Regional Development Australia Western Australia (RDAWA) Regional Investment Prospectus
WA Investment Prospectus
Regional investment opportunities and priorities across WA that can stimulate regional growth, economic diversification, and job creation.
Disclaimer In developing this Regional Investment Prospectus, Regional Development Australia WA (RDAWA) relied on input from industry, regional stakeholders and all levels of government. The information within represents the information available to RDAWA at the time of publication and views explored with industry, stakeholders and government and is not reflective of all the investment opportunities across each region. Additional opportunities will be covered off by either the RDA Regional Plans or the Development Commission Regional Plans, and the authors of this report suggest contacting those organisations. The information is provided as a resource and a starting point for potential public and private investors to conduct independent due diligence. RDAWA accepts no liability through reason of negligence or otherwise arising from the use or release of this information or any part of it. RDA Perth would like to personally thank all those involved in those conversations for the valuable input, observations and recommendations to help drive interest into investing in regional Western Australia. Photos provided by the RDAWA network and licensed online photo resources. About the Authors: Long Front Advisory Services provides governance, strategy and policy advice with an emphasis on driving progress toward net-positive, fully costed economic and business arguments for reform and development programs. This includes consideration of wider costs and benefits to ensure investors, rate- and taxpayers avoid embedding hidden costs that cost productivity, undermine living standards and disrupt community wellbeing. Regional Development Australia Perth (RDA Perth) has coordinated, co-written and funded this project in partnership with the RDAWA Network. The RDAWA Network includes the regions of: Peel, South West, Great Southern, Goldfields Esperance, Wheatbelt, Mid-West Gascoyne, Pilbara and Kimberley. Not all RDA’s participated in this project. This report was prepared through RDA Perth and does not represent the views of the Australian Government, its officers, employees or agents.
August 2022
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Statement of Intent The Australian Government has extended the operational mandate of five capital city RDAs (Sydney, Melbourne, Brisbane, Adelaide and Perth) to facilitate discussions between metro-based stakeholders and the regional RDAs about investment opportunities. In response, RDA WA developed the WA Investment Prospectus. This document is a high-level state-wide roadmap across key investment themes. These have been identified by industry and government as critical to regional development and improving our understanding of WA’s regional investment priorities. The goal is to stimulate discussion and support existing public and private initiatives that drive growth, investment and coordinate support for jobs and growth. The Prospectus offers several areas of focus for improved co-ordination across the RDA WA network, the private sector, State and Commonwealth initiatives to grow and diversify regional economies.
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Contents
6 7
Foreword
Executive Summary
Section One Priority Regional Investment Themes
11
Introduction
12
Aboriginal Enterprises
14
Accommodation
16
Freight
20
New Energy
22
Food Hubs and Aquaculture
26
Emerging Industries/Advanced Manufacturing
35
Over the Horizon
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Section Two Regions
37
Introduction
38
Goldfields-Esperance
48
Great Southern
56
Kimberley
64
Mid West Gascoyne
72
Peel
78
Pilbara
86
South West
94
Wheatbelt
Foreword Western Australia is coming of age; we are the modern-day pioneers, roaming new frontiers and making bold statements about our ability and capacity to drive new economic development opportunities. We are a vast state with a wealth of resources and land, ancient cultures, relentless drive and innovation. Finding inventive solutions to complex problems has always been a key driver of our economy. News stories about our growth in remote automation, new energy value chains, handheld satellites and life science technologies have a powerful grip on the State’s collective psyche. This document, assembled through the WA Regional Development Australia network, is an expression of that boldness; looking to the regions and identifying opportunities for both public and private investment that provide solutions to unlock the potential of the regions with imagination. Some of these opportunities are already bubbling up through new government interventions at both the state and federal levels. This is timely; capital city populations are showing unprecedented interest in relocating to our regions. We have the opportunity to identify new pathways that can drive investment and future job growth to support these trends. Our aim in identifying these opportunities is to start conversations that pave the path towards new sources of prosperity and thriving communities across our regions.
