Ken King, Pilbara Development Commission - Exploring progress towards strategic regional economic development through the Pilbara Development Commission and Pilbara Cities Initiative

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Published on March 17, 2014

Author: informaoz



Dr Ken King, Chief Executive Officer, Pilbara Development Commission delivered this presentation at the Mining the Pilbara 2013 conference. The conference aims to promote the sustainable development of mineral resources and the Pilbara region.

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Mining the Pilbara 2013 The Pilbara - Growth, Prosperity, Opportunity Dr Ken King Chief Executive Officer Pilbara Development Commission Wednesday 17 July 2013

The catalyst for regional growth and development Leader, Advocate, Broker and Innovator The Pilbara Development Commission The Pilbara, Australia’s Global Economic Hub

• In 2011/12 the Pilbara (on and off shore) was responsible for some $84 billion of minerals and petroleum production, 81 per cent of total WA production by value. This is shown in the chart below. PILBARA ECONOMY Source DMP 2012

• The Pilbara Gross Regional Product (GRP) using the production approach represents: • 38% of Western Australia’s GSP • 5.5% of Australia's GDP • 50% of New Zealand’s GDP. • The Pilbara’s GRP is greater than the individual GDP of 123 of the world’s 185 nation states. • The Pilbara currently supports some 45,000 jobs with 40% of these part of the broader economy. Sources: Pilbara Development Commission - 2010 International Monetary Funds list of GDP PILBARA ECONOMY

Understanding our regional economy • Mining and construction is fundamental to the growth and development of the Pilbara economy and provides ongoing prosperity. • Mining (74.6%), Construction (8.1%) and Manufacturing (5.2%) total some 90% of the economy now and will continue to do so. • Operations and maintenance in the resource sector together with economic diversification and normalisation provide opportunity for the Pilbara going forward with an estimated 20% increase in employment required by 2020. Sources: CME / PWC Pilbara Population and Employment Study 2012 PILBARA ECONOMY

PILBARA GROWTH Key areas of growth in the Pilbara: • Population – currently 62,000 • Resource demand and investment • Employment – doubled since 2006 • Construction – value add opportunities • Service industries – community and industry support services The Pilbara has low unemployment (2.6%) and an annual average population growth rate of 2.5% over the period 2006 to 2011. Source: ABS 2011 Karratha's population grew at over three times this rate and five times the national average!

PILBARA INDUSTRY INVESTMENTS $100 billion plus estimated investment over 5-7 years going forward IRON ORE • Rio Tinto - $10 billion • BHP - $7 billion • Fortescue Metals - $7.5 billion • CITIC Pacific - $8 billion • Hancock Prospecting (Roy Hill) - $9 billion LNG • Chevron - $52 billion (Gorgon) • Chevron - $29 billion (Wheatstone) • North West Shelf Joint Venture • Woodside - Pluto and Browse FLNG MANUFACTURING • Yarra International - $600 million OPERATIONS & MAINTENANCE – jobs for Pilbara residents

To build the population of Karratha and Port Hedland into cities of 50,000 residents each and for Newman to become a major town of 15,000 residents by 2035, with other Pilbara towns also growing into more attractive, sustainable communities. Pilbara Cities Vision

THE PILBARA IN 2035 • Sustainable and diverse economy • Normalised market for land and accommodation • Family oriented communities with active arts and culture, diverse retail and entertainment options • High quality health and education choices • Vibrant tourism industry • Engineering and support services for the resource sector supported by a global transport hub • Sustainable integrated energy system • Sustainable water supply • Public and private funding of infrastructure • Aboriginal people are engaged and benefiting from regional prosperity • A sustainable not-for-profit sector • A world leader in environmental and social sustainability • Strong national and international investment • Strong security presence

PILBARA CITIES FOCUS Commenced July 2010 to realise the vision of building cities and improving regional towns: • Infrastructure; • Land availability and development; • Community projects and engagement; and • Economic Diversification. $1.2 billion of initiatives to transform the Pilbara and cater for growth in the region. Source: WA Department of Regional Development and Lands

PILBARA CITIES PLANNING Key planning frameworks have been developed to provide the strategy for future growth of the Pilbara: • Pilbara Panning and Infrastructure Framework; • Karratha City of the North – City Growth Plan; • Pilbara's Port City Growth Plan – Port Hedland; • Newman Revitalisation Plan; and • Onslow Expansion Plan. Source: WA Department of Regional Development and Lands

KEY DRIVERS OF CHANGE • Continued Royalties for Regions funding • Growing awareness and focus on the Pilbara • Reducing cost of land and housing • Resource sector moving from construction to operational phase - focus on production and productivity • Growth of Asian markets • State Government focus on addressing Aboriginal disadvantage • Growing capacity of Aboriginal corporations • Government interest in agriculture and food security • Cost of doing business

PDC PRIORITY AREAS DIVERSITY • Economic Diversity • Liveable Communities PLANNING AND INFRASTRUCTURE • Land Supply and Accommodation • Core Infrastructure STRATEGY • Strategy, research and policy • Knowledge Hub • Promoting the Pilbara globally

