Goldfields pipeline will underpin growth of State's resources sector

4/10/96

Resources Development Minister Colin Barnett has predicted that the Goldfields gas pipeline will underpin the growth of Western Australia's resources sector well into the next century.

The pipeline was officially opened today by Premier Richard Court at a function in Kalgoorlie-Boulder.

Mr Barnett said the 1,380km, $450 million Goldfields Gas Pipeline was the flagship of development in the 1990s in WA. He said that while not the biggest project in financial terms, the pipeline was the most significant the State would see this decade.

"The completion of the Goldfields Gas Pipeline will reduce energy costs between 30 per cent and 60 per cent along the route of the pipeline," he said.

"Thanks to this project, there will be substantial new investment throughout the Goldfields as the price of energy drops to pave the way for further downstream processing opportunities, which will allow the State to become more competitive and continue to provide strong growth, essential to the economy.

"Assuming miners and mineral processors have long-term contracts and gas prices of $2 a gigajoule at the North West Shelf, the delivered cost of gas via the pipeline at Kalgoorlie will be $5.67 a gigajoule.

"This compares with $8 a gigajoule for distillate, net of the diesel fuel rebate, and reduces mineral processing costs by an average 28 per cent."

Mr Barnett said that significant private sector commitments had been made to power generation facilities along the length of the pipeline.

Six gas-fired power stations, with a combined capacity of 370 megawatts and costing $265 million collectively, had already been built at Newman, Mt Keith, Leinster, Parkeston, the Kalgoorlie Nickel Smelter and Kambalda.

The Minister said that among the projects planned for the Goldfields region were WMC Resources' expansion of its Mt Keith nickel operations as well, five nickel projects were rapidly advancing towards their goal of becoming producers. That investment could be in the region of $1.8 billion.

"Almost 60 per cent of WA's gold production comes from the Leonora, Kalgoorlie and Norseman areas," he said.

"The reduction in energy costs will benefit higher cost gold producers and some smaller operators working marginal mines. It will allow others to continue to treat lower grade ores and as a consequence extend the life of a mine.

"Due to the considerable flexibility of gas as a primary energy source and a potential feedstock, there will be increased processing options available to mineral producers in the Goldfields. "In addition, with the reduction in the number of diesel-fired power stations, there will be a noticeable increase in air quality associated with the lower greenhouse emissions from gas-fired stations."

Goldfields Gas Transmission Pty Ltd will manage the pipeline which is owned by a consortium of WMC Resources, Gold Mines of Kalgoorlie Ltd, and BHP Minerals Pty Ltd.

Media contact: Caroline Lacy 222 9595