THEVENARD PORT FACILITY

The Hon. J.S. LEE (15:24): I seek leave to make a brief explanation before asking the Leader of the Government a question in relation to the port of Thevenard on Eyre Peninsula.

Leave granted.

The Hon. J.S. LEE: The Minister for Mineral Resources Development in this council has on a number of occasions emphasised government support for the mining industry. On 23 June, the minister was asked in this chamber to outline the Plan for Accelerating Exploration, and he said:

This government has worked hard during the last eight years to ensure that South Australia becomes a world-renowned destination for resource investment.

On Tuesday 2 June 2009, the minister provided a report to this council that the government had announced the go-ahead of the mining project Iluka Resources heavy mineral sands deposit in the Eucla Basin on the state's West Coast.

To provide you with an overview of the state's West Coast, the Eyre Peninsula provides a significant contribution to the state's economy. The broadacre production in the region produces 45 per cent of South Australia's grain harvest and almost 7 per cent of Australia's national export; 90 per cent of Australia's plasterboard manufacture relies on gypsum from the Eyre Peninsula, as does the national cement industry. The world's most significant zircon discoveries in 30 years in the Eucla Basin of Eyre Peninsula and exploration expenditure indicate promising long-term prospects for the state and national economy.

The port of Thevenard is the main export facility of western Eyre Peninsula. It is also the region's only major multicommodity port. Recent concerns have been raised by both the former and the current members for Flinders in another place, as well as industry leaders in the Flinders electorate.

With significant mineral prospects in the area, the Thevenard port facility is set to become the key export facility for the mining industry. However, the challenge is that, with the expected surge in activity, it will require upgrades and expansion to the existing port facility to ensure capacity and capability for increased export volumes and shipping activity.

The Eyre Peninsula Regional Development Board and a range of local stakeholders have facilitated the development of four planning documents in relation to the port of Thevenard which include the Eyre Peninsula Ports Master Plan (2009) and the Economic and Social Impact Study and Business Case (2009).

Thevenard is estimated to be currently operating at approximately 40 per cent of its total import/export capacity. The inability of existing rail line to sustain existing and increased gypsum volumes in the medium to long term and the 8.2 metre channel depth of Thevenard is a significant impediment for the current and long-term use of the port facilities, particularly as global shipping trends are moving towards utilisation of a larger vessel size.

The PRESIDENT: I remind the honourable member that she should get to her question.

The Hon. J.S. LEE: Thank you, Mr President. My questions are:

1. Can the minister outline the government's plans to address the key impediments at Thevenard to ensure that the port remains internationally competitive?

2. Will the government support any of the recommendations that have been put forward by the Eyre Peninsula master plan, including the deepening and widening of the Yalata Channel at Thevenard?

3. With the emerging mining and resources sector boom that the government has been constantly reminding us of, what action will the government take to implement the necessary infrastructure upgrades at Thevenard to sustain and expand the region's economic base?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Industrial Relations, Minister Assisting the Premier in Public Sector Management) (15:28): I thank the honourable member for her question but I just remind her that some time before she came into this place, a former government—a Liberal government—privatised the ports in our state. So, now, of course, Flinders Ports—

The Hon. S.G. Wade interjecting:

The Hon. P. HOLLOWAY: So, you think we should put taxpayers' money into private infrastructure, do you?

Members interjecting:

The Hon. P. HOLLOWAY: The point I am making is that Flinders Ports is responsible for the ports in South Australia. I accept the honourable member's point that Thevenard is a less than ideal port. I was over there earlier this year when Iluka launched its new Jacinth-Ambrosia project, and while the port, as the honourable member says, is a fairly shallow depth, nonetheless it is adequate from the point of view of the Iluka exports and the gypsum.

I think the honourable member herself said in the question that there are some issues in relation to the rail line which, of course, is a fairly old track but, again, that is actually controlled, I think, by Genesee and Wyoming.

But there is a need for major port infrastructure within this state, and it is something the state has been addressing, but there are a number of ports that are likely to require upgrading, including other ports on Eyre Peninsula. Given the tonnages involved to make viable iron ore exports these days, obviously transport is a significant cost. One needs rail transport and also large ports that will handle Capesize vessels, which require depths of 20 metres or more, so there have been a number of investigations looking at ports on the Spencer Gulf side, and of course that is the sheltered side of the Eyre Peninsula and also closer to where most of the resources are kept.

There are a number of infrastructure programs under consideration at the moment. Of course, the one that is closest to the mineral projects in the north of the state is Port Bonython. OneSteel at Whyalla has also been looking at the possibility of deepening the port at Whyalla to take at least Panamax-size vessels, but there are also other proposals in relation to ports further to the south of Eyre Peninsula. Members would be aware that currently, as a short-term measure, exports of iron ore are due to be made out of Port Lincoln but there is investigation of other options south of Tumby Bay, so there is an amount of work going on.

Thevenard is the only multi-user port but, given the quantity of mineral sands produced and the fact that they are exported around to Geraldton in Western Australia, the depth of the port which takes vessels in the order of 20,000 to 30,000 tonnes is adequate to handle that sort of activity. If one is to get involved in bulk commodity export where you would be talking about not just a few thousand tonnes but tens of millions of tonnes of iron ore, then we would need very significant port infrastructure, and that is what the government has been looking at facilitating.

However, as I said, all current ports are operated by Flinders Ports, as a result of the decision to outsource those some years ago. In relation to future infrastructure, the government is aware of that, but inevitably we would expect that the industry would fund the vast majority of the cost because it will cost hundreds of millions of dollars, if not billions of dollars, for the sort of infrastructure that would be required for major bulk commodity exports.