2008 and Beyond: The Challenges, Opportunities and Obligations Facing Australia’s Minerals Industry

Owen Hegarty, Managing Director and CEO, Oxiana Ltd.

2The Year of the Rat

3Three Key Issues

>Why we are looking at a once-in-a lifetime opportunity

>The challenges facing our industry

>What we must do to grasp the opportunity

4The Opportunity

>Stronger for longer>Stronger forever>Paradigm shifts in demand and supply>Emerging super economies on Australia’s doorstep >Other rapidly developing economies

>The US is not the only game in town

5China: Copper intensity is growing but remains low

0

2

4

6

8

10

12

1998 2006

kg/c

apit

a/an

nu

m

Japan Korea China

Source: Macquarie Research

6The opportunity is now!

We can generate inter-generational benefits

We must take a long-term perspective today

7Capacity constraints to growth

>Production and export capacity

>Professional and trade skills shortages

>Declining national mining inventories

8Systemic efficiency

Source: Minerals Council of Australia

9Human Infrastructure

>75% increase in new jobs in the minerals industry by 2015

>Practical industry involvement in pre-employment and apprenticeship training

>Continue to develop our R&D capabilities

>Efficient 457 visa system to plug gaps in our skills base

10Diminishing mining inventories

>New discoveries are in trend decline

>Successful exploration is of paramount importance

>Incentives such as flow-through shares are effective

>Exploration is a global phenomenon:–Asia consumes 50% of the world’s copper and produces 15%–Asia / Pacific receives around 5% of global exploration budgets

11South Australia’s PACE initiative

>Improve land access

>Financially assist exploration

>Survey and collate existing geoscientific data

>Make information available to assist exploration

>Improve awareness of SA’s prospectivity

12Investment Horizon

>Investment time horizon is very long

>Prominent Hill; 7 years from discovery to production

>The opportunity is to generate strong returns for the long-run

>Patient capital will be well-rewarded

13The Year of the (Mighty) Ox!

14What is Required

>Better physical infrastructure management>Relevant education and training>Support for exploration and R&D>Efficient business migration to address skills gaps>Patient capital to create long-term wealth

We can generate inter-generational benefits

We must take a long-term perspective today

2008 and Beyond: The Challenges, Opportunities and Obligations Facing Australia’s Minerals Industry

Owen Hegarty, Managing Director and CEO, Oxiana Ltd.

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