OUT OF THE ABYSS THE UP­PER SPENCER GULF

The bad run has ended for the cities of the Up­per Spencer Gulf, who can fi­nally catch their col­lec­tive breath as new re­gional in­vest­ments sig­nal hope.

The Australian Mining Review - - CONTENTS - ELIZ­A­BETH FABRI

TWELVE months ago the Up­per Spencer Gulf cities of Whyalla, Port Au­gusta, and Port Pirie in South Aus­tralia were ex­ist­ing in a state of un­cer­tainty.

In Whyalla, the sale of Ar­rium’s as­sets re­mained up in the air; dire times for a com­mu­nity which had been im­pacted by al­most 1000 job losses lead­ing up to Ar­rium en­ter­ing ad­min­is­tra­tion.

If Ar­rium failed to se­cure a new buyer, many be­lieved Whyalla and – to a lesser ex­tent – the State of South Aus­tralia would fall into eco­nomic and so­cial cri­sis.

“We had never been in a sit­u­a­tion where [the Whyalla steel­works] went into ad­min­is­tra­tion and owed $4 bil­lion,” City of Whyalla mayor Lyn Breuer said.

“That was such a gut cruncher for the com­mu­nity be­cause while we had issues be­fore when the ship­yard closed back in 1970s, this was the re­ally big one. I could not see us be­ing able to get out this of eas­ily.

“Com­mu­nity morale went right down, com­mu­nity con­fi­dence and spend­ing went right down; peo­ple were very ner­vous.”

Sen­ti­ment was sim­i­lar in Port Au­gusta, which was strug­gling to fill the eco­nomic void left by the clo­sures of Alinta En­ergy’s Leigh creek coal mine and coal-fired power sta­tion, while things were bet­ter in Port Pirie with Nyrstar’s 127-year-old smelter at the tail end of a mas­sive $600 mil­lion re­de­vel­op­ment.

Flash for­ward to the sec­ond half of 2017 and things were be­gin­ning to look up for the Up­per Spencer Gulf, with a run of good news re­new­ing con­fi­dence in the re­gion.

A huge turn­ing point was the July sale of Ar­rium to GFG Al­liance, led by Gupta Fam­ily Group executive chair­man San­jeev Gupta, which ended 15 months of un­cer­tainty for the peo­ple of Whyalla and sup­ply chain busi­nesses in the area.

“I don’t think we could have asked for a bet­ter re­sult,” Ms Breuer said.

“Cer­tainly the State Gov­ern­ment has been very im­por­tant to Whyalla over the last 18 months, and very im­por­tant to the sale process of Ar­rium [through its $50 mil­lion con­tri­bu­tion to sup­port the new owner].

“I feel very con­fi­dent about GFG Al­liance and their role in all of this, very con­fi­dent about his [San­jeev Gupta’s] at­ti­tude, not to just the plant it­self but to steel mak­ing and our com­mu­nity.

“He’s pre­pared to get in­volved in our com­mu­nity, to put money into our com­mu­nity, as well as the re­birth of the steel plant.”

On 28 Septem­ber, Nyrstar an­nounced that hot com­mis­sion­ing of the Port Pirie re­de­vel­op­ment had com­menced, which was fol­lowed by the first feed of the TSL fur­nace in Oc­to­ber.

The re­gion also had a num­ber of high pro­file min­ing de­vel­op­ments un­der­way.

The mas­sive $4.5 bil­lion Cen­tral Eyre Iron Pro­ject re­ceived State Gov­ern­ment ap­proval in May and, if de­vel­oped, will em­ploy up to 2000 peo­ple dur­ing con­struc­tion and 700 once op­er­a­tional.

OZ Min­er­als’ gave the green light to its $916 mil­lion Car­ra­p­ateena mine, north of Port Au­gusta, in Au­gust, while BHP has pledged to sup­port Up­per Spencer Gulf busi­nesses as its FY17 $600 mil­lion in­vest­ment into its Olympic Dam mine ramps up.

In ad­di­tion, there were a num­ber of graphite mines planned for the re­gion.