Keith Ellis Chair, RDA Perth
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Executive Summary WA Context
Western Australia is in a sustained period of expansion, driven by robust demand for products and services. Successful economic and public health management through the pandemic has enabled business to continue its recovery almost without pause, while the global recovery and the accelerating green energy transition is driving demand for WA’s primary production sectors – mining, natural gas, agriculture and forestry. The good news is tempered in the medium term due to growing geopolitical instability. These are raising barriers to trade and limiting the flow of products to Australia’s trading partners. Trade in these inputs may require some realignment to ensure diversity of supply and economic resilience. These issues and high oil and gas prices may also accelerate new energy development to decouple reliance on outside markets. Western Australia has the good fortune to have options for adaptation, growth and diversification due to an abundance of primary materials. The WA Government’s study of the comparative advantages and structural challenges affecting WA’s regional growth and diversification identifies markets with significant potential value for investors.1 These prospects broadly fall into the categories of: 1. Major infrastructure projects that improve the business and cost of living fundamentals, removing barriers to investment and growth across regional WA; and 2. Diversification opportunities that deliver
Of the two, realising diversification opportunities is the more straightforward. State and Commonwealth industrial development policies, grant schemes and incentives support industry- driven diversification investments. This process is industry rather than project focused, open to a range of projects and builds on what already exists. A good example of this is the focus on leveraging a wealth of battery minerals to develop innovative energy storage technologies capable of serving resource industries that operate in isolated locations. WA has demonstrated expertise in operating sophisticated mining and defence equipment in remote regions. The State has strong competitive advantages in this market, including domestic demand that underwrites workforce development and innovation processes necessary to develop products and services for export. Similar opportunities exist in the accommodation sector, where modular construction methods with embedded microgrid and telecommunications infrastructure can deliver new housing and community amenities at the pace needed to address acute shortages that present during resource sector growth cycles, with the flexibility needed to redeploy units as the construction phase slows.2 The Government study identified the following sectors as offering the greatest potential for diversifying the economies of WA’s regions: 3 • Technology and Advanced Manufacturing
was identified as offering the greatest diversity of opportunities with growth potential, due to a changing mix of comparative advantages across the regions and the relative lack of existing proponents in these categories.
value to WA’s existing internationally competitive industries that also have export potential.
1 Hausmann, R., et al., 2021. Economic Complexity Report for Western Australia. Copy at - www.tinyurl.com/yk4vt5d6 2 Hausmann, R., et al., 2021. Economic Complexity Report for Western Australia. Copy at - www.tinyurl.com/yk4vt5d6 3 Harvard policy recommendations
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• Primary Industries including fishing, fruits, food and beverage manufacturing, and wood products. These are already established across the state, are globally competitive and have significant expansion potential. • Tourism, including traditional tourism, and associated food and transportation activities.
Global Context The world is transforming at a pace that is sometimes referred to as the fourth industrial revolution or Industry 4.0.4 Energy use is shifting from fossil fuels to battery and fuel cell storage technologies. Renewable energy, new energy storage technologies, 3D printing and automation are moving competitive advantages from low-cost labour markets to the resource supply or consumer markets. Advanced, high- cost economies, which struggled to compete for decades, are once again able to grow their manufacturing sectors. This has come about due to a shift towards the need for high quality minerals (from automated engineering processes rather than cheap labour) and sustainability- based products (including net zero now being required by global finance). Both of these shifts enable economic growth to shift to WA due to our strengths in science and engineering as well as strengths in sun, space and ethical production through environmental assessment and indigenous involvement. There is a global scramble to secure access to battery and high-tech mineral inputs to new production processes. Energy metals (lithium, nickel, copper, cobalt etc) are in high demand as new resources are being sought and supplies secured by leading battery manufacturers. WA offers the world’s most complete and abundant source of these minerals, and advantage boosted further by low sovereign risk and world class sustainability standards. Green credentials are of increasing importance for manufacturers in meeting standards and qualification to operate in regulated markets such as the European Union with its strong environmental requirements and the recently announced Carbon Border Adjustment Mechanism (CBAM). WA is strategically well-positioned with Asia, Africa, the Middle East, India and proximity to South East Asia, all creating significant advantage. The Indian Ocean Region is the fastest developing region globally and will be for the foreseeable future. It is already a major conduit for international trade through the Suez Canal and around the Cape of Good Hope. Shipping traversing the Malacca Straits are at capacity in terms of the volumes that
Green credentials are of increasing importance for manufacturers in meeting standards and qualification to operate in regulated markets such as the European Union with its strong environmental requirements and the recently announced Carbon Border Adjustment Mechanism (CBAM).
4
Schwabb, K (2015) “The Fourth Industrial Revolution”, World Economic Forum, Geneva, www.weforum.org/about/the-fourth-industrial-revolution-by-klaus-schwab
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can use the 2.7km wide channel and maximum vessel size. New routes will provide additional capacity and access for larger ships as they are deployed. This positions WA to play a transhipment and sustainment role complementary to South East Asian hubs as new trade routes through the Indonesian Archipelago emerge. The development of Westport is timely in this regard, as well as for the future growth of inland trade across WA and Australia, through providing: • A new, next generation, cape class port that will become a Western gateway to Australia by facilitating West-East freight growth, transhipment facilities and sustainment services. These strategic factors are driving the development of a complementary strategy to improve supply chains and diversify export/ import options available to industry. This includes: • Significant expansion of WA’s inland rail network; and • Increasing bulk, general cargo and container capacity at WA’s regional ports. The increase in freight expected due to West-East freight movements, raw and processed mineral movements and the flow-on supply chain benefits driven by productivity and access are expected to act as multipliers and generate returns for the State. While Westport will remain the primary container port, expanded standard gauge rail networks and strategic regional ports will play a growing role in ensuring all of WA continues to compete and take advantage of this emerging economic super cycle. Lower margin industries will all benefit from reduced costs which will flow to drive down the cost of living and doing business in the regions. A unique aspect of WA is the growing desire of Aboriginal people to participate in the economy. Native title settlements are creating large pools of capital looking for investment avenues to assure future generations benefit, and a key focus of investment trusts is economic empowerment and development of the people and communities they represent. Innovative enterprises that leverage local competitive advantage (local Aboriginal branding, culture, traditional knowledge and the wish to live on remote country) can deliver services and products that benefit regions, government and industries looking for local labour.
