Magnetite Strategy

Mr HUGHES (Giles) (15:10): My question is to the Minister for Mineral Resources and Energy. Minister, can you inform the house of the nature of this state's iron ore resource and what can be done to unlock its full potential?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:10): I would like to thank the member for this very important question, as it goes to the priority this government has assigned to unlocking the full potential of our resources, energy and renewable assets as a driver of sustained economic growth.

Our rich endowment of iron ore has played a central role in the industrial development of South Australia and indeed the country. Much of the current surge in supply of iron ore from Australia, and in particular the Pilbara, relies on hematite, one of the various types of iron ore. Hematite is also known as a direct shipping ore because you can simply shovel it up and ship it out without very much in the way of value-add beyond crushing, screening and blending.

This is what Arrium has been doing since the initiation of Project Magnet, with hematite sourced from the Middleback Ranges. South Australia is also richly endowed with magnetite, another form of iron ore which, unlike hematite, needs complex processing, which may include pelletising, before it can be used as feedstock for the steelmaking process.

Here is the good news for our state: that processed magnetite product is highly prized by steelmakers because it contains lower levels of impurities and allows blast furnaces to operate more efficiently with lower carbon emissions. South Australia is in the box seat to provide the world with cost-saving magnetite at a time when global steelmakers are looking to become more efficient and reduce their carbon emissions in response to their communities' commitment to the Paris conference on climate change.

Within five years, the global demand for magnetite product is expected to pick up, which means suppliers need to be making investment decisions now, today, so that they are in the best position to be able to meet this new and emerging market. South Australia has three major magnetite provinces: the north and south Gawler Craton, and the Braemar formation. Currently, only Arrium mines South Australian magnetite, the majority of which goes royalty free into the Whyalla steel mill, and a small portion is destined for export.

Mr Speaker, you might be aware of news reports that last week I announced my intention to develop a magnetite strategy. This strategy will be an Australian first for this sector of the resources industry and mirrors the successful launch in February of a long-term comprehensive Copper Strategy for South Australia. The Copper Strategy has been well received, and I hope that we can achieve something similar with magnetite, providing a strategic pathway for future investment into South Australia.

With magnetite, much of the resource has been identified, and the trick will be gaining committed investment to getting it out of the ground, onto ships and into the world's steel mills. The magnetite strategy seeks to establish South Australia as the foremost supplier of quality magnetite to the world's steelmakers. To do that, we intend to lock in $10 billion of investment commitment in projects within five years as a major step towards an ambitious target of producing—wait for it!—50 million tonnes of magnetite production by 2030 for export.

The investment means jobs and opportunities for suppliers as we construct mines and the supporting infrastructure that will benefit our regional communities. It won't be an easy task, but I have been heartened by the positive response of the magnetite proponents—

Members interjecting:

The Hon. A. KOUTSANTONIS: —at a workshop held last week, best summed up by the comments of the South Australian head of the Chamber of Mines and Energy, Mr Jason Kuchel, who said:

The magnetite strategy is a welcome opportunity which will identify initiatives that can bring some of the state's extensive magnetite resources forward, including our magnetite-rich regions throughout the Eyre Peninsula and the Braemar provinces.

Last week's workshop helped identify—

The SPEAKER: The minister's time has expired. The member for Davenport is warned for the second and final time and the member for Mount Gambier is called to order. The member for Stuart.