Lin­coln Min­er­als hopes to be­gin de­vel­op­ment at Kook­aburra Gully in the 2018-19 fi­nan­cial year, and Re­nascor Re­sources is push­ing hard to get its tier 1 as­set Siv­iour up and run­ning.

Then there’s the strong re­new­able en­ergy push; in Au­gust, the State Gov­ern­ment an­nounced a new $650 mil­lion so­lar ther­mal power sta­tion in Port Au­gusta to help fill the en­ergy void.

Due for com­ple­tion in 2020, the Gov­ern­ment es­ti­mated 700 jobs dur­ing con­struc­tion and 50 on­go­ing po­si­tions.

In late Oc­to­ber, GFG Al­liance’s Mr Gupta also made some big en­ergy an­nounce­ments.

GFG Al­liance sub­sidiary ZEN En­ergy would build 1 gi­gawatt (1000 megawatt) of dis­patch­able re­new­ables in and around Whyalla, 100MW/100MWh bat­tery stor­age fa­cil­ity at Port Au­gusta, 100MW of de­mand re­sponse at the Whyalla steel works and other sites, and a 120MW/600MWh pumped hy­dro stor­age fa­cil­ity at a dis­used iron ore mine pit in the Mid­dle­back Ranges.

Mr Gupta also promised an ad­di­tional 480MW of so­lar ca­pac­ity in due course.

A re­gion in tran­si­tion

Through the Up­per Spencer Gulf’s shared strug­gles, Ms Breuer said the cities had put ri­val­ries aside and now worked to­gether more closely.

“All three com­mu­ni­ties have been in cri­sis in the last cou­ple of years,” Ms Breuer said.

“Out of trauma and tragedy comes a stronger work­ing re­la­tion­ship.

“We’ve al­ways had a lit­tle bit of ri­valry be­tween the three cities, but we’ve ba­si­cally put that aside now and de­cided we need to work to­gether – we need to com­ple­ment each other.

“We com­mu­ni­cate al­most daily about what’s hap­pen­ing in our ar­eas, and while there will still al­ways be an el­e­ment of com­pe­ti­tion, there’s plenty of room for all three of us.”

This part­ner­ship be­tween cities was ce­mented at the an­nual Sus­tain­able Eco­nomic Growth for Re­gional Aus­tralia’ (SEGRA) na­tional con­fer­ence in Oc­to­ber, held in the Up­per Spencer Gulf for the first time in the con­fer­ence’s 20-year his­tory.

“I was thrilled to bits to have so many del­e­gates from all over Aus­tralia say to us ‘you are a model for the rest of Aus­tralia of com­mu­ni­ties strength­en­ing their num­bers by work­ing to­gether and ac­tu­ally be­ing suc­cess­ful in what you’re do­ing’,” Ms Breuer said.

“A whole range of new in­dus­tries are start­ing to look into com­ing to our area.”

Ac­cord­ing to the Up­per Spencer Gulf Com­mon Pur­pose Group, an al­liance be­tween the three lo­cal Gov­ern­ments, one of the re­gion’s biggest chal­lenges in the past had been its reliance on sin­gle in­dus­tries de­pen­dent on global in­flu­ences.

Metal min­ing and pro­cess­ing had been a key pil­lar sup­port­ing the re­gion since its in­cep­tion, but the group re­mained con­fi­dent this will change over time as the re­gion di­ver­si­fied into new in­dus­tries.

“Ba­si­cally in the past we have been en­gi­neer­ing and min­ing,” Ms Breuer said.

“We now are broad­en­ing; we are broad­en­ing into the health ar­eas, into education, the re­new­able en­ergy area, and de­fence is a huge item for us at the mo­ment.

“We’ve al­ways had a lit­tle bit of ri­valry be­tween the three cities, but we’ve ba­si­cally put that aside now and de­cided we need to work to­gether – we need to com­ple­ment each other.”

“We have got an area of land be­tween Port Au­gusta and Whyalla that has been taken over by the de­fence forces and they are do­ing all of their train­ing ex­er­cises in our area now.”