A unique aspect of WA is the growing desire of Aboriginal people to participate in the economy.
Nation Building Context Opportunities for investment returns,
diversification and growth exist within a longer- term set of strategic opportunities for investors seeking longer term value, stable returns and operating contracts. Opportunities revolve around productivity and cost of living improvements, particularly in the State’s northern regions. The challenge is to bring freight, water and energy cost downs through supply security. These activities require a nation building approach driven by the State and Commonwealth in partnership with the private sector. Industry is in a position to contribute by informing a long-term planning and delivery strategy, project proposals and capital raising. Australia’s superannuation funds are well positioned to contribute the bulk of private investment capital to safe projects with steady returns. Aboriginal Corporations with large investment funds have similar drivers, with an additional focus on realising local returns for communities where projects pass through their land. An investment case identified through discussions with industry is the need to address freight and electricity reliability and costs north of Geraldton. There is an opportunity to resolve growth barriers over the long term. The proposal is to develop a strategy for staged development of parallel electrified freight rail line and electricity transmission line north from Geraldton to the Pilbara. As each stage achieves feasibility, the
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project would structurally reduce freight costs, improve the flow of goods, enable passenger services and facilitate the development of renewable energy projects along the route to inject low-cost electricity into the South West Interconnected System to begin with and, upon completion, into the North West (Pilbara) Interconnected System and independent networks. Efficiency and cost of living benefits aside, there is an associated carbon reduction benefit that can capture offset revenue and reduce access costs to markets like the European Union which taxes the carbon content of imports. All of this is essential to establishing larger settlements in WA’s North. Infrastructure Australia 5 , Infrastructure WA 6 , the WA Department of Treasury 7 and Development WA 8 have well-established prioritisation and business case evaluation processes suited to infrastructure projects of this scale. The Commonwealth’s Northern Australian Infrastructure Facility was established to with nation building projects like this in mind. Western Australia has reached sufficient economic scale to realise a project of this magnitude. Renewable energy technologies now offer the opportunity to structurally reduce energy costs, while global policy is generating carbon offset revenues to offset development costs and new competitive advantages through carbon import duties avoided. With the potential to establish renewable energy projects along the alignment, the economic and revenue direct and indirect returns to government revenue and private investors should be sufficient to justify the initial capital investment.
www.infrastructureaustralia.gov.au www.infrastructure.wa.gov.au
5 6 7 8
www.wa.gov.au/organisation/department-of-treasury
www.developmentwa.com.au
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Section One
Priority Regional Investment Themes Introduction The first section of this prospectus includes introduces a series of investment opportunities by theme. This is followed by a region-by-region summary of specific opportunities and the supporting resources available. The information provided was developed through a series of discussions with the Regional Development Australia WA Regional Network, State Government organisations, industry investors and subject matter experts. Prioritised themes were highlighted and reflect a robust understanding of attractive investment opportunities in the context of State and global investment trends. The initial economic development themes emerged are relevant across multiple regions while more specific regional opportunities are included in region-by-region investment summaries contained in the next section.
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Aboriginal Enterprises Investment Opportunities
1. There are opportunities for investors to co-invest with Aboriginal Corporations across the vast portions of regional WA where Native Title has been determined into commercial projects, including aquaculture, renewable energy, mining, manufacturing, transport construction and agriculture. These arrangements contribute more to Aboriginal economic empowerment than almost any other measure and go a long way to achieving social licence. 2. Aboriginal cultural knowledge about country and species as well as the ancient culture of each local group has significant commercial value, provided governance arrangements respond effectively to cultural protocols and involve the support of local Elders. There are opportunities to develop uniquely Australian enterprises that harness this knowledge or elements of culture through co-investment. 3. Governments set aside a significant portion of infrastructure and general procurement for Aboriginal enterprises. There are opportunities across regional WA to invest in such enterprises to grow businesses and participate in a range of major projects.