STRATEGY Areas of Focus • Regional Knowledge Hub • Promoting the region globally • Facilitating a shared vision and approach for the Pilbara’s future • Collaborating with regional stakeholders Projects • Regional Investment Blueprint • Regional Positioning Strategy • Regional Action Plan Partners • Government and Government Business Enterprises • Regional Development Australia • Non-Government Organisations • Aboriginal Corporations

ECONOMIC DIVERSIFICATION To secure the sustainability of communities in the Pilbara, the region needs to diversify its economy. Key Opportunities include: • Tourism and short stay accommodation • Local fabrication and industry support for both onshore and offshore - e.g. PFSCUF at Port Hedland • Food Security and Fibre Production • Defence operations and services • Alternative energy generation – e.g. renewables • SME development: • Tourism and Hospitality • Business Incubation for new and existing SMEs • Increasing commercial retail premises • Digital technology uptake • Increased market opportunities

LIVEABLE COMMUNITIES To achieve the vision vibrant and thriving towns and cities are developing in the Pilbara with a focus on: • Social infrastructure and amenity • Education and Health • Communications and connectivity Current Place Activation Projects • Karratha City Centre /Health Campus -$500m • Pilbara Health Partnership - $38.2 million • Pilbara Education Partnership - $30 million • Recreational Facilities (e.g. Wanangkura Stadium, Karratha Leisureplex, Onlsow Multi- purpose Centre, Tom Price Sporting Pavilion) • Dampier, Wickham and Paraburdoo Community Hubs

LAND SUPPLY AND ACCOMMODATION • The Pilbara Development Commission closely monitors the housing supply pipeline from early stage development, subdivision approval, clearance and subsequent builds. • Current data and projections to 2017 indicate that supply is meeting demand with the following developments planned: • The Town of Port Hedland - 14,200 dwellings • Karratha - 6,900 dwellings • Newman - 1,684 dwellings • Onslow - 1,496 dwellings

$400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2007 2008 2009 2010 2011 2012 2013 Rental Cost Year Advertised Residential Rental Cost (Average), Pilbara Port Hedland Average Rental Cost South Hedland Average Rental Costs Karratha Average Rental Costs Newman Average Rental Costs Source: HOUSING AND LAND PRICE TRENDS

COMMERCIAL PROPERTY 0 10 20 30 40 50 60 70 80 $- $100 $200 $300 $400 $500 $600 $700 $800 Sept to Dec 2012 Jan to Mar 2013 Mar to Jun 2013 Retail volume Office Volume Retail average price sqm2 Office average price sqm2

INFRASTRUCTURE Power projects • Pilbara Underground Power Project - $100 million spent to date • Pilbara Power Board – Investment in a new Pilbara Power Station in Port Hedland – 110 MW, $140 million • Renewables and alternative energy - waste/solar/bio fuels Water • Investigating new sources (West Canning Basin) • New sources (Chevron in Onslow) Waste Treatment • Port Hedland Waste Water Treatment and plant relocation • Karratha Water Recycling Project • Newman Onslow waste water treatment upgrades Transport • Regional airports – Karratha, Hedland, Newman and Onslow • Road / rail upgrades and PortLink Road ($3.4515 billion) • Pilbara Ports – import opportunities for Hedland and Dampier Communications • NBN, Nextgen Networks, Fujitsu, Google, Trident • Smarter Cities initiatives and Pilbara Digital Flagship

RfR Projects in the Pipeline / in Progress: • Pilbara Underground Power - $75 million • Pilbara Fabrication and Services Common Use Facility , Port Hedland - $6-800 million ($5 million RfR) • Port Hedland Marina - $152 million ($72 million RfR) • Water for Pilbara Cities - $28.5 million ($3.862 million RfR) • Port Hedland Wastewater Treatment Plant - $42 million • Karratha Health Campus - $207 million • Pilbara Education Fund - $50 million • Pilbara Indigenous program - $30 million • Pilbara Health Partnership - $38.2 million • Pilbara Cities Community projects - $30 million • Local Government Support project - $3 million TARGETED PROJECTS

COMMERCIAL PROJECTS An artists impression of the $65 million Karratha Hilton Hotel – 8 stories, 144 rooms, 22 serviced apartments

SUSTAINABILTY Community challenges and pressure points: • Housing and accommodation – short and long stay • Land supply and release • Demand for utilities – power, water, telecommunications etc. • Infrastructure capabilities – roads, airports etc. • Community services demand and supply – health, education, police, child care etc. • Attraction and retention of workforces • Fly-In-Fly-Out workforces vs long term residents • SME growth and development • Institutional establishment Relieve the pressure, normalise the economy and develop sustainable communities

T: 1800 THE PILBARA (1800 843 745) E: W: PORT HEDLAND OFFICE Shop 2, 6 Wedge Street PO Box 544 Port Hedland, Western Australia 6721 As publishers of this presentation the Pilbara Development Commission makes every reasonable effort to ensure the accuracy of all information. Nevertheless, the Commission is unable to guarantee the accuracy of all of the information contained. The Commission takes no responsibility and will not be liable either in contract for negligence or in any other way for any errors, acts or omissions, which may occur in relation to it. KARRATHA OFFICE Suite 49, 5 Sharpe Avenue PO Box 294 Karratha, Western Australia 6714 PERTH OFFICE Level 2, 16 Parliament Place PO Box 51 West Perth, Western Australia 6872 Thank You!

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