Mr MITCHELL - 1996-09-17
I believe the minister recently visited Denver in the United States. What was the purpose of his visit and what benefits may arise from it?
ANSWER
Mr Speaker, I thank the honourable member for his question. I am pleased to talk about some of the possible benefits that may flow to the Territory as a result of my visit to Denver. The companies that I visited there were Newmont Gold Mining and Fleur Daniel Mining and Metals. They have a mine scheduled for construction late this year. Hopefully, production will begin in 1999. No major contracts have been issued as yet.
Contracts for the earthworks and mining will be worth many tens of millions of dollars, as will the supply of vehicles, steel, steel fabrication and other consumable products, including food. Training and curriculum development will be worth an estimated $US5m in the first 3 years. The provision of cross-cultural training and induction of expatriate staff in Darwin will be worth an estimated $US1m in the first year alone. The provision of medical and evacuation services out of Lombok to Darwin for expatriate staff also will be worth millions of dollars. Possible participation in community development aspects, such as cattle production, is potentially worth millions of dollars to Territory exporters. There is also the provision of shipping and other support services over the life of the mine. These are just some of the potential benefits that could flow to the Northern Territory should our strategy be successful and if our ongoing efforts to promote the capability of the Territory are supported by all parties.
I say `all parties' because I seek the support of the opposition and the media in trying to achieve what we are doing there.
I would like to give a little background to this visit. It is important that people understand that the Denver visit was part of a long-term planning process and a strategy for establishing Darwin as a significant supply and service base for the international mining industry in South-East Asia. In 1989, 7 years ago, a departmental officer met Newmont Exploration through team members in Lombok and established a relationship with Newmont that has been strengthened over the years. The same officer was posted to West Nusa Tenggara Province again in 1994. He worked closely with the Newmont project manager, and obtained information on the provisional and proposed Batu Hijau copper/gold mine to be developed on the island next to Lombok, Sumbawa. During the course of 1994 and 1995, the departmental officer was able to meet many senior Newmont executives and promote the capability of Darwin as a potential service and supply base for the mine. To give some idea of the scope of the project, it will be similar in size to the current PT Freeport Indonesia in Irian Jaya. The proposed mine requires capital investment of US$1500m and has a projected life of 25 to 30 years. This is expected to be extended with further exploration.
The DARTI officer returned to the department in 1995, and a strategy to position Darwin as a major supply and service base was developed and implemented. This has involved regular visits to Lombok and Jakarta and the hosting of senior Indonesia-based Newmont executives in Darwin. The response from Newmont has been very positive to date. We were
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advised that, although we had been successful in convincing the Indonesia-based Newmont people of Darwin's advantages, all important decisions were made in Denver, and that we should arrange a visit to Denver to meet senior management and promote our capability.
During NT Expo 1996, the assistant general manager of PT Newmont Nusa Tenggara and the project procurement officer for the mine visited Darwin. They were very impressed with what they saw and they undertook to facilitate a visit to Denver for myself and relevant departmental and industry representatives. An invitation to visit Newmont in Denver was received in mid-August. Newmont undertook also to introduce us to senior Fleur Daniel executives. Fleur Daniel has the contract to build the infrastructure of the mine, and will be responsible for issuing contracts for the US$1500m capital works.
To talk quickly about the trip, I did indeed travel first-class, and I stayed in a hotel booked by Newmont Gold for the group. The cost of my room was some $185 per night. We travelled for 1 days to arrive in Denver, held meetings and presentations over a 3-day period and spent 1 days travelling home. I was accompanied on my trip by my ministerial officer, who has been the main Newmont contact over the years, by the DARTI officer responsible for the mining industry, and by an industry ISO representative. Each participant provided an area of expertise that was essential to a professional and complete presentation and to question-and-answer sessions with both Newmont and Fleur Daniel.