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Context Aboriginal Australians are increasingly a focus of HR recruitment and workplace culture strategies, procurement strategies, public and student education programs and entrepreneurship. As this occurs, a diverse investment opportunity continues to develop. Internationally differentiated cultural, tourism and place-based services and amenities continue to grow as Native Title is settled and Indigenous Land Use Agreements increase the capital resources of Aboriginal communities. The financial and broader benefits are manifold and extend across the board. The range of majority Aboriginal, and wholly owned, enterprises continue to grow, including: • Cultural tourism offerings that integrate cultural song lines with scientific, geographic and recreational experiences are a key focus. • Bush tucker (food) and medicinal enterprises are proliferating, along with cultural protocols to ensure Aboriginal communities can ensure culturally appropriate practices continue and capture a share of growth benefits. • Aboriginal ranger and traditional burning advisory services are recognised as sources of knowledge and generating economic returns, particularly in remote areas. • Joint ventures with Aboriginal Corporations and privately held Aboriginal enterprises offer heavy industry, civil contracting services and operate aquaculture businesses. Securing a social licence to operate is critical for almost any new enterprise in Western Australia’s hinterland and coastal areas. Co-ownership structures involving equity and decision-making rights are increasingly sought by local communities. Rationale This prospectus will align with the National Roadmap for Indigenous Skills, Jobs and Wealth Creation. As the Australian economy grows momentum, fully activating and supporting Indigenous Australians to gain the skills and confidence needed to enter into jobs, upskill to more technical, managerial and leadership positions and to establish and thrive in their careers, will be a key part of Australian businesses response to skill and workforce shortages. 9
Oombulgurri, WA, Australia - Sep 2, 2014: Two Australian indigenous community leaders explain landscape features to adventure travellers on the Carson River Track.
www.niaa.gov.au/indigenous-affairs/economic-development/national-roadmap-indigenous-skills-jobs-wealth-creation
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Accommodation Investment Opportunities
There is a range of investment opportunities in projects across regional WA to meet high demand for worker and tourism accommodation, including: 1. The manufactured home, holiday resort, community housing developments based on the Caravans and Camping Grounds Act; 2. Flat-pack construction businesses that offer cost-effective, regionally manufactured, fast and flexible accommodation construction methods to meet worker and other accommodation demand; and 3. More traditional housing where projects require large workforces for some decades.
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Context At present, the construction industry is severely constrained by supply and labour issues arising from the pandemic. Government and industry are working to resolve these matters. In the medium term, WA must resolve its historical, structural challenges by resource sector investment cycles. The construction phase of these cycles drives rapid increases in demand for housing and dramatic price inflation, particularly in regional areas, followed by collapsing demand and property price deflation as construction winds down and projects enter their operational phase. This is destabilising for regional housing markets and economies and leaves many investors holding assets with negative equity for sustained periods. It also limits housing supply available to workers and businesses in other industries like tourism, hindering the diversification and growth of regional economies. The challenge is to meet cyclical demand for worker accommodation without undermining other economic sectors and local property markets. Rationale The traditional approach to building houses onsite out of bricks, timber and steel is being superseded as factory-built solutions are emerging and offer greater efficiency and sustainability. 1. Resort style villages targeting rental demand and comprised of modular homes and community amenities, such as childcare, meeting facilities, shared kitchens, swimming pools and fitness centres. These units can be built at factories across the State and trucked to sites zoned for caravan parks to offer tailored solutions suited to local requirements, fast mobilisation and the potential for demobilisation as demand ebbs. 2. Prefabricated panel (flat pack) constructed accommodation designed in Perth and manufactured regionally can be deployed quickly and in various configurations to address spikes in demand and local requirements for affordable, worker and tourist accommodation and community amenities. 3. Models from other countries where the land developer is also the builder, constructing a pattern of homes at pace and at a lower cost. The first two approaches address the labour and rapid deployment limitations of traditional, onsite housing construction methods, delivering more quickly, with lower construction costs, reduced labour, minimal construction footprints, lower costs of living through improved heating and cooling performance, high fire ratings (BAL), improved cyclone ratings, a fraction of the construction waste and substantially lower embodied energy and carbon. These qualities offer a useful complement to the traditional housing sector across regional WA. In respect of the third option, homes are built from the same template on a rolling process to minimise waste and create housing at speed. Mitigating against the ‘sameness’ of housing in this construction model, is a focus on landscaping and surrounds. A demonstration program designed to assist builders, consumers and tradespeople with understanding this emerging future would greatly assist WA to transition to more affordable, faster, cheaper to run and greener housing stock. Any such program would need to address the following elements: • Industry constructed demonstration homes in high traffic areas at entry points to rapidly growing suburban areas. • Digital billboards tracking – (1) cost to build, (2) time to build (3) cost of living and (4) green performance (an aggregate indicator encompassing embodied energy, carbon and circularity). • Government commitment to cover construction costs should the homes not sell. Whatever the approach, change of this magnitude will require a whole of industry effort, including the major builders, modular and flatpack housing providers, the Master Builders Association, the Housing Industry Association and State and Commonwealth planning and land development agencies. An effective solution will provide for the ongoing health of the traditional housing sector and the quality of new communities established using alternative business models.
