Countdown on for proposed Kimberley developments

THE next few months will be pivotal in shaping the long-term development of the Kimberley, as conservationists and developers weigh up the implications of the proposed James Price Point gas hub.

Design work for a 12 million tonnes per annum gas liquefaction plant began last week after the Woodside-led Browse LNG joint venture finally endorsed the site, 60 kilometres north of Broome, as the preferred location for the $30 billion project.

The decision was welcomed by the state and federal governments, which had threatened to revoke the Browse gas permits if the partners did not agree by April to use the proposed LNG hub.

Minor partners Shell, Chevron and BHP Billiton had previously favoured a subsea pipeline to the Burrup Peninsula to gradually “backfill” declining reserves at the North West Shelf after 2020.

The decision was also welcomed by the Kimberley Land Council, which represents the traditional owners of the site, as a conduit for desperately needed social infrastructure, training and job opportunities for indigenous people.

But it also drew condemnation from conservation groups and some local Aborigines who have vowed to fight what they claim to be a step toward unfettered industrialisation of Australia’s last great wilderness.

Conservationists also want further resource development put on hold while a comprehensive region-wide conservation and land management strategy is developed.

The battle comes as the federal government considers a proposal to heritage list 17 million hectares of the West Kimberley, virtually sterilising it from further development.

At the same time, the WA government is preparing its response to the Science and Conservation Strategy for the Kimberley report completed by former senator Chris Ellison in mid 2009.

Against that backdrop, the WA Chamber of Minerals and Energy will next month release its own study of the Kimberley aimed at ensuring social and economic considerations are also factored into any new regional development strategy.

“We were concerned that there were a number of things happening in the Kimberley region which were looking at things specifically from an environmental point of view, and felt there was a need to ... find that balance with economic development and social opportunities as well,” CME director Nicole Roocke said.

Ms Roocke said the chamber believed better, more coordinated, land-use planning could deliver more appropriate outcomes for the environment and industry, provided it also took economic and social benefits of development into account.

There would also be significant benefits if all activities, including tourism, were subject to the same scrutiny and strict environmental regulation as the mining industry.

The report is also likely to challenge the widespread perception of the Kimberley as an untouched pristine wilderness at risk of rampant development.

In fact, more than 80 per cent of the region is covered by active pastoral leases, compared to just 0.1 per cent taken up by mining, while most of the region’s existing indigenous and conservation reserves are located in the more sensitive north-west corner.

Currently only a few projects are operating, which together generate about $1 billion in revenue annually: Rio Tinto’s massive Argyle diamond mine; the Cockatoo and Koolan Island iron ore mines; the small Ellendale diamond mine; Panoramic Resources’ Savannah nickel mine; and Buru Energy’s tiny Blina oilfield.

However, a dozen more resource projects are at various stages of planning, including more than $60 billion in proposed LNG developments and the associated James Price Point LNG hub and Point Torment LNG supply base planned near Derby.

Also planned is a $100 million export coal mine at Duchess, the re-opening of the Lennard Shelf lead zinc mine near Fitzroy Crossing, a major zinc-copper mine at Admiral Bay, and small-scale uranium and iron ore mining at Oobagooma and Argyle respectively.

But conservationists’ greatest fear is that James Price Point will be the catalyst for bauxite mining on the ecologically fragile Mitchell Plateau, 550km north-east of Broome, and an associated alumina refinery near the LNG hub once Browse gas comes ashore.

Discovered in the 1960s, the Mitchell Plateau and nearby Cape Bougainville deposits contain Australia’s richest untapped reserves of bauxite.

Both are now held by a consortium controlled by Rio Tinto and are subject to a State Agreement dating back to 1971, which prohibits bauxite mining unless a refinery is also established.

To retain its leases, Rio must submit a detailed development proposal by the end of this year, or prove that development is not viable. Previously it has argued the project is unviable without a cost-effective energy supply for a refinery.

While the Browse gas project potentially changes the equation, Rio is understood to be waiting on the state government’s response to the Ellison report and the proposed federal heritage listing before deciding its course of action.

Critically, Western Australia’s premier, Colin Barnett, has so far declined to indicate whether the Browse project will be required to make gas available to local industry under WA’s domestic gas reservation policy.

But speaking at the 25th anniversary of the North West Shelf last July, he was adamant that James Price Point would be an LNG park only and would not become a hub for heavy industry.

His resolute refusal to allow Browse gas to be piped to the Pilbara for processing would also sit awkwardly with any subsequent connection of James Price Point to the existing Dampier-Bunbury gas pipeline.

While the significant hurdles to developing the Kimberley’s bauxite reserves have already forced Russia’s Aldoga Aluminium and Norway’s Norsk Hydro to quit the area since 2005, interest in the region’s bauxite potential remains undimmed.

Australian producer Bauxite Resources and its Chinese aluminium partners are major holders around Mitchell Plateau, as is Dutch pigments and cosmetics manufacturer Geotech International.

Queensland mining billionaire Clive Palmer’s Mineralogy Group has also applied for a large area south and east of the main Mitchell Plateau deposits.

“We’re looking for bauxite because ... 15-20 years from now, there won’t be much bauxite available in the world,” Mr Palmer told WA Business News.

Any new reserves could potentially be supplied to Australian refineries or exported, he said.

The clock is ticking.