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Speech for the Xstrata Zinc Australia: Head Office opening.



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Minister for Resources and Energy, Minister for Tourism

XSTRATA ZINC AUSTRALIA - HEAD OFFICE OPENING I welcome the opportunity to address you tonight and recognise Xstrata's significant investments in Australia.

And I would also like to welcome to Australia - Señor Santiago Zaldumbide.

Xstrata has been active in Australia only since 2002 but a lot has happened in this short time.

Six years, $16 billion worth of investment … and counting …

Through its copper, zinc, coal and nickel commodity businesses in Queensland, the Northern Territory,

Western Australia and New South Wales, Xstrata has become one of the most important investors in

Australia's minerals development.

For Australia's long-term economic success - not only in the mining field - this type of commitment is

essential.

Indeed, investment like this in the past is one of the main reasons we are enjoying our current economic

success and have been able to capitalise so much on the growth of China and India.

The iron ore boom that we are reaping the rewards of today can be directly attributed to Japanese supply

contracts in the 1960s. Australia built the rail lines and the ports, and developed the mines - often on extraordinarily tight timeframes - because of those contracts.

Tonight, with the opening of Xstrata Zinc Australia’s new head office here in Brisbane, we are seeing another

commitment to Australia following the growth of another commodity.

With 18 per cent of the world's economical demonstrated resource of zinc - Australia has more than any other

country in the world. But having 18 per cent means 82 per cent is elsewhere.

It means Australia can't be complacent. It means Australia has to ensure we continue to have an

internationally competitive economic, legal, and investment structure which promotes long-term investment.

The investment from companies like Xstrata shows we are doing something right - but we aren't taking it as a

signal to relax.

The growth which has fuelled the boom has also created more competition for mineral development from

other mineral-rich countries around the world. Increasing prices have made more locations attractive for

investment - and not just for the commodities constantly in the news, but the complementary minerals such

The Hon Martin Ferguson AM MP

The H

on Martin Ferguson AM MP

03 Jul 2008

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as zinc.

More than half of all zinc is currently used for galvanising steel, so with the global growth in steel being so

strong, the future for the zinc industry appears very bright indeed. Over the medium term, growth in global

zinc consumption is projected to average 4 per cent a year, bringing world consumption of zinc to 13.9 million

tonnes by 2012.

Through Xstrata, Australia will play a major role in meeting this demand, and along the way it will create

export earnings worth more than $3 billion. Australian zinc mine production is forecast to be close to 2.2

million tonnes by 2011-12.

Export volumes of zinc are also projected to grow solidly over the medium term, and with new Xstrata Zinc

Australia projects coming on line, earnings in real terms are projected to reach around $3.2 billion by 2011-12.

This doesn't include projects under consideration, such as the proposed zinc refinery.

As I understand it, Xstrata is weighing two options for the refinery: Gladstone in Queensland and Nordenham

in Germany.

As Minister I hope naturally the refinery will be located in Australia - it uses an Australian developed

technology (the Albion Process) after all. But I understand there are commercial considerations the company

must take into account.

Nor should I neglect the opportunity to acknowledge the extensive work Xstrata is undertaking to improve

their energy efficiency.

At a time when energy prices are soaring, it is logical that cost cutting through energy efficiency would be a

priority … but Xstrata is going the extra mile.

Under the Energy Efficiency Opportunities program, Xstrata is adopting a "beyond compliance" approach to

energy assessments. Increasing our knowledge and awareness of how we use energy will be an important

first step in lowering the cost of carbon abatement in a carbon-constrained future. And some of the lessons

from Xstrata are worth examining.

Xstrata Coal and Xstrata Copper divisions participate in trials to test and develop the Energy Efficiency

Opportunities program.

Both of these trials were developed into case studies which offer practical guidance to industry on how they

can realise maximum business benefits through energy efficiency.

Energy efficiency is also being promoted through equipment efficiency such as more efficient trucks and

process improvements.

Xstrata Zinc also recently commissioned a new gas-fired power plant at its Mount Isa mine.

I am told that in two months of operation, this plant has saved 2,830 tonnes of greenhouse gas emissions. As

a leading company in this area, I commend your efforts and your openness in sharing your experience with

other companies.

I commend you on your work in this field, and on your recent successes.

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In fact, in light of your significant growth over the past six years, and your recent investments, I get the feeling

we'll be doing this again shortly …. When you move to still larger accommodation!

Thank you again for the opportunity to be with you this evening and I wish you all the best of luck in your new

Australian headquarters.

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