South Australia prioritises mining sector

Last week’s pledge by the South Australian government to prioritise growth in the resources sector have met a cool reception from the state’s chief mining lobby group.

The South Australian Chamber of Minerals and Energy (SACOME) welcomed Premier Weatherill’s economic priority statement which named the resource sector in first place, but said the government’s approach was “mostly a case of business as usual”.

“It is essential this commitment is backed up by action,” SACOME said.

SACOME chief executive Jason Kuchel said government objectives to confirm commercial solutions to provide for bulk mineral export infrastructure from the Spencer Gulf showed commitment to the industry’s urgent need for new port infrastructure.

“Without this infrastructure many of the identified jobs will be delayed or perhaps lost for a full economic cycle,” he said.

However, Kuchel said the pressures on struggling junior explorers demanded more than a “business as usual approach”, one which incorporated “doubling efforts”.

“An example of doubling efforts would be more government investment into direct action programs to benefit the struggling mineral exploration sector in South Australia,” Kuchel said.

“In the last three years, mineral exploration has dropped from $328million to $116million whilst petroleum exploration has risen from $174million to $516million in the same period.

“The state government should take measures within programs they already run such as the discovery collaborative drilling program within PACE.”

The Plan for Accelerating Exploration (PACE) includes a two-year, $4million initiative to support exploration in the state, and has facilitated additional state mineral production of $2.4billion over the past decade.

Kuchel suggested increasing funding to the discovery drilling program to a “healthy amount” of $5million per year, and doubling the funding cap to $200,000 to attract more junior explorers to South Australia, and help existing explorers.

“Whilst the government should be applauded for its strong regulatory reputation, the reality is that in our time and money constrained world some very good projects will starve of funds before they get their approvals through,” he said.

New objectives of the South Australian Government (to complete by 2017)

  • Increase the value of our mineral and energy resources production from $7 billion (2013 baseline) to $10 billion per annum (by 2017), creating an additional 5,000 jobs.
  • Double the number of Aboriginal people working in the mineral and energy resources sectors from 250 to 500.
  • Increase private investment in mineral and energy resources exploration expenditure from $648 million in 2013/14 to $1 billion per annum in 2017.
  • Ensure $150 million of contracts are awarded through Industry Capability Network SA to local suppliers for the minerals and energy sector over the next three years.
  • Increase cumulative investment in exploration and appraisal to $430 million within the South Australian Cooper-Eromanga basins.
  • Expand investment in renewable energy to be on track to increase the proportion of electricity generated from renewable sources from 39 per cent in 2013-14 to 50 per cent in 2025.
  • Create a substantial and sustainable bioenergy industry.
  • Attract a further 10 service companies with a significant presence in South Australia.
  • Attract a further 3 resource companies with head offices in Adelaide.
  • Establish South Australia as a mining services hub for the nation.
  • Successfully diversify 20 non mineral and energy suppliers into the minerals and energy resources sector.
  • Increase cumulative investment in South Australian offshore petroleum exploration to reach $1 billion.

Goals to achieve within 12 months to ensure further success

  • Increase private investment in mineral and energy resources annual exploration expenditure from $648 million in 2013-14 to $750 million in 2014-15.
  • Confirm the preferred commercial solutions to bulk mineral export infrastructure on Spencer Gulf.
  • Assist BHP Billiton to the first stage of unlocking the full potential of Olympic Dam through its commencement of construction of the Heap Leach Demonstration Trial.
  • Facilitate $50 million of local contracts through the Industry Capability Network SA from approved and emerging resources and energy projects.
  • Progress implementation of recommendations of the Roundtable for Oil and Gas Projects in South Australia with 90 of the 125 recommendations underway.
  • Achieve $140 million in exploration and appraisal investment within the South Australian Cooper – Eromanga basins.
  • Facilitate collaboration between industry and researchers to commercialise technology and innovations through the Mining and Petroleum Services Centre of Excellence by approving 10 projects and developing a further 10 in the project pipeline by the end of the 2014-15 financial year.
  • Develop export readiness and business development capabilities for 68 companies so they can meet the supply and procurement demands of local and international mining and energy projects.
  • Maintain South Australia’s international ranking and reputation for best practice policy and trusted regulation of the resources sector in the annual Fraser Institute Surveys and other independent resource industry surveys.

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