AUSTRALIAS URANIUM CONFERENCE 2006 Has the Canadian Ant overtaken the Australian Grasshopper

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AUSTRALIAS URANIUM CONFERENCE 2006 Has
the Canadian Ant overtaken the Australian
Grasshopper?
10-11 July 2006 Adelaide, Australia
Don Larkin CEO, The AusIMM
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AESOPS FABLE THE ANT AND THE GRASSHOPPER

• The advantages of forward planning

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MY PROPOSITION

• If we dont-
• Encourage more exploration in Australia
• Fund our universities and research centres
  appropriately
• Manage our human resources better
• The sustainability of the minerals sector in
  Australia is at risk.

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DOUBLE EDGED SWORD

• Buoyant sector contributing to the economy
• Global companies with global options
• Governments elected on short term cycles
  competing with guided democracies.

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ENCOURAGE MORE EXPLORATION

• Australias relative position declining
• Government attitude, budget and initiatives
• MEAA
• Access to finance
• Access to data
• Access to human capital
• Access to land
• Too little, too late.

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CONCERNS EXPRESSED

• AusIMM MacBank Survey 2006, skills and
  exploration
• MCA and PWC Survey Report, 2005 Exploration
  RD. Also June 2006 Global Report
• Fraser Institute policy potential/mineral
  potential
• Metal Economics Group exploration budgets 2005
• ABARE warnings development projects - 2006

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WARNINGSABARE WHEN RELEASING CURRENT PROJECT
EXPENDITURE IN ADVANCED PROJECTS OF 34 BILLION,
STATED

• It is important to recognise the ability of
  Australias mineral sector to sustain its strong
  recent growth, in the medium and longer term
  depends critically on the amount of investment in
  minerals exploration.
• April, 2006

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MCA AND PWC MINERALS INDUSTRY SURVEY REPORT 2005

• Exploration expenditure is forecast to fall by
  3 in 2005/06. The outlook for research and
  development expenditure is also lower, with the
  2005/06 result to be down by 68 on the 2004/05
  outcome.

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2006 SURVEY OF MINERALS INDUSTRY
PROFESSIONALSTHE AusIMM/MACQUARIE SECURITIES

• CONSTRAINTS
• Skills shortages most critical issue
• 91 of respondents insufficient investment in
  exploration could see a downturn in the
  Australian minerals sector in longer term.

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MANAGE OUR HUMAN RESOURCES BETTER

• 1992 Rio Summit Sustainable Development Human
  Capital
• Managing the cyclical peaks and troughs
• Promoting awareness and career opportunities
• Greater presence on campus
• Our demographic destiny and mission critical
  employees
• Or is human capital just another commodity?

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FUND UNIVERSITIES AND RESEARCH CENTRES
APPROPRIATELY

• Minerals Sector - High tech, high value added,
  geographically diverse, not
  homogeneous
• - low demand, knowledge based
• - value added (Uranium)
• - lead timing 10-15 years
• Government Attitude
• - approach to higher education user pays
• - resources curse - taxes and welfare
• Increasing Prospectivity
• - new mineral deposits (uranium
  exploration)
• - processing uneconomic resources
• - increasing efficiency reducing costs

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MAJOR CHALLENGES AND OPPORTUNITIES FOR LEADERSHIP

• GOVERNMENTS
• Embrace the sector as nationally important
• Improve incentives for teaching of SET in schools
  
• Move SET related courses in higher education to
  Cluster 10
• Support breakthrough research to increase
  prospectivity and processing CSIRO and CRCs
• Continue to highlight implications of an ageing
  population
• Implement the recommendations of Prosser, Nairn,
  MEAA etc.
• Protect discipline areas of national importance.

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MAJOR CHALLENGES AND OPPORTUNITIES FOR LEADERSHIP

• Employers
• - Greater focus on human resources including
• Forecasting of skills needs (uranium)
• Look outside the square (RMS)
• Increasing flexibility in employment practices
• Longer term commitment to manage the cycles
• Understanding implications of ageing population
• - Embrace the opportunities from acceptance of
  diversity and increase participation rates.

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LEADERSHIP Dr Ian Gould

• Taking risks, being out in front
• Being prepared to take criticism, courageous
• Being able to identify real winners, not just
  follow fashion candidates
• Its all about confidence.

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SOUTH AUSTRALIA A ROLE MODEL

• Leadership from Premier and Government
• Support from a committed group with belief in the
  sector (SAMPEG)
• World leading resources (particularly Uranium)
• Support for exploration (PACE) exploration
  targets met
• Balanced approach Scorecard Mining project
  approval processes.

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AESOPS FABLE THE ANT AND THE GRASSHOPPER

• Minerals Sector A Double Edged Sword
• Encouraging exploration and removing impediments
  cf Canada to become a preferred destination
• Supporting the provision of skills, research and
  development
• Focusing on human capital as well as assets and
  finance (Vision 2020).

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AESOPS FABLE

• Has the Canadian Ant Overshot the Australian
  Grasshopper?
• The Sustainability of the minerals sector in
  Australia.