I believe the visit achieved all our objectives. We have put Darwin and the Northern Territory into the Newmont and Fleur Daniel thinking process. The senior executives in Denver had no real knowledge of Darwin's geographical and competitive advantage to support the project. They do now. We secured a commitment from a team of senior, Denver-based executives to visit Darwin. I am pleased to advise the House that this team will be in Darwin in the week beginning 13 October. We obtained an agreement, in principle, for the positioning of a Newmont procurement office in Darwin, and we will continue our efforts to have Fleur Daniel also place a procurement office in Darwin.
My department has initiated the formation of a new training company with consortium members from private sector Northern Territory training companies, Northern Territory University, my department and the Western Australian TAFE to bid for the significant training work required by Newmont. Newmont's budget for training is US$8m per annum for the first 3 years, and will remain significant for the next 25 years. This company has already won some minor consultancy work from Newmont. Newmont has requested formal costing proposals for the provision of schooling for expatriate children, medical services, medical evacuation services, cross-cultural training and induction of expatriate staff, R&R in the Territory and the possibility of a fly-in, fly-out operation from Darwin. We are working with a number of departments, institutions and Territory companies to prepare these proposals.
I remind honourable members that we are in an extremely competitive market for the project. My South Australian counterpart visited Denver 2 weeks before my own trip to bid for the same work for his state. We have also to compete with Singapore and Indonesia-based companies. Perhaps those who have been critical of the cost of the trip believe that we should just lie down and let others take the project work that is in our region. Fortunately, neither I nor my department share this view. We will continue to take every opportunity to pursue our strategy to win significant project work from Newmont and Fleur Daniel.
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I conclude by restating that the Denver trip was an essential component of a detailed strategy to position Darwin as a major mining industry supply centre. It will return benefits many times the value of any expenditure, and I ask for all parties to support the initiative that we have taken. We did not announce our strategy for Newmont to the world for obvious reasons. We do not want our competitors to be aware of our proposals. This led to an editorial recently in the NT News suggesting I had `snuck off' on this trip. The editorial stated that the NT News would monitor very closely the flow of benefits to the Territory. I welcome that monitoring by the NT News. Hopefully, it will be able to write of the successes that will come in a positive way and will give credit where credit is due.
Page 1599
ANSWER
Mr Speaker, I thank the honourable member for his question. I am pleased to talk about some of the possible benefits that may flow to the Territory as a result of my visit to Denver. The companies that I visited there were Newmont Gold Mining and Fleur Daniel Mining and Metals. They have a mine scheduled for construction late this year. Hopefully, production will begin in 1999. No major contracts have been issued as yet.
Contracts for the earthworks and mining will be worth many tens of millions of dollars, as will the supply of vehicles, steel, steel fabrication and other consumable products, including food. Training and curriculum development will be worth an estimated $US5m in the first 3 years. The provision of cross-cultural training and induction of expatriate staff in Darwin will be worth an estimated $US1m in the first year alone. The provision of medical and evacuation services out of Lombok to Darwin for expatriate staff also will be worth millions of dollars. Possible participation in community development aspects, such as cattle production, is potentially worth millions of dollars to Territory exporters. There is also the provision of shipping and other support services over the life of the mine. These are just some of the potential benefits that could flow to the Northern Territory should our strategy be successful and if our ongoing efforts to promote the capability of the Territory are supported by all parties.
I say `all parties' because I seek the support of the opposition and the media in trying to achieve what we are doing there.
I would like to give a little background to this visit. It is important that people understand that the Denver visit was part of a long-term planning process and a strategy for establishing Darwin as a significant supply and service base for the international mining industry in South-East Asia. In 1989, 7 years ago, a departmental officer met Newmont Exploration through team members in Lombok and established a relationship with Newmont that has been strengthened over the years. The same officer was posted to West Nusa Tenggara Province again in 1994. He worked closely with the Newmont project manager, and obtained information on the provisional and proposed Batu Hijau copper/gold mine to be developed on the island next to Lombok, Sumbawa. During the course of 1994 and 1995, the departmental officer was able to meet many senior Newmont executives and promote the capability of Darwin as a potential service and supply base for the mine. To give some idea of the scope of the project, it will be similar in size to the current PT Freeport Indonesia in Irian Jaya. The proposed mine requires capital investment of US$1500m and has a projected life of 25 to 30 years. This is expected to be extended with further exploration.
