Graphite Industry

Mr PICTON (Kaurna) (15:16): My question is to the Minister for Mineral Resources and Energy. Minister, what is the current state of South Australia's graphite industry?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:17): I thank the member for this important question about the commodity that is emerging as a new growth resource for the South Australian minerals sector. In recent years, South Australia's mineral resources strength has been achieved through the production of commodities such as iron ore, copper, gold, mineral sands and uranium.

To ensure we can unlock the full potential of these major resources, the state government has announced a long-term comprehensive Copper Strategy and has embarked on the process of designing a magnetite strategy. Meanwhile, gold producers continue to push forward on a number of fronts, and our mineral sands production has dropped back in the expectation that prices will improve in the medium term. One emerging area that is generating lots of excitement is graphite. I notice the member for Flinders is very excited.

Renewable energy and breakthroughs in battery storage that will allow solar PV and wind generation to overcome intermittency issues are driving demand for graphite. China has produced a majority of the world's graphite, but as worldwide demand for this commodity begins to steadily grow, explorers are seeking alternative sources. That is good news for South Australia. This state is blessed with more than 60 recorded graphite occurrences, with most of those centred on Eyre Peninsula, which is good news for the member for Flinders and his engagement with local landowners. I am sure he is very excited about all the community meetings he will be having very soon.

These are exciting times for this state as we continue to be a leader in renewable energy, and now we have the opportunity to contribute to the development of battery storage, which is very, very exciting, by providing the material that is required for rechargeable lithium batteries. These rechargeable cells are already being used in mobile phones, tablets and other electronics, but they can also be used in electric cars and microgrids to store energy generated from wind and, of course, the sun.

The battery industry is preparing for a surge in demand and they are scaling up their existing operations. These expanded factories will be looking for new and secure supplies in First World countries where the rule of law is applied and, of course, you have an open regime, like we do here in South Australia, which is the envy of all the states. Demand growth is expected to focus on the availability of larger and coarser flakes, and, luckily, here in this state, most of the recent discoveries have identified significant larger 'jumbo-size' flakes. These discoveries mean South Australia is poised to become one of those secure suppliers being sought by battery makers.

I recently approved the mineral lease for Lincoln Minerals to progress its Kookaburra Gully graphite project on Lower Eyre Peninsula. Lincoln Minerals is now required to prepare a program for environmental protection rehabilitation, which, once approved, will allow the project to move into the production stage. Should the PEPR be granted, Lincoln Minerals expects to invest $40 million to construct a mine and its processing plant north of Port Lincoln.

This project has the potential to employ 60 people during construction and a further 30 people working on the mine and its processing facilities. Add to that the opportunities for suppliers and providers of transport logistics and other services, there's a great potential to generate regional economic activity on Lower Eyre Peninsula and to diversify Eyre Peninsula's economy. Kookaburra Gully is just one of the graphite projects in the pipeline in South Australia. Archer Exploration is also seeking approval for its lease in the Campoona graphite project, and it's also looking to develop Carappee Hill—both near Cowell, just south of Whyalla.

We remain a magnet for investment in the mineral resources industry and even at this point in the price cycle. It is because we, as a government, promote this industry and promote mining in our state to generate wealth.