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Freight Investment Opportunities
1. There is potential for public and/or private investments in the following freight rail initiatives identified by industry: • Eastern Goldfields Route capacity expansion to address current constraints on WA’s busiest rail line. • Capacity expansion from Kalgoorlie to Esperance to meet demand on WA’s second busiest rail line. • Mundijong to Brookton to address capacity constraints. • Upgrade and extension to Greenbushes to address spodumene freight demand. • Geraldton to Wiluna to improve productivity of inland mines. • Staged extension from Geraldton to Carnarvon and then to the Pilbara to unlock productivity, cost of living and development capacity that can sustain industrial in northern WA. 2. As the freight and regional industrial network grows there is an associated opportunity to provide intermodal facilities to facilitate transfers between freight modes including: • Canning – empty containers and WA food hub logistics centre. • Mundijong – southern and eastern WA rail, road freight and Mundijong industrial development intermodal node. • Rockingham / Kwinana – dock-side Westport intermodal terminal. • Bullsbrook - Muchea – northern corridor rail, road freight and Bullsbrook - Muchea industrial development intermodal node. • Bunbury / Waterloo – south west road, rail, Port of Bunbury and industrial precincts intermodal terminal. • Northam (Avon Industrial Park) and Brookton – to optimise agricultural rail freight movement west across the Darling Scarp and facilitate the growth value added processing. • Kalgoorlie – inland freight hub servicing West-East national freight and Goldfields- Esperance Road, rail and industry precincts. 3. Public and/or private investment in additional port capacity and freight handling capabilities to meet growing and diversifying demand for regional import and export services, including general cargo, last mile road and rail capacity and bulk goods. 4. There is an opportunity to harness growing air passenger numbers to Albany, Busselton, Exmouth and Broome to provide a refrigerated freight handling and storage service.
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Context WA sits astride Indian Ocean Basin, the world’s third- largest body of water and the fastest growing global region, strategically positioning Australia to grow and diversify economically while playing an important international trade facilitation role. The State Government’s commitment to develop a world-class, industry backed port in Kwinana (Westport) signals to investors that WA is transitioning into a Western gateway to Australia, with global transhipment and sustainment services and growing value-added industrial exports. Industry is responding. Low cost renewable energy generated in the regions and reduced labour requirements through automation are increasingly shifting the focus of WA’s regions from exporting primary goods to local value-adding. Plans and projects are under way to establish or increase value-added production capacity throughout the State. To capitalise on this generational opportunity, WA will need to boost improve freight efficiencies throughout the network. Across most of WA, freight rail is the missing element in the productivity equation. In the Eastern States and across the developed world, freight moves according to a mix of drivers – speed, capacity, flexibility and cost – as follows: 10 • Air freight – highest speed, lowest capacity and highest cost. • Road freight – point to point and scheduling flexibility, medium capacity, speed and cost. • Rail freight – high capacity, lower speed, flexibility and cost. • Maritime freight – slowest speed, highest capacity and least cost and flexibility.
The State Government’s commitment to develop a world- class, industry backed port in Kwinana (Westport) signals to investors that WA is transitioning into a Western gateway to Australia, with global transhipment and sustainment services and growing value- added industrial exports.
The growing global mandate to decarbonise supply chains and the commercial imperative to reduce carbon offset costs is driving freight onto the lowest carbon option. Inland freight will benefit from the 16-fold carbon efficiency per tonne kilometre offered by rail over road freight, particularly during the transition to renewable energy. Safety benefits and savings from road accidents avoided also favours rail over road. This savings is estimated to be in the neighbourhood of 1 cent per tonne kilometre. 11 Further, labour constraints in trucking experienced in WA growth cycles would be reduced by the growth of rail.
