Legislative Council: Wednesday, June 17, 2009

Contents

MINERAL EXPLORATION

The Hon. C.V. SCHAEFER (15:16): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about mining exploration.

Leave granted.

The Hon. C.V. SCHAEFER: Complaints have been received by my colleagues in another place that the South Australian Chamber of Mines and Energy (SACOME) and the South Australian government Resources and Energy Sector Infrastructure Council (RESIC) wield a disproportionate amount of influence on decisions made by the government. Can the minister outline what funding is provided to these two organisations and what it is used for? Is any money provided to smaller independent exploration companies? If so, how much, and what percentage is it of total funding?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:17): SACOME represents all the major mining companies in this state.

The Hon. C.V. Schaefer interjecting:

The Hon. P. HOLLOWAY: Yes; which is the large majority, I would have thought, of the industry. So, as with any peak industry body, I meet with SACOME on a quarterly basis. I respect its input, because it is the peak body for the industry. Whether or not members choose to join the peak body, obviously that is a decision for them. RESIC is a body that was established under the auspices of government. It is essentially a private sector body involving major resource companies within the state. Its role is to advise government, particularly on infrastructure needs and the broader needs of the industry.

The Hon. C.V. Schaefer: How much money do they get?

The Hon. P. HOLLOWAY: Well, not a great deal. RESIC is essentially an advisory body for government, but it plays a very important role. Yesterday we had a question from the Leader of the Opposition in relation to Port Bonython and the issue of exporting our commodities. As a representative of all the major mining companies within this state, RESIC is clearly a very important body that coordinates all the views of industry in relation to particular infrastructure issues, such as an export port.

Obviously the government pays close heed to advice that it gets from those two bodies, because they represent by far the bulk of the industry in this state. In relation to particular applications for funding under PACE, for example, they are considered on their merits by a different group within the department. Clearly, we believe in giving smaller exploration companies equal opportunity for those sorts of funds. Indeed, if you look at the funds given under the PACE program, I think by far most of the money goes to small explorers, because greenfield exploration, or exploration in new areas, is very much the province of small exploration companies. Larger companies tend to buy into projects once they have been discovered, and the cutting edge, high risk exploration tends to be undertaken by small companies. Indeed, some of the big discoveries in this state, such as Prominent Hill and others like Carrapateena, were made by small companies, all using data provided by the government—and in some cases, like Carrapateena, with RMG services funded by the PACE program.

Whereas RESIC and SACOME are very important bodies from the government's point of view in relation to getting advice on broader industry issues—and I meet with them regularly and consider their advice in relation to mining more generally—we recognise that small explorers are the heart of the industry. Unfortunately, at present, and as I indicated in answer to a question yesterday, because of the global financial crisis it is those smaller companies that will suffer the most in terms of finance, and that is why we have seen a dip in exploration expenditure at this time.