the mineral industries research association growth, productivity & innovation in the minerals...

ARIES-1

Australian Resource Information and Environment Satellite

The mineral industries research association

But, the Australia has Undervalued Mining and Minerals Source: Robert Champion de Crespigny, 22 Feb 2002)


The moral of this story is:-Hi tech R&D inputs in gold mining significantly improved productivity - continuous improvement in PROCESS technologies and breakthrough in EXPLORATION This R&D is leading edge and world classNew service businesses created But undervalued in Australia


Furthermore.

I could tell similar tales for oil, coal, alumina, iron-ore, mineral sands, copper, zinc.

.but I wont!



Ian Wark Research Institute




Ian Wark Research InstituteInterfacial Science and Technology (hard and soft surface interactions)Control of Acid Mine Drainage in waste rock and tailings damsReduction of environmental impact of mining and in liability to company and country in management of wasteDrug delivery and nanotechnologyBio materialsOphthalmic lensesInkjet printingPolymer surface coatings

New Sectors





A word about the minerals industry


Importance of Australian Minerals Industry8.5% GDP in 2001/02Contributed ~$500 billion to Australias wealth over the past 20 yearsExported $41 billion in 2001/02 = 37% merchandisable exports = 28% total goods and services


Trends in the Australian Mineral IndustriesDecreasing commodity pricesMergers and acquisitionsFrom Production Base to Minerals Finance HouseNo longer Australian owned


Real Metal Price Trend 1970-1998

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Australian ProductivityIndex (1986 = 100)Source ABS (2003), Access Economics MCA


Contributing Factors to Mineral Export SuccessLabour productivityCapital productivityMicroeconomic reformMulti factor productivityContinuous innovation (process improvement)Breakthrough R&D (Exploration success)


Trend in BERD for Broad and Narrow Defined Australian Minerals Industry


Claims Under Australian R&D Tax Concession by Industry Sector (ANZIC)Source Matthews and Howard 2000


Australian BERD with Broadly Defined Minerals Industry (ANZIC classifications)


Australias sixth largest merchandise exportAustmine $1.9billionTotal ~$3 billionMTSAA estimate 2001 $611 millionMining Services Technology


Mining and mineral technologies and engineering are leading edge, hi-tech and world class.

They under-pin basic research disciplines which Reduce market risk and Provides a platform for new market sectors.

Sustainability objectives are also achieved through energy efficiencies and reduced impact of mining.

Minerals: A Platform for Innovation


Mining wealth is created its not a gift from natureCommercialisation of R&D and innovation extends beyond start-ups and venture capital. Incremental and step change gains in productivity in established industries greatly enhance economic activity.Spillovers occur into new markets.Relevant statistics to support this case are not collected: ABS, BERD, MTSAA inadequateLessons for Government


But when government does get it right

it gets hammered !!.


Brown coal keeps Victoria in the steam age Kenneth Davidson 22/7/02

Age 18/7/02


www.amira.com.au

Despite the emphasis on biotech, aero-space, new materials, IT and ETMs in the mid 1980's, like Mark Twain, reports of the death of the mining industry were greatly exagerrated.

So what happened on 1st January 1985?Gold price peaked at $600/oz mid eighties and was the initial driver for interest in gold.That soon dropped but the surge continued, principally on the back of technology despite attractive taxation and gold loan facilities.

At $5.5 billion exports per year, gold remains Australia's second largest merchandise export. Exports over the last twenty years exceed AUD$80 billionThe average DCF broker assessment for North was higher at $3.85/share, but this still left a gap of $669 million additional strategic value.

Similarly for Normandy the DCF valuation by Grant Samuel was at $1.68/share - a gap of $558 m additional strategic value.

Similar multiples apply tp Barrick's acquisition of Homestake and AngloGold's of Acacia.

See Melbourne Mining Club address by Robert champion de Crespigny, www.vicmins.com.au/events/22 February 2002

RADCF analyses are availbale for many minerals and energy projects. They typically indicate realised benefits of >10:1 with upside potential.The connection between undesirable acid mine drainage and sophisticated health care products may not be immediately obvious but it reflects a classic example of innovation spin-off in mineral research.X - ray Photoelectron Spectrometry, a technique used in the characterisation of the chemistry of surfacesInvestigating the adhesive properties of a polymeric fluid in a tensile testing machineIWRI has also developed unique surface coatings that enhance the durability and lifetime of body implants. This technology has been transferred to TGR Biosciences in which IWRI and the University of SA have a shareholding.

IWRI have recently been awarded an AusIndustry grant to liaise with four Australian Companies and EU industrial labs in nanotechnology building on the minerals base.Sola International Holdings Ltd began in Adelaide in 1956 and is now an international company, part of AEA Inventors Inc. headquartered in Claifornia.

Annual Sales are $700 million with R&D mainly in Adelaide.

Sola products include thinner,lighter lenses, innovative designs and high performance super coatings for tinting and anti-reflective properties.This slide is more relevant to instrumentation and software sold into the minerals industry than to other sectors such as health care.

Nevertheless, sharing the technical risk across several sectors reduces the level of risk to any individual sector.Resources are a major contributor to wealth in Australia. increased by X2.5 since 1990.

ABS categorises mining at 5% GDP but this understates contribution to manufacturing and services - closer to 9% GDP. ABS excludes ore processing and metal production and services and coal, petroleum and chemicals. 60% of all mining software used around world is Australian 240,000 jobs direct and indirect especially in rural and remote Australia

As definative figures are not collected by the ABS, total exports are estimates. Austmine is a self selected group that does not include many significant mining service exporters. (AMIRA and JKMRC are members of Austmine).

The newly created Commonwealth 'Mining Technology Services Action Agenda' has so far failed to collect definitive numbers. Its ABARE study estimated exports at $611 million but excluded:-Industry Associations and InstitutesUniversities ouside CRCsFinance, legal and management cos servicing corporateminingWholesale trade cos and distributorsMagazines and publicationsHeavy machinery and equipment including transport

Austmine has ~ 100 members, DITR estimates total companies at 300. Therefore export estimates of ~ $3 billion not unreasonable. Domestic market for MTS $11.9 billion.CRC for Clean Power from Lignite developed de-watering, gasification and fluidized bed technologies which already demonstrate 33% GG emission reductions.

But energy efficiency is doubled by combining these technologies with future technologies such as fuel cells and CFD.

the mineral industries research association growth, productivity & innovation in the minerals...

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