10 11
BITRE elasticity citation 2013 report
https://ara.net.au/wp-content/uploads/REPORT-ValueofRail2020-1.pdf
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Rationale There is a generational opportunity to capitalise on improved freight productivity through expanding and electrifying WA’s rail network. This will allow for greater efficiencies in time and cost, adding competitive to regional comparative advantage. Rail With the development of Westport, a period of renewed nation-building investment becomes attractive in the form of an expanded freight rail network between WA’s ports, to the Eastern States and to the hinterland of WA’s regions. Improved resilience through improved trans-Australia freight; improved productivity and reduced carbon pollution through rail-connected ports and regional gains combine to offer significant national and state growth potential. Rail investment also provides a transport redundancy alternative and mitigates against vulnerability risk as demonstrated by COVID-19 and major flooding. Working with industry to progressively extend freight rail north from Geraldton to the Pilbara cities, as well as inland to mineral districts, such as Wiluna, offers the productivity gains and cost reductions necessary to establish larger settlements and diversify local economies. The capacity to move goods at rates comparable to the rest of the country would normalise the cost of living and doing business unlocking a more normal pattern of investment and growth. These are long term plans to be considered in stages, but much as with the Ghan line to Darwin, it will be necessary to establish all forms of freight transport across WA to fully realise the potential of northern WA. Intermodal Terminals Intermodal terminals (IMT) are critical nodes in supply chain logistics, facilitating freight transfers between modes – ships, trucks and rail. The design of IMTs varies according to the key freight task and local geographic characteristics. There are a number of IMT expansion opportunities across the WA freight network where investment will boost efficiencies, lower costs and open up new opportunities. It is crucial that all hubs – metropolitan and regional – work together in harmony for maximum economic efficiency and benefit. In regard to the Perth Metropolitan region, the development of Westport as the Western Gateway to Australia will include dock-side interoperability to enable rail to ship and truck to ship container transfers. With access for Cape Class vessels, this represents and key point in the network that will require global standard ship to rail and truck loading infrastructure to each land freight mode, to ensure efficient import and export functionality. A new IMT is proposed at Canning to handle empty containers and service the adjacent industrial area. In turn, this connects with WA’s central food wholesale and distribution hub, while Bullsbrook is planned as a future IMT for truck to rail transfers from the northern regions. It will also serve as a future distribution centre for an adjacent industrial estate. This can be linked with the proposed industrial/intermodal precinct at Muchea in the Wheatbelt. With the development of Westport, there is an opportunity to make better use of west to east rail capacity to improve economic resilience, establish Kalgoorlie as an inland intermodal freight hub facilitating freight movements to and from the Eastern States by the most cost-effective freight-mode and to better incorporate the Cape Class capacity of the Port of Esperance into Western Australia’s freight network. Roads The Western Australian and Commonwealth Governments have made unprecedented commitments to future road network upgrades across WA. Roads remain a key element of the freight network; improvements to rail freight through electrification will not negate the need for road freight. The two can simultaneously offer net carbon zero options as the freight network delivers improved options. Consideration of road safety and congestion in urban areas will most likely drive any improvements
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across the freight network. That and the overall cost of road maintenance. Of particular importance in the context of the freight task is the efficacy of ‘last mile’ connections to ports.
Ports WA’s ports are a key link in creating an efficient freight network. Additional capacity to address general cargo, container and bulk freight exports and imports are critical to reducing costs and creating competitive advantage in the regions. This is particularly the case in WA’s northern regions, which are at the end of long supply chains via Perth and the Eastern States. Expansion of the rail network and capacity improvements generate attractive options of low-cost land and renewable energy in regional locations. To add further value, regional ports will need to boost capability. The following priorities have been identified: • Redirect bulk mineral exports to regional ports to create additional value adding opportunities and free up Western Trade Coast heavy industry land for new projects that leverage industrial ecology synergies with established operations. • Some regional ports will need to increase container capacity to facilitate rapidly growing exports of value-added critical raw materials for batteries processed in the regions, particularly in the Pilbara, Goldfields Esperance and South West. • Ensuring adequate general cargo capacity to lower costs for business and in communities. • Bulk export capacity will be required at some regional ports to export locally processed hydrogen. Air Freight As more regions generate high value produce it will be important to ensure refrigerated air freight capacity at selected airports, particularly in WA’s northern regions. This is driven primarily by the growth of aquaculture across the state and the need to transport perishable goods to market as quickly as possible. Supporting markets include wine and other fresh produce. The critical element is adequate cold storage at airports and adequate volumes and runway length for dedicated air freight flights.
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New Energy Investment Opportunities
1. There are significant public and private investment opportunities to scale up new energy technologies throughout regional WA, decarbonising the economy and offering locations where business can manufacture goods using 100% green energy. 2. There are significant opportunities for investments that capitalise on synergies between telecommunications, renewables, hydrogen, batteries, electrical distribution rail and port infrastructure projects, such as: • Renewable energy charging stations connected by transmission lines along new and existing rail corridors as the means of extending the grid and supporting the electrification / decarbonisation of rail freight; and • Market-led proposals to install fibre optic lines along rail corridors. 3. There are investment opportunities in establishing independent green energy, water and telecommunications through private microgrids (behind the meter), such as: • Industrial estate microgrids linked to renewable energy generation; and • Accommodation villages with renewably powered microgrids and batteries.
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Context A global energy transformation is under way, driven by international carbon reduction agreements and generational scale government and private investments. Renewable energy generation (wind, solar and geothermal), battery storage and manufacturing, microgrids and green and blue hydrogen production facilities are being funded at a rate similar to the internet investments of the late 1990s and early 2000s. Demand for green hydrogen production in WA alone is estimated to require an additional 100 GWh of renewable energy generation in the coming decade. The global market for hydrogen is projected to grow by a factor of ten by 2026. Multi-service infrastructure corridors are being proposed to improve energy resilience and leverage distributed renewable energy generation investments in regional areas, including mine sites and regional towns. The future productivity and prosperity of WA will be determined by the way these investments are coordinated and delivered. Rationale There are clear business opportunities in this energy transformation through investing in key nodes and parallel infrastructure that enhance energy reliability, reduce costs and boost regional economic development. Existing renewables, battery and hydrogen energy projects will need to be scaled up significantly to meet demand, leveraging off Government investments and policy drives to Net Zero. Focusing investment on these priorities will establish the next set of investment and economic development opportunities.
