One example sums it up. Before the 2014 collapse in oil prices, the emergence of a shale gas industry in the Cooper Basin looked to be a real chance. Beach Energy was advancing rapidly with an unconventional gas play, and had attracted Chevron to bankroll an ambitious fracking program worth more than $200 million.

The Labor state government didn’t waste time. It organised a steering committee and worked frantically with members from across government, the oil industry and the mining equipment, technology and services sector to get cracking on fracking.

It wanted to figure out how to supply its new frack industry with enough drill pipe, proppants and skilled workers to unlock the full benefits of the boom. 

Meanwhile, most other states were freezing the industry with endless inquiries and outright bans.

The collapse in oil prices crushed high hopes for petroleum, however, South Australia has remained undeterred.

It has instead turned its sights on copper. 

This time the state seems to have backed a winner in its determined efforts to rebuild economic activity and employment, which will take another hit with the closure of Holden’s Elizabeth plant later this year.

Copper looks like a winner because the supply and demand fundamentals are improving every year for producers, with consensus among analysts of a supply deficit from around 2020. 

There are no price shocks on the horizon to derail South Australia this time around, and any surprises are likely to be positive ones.

Even more significantly, South Australia has natural competitive advantages in copper that are begging to be developed into greater prosperity. 

The state hosts 68% of Australia’s 85 million tonnes of copper resources and reserves. It also has higher than average grades than the rest of the country, however, accounts for only about 25% of national production.

Against this background, the state government last year unveiled a copper strategy with the goal of more than tripling production from around 300,000tpa to 1Mtpa by 2030. If achieved, South Australia would lift Australia past Peru and the US to become the world’s third largest copper producer.

The SA copper strategy has a three-pronged approach to achieving its ambitious target — accelerate exploration and discovery, develop truly innovative infrastructure and services for the copper mining industry, and support the industry to build connections internationally and with the communities in which it operates.

While 1Mtpa is certainly a stretch target, there are reasons to believe South Australia could get there. After years of delay and disappointment, the expansion of BHP’s supergiant Olympic Dam is finally happening. Underground development has begun in the Southern Mine Area, which accounts for 70% of the resource footprint but is untouched after almost 30 years of operation. This is the first step along a path from 170,000tpa to about 500,000tpa over the next decade.

OZ Minerals, as operator of the state’s second largest copper mine, Prominent Hill, will also have a big influence. The 120,000tpa Prominent Hill mine will run out of reserves in 2028, however, OZ has achieved several mine-life extensions and hopes brownfield exploration success will produce more feed for the project. 

The company is also on track to bring the 60,000tpa Carrapateena underground mine into production in 2019, which could open another mining and production hub.

Beyond that, there are plenty of unknowns. The last of the state’s three operating copper mines, Hillgrove Resources’ 20,000tpa Kanmantoo operation, is looking for new reserves beneath the existing open pit and elsewhere in the Adelaide Hills. Havilah Resources hopes to develop its Kalkaroo copper-gold deposit in the Curnamona region, which has a JORC resource of 1.13 million tonnes of copper but is low grade and might produce only 30,000tpa along with more than 100,000 ounces of gold. Rex Minerals is waiting for a recovery in copper prices so it can raise finance for a 35,000tpa mine on Yorke Peninsula.

If everything goes right for existing copper miners and those with JORC copper resources, there is still at least 250,000tpa of additional production needed to achieve 1Mtpa by 2030. 

There is no doubt discoveries will have to be made, and they will be needed in the not-too-distant future to make a difference by 2030. 

South Australia has arguably the most prospective rocks in Australia on the Gawler Craton, and government is driving hard at encouraging exploration investment as the first of the three-part copper strategy. This includes a $20 million Plan for Accelerating Exploration (PACE) Copper fund, which is funding bold new geophysics and a pre-competitive drilling program on the Nullarbor Plain, where the target is magmatic nickel-copper sulphides.

Of course, exploration success can be a bit like planning for a lottery win, which is why the second part of the strategy – developing innovative infrastructure and services for the copper mining industry – could emerge as the real hero. 

The state’s goal is to go way beyond building a strong local METS sector. It wants to create an international copper development and research hub focused on big-ticket opportunities such as lean development, the digital mine, underground automation and processing technologies. 

Success in these areas would slash development and operating costs, and translate into much higher production from the copper resources that South Australia already has.

The way South Australia is shaping the hub is novel in itself, yet industry response already suggests the hub will flourish despite minimal government funding. The trick has been to capture the zeitgeist for innovation and collaboration, which finally seems to be seeping into the mining sector some five to 10 years after turning most other industries on their head.

