Hillside Mine

The Hon. M.C. PARNELL (14:54): I seek leave to make a brief explanation before asking a question of the Minister for Water and the River Murray about the proposed Hillside mine on Yorke Peninsula.

Leave granted.

The Hon. M.C. PARNELL: Last week, the government announced it had offered a mining lease and associated infrastructure leases to Rex Minerals for its proposed Hillside mine on Yorke Peninsula near Ardrossan. The government's offer is said to be subject to the acceptance of 99 secret conditions. The mine proposal also includes a new water pipeline to carry some two gigalitres of River Murray water each year to the mine for the purpose of washing the ore and attempting to suppress some of the dust, including from the proposed rock stockpiles. My questions of the minister are:

1. As Minister for Water and the River Murray, were you consulted about this proposal?

2. Do any of the 99 secret conditions relate to the use of River Murray water?

3. In the inevitable eventuality of future drought and water restrictions for agriculture, will water to the mine also be restricted?

4. Does the minister believe that this proposal will be a good use of River Murray water, and what alternative uses for this water were considered?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:56): I thank the honourable member for his important question. Some of that question relates to another minister in another place, and I will refer those questions to him, but I can say that Rex Minerals made an application pursuant to the Mining Act 1971 for two leases and two licences to develop a copper, gold and magnetite mine near Ardrossan and export ore concentrate via the existing port of Ardrossan.

The Hillside mine proposes the extraction of copper, gold and magnetite initially through an open-cut pit with later mining occurring underground, I am advised. I understand that an open-cut pit approximately 2.4 kilometres long and one kilometre wide and 450 metres deep would be created under the current planning. Unwanted rock overlying the ore bodies is proposed to be stored on site with tailings being stored in a facility within the largest waste rock stockpile. Initial processing of the ores would occur on site, producing a slurry that will be transferred through a 12-kilometre long pipe to Ardrossan for de-watering and transfer onto ships at the existing port.

Rex Minerals submitted a mining lease proposal and management plan to the state government in support of its application. I am advised that the EPA assessed the mining lease proposal and management plan in November 2013 and submitted a response that examined potential impacts under the Environment Protection Act 1993 and Radiation Protection and Control Act 1982. The Department of State Development (formerly the department for manufacturing innovation, trade, resources and energy) has prepared an assessment report for the proposal with input and advice from the EPA.

On 28 July 2014, the government offered Rex Minerals a mining lease tenement that imposes, as the honourable member said, a number of conditions to manage any potential impacts. Rex Minerals has, as I understand it, 21 days to consider and respond to the offer and the conditions on which it is made. If Rex Minerals agrees to the conditions imposed by the government and a mining lease is granted, Rex Minerals will be required under the Mining Act to prepare a program for environmental protection and rehabilitation (PEPR) to outline how it will adhere to the conditions included in the offer. The EPA will work with the DSD and Rex Minerals to ensure that the PEPR adequately addresses any issues of environmental concern.

In relation to water impacts, I can say that mine de-watering is required for safe working conditions. Groundwater will be extracted, I am advised, from a fractured rock aquifer during the life of the operation. The fractured rock aquifer at the project site is saline, ranging from 10,000 to 50,000 milligrams per litre and, due to elevated salinity, its groundwater use is restricted to industrial use and is unsuitable for agricultural or horticultural purposes in any case. Rex Minerals proposes to use a combination of water sources for all processing.

Water sources include approximately three gigalitres per year from groundwater and approximately half a gigalitre per year from the SA Water pipeline. The groundwater component will be sourced from de-watering bores and in-pit sumps at the mine site, is my advice. Groundwater modelling reports indicate that, during the de-watering phase, groundwatering drawdown would be recorded up to about a kilometre away from the site and impacts to third-party groundwater users are not anticipated, I guess, because of the quality of the water and its salinity, as I alluded to earlier.

I will take those other questions that the honourable member asked that relate to another minister's portfolio to the minister in the other place and seek a response on his behalf.