Lay of the land
Rural land owners remain uncooperative and the federal government’s innovation policy being deployed as part of the Townsville City Deal is still immature and conservative in its industrial scope, while the Green minority fundamentalist movement is seeking the destruction of capitalism and carbon-based industries in Townsville North Queensland.
Townsville North Queensland is having to battle tooth and nail to realise the ambitious goal of becoming “the place to invest” in Queensland.
As the climate change union and socialist green power converge in coalition to fight the existing establishments of political power, Townsville Mayor Cr. Jenny Hill is saying Townsville is ‘open for business.’
But in Townsville, the “guard dogs and the galahs” are bailing up the postman at the city gates and the farmers in Charter Towers are warning parents with kids “keep out” or “my abuse could offend”.
Nevertheless, the message of hope is getting through; causing business confidence to increase and the predicted property spruikers to bait the hook.
The early adopters are recruiting staff as job advertisements have jumped by 48% on latest reports.
Still, the materials of industry are being challenged at the producers’ gate while the fruit of Northern Australia’s natural resources are again being abandoned in a protracted climate change storm.
But the questions on many property investors lips are directed towards the uncertainties. And the biggest threat to Townsville sustained property growth is this – Is the activist’s actions against industry seasonal or is it the new universal state of doing business in North Queensland?
The minority fundamentalists’ actions could strike a gaping wound however to the faculties of hope, desire and goodwill in the eyes of the Adani Carmichael coal mine, Magnus Resources Battery Gigafactory, and the Singapore Army training area, all of which are depending on billions in capital backing and land supply.
With respect to the largest industrial projects, what could Townsville be risking in economic terms?
These three projects alone are the largest private and non-government investments amongst many investments occurring in North Queensland. Townsville residents are overwhelmingly positive about the impact. But the go-ahead of part or all of the projects is subject to fringe groups individual rights, extreme ideology and the political agenda of disruptive alliances.
Scope of projects
The industries being touted as the next golden age for industry and economics in Townsville are major contributors to the expected drive for population growth over 200,000 in the next few years.
Multiple billions of dollars in defense training, mining and manufacturing contracts make the stakes for the economy, political leadership and industry very high indeed. The collective investment by these companies is over $25 billion with a potential life span of over 50 years.
Adani Carmichael coal mine
The Adani project is expected to bring into the Queensland economy $16.5 billion for the coal mine and $2 billion for the rail line construction to connect the mine from the Galilee Basin to Abbott Point near Bowen, generating an estimated 10,000 jobs over the life of the mine.
Adani says the jobs will be 4000 to build the mine, 3000 to build the rail line while 1400 are expected to work in the mine on an ongoing basis.
The Australian company headquarters has already been announced in the Telstra building in Townsville. The company has already placed advertisements calling for jobs for the Townsville office. The estimated number of jobs Adani proposes to employee in the Townsville office are approximately 500 in total.
Initially, 200 jobs are being created. Jobs have also been advertised in Rockhampton, at the mine site and Abbott Point port at Bowen. Senior investment jobs have been called in Brisbane, Sydney, and Melbourne. The Townsville office will accommodate the remote operations centre as new remote controlled driverless machinery is expected to be used at the mine site.
Adani has already invested $3.3 billion in purchasing the Abbott Point Port. AECOM will employee 70 staff in Townsville to carry out surveying and design of the rail line. The port is located a short distance north of Bowen in the Whitsundays district.
Downer EDI mining has been awarded the largest contract to build and operate the mine in the Galilee Basin. The Melbourne based mining and infrastructure engineering firm is unlikely to impact on the Townsville economy with the $2 billion construction contract as it has an established organisational base in southern capital cities and central Queensland.
Green groups determined to “blockade” the mine site have written directly to the Managing Director of Downer demanding the withdrawal of the Downer relationship with Adani. The Green group warns Downer the “blockade” action will escalate and target shareholders. “Please choose wisely. The world is watching,” the letter concluded.
