Gold Production

The Hon. T.R. KENYON (Newland) (14:04): Thank you, sir. My question is to the Minister for Mineral Resources and Energy. Minister, can you update the house on the state of South Australia's gold sector amid the current challenging business climate for the mineral resources industry?

The SPEAKER: Before the minister starts, I call to order the members for Hartley—

Mr Pederick interjecting:

The SPEAKER: Oh, dear! The member for Hammond was already on two warnings.

Mr Pederick: Only one, sir.

The SPEAKER: Well, I have two here, so the member for Hammond will withdraw for the next half hour.

The honourable member for Hammond having withdrawn from the chamber:

The SPEAKER: I also call to order the members for Chaffey (who has already departed the chamber once today), the member for Mitchell and the member for Morphett, and I call to order the leader and I warn him for the first time and I warn him for the second time owing to his egregious conduct before the minister had begun to debate the matter. Minister.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:05): Thank you, Mr Speaker, and I would like to thank the member for Newland for his question and note his spectacular support for all things mining.

South Australia ranks second behind Western Australia in terms of the percentage of the country's economically demonstrated resource—gold. South Australia is home to the world's fourth largest gold resource at Olympic Dam, where it is mined along with copper. In fact, it is not unusual to find gold within copper deposits. South Australia produces the precious metal from its Prominent Hill and Kanmantoo copper mines, and OZ Minerals is continuing to make progress towards developing the world-class Carrapateena copper-gold project south of Olympic Dam.

Aside from copper-gold deposits, South Australia also has a stand-alone gold mine in Challenger, which has operated since 2002. Challenger is not alone. Slowly but surely, we have been adding new gold mines to our tally of mineral assets. The White Dam Gold Production Joint Venture and the Drew Hill Exploration Joint Venture, with partners Exco Resources and Polymetals Mining Limited, first poured gold in April 2010.

White Dam was originally expected to have a 30-month mine life. Six years on, White Dam has already produced more than 150,000 ounces of gold. Only last month, mining resumed at White Dam to further extend the mine's life. I am also pleased to inform the house and members that a major milestone has been achieved at Havilah Resources' Portia project, with the mining of its first gold ore 3½ months earlier than initial expectations. Portia's next major milestone will be passed when the processing of the stockpiled ore begins when construction and commissioning of the processing plant is completed next month.

Earlier this month WPG Resources was granted a mineral lease over its Tarcoola goldfield, south of the existing Challenger gold mine, and finalised the purchase of the Challenger gold mine itself. The acquisition of the Challenger mine and the new lease for Tarcoola are a key step forward towards WPG's multi-pronged approach to develop a regional gold play in the Gawler Craton. WPG's position has the potential to extend the life of the Challenger mine and to utilise the project's existing infrastructure as a central processing facility.

Additionally, WPG is also developing another gold project near Tunkillia, also in the Gawler Craton region, which could again potentially use the processing facilities at Challenger. In 2014-15, South Australian gold miners produced 10 tonnes of gold valued at $484 million, contributing $17.98 million in royalties for South Australians.

The majority of South Australian gold is used domestically rather than exported and, in contrast to recent lower commodity prices, the average price achieved by South Australian gold miners has remained buoyant and steady between $1,400 and $1,700 per ounce during the past five years. In these difficult times for the resources industry it is too easy to sit back and focus on projects that have been cut back—

Mr Tarzia interjecting:

The SPEAKER: The member for Hartley is on two warnings, and he will depart for the remainder of question time.

The honourable member for Hartley having withdrawn from the chamber.

The SPEAKER: Apparently, there was much contretemps during private members' time.

The Hon. A. KOUTSANTONIS: Yet, sir, South Australia continues to press forward on many fronts. Gold is one of those areas where investment is continually made on mine development. Some of these mines may not be huge projects by any stretch of the imagination, but they are employing South Australians, generating economic activity in the regions and helping maintain confidence in the industry until commodity prices swing back in their favour. Collectively, they are an important element in the overall South Australian economy, and I for one welcome the progress that they are making. And, no, I have not been speaking dirty to the member for Newland.