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The Year of the Rat

2008 and Beyond: The Challenges, Opportunities and Obligations Facing Australia’s Minerals Industry Owen Hegarty, Managing Director and CEO, Oxiana Ltd. The Year of the Rat. Three Key Issues. Why we are looking at a once-in-a lifetime opportunity The challenges facing our industry

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The Year of the Rat

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  1. 2008 and Beyond: The Challenges, Opportunities and Obligations Facing Australia’s Minerals IndustryOwen Hegarty, Managing Director and CEO, Oxiana Ltd.

  2. The Year of the Rat

  3. Three 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

  4. The 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

  5. China: Copper intensity is growing but remains low Source: Macquarie Research

  6. The opportunity is now! • We can generate inter-generational benefits • We must take a long-term perspective today

  7. Capacity constraints to growth • Production and export capacity • Professional and trade skills shortages • Declining national mining inventories

  8. Systemic efficiency Source: Minerals Council of Australia

  9. Human 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

  10. Diminishing 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

  11. South 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

  12. Investment 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

  13. The Year of the (Mighty) Ox!

  14. What 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

  15. 2008 and Beyond: The Challenges, Opportunities and Obligations Facing Australia’s Minerals IndustryOwen Hegarty, Managing Director and CEO, Oxiana Ltd.

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