The re­new­able en­ergy in­dus­try was also a big ticket item for the re­gion’s growth, with Whyalla now un­der­tak­ing a lot of the work for the tow­ers and tur­bines for wind farms.

“We’ve also got a com­pany that is in­ter­ested in mov­ing to Whyalla to set up a he­li­copter train­ing school which is go­ing to be quite amaz­ing for us in the fu­ture if that gets off the ground,” she said.

“And then there’s a whole lot of other com­pa­nies — trans­port com­pa­nies for ex­am­ple — that are mov­ing in.

“In the last three months since the Ar­rium an­nounce­ment, we’ve started to get a whole lot more com­pa­nies that are talk­ing to us again with a view of set­ting up in our re­gion. All three cities have no­ticed this.” Yet min­ing re­mained a key pil­lar. Ms Breuer said a sub­stan­tial amount of money was cur­rently be­ing in­vested in the re­gion, par­tic­u­larly in prospect­ing and the de­vel­op­ment of new projects.

“At the re­cent Up­per Spencer Gulf Global Main­te­nance Con­fer­ence there were a num­ber of new min­ing projects dis­cussed,” she said.

“It was re­ally quite ex­cit­ing be­cause even if only half of them get off the ground there’s jobs and ser­vices for our re­gion.”

Build­ing a na­tional hub

While con­fi­dence was re­turn­ing to the re­gion, the three cities still recorded a below av­er­age num­ber of tech­ni­cal, sci­en­tific and pro­fes­sional and business ser­vices en­ter­prises.

Ac­cord­ing to the lo­cal Gov­ern­ment al­liance, build­ing lo­cal ca­pac­ity in th­ese ar­eas was vi­tal to pro­mote growth for a more di­ver­si­fied econ­omy.

Ms Breuer said given the Gulf’s prox­im­ity to South Aus­tralia’s prospec­tive min­ing projects, the re­gion was ide­ally lo­cated to be­come a hub for in­no­va­tion, ap­plied re­search, skills and train­ing for the min­ing sec­tor.

De­vel­op­ing the re­gion as a heavy in­dus­try hub was also high on the agenda.

“The three Spencer Gulf cities have a fairly com­mon her­itage in that we all have a fairly strong en­gi­neer­ing back­ground,” Ms Breuer said.

“With this com­mon her­itage, we have com­mon skills across the three cities and are able to use them for de­vel­op­ment of fu­ture projects.”

Ms Breuer said there had also been a lot of dis­cus­sion about in­vest­ing in trans­port in­fra­struc­ture to re­po­si­tion the re­gion as a na­tional trans­port and lo­gis­tics hub.

At present, the Port Pirie and Whyalla ports were both un­der­utilised, with the re­gion seek­ing greater ac­cess and use of th­ese fa­cil­i­ties.

“There’s been a lot of dis­cus­sion about this and work­ing close with State and Fed­eral Gov­ern­ment on this,” she said.

“The isolation of our re­gion is one of our biggest prob­lems, we are a long way from any­where, so those back up ser­vices there and a good trans­port sys­tem will cer­tainly make it more at­trac­tive for the com­pa­nies com­ing in, par­tic­u­larly for the trans­port of goods and ser­vices and work­ers.

Ms Breuer said she was proud of the re­gion and the recog­ni­tion it re­ceived at the SEGRA con­fer­ence.

“We know that we are mak­ing things hap­pen in our re­gion, and look for­ward to a con­fi­dent fu­ture for our chil­dren and grand­chil­dren,” she said.

“In the last three months since the Ar­rium an­nounce­ment, we’ve started to get a whole lot more com­pa­nies that are talk­ing to us again with a view of set­ting up in our re­gion. All three cities have no­ticed this.”

GFG Al­liance. Photography: Sean Kelly.

GFG Al­liance. Photography: Sean Kelly.

GFG Al­liance. Photography: Sean Kelly.

Whyalla Mayor Lyn Breuer.

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