The DARTI officer returned to the department in 1995, and a strategy to position Darwin as a major supply and service base was developed and implemented. This has involved regular visits to Lombok and Jakarta and the hosting of senior Indonesia-based Newmont executives in Darwin. The response from Newmont has been very positive to date. We were
Page 1597
advised that, although we had been successful in convincing the Indonesia-based Newmont people of Darwin's advantages, all important decisions were made in Denver, and that we should arrange a visit to Denver to meet senior management and promote our capability.
During NT Expo 1996, the assistant general manager of PT Newmont Nusa Tenggara and the project procurement officer for the mine visited Darwin. They were very impressed with what they saw and they undertook to facilitate a visit to Denver for myself and relevant departmental and industry representatives. An invitation to visit Newmont in Denver was received in mid-August. Newmont undertook also to introduce us to senior Fleur Daniel executives. Fleur Daniel has the contract to build the infrastructure of the mine, and will be responsible for issuing contracts for the US$1500m capital works.
To talk quickly about the trip, I did indeed travel first-class, and I stayed in a hotel booked by Newmont Gold for the group. The cost of my room was some $185 per night. We travelled for 1 days to arrive in Denver, held meetings and presentations over a 3-day period and spent 1 days travelling home. I was accompanied on my trip by my ministerial officer, who has been the main Newmont contact over the years, by the DARTI officer responsible for the mining industry, and by an industry ISO representative. Each participant provided an area of expertise that was essential to a professional and complete presentation and to question-and-answer sessions with both Newmont and Fleur Daniel.
I believe the visit achieved all our objectives. We have put Darwin and the Northern Territory into the Newmont and Fleur Daniel thinking process. The senior executives in Denver had no real knowledge of Darwin's geographical and competitive advantage to support the project. They do now. We secured a commitment from a team of senior, Denver-based executives to visit Darwin. I am pleased to advise the House that this team will be in Darwin in the week beginning 13 October. We obtained an agreement, in principle, for the positioning of a Newmont procurement office in Darwin, and we will continue our efforts to have Fleur Daniel also place a procurement office in Darwin.
My department has initiated the formation of a new training company with consortium members from private sector Northern Territory training companies, Northern Territory University, my department and the Western Australian TAFE to bid for the significant training work required by Newmont. Newmont's budget for training is US$8m per annum for the first 3 years, and will remain significant for the next 25 years. This company has already won some minor consultancy work from Newmont. Newmont has requested formal costing proposals for the provision of schooling for expatriate children, medical services, medical evacuation services, cross-cultural training and induction of expatriate staff, R&R in the Territory and the possibility of a fly-in, fly-out operation from Darwin. We are working with a number of departments, institutions and Territory companies to prepare these proposals.
I remind honourable members that we are in an extremely competitive market for the project. My South Australian counterpart visited Denver 2 weeks before my own trip to bid for the same work for his state. We have also to compete with Singapore and Indonesia-based companies. Perhaps those who have been critical of the cost of the trip believe that we should just lie down and let others take the project work that is in our region. Fortunately, neither I nor my department share this view. We will continue to take every opportunity to pursue our strategy to win significant project work from Newmont and Fleur Daniel.
Page 1598
I conclude by restating that the Denver trip was an essential component of a detailed strategy to position Darwin as a major mining industry supply centre. It will return benefits many times the value of any expenditure, and I ask for all parties to support the initiative that we have taken. We did not announce our strategy for Newmont to the world for obvious reasons. We do not want our competitors to be aware of our proposals. This led to an editorial recently in the NT News suggesting I had `snuck off' on this trip. The editorial stated that the NT News would monitor very closely the flow of benefits to the Territory. I welcome that monitoring by the NT News. Hopefully, it will be able to write of the successes that will come in a positive way and will give credit where credit is due.
Page 1599
Last updated: 09 Aug 2016