PLACE OF RESIDENCE 1313 2759 +110%

BY PLACE OF WORK 694 1318 +90%DIFFERENCE 624 1446 +132%

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Source: Cummings Economics from ABS Census data.

TOTAL ESTIMATED FIFO WORKFORCE

TOTAL CAIRNS RESIDENTS SAYING PLACE OF WORK OUTSIDE CAIRNS REGION ACROSS THE NORTH 2916

ESTIMATED FIFO/DIDO WORKFORCE ASSOCIATED WITH MINING 2000

ESTIMATED FIFO WORKFORCE INCOME OF ORDER OF $200 M

PLUS AVIATION INDUSTRY IMPACT UNKNOWN

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NON-WORKFORCE EXPENDITURE BY MINES IN REGION FROM WITHIN AUSTRALIA

ESTIMATED EXPENDITURE IN CAIRNS LGA BY QRC MEMBERS $146 M

ESTIMATED TOTAL IN CAIRNS REGION INCLUDING TABLELANDS & CASSOWARY

COAST PLUS OTHER MINESAPPROX $200 M

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PAPUA NEW GUINEA & PAPUA INDONESIA

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FIFO INCOME ($ UNKNOWN) |OTHER R&R AND TRANSIT ($ UNKNOWN) | AIR FREIGHT ($45M)

TONNAGES SHIPPED THROUGH FNQ SEAPORTS 2009/10

MACKAY REGION (INCLUDING ABBOTT POINT) 99M TONNESFITZROY REGION (INCLUDES GLADSTONE) 79M TONNES

BRISBANE/SOUTH EAST QUEENSLAND 32M TONNESSOUTH AUSTRALIA 25M TONNES

CAIRNS/FAR NORTH REGION 22M TONNESNORTHERN TERRITORY 21M TONNES

TASMANIA 19M TONNESTOWNSVILLE/NORTHERN REGION 10M TONNES

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Source: Cummings Economics from Bureau of Infrastructure, Transport & Regional Economics..

SEASWIFT, PERKINS, FREEPORT MCMORAN; EST 100 CONTAINERS A WEEK; EST VALUE OF CARGO $300M

GENERAL CARGO SHIPPING TO MINES

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o CORPORATE OFFICES – CAPE FLATTERY SILICA, FREEPORT, BARRICK, INTEROIL

o EDUCATION & TRAINING

o EXPLORATION

O T H E R

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BASE METAL PRICE MOVEMENTS : 5 YEARS

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CAIRNS’ ADVANTAGE NOT DEPENDENT ON ONE MINERAL OR ONE AREA.

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GOOD PROSPECTS OF A POSITIVE STIMULUS IN FORESEEABLE FUTURE

THE IMPORTANCE OF MINING TO CAIRNS

J2630 | 12th June 2013

ADDRESS TO THE

CAIRNS & MINING CONFERENCEW S (Bill) Cummings

Cummings Economics

21