NSW is Australia's leading state for minerals processing, with well-established steel, aluminium, electrolytic, manganese dioxide (EMD), refractories and cement operations. Annual output of simply processed metals and mineral products is valued at more that $5 billion with direct employment of about 10 000 people. NSW exports of these products were valued at about $2.7 billion in 2003-04, in addition to the $3.7 billion of unprocessed mineral exports. The strength of NSW as a location of value-added processing is based on well-established infrastructure and internationally competitively-priced electricity, derived from coal-fired power stations.

Minerals processing in NSW

The reliable supply and world competitive cost of energy in NSW is a major locational advantage for minerals processing investment in the State. NSW produces some of the lowest cost coal-fired electricity in the world due to the proximity of high-quality thermal coal deposits to modern efficient power stations and associated power infrastructure.

Other Government reforms include opening up rail freight transportation to competition, continued improvements to the State’s existing rail infrastructure and the corporatisation of the State’s three major ports. Rail freight costs alone have declined significantly in the past decade. These reforms and cost savings have enhanced the State’s attractiveness for mining and minerals processing investment by lowering project costs and increasing infrastructure efficiencies.

In June 2004 the Federal and NSW Governments signed an agreement to transfer operation and maintenance of the State’s rail infrastructure, other than the Sydney suburban network and small country branch lines, by way of lease to the Australian Rail and Track Corporation (ARTC). Under the agreement, ARTC will undertake capital works including those previously identified by the Rail Infrastructure Corporation (RIC) to upgrade the capacity of the Hunter rail infrastructure. ARTC expects to spend $375 million to lift the Hunter’s coal rail capacity from 80 to 145 Mtpa by 2011.

In April 2005, the Port Waratah Coal Services (PWCS) Board formally approved the expenditure of $170 million to expand throughput capacity at its coal loading facility from the current 89 to 102 Mtpa. Construction commenced in November 2005 on the expansion.

In March 2005, the NSW Government announced both PWCS and the Newcastle Coal Infrastructure Group (NCIG) as short-listed candidates to develop new coal loading facilities on Kooragang Island, adjacent to the current PWCS facility. In August 2005 the Government announced the NCIG as the preferred developer and operator of a third coal loader at the Port of Newcastle. Stage 1 of the project is expected to cost around $500 million and increase port capacity by an initial 30 Mtpa. The new coal loader is expected to be operational by 2009.

Significant recent minerals processing project developments include the following:

• In December 2004 the NSW Government granted development approval for Bluescope Steel to proceed with a $120 million coated steel plant in Western Sydney. The plant is expected to create over 60 new jobs when it becomes operational in 2007.
• In July 2004 BlueScope Steel also announced Board approval for investment of $100 million to increase the nominal capacity of the Hot Strip Mill at the Port Kembla steelworks from 2.4 to 2.8 Mtpa.
• In November 2005 the NSW Government granted approval for a $232 million upgrade of the Port Kembla steelworks. The project is expected to create up to 1000 construction jobs. The project involves two upgrades. The first being for relining and ancillary repairs to the No.5 blast furnace. The second upgrade would involve a $78 million expansion of the cold mill and pickle line.
• Tomago Aluminium completed a $210 million expansion in 2004 which will increase its smelter production capacity by over 15% to 530 000 tpa by 2007.
• UCC Energy Pty Ltd, a wholly owned R&D subsidiary of White Mining Ltd, finished construction on its Ultra Clean Coal (UCC) pilot plant at Cessnock during late 2001. In the first half of 2002, UCC Energy was running the pilot plant to produce test samples of UCC. The UCC process is capable of producing a new clean solid fuel with ash levels between 0.1% and 0.2%. In July 2002, samples of UCC from the pilot plant were sent to Mitsubishi in Japan for testing and evaluation as a fuel for direct firing into a gas turbine combined-cycle power station. The results of the Mitsubishi tests were very encouraging. The next step in the evaluation of UCC is combustion tests similar to those already performed but at elevated pressure and firing against turbine blades in order to assess the corrosion and erosion properties of UCC. If this stage is successful, then UCC could proceed to be evaluated in a small commercial/demonstration scale gas turbine plant. This plant is proposed to be constructed in association with the development of the Moolarben coal project.
• A feasibility study into Alkane Exploration Ltd’s Dubbo zirconia project was completed in September 2002. The project is based on a large resource of zirconium, yttrium, tantalum, niobium and other rare earth elements which has been identified at Toongi, south of Dubbo, within an altered trachytic intrusion. Extensive metallurgical testing (and future commercial processing) of the ore is based on sulphuric acid leach - solvent extraction processing, with high purity zirconia the key product plus other rare earths and metals. Alkane is currently examining options to progress the project. If it proceeds, the project is projected to produce around 6 000 t of metal per annum.
• The NSW Government granted development consent in May 2002 for BeMax Resources NL’s Mineral Separation Plant (MSP) located at Broken Hill for its Ginkgo mineral sands project. Construction commenced on Stage 1 of the MSP in April 2005. Commissioning of the MSP commenced in the first quarter of 2006.

NSW is endowed with a variety of high-quality mineral deposits and is well placed to expand its minerals processing industrial base.