WHYALLA RARE EARTHS COMPLEX

The Hon. CARMEL ZOLLO (14:43): I seek leave to make a brief explanation before asking the Minister for Urban Development and Planning a question about investment opportunities in Whyalla.

Leave granted.

The Hon. CARMEL ZOLLO: Whyalla is one of South Australia's most important regional cities. As a base for OneSteel, it has become a major employer for both the mining industry and steelmaking. Operation Magnet has provided the city with a new lease of life and changed the landscape in terms of the red dust that once bedevilled the city when crushing occurred at the steelworks. With so much of the workforce of Whyalla relying on OneSteel for its livelihood, will the minister provide an update on any investment opportunities that could diversify the city's industrial 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) (14:44): I thank the honourable member for her important and timely question. It was with great pleasure that I was invited to Whyalla by Arafura Resources earlier this month to attend an event to announce that the city had been selected as the preferred site for a $1 billion rare earths complex. I can happily inform members that Arafura and OneSteel have reached an agreement on access to land zoned for industry just north of the existing steelworks. To quote the Mayor of Whyalla, Jim Pollock, 'This is great news for the City of Whyalla.'

Whyalla was chosen after an exhaustive national search by Arafura Resources for a suitable site for its major investment. The proposed rare earths complex is expected to create a significant long-term economic boost for this important city and the surrounding region in terms of both jobs and investment. The entire complex is expected to occupy a total area of 730 hectares. Arafura Resources advises me that Whyalla was chosen due to the city's standout qualities such as the availability of land close to associated infrastructure and access to a highly skilled workforce.

While the state government was not required to provide any financial inducements to secure the decision, we did work long and hard through PIRSA and the Department of Planning and Local Government and also contributions from the Whyalla Economic Development Board and council to convince Arafura of the merits of choosing Whyalla as the best site for this project. South Australia welcomes and supports initiatives to further develop mineral production in this state that will further underpin our vibrant and sustainable resources industry. While we have already achieved the target in South Australia's Strategic Plan of increasing the value of minerals production to $3 billion four years early, we are still aiming to increase the value of minerals processing to $1 billion by 2014. With Arafura Resources predicting production to begin on site by 2013, this will no doubt assist us in achieving that target.

As Minister for Urban Development and Planning, I have decided to declare the Arafura Resources rare earths complex at Whyalla a major project, thus triggering the most rigorous development assessment process available in South Australia. This is a very significant project and requires the highest level of scrutiny. The scale and complexity of the proposal and its potential to contribute significantly to employment in the state's economy clearly satisfy the significant economic test required to justify a declaration. The large-scale production and use of chemicals and the need for proper risk management also satisfy the environmental test, while the improvements to the diversity of employment and skills within Whyalla's workforce satisfy the test of social importance.

It is important to note that such a declaration will enable the independent Development Assessment Commission to set the guidelines for the proponent to undertake an environmental impact study or a public environment report, whichever the commission deems to be the most appropriate. As I have publicly said, I would expect that, for a project of this scale and complexity, it would be a full EIS, but that is obviously up to the commission. Major development assessment is also the only statutory process in South Australia that is recognised by the commonwealth under its environmental protection and biodiversity conservation law.

This proposed investment will set Whyalla on the path to being Australia's gateway to the world in terms of exports of rare earths. While the resource for the complex is to be sourced from Arafura Resources' Nolans Bore deposit in the Northern Territory, having a facility that can refine these materials in South Australia opens up supply opportunities to local mine operators with access to these commodities. Although South Australia does not have a stand-alone rare earths prospect, there are a handful of projects that could produce this material as a by-product of mining for other resources. Having a rare earths complex at Whyalla suddenly makes it more feasible to process these materials.

I am aware that this project is still in its very early stages and it will obviously need to satisfy all statutory approvals and requirements, but if Arafura's confidence in achieving such approvals is any indication then we can expect a major $1 billion investment in the Upper Spencer Gulf. Such a facility is expected to create more than 1,000 jobs during the two-year construction phase and about 200 to 300 ongoing jobs at the processing site. An investment on such a major scale will no doubt act as a catalyst for attracting support industries to not just Whyalla but also the Upper Spencer Gulf region.

Arafura Resources' plans to use the Adelaide to Darwin rail line to transport the rare earths from a siding at Rankin Springs, which I think is about 100 to 150 kilometres north of Alice Springs, to Whyalla also make use of that important piece of rail infrastructure. It is interesting that, where significant ore has been railed north to the port of Darwin, there is an opportunity here for the rail to bring ore in the reverse direction.

For the uninitiated, rare earths are in demand worldwide for use in lasers, computer and television screens, fibre-optic cables, iPods and mobile phones. They are also essential for developing green technologies such as low-energy light bulbs, wind turbines, rechargeable motor vehicle batteries for electric and hybrid cars, high-strength magnets used in the motors of such cars, and other magnets. With China, the major source in the global supply of rare earths, announcing that they will be significantly curtailing exports of this material, opportunities have opened for companies such as Arafura Resources to enter this market. The building of the rare earths complex is consistent with this government's desire to broaden the state's regional economic base by expanding its mining and mineral processing industry and enhancing the development of key regional infrastructure.

Arafura plans to source staff and supplies from the Whyalla region for the rare earths complex and will work with local organisations to provide pre-employment and on-the-job training programs. Community benefits derived from Arafura's planned operations in Whyalla include jobs and training for local people, providing skills that will last beyond the life of the project; support for regional economic development; sharing of resources and infrastructure developed for the complex, such as power, and less reliance on water from the Murray Darling river system due to the construction of a small desalination plant; such a plant will provide the adjoining salt works with brine discharge for use in its operations; about $100 million annually into the local economy, primarily through wages and long-term business stimulus; and Whyalla can be expected to be recognised globally as Australia's gateway for rare earth oxides.

As I said before, these are early days in the process of finalising the mine at Nolans, but this government is quite excited by Australia's potential as a supplier of rare earths and the opportunity for Whyalla's involvement.