AUSTRALIAN METS SECTORMINING INNOVATION & KNOWLEDGE

AUSTRALIA’S NEXT MINING BOOM?

MINING EQUIPMENT,TECHNOLOGY AND SERVICES

ELIZABETH LEWIS -GRAYMINES METS AND MONEY OCTOBER 2013

OUTLINE

Industry profile

Sector Size

METS profile

Implications and opportunities

2

METS COMPANIES BY ACTIVITYMANUFACTURING AND GOODS SUPPLY 40%

3

METS COMPANIES ARE DIVERSEBY MINERAL AND LIFE CYCLE STAGE

4BY NO OF COMPANIES

MINING LIFE CYCLECAPITAL VS PRODUCTION CYCLES

5

METS COMPANIESHIGH ESTABLISHMENT RATE IN PAST 30 YEARS

6

73%

METS COMPANIESNATIONAL REACH : 84% AUSTRALIAN OWNED

7

METS COMPANIESNATIONAL FOOTPRINT

8

METS BY COMPANY SIZE37% LARGE COMPANIES, 63% SME

9BY NO OF COMPANIES

METS SECTOR GROSS REVENUESIGNIFICANT CONTRIBUTOR TO THE ECONOMY (FY12)

10

State Gross Revenue

%

WA $23.18 b 26

NSW/ACT $22.79 b 25

QLD $21.22 b 24

VIC/TAS $16.73 b 19

SA/NT $1.62 b 2

Unaccounted $4.39 b 4

Total $89.9 b 100

METS DEVELOPMENTGROWING IN EMPLOYEES AND REVENUE

11

AVERAGE GROWTH 32%

AVERAGE GROWTH 22%

METS INTERNATIONAL FOOTPRINTSIGNIFICANT EXPORTER

12

13

METS RELATIVE EXPORT BY VALUE

$264.2bn total merchandise exports

5.9% relative

METS INTERNATIONAL FOOTPRINTPROPORTION OF COMPANIES EXPORTING TO THIS REGION/ COUNTRY

14

METS INTERNATIONAL FOOTPRINTLOCATION OF INTERNATIONAL OPERATIONS

15

41% have offices offshore

METS – ENTREPREURIAL AND HIGH GROWTH

16

17

LONG INNOVATION CYCLESLEVERAGE AND ACCELERATE

18

BUILDING GLOBAL CLUSTER LEADERSHIPBOTHNIAN CLUSTER MARKET SHARE

19

0 50 100

MiningExplorationSmeltingFlash smeltersDrill unitsSAG mills

Source : RMD Intierra

METS DEVELOPMENTINVESTING IN THE FUTURE

20

METS COMPETITIVE ADVANTAGECUSTOMER FOCUSED

21

METS WORKFORCESIGNIFICANT EMPLOYER

22

386,000 EMPLOYEES IN AUSTRALIA

2% unknownREPRESENTS EMPLOYEES OF ALL METS RELATED CO’S

METS OUTLOOKCURRENT CHALLENGES

23

LEVERAGING THE FUTURE

24

INNOVATE

•PLAY A KEY ROLE IN IMPROVING PRODUCTIVITY

•ACCELERATE THE INNOVATION CYCLE

•ATTRACT INNOVATION FUNDING

EDUCATE

•ENSURE A SKILLED WORKFORCE

•STRONG LEADERSHIP CAPABILITY

•ATTRACT HIGH QUALITY YOUNG PEOPLE

LEVERAGING THE FUTUREINCREASE CONNECTIVITY

25

INTERNATIONALISE

•GROW INTERNATIONAL PRESENCE

•ASIA, AFRICA, AMERICAS

•LEVERAGE DISTRIBUTION CHANNELS

COLLABORATE

•DEVELOP STRONGER ENGAGEMENT PLATFORMS WITH MINERS AND RESEARCH INSTITUTIONS GLOBALLY

•BUILD INNOVATION NETWORKS - PRECINCTS

•BUILD STRONG POLICY FRAMEWORKS

FACTORS FOR PERFORMANCEMINERS REQUIRE HIGHER PRODUCTIVITY

26

EXPOSURE TO OPERATIONS

CAPITAL & OPERATING PRODUCTIVITY

NICHE TECHNOLOGY PLAYERS

BRAND

GLOBAL & MINERAL DIVERSIFICATION

UNIQUE COMPETITIVE ADVANTAGE

SCALE & SCALEABILITY

THANKS TO OUR PARTNERSSteering Committee Members

Austmine Limited

MESCA

Minerals Council of Australia

Gekko Systems

Haulmax

International Energy Centre

CSIRO

Industry Capability Netw ork (ICN)

Austrade

Department of Resources, Energy and Tourism

Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (observer)

Enterprise Connect (observer)

Survey Distribution Partners

Austmine Limited

MESCA

Industry Capability Netw ork (ICN)

Austrade

Enterprise Connect

Mackay Area Industry Netw ork (MAIN)

Aboriginal Enterprises in Mining, Exploration and Energy (AEMEE)

BIBLIOGRAPHY

28

• Australian Trade Commission (Austrade), Australia Benchmark Report, 2012 , Australian Government

• John Barber, Tom Shael, Nina Hitchins, Adam Bialowas, Resources and Energy Major Projects, October, 2012, Bureau of Resources and Energy Economics (BREE), Australian Government, Canberra

• Don Scott-Kemmis, How about those METS? Leveraging Australia’s mining equipment, technology and services sector, A Public Policy Analysis produced for the Minerals Council of Australia (March, 2013), ACT

• Vanessa Rayner and James Bishop, Industry Dimensions of the Resource Boom: An Input-Output Analysis , Research Discussion Paper 2013-02, Economic Research Department, Reserve Bank of Australia

• Richard Roberts, METS top 100 tops $65B in sales, High Grade, 27th March, 2013

•Wright, Gavin & Czelusta, Jessie, “Exorcising the resources curse: minerals as a knowledge industry, past and present,” Stanford University July 2012

•Smith, Norman J., “The sea of lost opportunity volume 7: North Sea oil & gas, British industry and the offshore supplies office (Handbook of petroleum and production)” Elseviev 2011

•Presentation by Ian Satchwell, Director, International Mining for Development Centre, “Building mining services clusters in Australia,” 15 May 2012

END

SECTORAL PERFORMANCEMORGAN STANLEY SMALL MINING SERVICES INDEX

30

Morgan Stanley Small Mining Services Index

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

Dec-0

9

Mar

-10

Jun-10

Sep-10

Dec-10

Mar

-11

Jun-11

Sep-11

Dec-11

Mar

-12

Jun-12

Sep-12

Dec-1

2

Mar

-13

Jun-13

Sep-13

Dec-1

3