Department of State Development

The Mining Equipment, Technology and Services (METS) stands as a pillar for future economic development in South Australia.

Over 500 companies operate as minerals and energy suppliers in South Australia with a combined contribution of $2.4B (2.6%) to gross state product.

Recent statistical data indicates the sector employs over 17,000 full time equivalent employees and provides an epicentre for applied research, information technologies and advanced manufacturing techniques to fuse into new goods and services that feed a truly global market (METS Economic Indicators for South Australia and Australia 2012/13 – Econsearch 31 May 2015).

METS in South Australia - An Overview
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Growing the supply chain - Study

An independent study was commissioned in mid-2015 to review and provide recommendations to the State Government on accelerated growth in the METS sector.

The study titled “A Scorecard for Growing South Australia’s Minerals and Energy (METS) Supply Chain” made a series of  recommendations on how best to  grow the METS industry and achieve the State Government’s economic priority of “Unlocking our Resources, Energy and Renewables Assets”.

A review of the work of the Mining Industry Participation Office in relation to the METS sector was undertaken and a baseline for economic contribution within the sector established.

The study also made some key observations on what the most relevant success drivers were for METS companies. High-level recommendations and observations made in the report can be summarised as follows.

1. Role of Government

The report recommended that the role of government was best suited to focus on:

  • providing a compelling set of programs for encouraging investment
  • exposing local METS companies to global supply chains
  • providing an environment where technology can be integrated from universities and the ICT sector into the resources sector.

2. Success factors for METS companies

Successful METS companies were found to exhibit certain consistent behaviours. These include the ability to:

  • build relationships with relevant resource and energy companies
  • understand the issues and problems of those companies
  • provide innovative solutions to the problems those companies face.

Technology readiness was found to be a key leading indicator for SMEs that successfully delivered against success factor three - provide innovative solutions to the problems those companies face.

Economic indicators

The study recommended the following key lagging indicators be used for measuring ongoing economic activity and growth for the South Australian METS sector:

  • Contribution to Gross State Product
  • Export revenue as a percentage of sales

In an environment of depressed commodity prices a challenge now exists for the South Australian economy to grow the METS sector contribution of GSP from the current 2.6% to the national average of 4.7%.

A target of transitioning export sales from 10% to 15% to total sales has also been set.

Specific report recommendations and current actions

Recommendation

A loan pool is established for METS companies in order to encourage investment and to be repaid based on subsequent incremental profits earned by participating companies.

Current activity

The 2016-17 State budget includes a $60M South Australian Commercialisation Fund consisting of two programs to support and nurture early-stage start-up businesses with high growth potential to commercialise new technologies.

Recommendation

MIPO’s existing programs should increase their focus toward facilitating “technology integration” for METS companies.

Current activity

This recommendation has been adopted as part of the Mining and Petroleum Services Centre of Excellence program. A greater focus now exists on commercialising technologies and integrating university research. Recent examples include the UniSA/IPACS/Santos “Predictive Analytics” collaboration aimed at transferring Oxford University capabilities into local industry and universities.

Recommendation

Harness university capabilities by issuing vouchers to South Australian METS companies so they can buy research that will assist them in meeting technology gaps in their value proposition.

Current activity

This recommendation has also been implemented. The Innovation Voucher Program provides funding of up to $50,000 for a company to access external research aimed at solving technical problems that the company cannot solve themselves. Recent examples include the University of Adelaide / Minotaur Exploration Ltd collaboration to evaluate mineral assets (kaolin) for application as a lightweight proppant.

Recommendation

BHP Billiton to take a leading role in MIPO’s technology integration program.

Current activity

As part of its commitment to the Mining and Petroleum Services Centre of Excellence, BHP Billiton has to date committed $6.4 M towards development of key research and supply chain capabilities within South Australia. BHP Billiton also continues to sit on the MIPO Advisory Council and Global Maintenance Upper Spencer Gulf board.

A copy of the full report can be obtained by emailing paul.goiak@sa.gov.au