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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2015-06-04 Daily Xml
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Mining Sector

Mr HUGHES (Giles) (15:30): Just over one year ago, I gave my maiden speech in this chamber. In the speech, I discussed the importance of mining in the Giles electorate and the importance of mining as a contributor to the economic wellbeing of our state. I pointed out the significant increase in the number of jobs in the iron ore sector in South Australia as a result of the export of haematite. Iron ore mining jobs went from approximately 250 jobs in 2002 to close to 1,500 jobs at the time of my maiden speech.

In the speech, I did flag a serious concern when I said that we were entering a period of oversupply in the iron ore market, and we were doing so at a time of softening demand from China. The consequences of those two factors are now with us, following the mothballing of two iron ore mines in the north of our state and the associated job losses. The headline figure from Arrium, as a result of the mothballing of Peculiar Knob near Coober Pedy, was the loss of 580 jobs. Since that announcement, there have been further job losses near Whyalla in the Middleback Ranges. The first casualty in South Australia due to the fall in iron ore prices was the magnetite exporter, IMX.

Arrium has gone from exporting close to 13 million tonnes per annum to nine million tonnes through its port at Whyalla. There is ongoing uncertainty about the future of iron ore prices. Currently, the price is bouncing around the $62 a tonne mark, but it did recently go under $50 and it could go under $50 again. The impact of job losses in Whyalla has been significant with additional jobs lost at the steelworks, independent of the iron ore price. The impact of the mothballing of Peculiar Knob was not concentrated in one community, given the fly-in fly-out nature of the operation.

One community that has experienced concentrated job losses is Roxby Downs. I said in my maiden speech that Roxby Downs had taken a major hit with the loss of approximately 800 jobs on the heels of the decision not to go ahead with the expansion. There have been additional job losses since then, partly as a result of operational problems. Unfortunately, further large job losses look likely in order to drive productivity improvements. By the time the job losses have finished, we might be looking at a figure not far short of 2,000 over a period of a few years.

When you consider that the population, not counting fly-in fly-out workers, was 5,032 in 2014, you can appreciate the magnitude of the losses. The impact on employees, families and Roxby Downs based businesses has been very hard indeed. Clearly, Roxby Downs and the Olympic Dam mine will be there for many years to come and, looking to the future, there is the potential for additional growth. The next few years, however, are going to be very difficult.

The two major population centres in my electorate are undergoing major challenges. The two centres differ when it comes to demographic make-up and population movement. Whyalla has a relatively stable population with a large number of long-term residents. Roxby Downs experiences a far greater population turnover, with census figures indicating that 28 per cent had arrived in the year before the census and 58 per cent of the population did not live in Roxby Downs five years prior.

Roxby Downs does have long-term residents, but there is a large number of people who work there for three to five years before leaving. We need to turn our minds to how we can assist the north of our state over the coming year or two. We cannot control commodity prices but, as I said in my maiden speech, we can control how we plan as a state to take advantage of our mineral resources over the long term. There are a number of specific things that we can do that I intend to canvass over the coming months. Although exploration and mining have taken a hit, they will remain an important element of the state economy.

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