CENTREX METALS

The Hon. CARMEL ZOLLO (15:19): My question is to the Minister for Urban Development and Planning. Will the minister outline the decision by the Foreign Investment Review Board to approve a joint venture agreement between Centrex Metals and China's WISCO?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:19): Last month, I informed honourable members of my decision to grant conditional approval to Centrex Metals to establish bulk handling facilities at Port Lincoln. That approval marked a further significant step in the emergence of a new mining industry on Eyre Peninsula. It was also an important step in the development of South Australia's mining industry and the state's re-emergence as a major supplier of iron ore to the world.

I am pleased to be able to follow up that information with news that the Foreign Investment Review Board has approved a $271 million investment by China's Wuhan Iron and Steel Company (or WISCO) in Centrex Metals. Centrex Metals informed the Australian Stock Exchange that the FIRB approval is unconditional and allows China's third largest steelmaker to take a 60 per cent share in the Australian iron ore company. The FIRB's approval is an important step in the continued revitalisation of South Australia's mining industry since this government took office and the state's emergence as a significant iron ore supplier to China.

I met several representatives of Wuhan and its subsidiary WISCO during my visit last month to China Mining 2009 in Tianjin. During those talks I expressed my support for foreign investment, including capital from China, in our mineral resources sector. The South Australian government further demonstrated its support in a letter to the federal government supporting WISCO's investment in the Centrex Metals Wilgerup project.

I was extremely delighted by the enthusiasm generated in China about prospects in South Australia, including WISCO's investment in Centrex. Now that the Foreign Investment Review Board has cleared the way for that company to play a role in developing our mineral resources on Eyre Peninsula, I hope that will encourage WISCO to establish a regional office in Adelaide to support its investment in South Australia. China's investment in South Australia will assist companies such as Centrex to develop iron ore projects throughout the state and provide an alternative supply of resources to the major producers.

Commercial mining at Wilgerup is expected to begin after all statutory approvals are finalised, with the first shipment of iron ore scheduled for midway through 2010. The ten-year mining lease granted to Centrex Metals for its Wilgerup iron ore project on South Australia's Eyre Peninsula highlights the continued confidence of the state's minerals sector.

The Wilgerup project follows the success of OneSteel's Project Magnet in the Middleback Ranges, and it will create both jobs and export income to support the South Australian economy into the next decade and beyond. I am advised that the Wilgerup mine near Lock will create up to 150 jobs and inject $70 million a year into the regional economy. That is an important development considering the recent reduction in blue fin tuna quotas and the impact that will have on the local fishing industry.

The WISCO investment demonstrates that Eyre Peninsula will need a large and more significant port if it is to accommodate the huge cape-sized vessels required to transport iron ore to markets in China—and I referred to that yesterday in answer to a question from the Hon. Mr Brokenshire. I was also heartened to note that WISCO and Centrex have announced plans to embark on a joint-venture to develop a deepwater port at Sheep Hill Bay, near Tumby Bay, capable of handling cape-sized vessels.

South Australia has emerged as a competitive and reliable supplier of a wide range of resources, and that has attracted strong interest from Chinese investors. At the recent international China Mining convention in Tianjin, major Chinese mining companies acknowledged that South Australia is host to many world-class mineral and energy deposits and has great potential for further discoveries of copper, gold, uranium, iron ore and mineral sands. The number of Chinese-South Australian project partnerships has continued to grow this year, despite the recent global financial downturn, with more than a dozen significant mineral project investments by Chinese-based companies.

This government continues to support the numerous Chinese resource and investment groups that have entered into cooperative ventures with South Australian explorers and mining companies to harness this state's enormous mineral potential.