There are significant public and private investment opportunities to scale up new energy technologies throughout regional WA, decarbonising the economy and offering locations where business can manufacture goods using 100% green energy.
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Food Hubs and Aquaculture Investment Opportunities
1. State-wide opportunities exist to invest in new common user food hubs and expanding existing food enterprises to provide marketing, processing, storage and freight services in support of artisan food producers. 2. There is an opportunity for the aquaculture industry and government to develop a feasibility study for a WA feed mill to meet demand as the industry reaches scale to improve cost structures, supply resilience and carbon pollution impact, while averting potential trade barriers. 3. The current capacity of hatcheries is close to fully subscribed, thus creating new prospects in both aquaculture and associated common user refrigerated logistics infrastructure. 4. Block chain technologies provide openings to a ‘clean-green biosecurity and regional provenance’ assurance. This service supports the development of high value regional
brands and niche aquaculture, food and beverage product markets. 5. There is potential for marketing services to underpin branding.
6. There is a significant opportunity for regional food hubs to work with government in a supply line that supports a central value-added artisan food and beverage market and distribution hub in Perth. 7. There is demand for a hub and spoke approach to delivering training that is centrally co- ordinated and delivered onsite at regional industry facilities.
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Context While WA is a globally significant primary producer of agricultural goods and seafood, the recent pandemic exposed food security issues and dependence on produce outside WA. There is an opportunity to improve the resilience of WA’s food supply chain and broader economy through growing and diversifying the WA food sector. This prospectus has identified small scale, artisan food production and aquaculture as offering an excellent investment and growth opportunity across WA. Artisan food and beverage value-added production is underdeveloped across most of the State’s food producing regions. This segment presents a growth scenario that can improve WA’s food security, grow the value captured regionally and develop branded food regions coupled with quality assurance
Aquaculture will be an essential part of the solution to global food security.
schemes akin to those long established in Europe. The high value focus is on niche agriculture to avoid competing with mass market economies of scale. Further, the shift to renewable energy generation improves the cost of regional food processing enabling the establishment of facilities close to food crops. “Aquaculture will be an essential part of the solution to global food security.“ 12 Aquaculture is characterised by intensive production which offer production economies. Global demand for seafood is forecast to grow by 26% by 2030 with aquaculture overtaking wild catch fisheries at the same time. This represents a 50% increase in global aquaculture production over the same period. This is a major opportunity to expand the sector both inland and along WA’s pristine coastline. Industry is investing heavily to expand both onshore and offshore aquaculture. Some operations are mature, including rock oyster, Akoya, pearl and abalone farming at various locations in the Southern and Kimberley Aquaculture Development Zones. Others are at various stages of the pre-commercial investment development process, including asparagopsis (seaweed), onshore and offshore finfish and prawn farms as well as offshore tropical rock oysters. Most aquaculture is offshore, however onshore facilities offers some significant benefits despite being capital intensive. Onshore facilities paired with renewable energy generation and secure access to water avoid many of the ecological challenges associated with establishing a new offshore facility. WA currently has two commercial hatcheries servicing the industry: shellfish from Albany and barramundi /yellowtail kingfish out of Fremantle. The State Government is investigating a proposed finfish nursery for Geraldton. 13
FISH TO 2030: Prospects for Fisheries and Aquaculture, World Bank 2015 - www.fao.org/3/i3640e/i3640e.pdf
12
13 www.fish.wa.gov.au/Fishing-and-Aquaculture/Aquaculture/Aquaculture-Regions/Pages/Marine-Fish-Production-And-Research.aspx
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Rationale – Food Hubs Artisan food and beverage rely on achieving economies of scale through shared marketing, distribution and other production costs. Individually, it can be difficult for producers at this scale to justify capital expenditure in such as kitchens, drying facilities, bottling, packaging and storage facilities that will be underutilised much of the year. Co-operative food hubs or common user approaches are typical among artisan producers globally. There is an opportunity across regional WA to work with artisan producers to identify specific needs for common user approaches that could assist in business growth. Food hubs can be privately, co-operatively, publicly funded or in a combination of public seed funding and matching contributions. Investment models focus on developing a mix of infrastructure that meets the needs of artisan food producers and leasing facilities on a user pays basis. Demand and conditions vary by locality and region, requiring market analyses. The Perth Region can play a significant role in supporting the development of food hubs, through providing a hub for local, domestic and international marketing of regional food products. The City of Canning is exploring the potential of adding a new facility adjacent to the Canning Markets (WA’s primary fresh food market) to showcase regional value-added food products. The opportunities and considerations that go into establishing a successful food hub include: • Producer-led, incremental expansion of markets and shared infrastructure to coordinate