MINING INDUSTRY

The Hon. B.V. FINNIGAN (15:01): My question is to the Leader of the Government and Minister for Mineral Resources Development. Considering that when this government came to office more than 8½ years ago there were only four operating mines, can the minister provide advice on how the outlook for mineral investment in this state has improved under this government's supportive policies?

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) (15:01): I thank the honourable member for his very important question. South Australia's mineral resource industry had indeed been languishing when this government came to office in 2002, and steps were needed to create an investment climate that encouraged spending, exploration and mine development.

Since the plan for accelerating exploration was adopted in 2004, the investment in exploration in this state has climbed from $40 million a year to well above the $100 million we set ourselves in the South Australian Strategic Plan. Mine development has also been encouraged with PIRSA's one-stop approach to assessment and regulation of mineral leases. Annual mineral production exceeded the government's $3 billion target in calendar year 2009. By adopting these initiatives in an uncertain world, the South Australian government has provided a stable environment for companies making long-term and high-risk investments in the resources sector.

I am pleased to inform members that in just the last few weeks Hillgrove Resources approved the final investment decision on its 2 million tonne a year Kanmantoo copper gold mine in the Adelaide Hills. Initial construction work is expected to have already begun, making Kanmantoo the second metal mine to proceed in the Mount Lofty Ranges since the Rann government came to office. This follows on the heels of the opening in 2008 of Terramin's Angas zinc project near Strathalbyn.

Hillgrove, an Adelaide-based resource company listed on the Australian Stock Exchange, has decided to resume mining at the Kanmantoo site, which had previously operated until the mid-1970s. The decision by Hillgrove to go ahead with the Kanmantoo copper gold mine is great news for the South Australian economy. The project, which is located between Kanmantoo and Callington, will provide a significant boost to the local community, with the potential to generate more than 150 new jobs and the injection of $55 million a year into the South Australian economy.

I would also like to acknowledge the efforts made by Hillgrove to work closely with local community members and interest groups to develop its project. Formal community meetings have been held since mid-2005, and the Kanmantoo Callington Community Consultative Committee (KCCCC) has identified a range of issues, such as native vegetation, transport routes and water usage and their effects on the local communities that are being addressed by Hillgrove Resources as it develops this mine.

Many of the recommendations put forward by the community, as well as the company's responses, were used as a basis for development of the Mining and Rehabilitation Program (MARP) approved by PIRSA and to be implemented by Hillgrove. During the community engagement process, a number of high-risk issues were identified, such as those I have indicated. One such risk management technique led Hillgrove to enter into a memorandum of understanding with the District Council of Mount Barker for the council to supply water from its effluent treatment facility for mining operations, and Hillgrove proposes to process this water for reuse at the mine site.

The Adelaide Hills and areas to the north and south of Adelaide are part of a geological region of the state recognised as having a very high endowment of metals, precious metals and other mineral deposits and extractive resources. There is a historical perspective to prospecting and mining in the Hills; the first metal mine in Australia was established shortly after settlement, in the late 1830s, at the Glen Osmond mines. Since its beginnings in the Kanmantoo area in the 1840s, mining has made some significant contribution to the South Australian economy.

Between the 1840s and the 1880s underground methods were used to mine rich copper lodes until the 1970s, when a large open cut mine was developed at Kanmantoo to access larger, lower grade copper resources. This government looks forward to Kanmantoo once again producing ore, with the first output expected in early 2011 ahead of gold and copper production in the fourth quarter of next year.

Kanmantoo builds on the 12 operating mines already in existence in South Australia, which is a threefold increase on the projects in operation when the Rann Labor government came to office. This government is still confident that construction will be underway by the end of this year to increase the total number of mines in South Australia to 16. Behind that, we still have a pipeline of 20 to 30 world-class projects that will build on South Australia's global reputation as a reliable supplier of mineral resources.