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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-06-02 Daily Xml
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MINING PROJECTS

The Hon. CARMEL ZOLLO (14:42): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about new mining projects within South Australia.

Leave granted.

The Hon. CARMEL ZOLLO: Less than eight years ago, there were only four operating mines in South Australia. It seemed to many that the worldwide commodities boom that had helped to boost the economies of Western Australia and Queensland was going to pass us by. That seems to have changed in recent years. Investment in mineral exploration has surged to a record $355 million. There are now 11 operating mines in South Australia and a strong pipeline of projects that will set up this state for decades to come. My questions are:

1. Will the minister provide details of the most recent mining project to officially begin production?

2. What does this sort of investment mean to jobs and exports for the state?

3. Are there any other projects on the horizon that might provide further support for this state's economy?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:43): I thank the honourable member for her most important and very timely question. I am delighted to inform the council that only last week the Premier took part in the official opening of South Australia's newest mining project at Prominent Hill near Coober Pedy. While copper and gold were first uncovered in 2001 by Minotaur Resources using data collected by the state government, the expeditious process by which this operation has evolved from exploration to production has been impressive by any measure—just six years to go from exploration to production.

It is a testament to the dedication of OZ Minerals and its predecessor Oxiana and the efficiency of PIRSA's minerals section that it took just five months from the time its mining lease application was lodged until mining was underway. I acknowledge at this point the contribution made by Dr Paul Heithersay and the team at PIRSA's minerals section in helping to steer this project through our state's regulatory approval process. Is it any wonder that the 2008 resources stock worldwide risk survey rates South Australia as the best place in the nation and the second best jurisdiction in the world for investment in mining?

Prominent Hill is expected to reach full capacity by the end of this year, and the copper concentrate it will yield is the highest grade of any concentrate being traded on the open market today. The mine is expected to produce up to 100,000 tonnes of contained copper and up to 70,000 ounces of gold this year. During its expected mine life, which is conservatively estimated at 10 years, Prominent Hill will deliver export earnings of about $6 billion. Recent exploration results show outstanding prospects for an expansion of the existing site, with a possibility of the mine life being extended until at least 2030.

This project is also providing other significant economic and social benefits, particularly for people in South Australia's regional and remote communities. At the height of construction, Prominent Hill provided employment for 1,500 workers, including a large number of contractors from country areas and Adelaide suburbs. OZ Minerals is also to be congratulated and recognised for its commitment to providing employment and training opportunities for local people in this area. Of its current staff of 580, about 75 per cent are South Australian.

The company's award winning pre-employment training program enables indigenous and non-indigenous participants with no experience in the mining industry to gain skills needed to win jobs in the sector. Since the program was launched in 2006, 34 trainees have successfully completed the course and taken up full-time roles with OZ Minerals. The fifth training program begins this month and is specifically designed for people from the Antikarinya community. During the past three years, OZ Minerals is estimated to have injected about $500 million into this state's economy, including $25 million in regional South Australia and $4 million in Coober Pedy.

Should shareholders approve the sale of OZ Minerals' other major assets to China Minmetals, Prominent Hill and nearby exploration leases will constitute the core holdings of the new-look OZ Minerals. Given that concentration of its operations in South Australia, this government is hopeful that OZ Mineral's new management team will give some serious thought to relocating the company's head offices from Melbourne to Adelaide.

Prominent Hill is one of a range of world-class mineral projects due to begin production within the next year. This month the government announced the final go-ahead for our newest mining project, Iluka Resources' heavy mineral sands deposit in the Eucla Basin on the state's West Coast. The Jacinth Ambrosia venture is considered the most significant new source of zircon found in four decades and signals the beginning of a significant shift in production of this resource away from Western Australia to South Australia. Iluka's investment in this project will contribute more than $470 million to the state's economy. Importantly for the future of heavy mineral sands mining in South Australia, Iluka and its partners continue to make exciting discoveries at other prospects within the Eucla Basin, such as Dromedary and Tripitaka.

PIRSA also recently offered a mining lease to Centrex Metals to develop its iron ore project at Wilgerup near Lock on Eyre Peninsula. Centrex Metals plans to develop a two million tonnes per year hematite mine with an estimated capital expenditure of $50 million at Wilgerup. Centrex expects to directly generate 120 to 150 locally recruited jobs and contracts, with an indirect employment multiplier of about three to one.

These are just a few of the world-class mining projects that are coming on line in South Australia. These projects are creating thousands of jobs in economic development for this state's regions and providing a valuable new area of support for South Australia's economy, alongside defence and technology. They are further evidence that this government's pro-business, pro-investment policies are continuing to pay dividends even as we face the tremendous challenges created by the global financial crisis.

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