and consolidate volumes and open export potential. • Market and supply chain co-ordination promotes knowledge and data sharing, managing regulatory processes and reducing costs; • Industry and/or Government co-investment leading to industry ownership and operation. • Regional development multipliers, such as: A Creating jobs and facilitating skills training programs; A Community benefits; Rationale – Aquaculture Developing new offshore aquaculture species/location combinations involves significant capital and time to determine effective practices that are ecologically and commercially sustainable. Government has taken steps to support this process including: • Investments in research and development programs across the value chain. • An investment attraction strategy. • An aquaculture policy framework. • Establishing a germination facility to generate affordable biomass for aquaculture operations and investigations into the potential of a WA feed mill to support growth of the industry and reduce dependency on Tasmanian supplied feed. • The potential of seaweed and algal aquaculture crops to deliver a carbon sequestration benefit through mitigating cattle methane production. A Innovating to improve sustainability; and A Aboriginal co-investment and participation. A hub and spoke training program co-ordinated centrally and delivered regionally is considered essential to establishing industry traineeships at regional facilities. Key skills sought include – dive training, boat handling, biosecurity and other regulations, animal husbandry, block chain traceability requirements and branding and marketing. Efforts are already under way to develop skills programs in the regions, particularly with Aboriginal job creation in mind. Joint ventures with Aboriginal Corporations are under development – for example with the Bardi-Jawi People on the Dampier Peninsula.
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WA is geographically well-positioned to deliver product to the rapidly growing Middle Eastern, Indian and Asian markets by sea or air. Additional regional air freight facilities could support direct exports or via Perth. The freight section of this prospectus outlines the potential for investment in refrigeration to improve transport times and freshness when delivered to international markets. Discussions with industry suggest that common user infrastructure such as refrigerated air freight facilities at Carnarvon will contribute to the success of aquaculture projects and will benefit from the development of a food hub that can serve both seafood and horticulture industries in Shark Bay and Exmouth as well as Carnarvon. Developing international awareness of and demand for ‘clean and green’ produce is expected to stimulate demand, investment attraction and assist with securing a social licence to establish new aquaculture facilities. Blockchain technologies can assist with assuring biosecurity regulators and international buyers of the provenance of WA-branded aquaculture. The key elements are – traceability, monitoring, distribution chains, legality, transparency, species fraud and food safety. 14 Social licence considerations have additional importance in WA where prospective aquaculture facilities are located in areas where Native Title has been established and/or within marine conservation reserves.
Blockchain technologies can assist with assuring biosecurity regulators and international buyers of the provenance of WA-branded aquaculture.
14 laha, F. & Katafono, K. 2020. Blockchain application in seafood value chains. FAO Fisheries and Aquaculture Circular No. 1207. Rome, FAO. https://doi.org/10.4060/ca8751en
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Emerging Industries/ Advanced Manufacturing Investment Opportunities There are opportunities investment in the development of the following emerging industries, including: 1. Forest thinning around settlements and the introduction of mosaic burning reduces fuel loads, bushfire risk and offers an investor-driven approach to returning WA’s native forests to the open parkland structure that existed before 1826. 15 Thinning provides timber for boutique local manufacturing and delivers unprecedented tourism opportunities. 2. Soft and native hardwood plantations offer significant investment options as global demand for structural and high value decorative timbers grows while carbon offsets appreciate in value. 3. Renewable energy is creating an opportunity across regional WA for industry to capture returns through investing in the recycling of bulky and heavy waste materials as well as value-added circular economy manufacturing operations using recycled materials as inputs. 4. Investment opportunities in drone technologies exist across multiple regional airports through the Muresk Institute based Centre for Aviation Performance and Training. 5. Widespread investment opportunities exist across every industry and every region to capture returns through sequestering carbon for resale as rapidly appreciating carbon offsets. 6. Renewably powered Green Steel and Green Aluminium refining offer emerging opportunities for regional manufacturing in WA. Such production is most effective when located adjacent to mineral resources to add value to primary production, where there is also high solar gain to power solar energy and reduce the requirement to transport hydrogen 7. There is an opportunity to invest in regional tourism offerings that showcase space industry sites, Aboriginal cultures, dark sky observation spots and natural and mined geological features. 8. There is an opportunity invest in the development of internationally co-ordinated regional tourism destination brands to improve awareness of these unique features. There is momentum in the form of WA’s Dark Sky and Astrotourism Position Statement, regional tourism strategies, the UNESCO geo-parks certification scheme and existing infrastructure such as observatories and industrial sites. Together they offer certainty and pathways for harnessing international market demand.
15
Date of the first settlement in King George Sound, Albany.
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