MINING INDUSTRY

The Hon. R.P. WORTLEY (14:50): I direct my question to the Minister for Regional Development. Will the minister update the chamber on the continuing interest among foreign companies in making significant investments in South Australia's mining sector?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:50): I thank the honourable member for his important question. South Australia has drawn intensive interest from foreign investors in recent years, particularly in the mining sector. While a lot of attention has been drawn to the level of Chinese investment in this state, I was delighted last month to attend the formal signing of a $114 million joint investment deal between Mitsui of Japan and Uranium One of Canada to develop mining projects in South Australia. Senior executives of Mitsui flew to Adelaide from Tokyo for the signing ceremony.

Mitsui has acquired a 49 per cent interest in the Honeymoon uranium project and Uranium One's Australian exploration portfolio. This portfolio includes the Goulds Dam and Booleroo projects and other prospective tenements on the Stuart Shelf and Eyre Peninsula. Mitsui's significant investment in this joint venture will allow commercial production to begin at the Honeymoon mine.

Members may be aware that this government approved the mining and rehabilitation program for the Honeymoon mine in early 2008. Amid the current economic uncertainty sweeping the world, this government is delighted that this joint venture partnership has allowed site development work to begin at the Honeymoon uranium project.

Mitsui's joint ventures with Uranium One are a prime example of the confidence international companies continue to have to invest in this state. While Mitsui's business interests around the world are extremely diverse, this joint venture marks the Japanese company's entry into the uranium industry. The South Australian government is extremely pleased that Mitsui has chosen this state for such a milestone investment.

Honeymoon will be capable of producing some 400 tonnes of uranium oxide a year, resulting in an expected mine life of six to seven years. Based on this production rate, that annual export contribution to the state is estimated to be about $40 million. This project is also expected to eventually create about 60 new jobs at the mine, generating added value for the state.

We all acknowledge that, particularly in the case of uranium exploration and mining, the public has a right to expect appropriate regulatory scrutiny of companies operating here. This is precisely what this government has sought to achieve at Honeymoon and other potential mine sites while at the same time still encouraging exploration and development, and this is never a simple balancing act. That is why I was heartened by comments at the signing ceremony in which the joint venture partners supported this government's contention that in South Australia we have struck the right balance.

South Australia remains an active pro-mining, pro-uranium and pro-foreign investment state, with an emphasis on getting things done. While we welcome Japanese interest in the Honeymoon project, Chinese investment in our state also underlines the confidence foreign investors have in our mineral sector. Chinese investors are continuing to seek opportunities for investing in South Australia, even amid the current global financial downturn. Just last month the Shandong Geo-Mineral Resources Bureau was the most recent Chinese delegation to be received by PIRSA Minerals. The level of interest may change amid the slowdown in China's economy, with that country's GDP growing at an annualised rate of just 6.8 per cent in 2008, less than half the recently revised peak of 13.9 per cent achieved in 2007, but so far the signs are good that interest remains undeterred. That is not surprising when you consider the good reviews this state received in 2008.

International and impartial research by both the Fraser Institute of Canada and the London-based ResourceStocks magazine rate South Australia as one of a handful of preferred exploration and mining development locations in the world. We are certainly well ahead of any other Australian state in that regard. The Rann Labor government's policies in recent years have resulted in a massive increase in exploration and, while we can expect a slow-down from the record peak of $355 million in annual spending in the past financial year, the world-class discoveries that are a result of the past five years of exploration are still being translated into mining developments.

While funding for exploration has become tighter, we are still seeing some interesting new discoveries, sometimes in the least expected places. Just last month, Rex Minerals, an Australian junior exploration company based in Ballarat, Victoria, announced an exciting new copper, gold and uranium discovery at its Hillside project on Yorke Peninsula. This discovery is generating a lot of interest from other explorers in the state's mineral-rich Gawler Craton.

Yorke Peninsula hosts historic copper mines and numerous mineral prospects. Most South Australians would be aware of this state's colonial mining history owing a lot to the discovery of copper around Moonta, Wallaroo and Kadina. While the Copper Coast contribution to South Australia may previously have been regarded as historical, the Rex Minerals discovery could signal a renaissance. This is the most significant contemporary discovery using modern concepts and techniques to explore undercover rocks. The area is the southern continuation of the geology in the mineralised area around Olympic Dam, Carrapateena and Prominent Hill.

The discovery at Hillside near Ardrossan confirms the potential extension of similar types of sporadic mineralisation through a belt of rocks over more than 700 kilometres. Exploration is in very early stages at the Hillside project and no economically viable deposit is yet defined, but results returned so far are comparable with early results from Prominent Hill. The mineralisation currently indicates separate copper, gold and uranium-rich zones.

The announcement by Rex Minerals is a further sign South Australia's mining industry is weathering the international economic storm and again registering significant discoveries. Indeed, geoscientists from PIRSA recently revealed that the age of the ancient volcanic rocks responsible for the Burra mine copper mineralisation could be as old as 797 million years.

This age data is part of a project funded by the state government's internationally renowned PACE initiative and is providing potential prospectors with a new understanding of the geology and origin of the Burra ore body. It also confirms that areas of the Adelaide Geosyncline previously regarded as having low prospectivity for copper mineralisation now definitely warrant further exploration. Impressive projects such as this can only lead to increased interest in our state's untapped mineral potential.

This government expects mining companies to look through the short-term weakness in the market due to the current global downturn and continue to work towards the long-term goal of tapping South Australia's huge mineral potential. That is why I was also heartened to read at the weekend that OZ Minerals has informed the ASX that construction of the Prominent Hill copper and gold mine near Coober Pedy essentially is complete. OZ Minerals' Andrew Michelmore told the ASX last Friday that the company expects initial production to begin at the project by mid-February. That is great news in the current climate of uncertainty that is facing most international mining companies.

With all this activity going on in South Australia, what do we hear from the opposition? I will quote some rather irresponsible comments from Mr Pisoni of the opposition, as follows:

The unfortunate thing is that Mike Rann is fixated on a mining boom, where he's promised jobs and revenue for South Australia from a mining boom that we now see hasn't happened and won't happen with the collapse of mining shares and the collapse of mining jobs across Australia.

That could not be further from the truth. Rather than missing the boat, as Mr Pisoni also claimed in his comments, this government has pulled out all stops to ensure that, even with the uncertain global economic outlook, the mining industry remains confident in our state's future. Those opposite want to live in denial, denying the advances made in the past seven years to tap this state's mineral wealth and the important role that this government's confidence-building policies have played to generate jobs and new investment.

This state is still on track to deliver job-generating mining projects focused on world-class ore bodies. We are delivering on the promised jobs; we are delivering on the promised investment; and, unlike the rest of the country and the world, mining projects are going ahead rather than being put into mothballs. Rather than talking down mining activity in this state, the opposition would be better served in supporting this government's initiatives and supporting the mining sector as it invests to unlock the potential that lies beneath the earth.