SA Mines and Energy Journal : October-November 09
OCTOBER/NOVEMBER 2009 SA MINES & ENERGY JOURNAL 6 CEO'S REPORT LOOKING INTO THE CRYSTAL BALL A word from the Chief Executive Jason Kuchel Thirty years! From small beginnings, great things grow. At least, we would certainly like to think so and I am sure the people who started the Chamber in 1979 intended that we would be a prosperous association with real influence on the issues that matter to our industry. We have come a long way, from the first staff member in 1979 to 12 staff this year. I think we have also achieved their vision of a respected body that speaks without fear or favour to the Government, yet at the same time has garnered respect for its collaborative and consultative approach. In our President's column, John Roberts reflects on the past 30 years, but we also thought our 30-year anniversary offered an appropriate opportunity to look ahead 30 years. Our draft Resources Industry Strategic Plan includes a vision which states: "The minerals and energy industries will contribute 50 per cent of the South Australian exports by 2015. "SAisontrackto achieve this, with exports standing at 13 per cent just two years ago and 27 per cent last year. A few years ago, South Australia had only four operating mines, but with 10 mines now operating, five under development and a further five expected to be approved over the next 12 months, we expect to double the number of mines in the space of only a few short years. Perhaps even more importantly, we expect to have 40 mines by 2020! So where will the industry be in 2039? I don't profess to have a crystal ball, but I'll take a shot. In 2039, I think that we are likely to have experienced growth comparable to that which WA has enjoyed over the past 30 years. That might be a big call, but there are a number of industry experts, economists and the like who have likened our current mining activity and growth with that of Western Australia 20 plus years ago. If this is to eventuate, our state will see outstanding growth in regional areas of infrastructure, employment opportunities and population growth, tourism opportunities and much more. In fact, the power, gas and water needs for the mining industry will more than double over the next 20 years, which will lead to additional capacity-building in regions such as the Eyre Peninsula and in the north of our state, both of which have very little infrastructure now. If mining can provide the impetus for some of these infrastructure projects, then other opportunities will emerge, such as being able to connect currently unviable renewable energy sources to the grid. We expect that within 30 years, South Australia will be recognised as a world leader in a range of renewable energy sources, particularly in the area of geothermal power and perhaps in the area of solar power, incorporating methods of power storage to overcome the issue of the need for renewable to produce power at our peak demand times. We currently have seven fledgling iron ore companies poised to make an important contribution to our economy with projects ranging from Port Lincoln to near Coober Pedy. Iron ore has been an important part of the SA economy and is set to make a resurgence. It is likely that our iron ore sector will be of strategic significance in the world marketplace. To take it one step further, while there is a lot of debate around one bulk commodity port now, in 30 years we will be exporting from two if not more bulk commodities ports. As demand for oil and gas continues to grow, the price for these commodities will justify greater expenditure and/or the use of new technologies to derive more oil and gas from our existing basins. Coal-to-liquids will also be an important part of the landscape by 2039, and we already have several companies intending to collectively spend billions of dollars to bring such projects to fruition. I couldn't write this editorial without mentioning the geological area known as the Gawler Craton. It is currently one of the most prospective geological regions in Australia and contains one of the world's greatest poly- metallic ore bodies in the world, namely Olympic Dam. Recently, the Prominent Hill copper- gold project began production and numerous other opportunities exist in the same area. Primary Industries and Resources SA (PIRSA) estimates many billions of dollars of new opportunities over and above the trillion-dollar value of Olympic Dam. Over the next 30 years, we can expect this region to have a number of new mines and be recognised as one of the world's premiere copper-gold regions. All of this potential growth will bring challenges, but the potential rewards are vast. Not only will many billions of dollars be poured into the South Australian economy, there will also be employment, business, social and environmental opportunities to make this state the envy of many others. Of course, none of these things will happen without the continued optimism and tenacity of our industry and, critically, we must continue to have supportive governments. Governments will play a vital role in infrastructure by paving the way through planning and coordination, and on occasions by kick- starting essential infrastructure development through sourcing seed funding or underwriting projects either on their own or with the Federal Government and public-private partnerships. Our current State Government is incredibly supportive, but if we wish to climb this stairway, the next few steps will be large ones indeed. So where will the industry be in 2039?