Despite last year’s decision to shelve the Olympic Dam expansion, South Australia still has an ace up its sleeve in encouraging exploration and investment.

State government efforts in reducing red and green tape to encourage expenditure have already boosted the number of major mining projects in the state to 20 – with more applications pending.

Key to this strategy is a minerals exploration framework, which includes a commitment to make decisions in the shortest possible time, minimise red tape and simplify regulatory processes for timely decision-making.

SA is also leading a campaign to create a tax rebate scheme that would encourage explorers and facilitate swifter financial returns.

And then there are the state’s uranium resources, which total about 80% of Australia’s total uranium resource.

In December, BHP effectively scrapped its uranium division after it moved the Olympic Dam operation to the care of the base metals division. BHP has until 2016 to decide whether to forge ahead with the $A28 billion expansion of the copper and uranium operation, which has the potential to create one of the largest uranium mines, exporting 19,000 tonnes per year.

The deputy chief executive of the Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE), Dr Paul Heithersay, told Australia’s Mining Monthly the department had been successfully working to reduce the amount of red and green tape facing miners in the state.

“There’s been a comprehensive review on red tape reduction over time,” he said.

“There has been a commitment by the state government to reduce red tape, because it adds cost and uncertainty to the process.

“Provided people give us a fully documented application for a mining lease approval, we turn that around within six months.

“We have also improved our exploration licence approvals processes, putting it online to track the process.

“It’s very transparent.”

Heithersay said the government had cut out a lot of unnecessary processes.

“We’re working very hard to make processes streamlined and efficient, without cutting corners. We have to make sure our regulatory processes are rock solid,” he added.

“But on the other hand, we operate at the speed of business – not the speed of government.”

He said there had been disappointment in the state following the Olympic Dam decision, but there were a number of other projects that were accumulatively the same size.

“We have an amazing story in the mining sector in South Australia right now,” Heithersay continued.

“There are hundreds of mining projects in South Australia, including 20 major mining projects.

“We have rapidly gone up the scale. We also have between 30 and 50 projects in the pipeline.

“Things are moving very quickly. These projects range from iron ore to copper, gold and uranium, a whole range of minerals.”

Heithersay reminded delegates that SA was a major copper and gold producer already.

“We have some of the best copper and gold reserves in the world,” he added.

“Olympic Dam, on its own, is the fourth-largest copper deposit in the world and the biggest uranium deposit by a country mile.

“We host 80% of the world’s uranium. Most of the world’s uranium is ultimately going to come from South Australia.

“South Australia is also coming back as the second-tier iron ore producer in Australia and that’s a very welcome opportunity.”

Australia’s Mining Monthly visited iron ore miner IMX Resources, which operates the Cairn Hill Mine near Coober Pedy.

Cairn Hill produces about 1.7 million tonnes per annum and the company has also received positive results of a preliminary economic assessment for the nearby Mount Woods magnetite project, about 15km southwest of the mine.

IMX said existing key infrastructure and favourable metallurgy differentiated Mt Woods as an economically attractive, lower risk and feasible near-term development opportunity.

Rail and port capacity is available through the existing infrastructure used for Cairn Hill and the company is projecting a mine life of more than 25 years based on the production of 2.5 million tonnes per annum.

The project’s Snaefell deposit at Mt Woods has an inferred resource base of 569Mt, grading 27.1% Fe, in addition to other exploration targets including Tomahawk and Axehead.

Mine general manager Simon Parsons said the company was committed to long-term mining operations in the area and engaging with the local community.

“We are an iron ore/copper/gold deposit,” he said.

“Our iron in situ grade is about 52% iron and our copper grade is about 0.5%. We get about 30% of our revenue from copper.

“At the moment, we would probably be getting about $US115 a tonne, but it depends on the 30-day average price.

“We have been operating for a number of years and generating cash flow.

“We have existing relationships with the service providers and the statutory bodies, we have a stable and developmental-focused political jurisdiction and we own all our tenements.”

Parsons confirmed the company had received a positive result in scoping studies investigating the magnetite potential for the Mt Woods project, particularly the Snaefell deposit.

IMX managing director Neil Meadows continued: “We believe the Mt Woods project is a unique opportunity in the Australian magnetite industry as the infrastructure required to develop the project is already in place and being used by IMX’s Cairn Hill mine.

“As a consequence, unlike most pre-development and current Australian magnetite projects, Mt Woods does not require large-scale capital investment and is not reliant on third parties for new infrastructure in order to develop a potentially economically viable project.”

The South Australian Chamber of Mines and Energy also welcomed a recent state budget announcement of $6 million over four years to support a multi-site Mining and Petroleum Services Centre of Excellence.

An additional $4 million has been awarded over two years to extend the plan for accelerating exploration (PACE) initiative. And more than $500,000 has been allocated to fund an Eyre Peninsula Land Use Support program to help foster positive relations between explorers and landholders.

SACOME said the funding would help the mining and energy sector in South Australia to continue its growth, improve confidence and establish the state as a significant global jurisdiction for research and innovation in the sector.

But chief executive Jason Kuchel said significant changes were required at a federal level to boost flagging investment.

“Investor sentiment, particularly in regards to mineral exploration, is at its lowest level in more than a decade,” he said.

“Both major federal parties must commit to implementing policies to turn this around, in particular with the introduction of an exploration tax credit similar to the scheme operating in Canada, which is credited with much of that country’s exploration investment attraction.

“Our federal government needs to recognise the importance of this sector to the economy and take the necessary steps to ensure it continues to prosper.”

SACOME corporate social responsibility director Dr Nigel Long said there had been disappointment that the Olympic Dam expansion did not go ahead.

“But while there hasn’t been that step change that would have made a significant change to the industry in South Australia, we are very confident that there are other projects that will continue to develop over time,” he added.

“There are a number of companies that are moving forward, such as Rex Minerals, Iron Road and Arrium. There are a lot of things to be positive about in the industry.

“Companies also want to see that projects aren’t being bogged down in red and green tape.

“And if you can have an approvals process that is as streamlined as possible, then that’s an attractive feature.”

MiningNews.net sister publication Australia’s Mining Monthly was a guest of Advantage SA, which promotes the state through partnerships with government and the business community.