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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-11-29 Daily Xml
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Olympic Dam

The Hon. T.R. KENYON (Newland) (14:38): My question is to the Minister for Mineral Resources and Energy. Minister, can you inform the house on any progress on the expansion of the Olympic Dam mine at Roxby Downs?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:39): I thank the member for his question and his keen interest and appreciation of the government's key role in supporting strategies that unlock the full potential of South Australia's mineral assets.

The eyes of the international investment community are on South Australia this week, with BHP conducting a briefing and site tour of its Olympic Dam project. After 30 years of producing copper, gold and uranium in this world-class ore body, we have only just begun to scratch the surface of its potential and the benefits that can be generated for South Australia. In the past few years, BHP has spent a lot of time and effort to try to work out the best options for delivering better returns to its shareholders and South Australia from the world's third largest copper deposit.

This week, investors and analysts from interstate and overseas have been brought to Adelaide so that BHP can better explain the investment potential for Olympic Dam. The move into the Southern Mine Area, which represents 70 per cent of the known resource, has created 120 new jobs, while the smelter maintenance campaign currently underway has generated new investment to improve the productive capacity of the mine and provided work for 1,300 contractors. Analysts were told BHP plans to spend $US800 million between financial year 2018 and 2021 on surface infrastructure and a further $3.1 billion on expanding the mine.

The surface work includes the ongoing smelter campaign and upgrades to its water infrastructure, electrolytic refinery and tailings storage. BHP also announced that a new remote operating centre based in Adelaide is part of the technology in development. Underground, BHP have 20 kilometres of new mine under development, with three new blocks in the Southern Mine Area. A third decline is being developed, the Whenan shaft is being refurbished and the underground rail line is being extended.

This week's investor tour has also been an opportunity to highlight the $2.1 billion brownfield expansion option. If approved by BHP, this option could almost double current capacity to 330,000 tonnes a year. Increased production from Olympic Dam aligns with the government's copper strategy target of tripling the state's production of the red metal to one million tonnes by the year 2030. Longer term investment options, such as scaling up a heap leach technology to increase the volume of copper production, have the potential to further build on the increased output from the brownfields expansion option.

While BHP has stressed that any investment must compete for capital against other options within the company's vast portfolio, quite frankly, with copper and gold prices rising and the shift down the cost curve at Olympic Dam, the fact that institutional investors and analysts have been flown here to be briefed about the positive aspects of these investments should send a positive message to South Australians about the prospectivity of mining and the future of the resources industry in South Australia.

We are seen as a very good jurisdiction to invest in the resources sector. Hopefully, we can maintain that mantle. The most recent Fraser Institute findings show South Australia as the highest ranked of the states. What can risk that, of course, are moratoriums on things like unconventional gas and things like land access—things all members opposite will espouse at the next election.

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