Ministerial Statement

Mineral and Energy Resources

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:02): I seek leave to make a ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: I am delighted to inform the house that I have recently approved a mineral lease for WPG's gold project at Tarcoola in the gold arc of the Gawler Craton. Tarcoola has a probable ore reserve of 900,000 tonnes containing 74,000 ounces of gold. WPG is now required to prepare and lodge its detailed operating plans for the mine—a Program for Environmental Protection and Rehabilitation (PEPR)—so that the company can move to the next stage of mine development.

Tarcoola Gold has successfully negotiated and registered a native title mining agreement with the registered native title holders for the mine area—an important prerequisite for the approval of a mining lease. If the PEPR is approved, and subject to WPG raising the required financing, construction will be able to begin later this year on the mine located west of Glendambo. WPG plans to invest $16.7 million to construct the mine, employing about 68 full-time equivalent workers during production to produce about 20,000 ounces a year of gold.

WPG has big plans in South Australia, with a regional gold strategy in the Gawler Craton, building on this new mining lease in Tarcoola; its Tunkillia gold project; and the execution of the final agreements with Kingsgate Consolidated Limited to acquire the Challenger gold mine and its exploration assets just last month.

The nearby Challenger gold deposit was discovered with funding support from the South Australian Exploration Initiative, established by my predecessor, the late Frank Blevins. This initiative was a forerunner of the Plan for Accelerating Exploration (PACE) which has been running in South Australia for more than a decade and which supported the important deep drilling to extend the mine life at Challenger.

Challenger was the first major gold mine to open in South Australia in 100 years when it began production in 2002. Now, South Australia is home to the White Dam gold mine in the Curnamona province west of Broken Hill, and Havilah Resources is racing towards extracting first ore at the nearby Portia gold mine, and the list will continue to grow. Progress on the Tarcoola project highlights the foresight of the state's long-term investment in the significant economic potential of the original Challenger gold mine and our mineral resources across our most remote regions.

Fifteen years ago, Challenger was developed in an area that had no previous history of major mining developments. We can now imagine the very real prospect of Challenger becoming the epicentre of satellite operations as further gold discoveries in the region provide ore for the processing facilities at the mine site. The Challenger mine has operated successfully for more than a decade to produce more than one million ounces of gold.

WPG's strategy will extend the life of that mine and generate even more gold production from South Australia. I am also delighted to note the comments made by WPG executive chairman Mr Bob Duffin in the company's statement today to the ASX:

It has been a pleasure dealing with the Department of State Development, which is clearly strongly supportive of South Australia's growing mining industry.

Everyone who knows Bob knows he is not usually overly optimistic. The Department of State Development will continue to work closely with WPG through the assessment of its detailed operating plans. If approved, WPG has indicated that the mine construction and production at Tarcoola are targeted to begin in the second half of this year. Even in the middle of the downturn in the resources industry, South Australia remains an attractive destination for investment, and that is not just my word.

The highly regarded Fraser Institute Annual Survey of Mining Companies has again ranked South Australia at the top of the list, with the latest results putting South Australia in the top 10 of 109 mining jurisdictions for investment attractiveness. The South Australian government will continue to work with the resources sector to ensure the search for new discoveries and the build-up of the capacity of successful explorers to transition to successful mining companies.