Royalties for Regions – Information Briefing 10 October 2014 Presenter:David Horton Chief Operating Officer

Southern Ports Authority, Port of Esperance On the 1 st October 2014, the Esperance Ports Sea and Land merged with the Bunbury and Albany Port Authorities to form the Southern Ports Authority. The Esperance Ports Sea and Land is now known as the Southern Ports Authority, Port of Esperance.  The Southern Port Authority trading as SPA is a statutory authority created under the Ports Legislation Amendment Act 2013 and is subject to the Port Authorities Act 1999 (amended) and Port Authorities Regulations The SPA operates as a Government Trading Enterprise and has control of the Port of Esperance.  The Port’s primary role is to facilitate trade, to support the industry in this function, operate in a safe and efficient manner and return a dividend to the Government of Western Australia.  The Port consists of three operational berths Berth 1 is a land backed berth used exclusively for exporting grain products. The Port is currently looking at constructing an additional pipeline at Berth 1 to allow for the discharge of fuel. Berth 2 is a multi-user land backed berth importing sulphur and fertiliser in bulk form and fuel. Exports from berth 2 include mineral concentrates in containers and in the near future, woodchips. Berth 3 is an isolated marine structure known as a dolphin style berth and is dedicated to exporting iron ore sourced from the Goldfields region.

Who Benefits from the Port of Esperance Fuel & Energy Suppliers Specialist Consulting Groups PLC’s Infrastructure & Machinery Maintenance Suppliers Audit & Probity Specialists Transport Industries Skilled Labour Companies

Buy Local Policy  The Port of Esperance has an internal Buy Local Policy which aims at supporting business through procurement of a variety of goods and services.  Why Buy Local? The Port of Esperance believes in supporting the township of Esperance and the region as a whole  Procuring locally & within the district ensures continuity of service and the economic benefit to the region.

Goods & Services Sourced by the Port The Port of Esperance source a variety Personnel, Goods and Services which include:  Manufacturing & Engineering Services  Industrial Cleaning & Sweeping Services  Machinery & Equipment Hire  Information Technology Specialists  Corporate and Administration Services  Rail Contractors  Mobile Plant Maintenance & Subcontractor Services  Marine Maintenance Providers  External Training Providers  Accommodation Services Providers  Trades including Plumbers, Electricians, Carpenters and Builders  Finance and Insurance Providers  Local Retail and Wholesale Business’  Professional and Technical services.

Regional Benefits The Port of Esperance provides an opportunity for the mining and agriculture sector to also contribute to the local economy through the facilitation of their trade.

Statement of Profit & Loss Year Ending 30 June 2014

Upcoming Port Projects Among numerous projects being developed at the Port of Esperance, a number of major projects have been identified and approved within the Port’s capital budget:  Hughes Road Upgrade – $5 - $11M  Iron Ore Shed Ventilation Upgrade  Construction of a Container Hardstand Area  Berth 1 Pipeline Project – up to $1M  Heavy Haulage Transport Services  Front End Loader Contractor *Projects will be subject to a tender procurement process.

Multi User Iron Ore Facility  In May 2014, the Yilgarn Esperance Solutions (YES) consortium was named as the preferred proponent to design, build and operate the new Multi User Iron Ore Facility valued at $200M.  The consortium will finalise the design in conjunction with SPA prior to reaching financial close that is due within 18 months of contractual close.  Works will be tendered primarily by the YES consortium.

Looking into the Future  The Port of Esperance continues to grow in trade and over the next few years and is expected to double the amount of iron ore currently being exported via berth 3 to a very productive 20 million tonnes per annum.  The discovery and re-commissioning of mineral deposits may see the current mineral concentrate exports increase from 216,000 tonnes per annum to potentially 400,000 tonnes per annum.  In the second quarter of 2014, the Port of Esperance will see it’s first ever trial of woodchip product exported using a mobile ship-loader across berth 2.  In the Port handled two Post Panamax sized vessels. The CMB Medoc sailed with 78,636 tonnes of grain and was the largest grain shipment to ever leave Western Australia.  In 2014 the Port completed maintenance dredging of the inner harbour and channel, removing 68,000 cubic metres of sand and restoring the Port to the original design depth and allowing vessels to load additional product.

Southern Ports Authority, Port of Esperance