The fly-in fly-out hub for the mine is yet to be confirmed. Adani has identified Townsville and Rockhampton as the two options so far. With the construction of the mine needing 4000 jobs, it is anticipated that both cities including Mackay will be identified as fly-in fly-out hubs for the sheer volume of people and goods to be transported.
As the mine moves into an operational phase, the fly-in fly-out impact is expected to reduce and one location could be announced as the preferred site. The selection of the operational transport hub will be essential for the ongoing growth of the Townsville economy.
Construction of the mine and employment of the majority workers will be conducted by Downer based in Melbourne. Therefore, the fly-in fly-out headquarters may not be determined by Adani exclusively.
The Indian mining company has placed a loan application for the construction of the rail line with the Northern Australia Infrastructure Fund for $1 billion. The approval of this loan is yet be finalised.
Other critical funding has not been achieved by Adani. The construction of the mine is unlikely to commence for another 5 years, a major projects pipeline report from BIS Oxford Economics has forecast.
Singapore Army Training Initiative
The Singapore Army Training Initiative is expected to generate $2.2 billion of economic impact in Queensland over 25 years.
A KPMG report identified that $36.2 million will go into the Townsville economy per year after the construction is completed. The report also estimated that $143 million will impact the Townsville economy during the first 7 years of construction.
The construction phase is due to begin in 2019 and finish in 2026 at which time the Singapore military will begin training exercises for the next 25 years.
However, the 23 land owners around the existing Australian Army High Range field training area are yet to negotiate a deal with defence. The economic impact to Townsville will reduce and even diminish to negligible benefits altogether if the Singapore Army is forced to move to another region.
Rockhampton is a competitive option as the Singapore military has based its air force for the past 25 years. Also, if the Shoalwater Bay training area is where defence can secure existing Commonwealth land, the Rockhampton region is likely to receive the lions share of the $2.2 billion economic impact.
The Singapore Army is expected to rotate 2000 to 4000 troops through the training facility over an 18-week period each year for 25 years.
Magnus Resources and its consortium of United States investors and the Townsville City Council is initially investing $2 billion in the 15Gwa battery storage manufacturing factory generating 2000 jobs in manufacturing and supporting a further 5000 indirect through the global supply chain.
The company reports also that the initial project is just the beginning of plans for the 400-hectare industrial site at Woodstock to expand their operations. Construction of the factory could begin within the next 12 months with the consortium already signing off on the pre-feasibility study. Production is expected to begin by 2020.
The gigafactory relies on graphite supply from the Magnus Resources mine in Tanzania. However, the government of Tanzania has created uncertainty around the company’s capital raising capacity due to the Tanzanian government unexpectedly raising taxes on the miner.
Magnus Resources shares have dropped by half and were suspended from trading on the Australian stock exchange. The Magnuis chairman, Mr. Poullas said the tax change would have no impact on the Townsville project.
At a nearby site, an independent investor is building a 142-megawatt solar power facility consisting of 450,000 solar panels. It is being constructed at the Ross River Solar Farm on a mango plantation north of Townsville.
The Townsville economy is expected to benefit from $1.5 billion in infrastructure projects in the next 12 months. The stimulus coming from the stadium project, roads, water, rail and port investments is an approximate $1.2 billion more than last year, a BIS Oxford Economist shared with an RDA and Infrastructure Association forum last week in Townsville.
Threats to progress
Although the infrastructure projects are positive to the local economy, the stimulus is short term. “At the moment there is a lot of politics. The policy environment can be very toxic,” Mr. Adrian Hart said.
As land owners in the Charters Towers area dig their heels in on the Singapore Army training deal and Green groups disrupt the progress and delivery of the Adani project by threatening more “blockade” protest action on the ground, even more court action and a massive international public relations campaign, the world’s largest coal mine project and the battery gigafactory still have serious supply hurdles to cross.
Red tape, white papers and green banners are literally suffocating the life out large scale industries in Townsville North Queensland.
The impact on public opinion in Australia from protest groups is significant enough for the Indian energy company to undertake a $1.4 million advertising campaign to counter the Green activists across Australia.
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