The Copper Hub is led by a steering committee chaired by former OZ Minerals CEO Terry Burgess and hasmembers from government, the state’s three universities, the CSIRO, METS Ignited and top executives from BHP, OZ Minerals and Hillgrove.

Oversight of the hub is a natural step for Burgess, who is a member of SA’s economic development advisory board and president of the SA Chamber of Mines and Energy. He is also a passionate advocate for innovation and, since 2014, has chaired the steering committee for the Tonsley innovation precinct on the former Chrysler/Mitsubishi manufacturing site in Adelaide’s inner southern suburbs.

Tonsley was a bold idea back in 2010 when the state government bought the 61-hectare site and started selling its vision of campus-style innovation precinct for industry. After a slow yet steady start it has hit critical mass and is home to dozens of diverse, tech-driven businesses, including Siemens, Micro-X and Zen Energy.  It also houses Flinders University’s Science & Engineering School, which will be linked to the main Bedford Park campus via an elevated extension of the Tonsley rail line. 

There already about 1000 employees on site, which matches the size of Mitsubishi’s workforce when car manufacturing ended in 2008, plus thousands of students at the university and the TAFE.

The copper development and research hub began as an idea when copper strategy was being formulated and has snowballed since the release of a concept report in July 2016. 

By February, the steering committee was hosting a workshop of 80 delegates from copper producers, METS sector companies, universities, CSIRO and government. Collectively, they came up with a wish-list of more than 100 ideas they wanted to pursue to improve copper mining and processing. This was whittled down to 12 programs, which was released last month as the copper development road map at the state government’s inaugural Copper to the World conference.

The next steps for the hub will be to raise funding from its cross-section of supporters, hire a handful of staff and establish a physical presence, which Burgess strongly believes should be at Tonsley.

Burgess said he did not believe finding cash from the private sector would be a stumbling block, given the hub’s funding needs would be in the order of hundreds of thousands rather than millions of dollars. 

He said the hub needed to stand on its own two feet, with government providing the leadership to draw players together, most likely offering in-kind support along the way.

That just leaves the question of whether copper producers are ready to collaborate and share their ideas and efforts? Historically, miners have liked to keep a lid on competitive advantage wherever the can find it, as well as being conservative when it comes to adopting new practices.

Furthermore, Australia lags the world in all industry sectors when it comes to innovation. 

In a presentation to the Copper to the World conference, CSIRO director Jonathan Law said Australia spent big on R&D, ranking 10th globally in terms of R&D inputs, but was only 24th in terms of output.

His main point was that the “invent and build” of most of the new copper mining and processing technologies were beyond the time, resources and risk of a single miner or supplier. He argued integration between industry sectors and collaboration was essential.

Burgess believes this reality has been accepted by the copper industry in South Australia, which notably includes the world’s biggest resource house, and there is a strong desire for change.

“All of the groups that have come together in the early stages of the hub – the copper producers, universities, CSIRO and the METS sector – are saying this is a great idea,” he said. 

“There is violent agreement that this is what we should do.

“They want somewhere they can collaborate on technical advancement in the sector, and can see that it is going to benefit everybody. They fully understand that through collaboration and interconnectivity you could end up with much better results than people working away on their own.”

Burgess said there would always be certain areas in mining where there was competition, such as pegging tenements, geological models for discovery and pricing and marketing.

“But when it comes to making a better mining operation, and we have seen that particularly with safety, companies working together get the best outcomes,” he said. 

“Mining and processing is something on which we can collaborate.

“One of the other challenges for the mining industry is we are way behind with digitalisation compared with other sectors. If you look at defence, retail, financial services, these industries are leaps and bounds ahead. But if we have a hub where people are talking collaboratively and ironing out the issues collectively, we might be able to innovate more rapidly.”

Burgess said the proof was in collaboration that was already underway in South Australia between BHP, OZ Minerals and Hillgrove in a beta testing session. 

The state’s three copper producers recently got together for proof of concept discussions on new approaches to underground automation, ore tracking and sorting, and simulation or creating “digital twins” of an operating mine. 

The next step will likely be pilot testing of at least one of these ideas with a small team of dedicated people.

Burgess said locating the Hub at Tonsley would also create opportunities for collaboration with other sectors because of the unique way the Tonsley community operated.

“For example, we have meetings of all the occupants every six to eight weeks, and the idea is to sit around, talk about what’s happening and meet other people because there are a lot of new businesses moving in,” he said. 

“At the end of one meeting, people from companies in two entirely different industries were in deep conversation, which led them to form a consortium to bid for work.