SA Mines and Energy Journal : February-March 2010
FEBRUARY/MARCH 2010 SA MINES & ENERGY JOURNAL 4 CEO'S REPORT WE DON'T NEED MORE HURDLES A word from the Chief Executive Jason Kuchel It's 2010 already! The past year flew by so quickly and, all things considered, it ended on a pretty bright note for the resources sector. However, a few matters were left languishing, including progress on the development of a deep-sea export facility at Port Bonython and clarity for mineral explorers seeking access to their tenements in the Woomera Prohibited Area (WPA). These two issues are barriers to the growth of the minerals resources industry in South Australia. Since the December edition of the SA Mines and Energy Journal, when we described the difficulties that uncertainty of access to the WPA is causing explorers, there have been some signs of movement from Government. The Department of Defence has publicly indicated that clearer guidelines on mining access to the area are being developed by a number of Federal Government departments, in conjunction with the South Australian Government. SACOME understands this includes the Departments of Defence, Resources, and Prime Minister and Cabinet. The longer uncertainty persists, the more damaging it is to projects, which are stymied not through lack of resources, but through lack of certainty about access to the WPA. For each month that passes without clarification, the costs of maintaining tenements mount. Explorers charged with investing their shareholders' funds in exploration can find themselves in an untenable position when they can't proceed. Read about Western Plains Resources withdrawal on page 6, for instance. For good, bad or otherwise, the matter is escalating and we will keep pushing for a resolution. Fortunately, the Federal Government does acknowledge the importance and value (estimated by the State Government as being more than $1.3 trillion) of the minerals within the WPA. Perhaps in this election year, we might hope for greater speed on both the defence and infrastructure fronts. The year 2010 brings much in the way of new activity in the minerals, renewable energy, and oil and gas sectors, as our feature story points out. This is great news for South Australia. On the flip side, it also brings more layers of regulation in the resources sector. A number of these have already been on the Government's agenda, including Marine Park boundaries and zoning, and the Northern Flinders Ranges Management Plan. The possibility of similar regulation in the Painted Desert has been flagged, with perhaps other areas to come. By its own admission, the Department of Environment and Heritage (DEH) already has good controls over activities within the Flinders Ranges. Any proposed mining activity, even in the least sensitive areas, faces many hurdles and must satisfy the (rightfully tight) regulations that already exist. So why are more regulations proposed? To my thinking, the answer is simple: the politics are such that the public would like more reassurance the area has adequate protection. However, it appears that instead of promoting the already tight controls that government is able to exercise, it is more simple to add yet another layer of regulation. Any one of these proposals seems harmless enough on its own and many might ask: what is the problem with making miners jump a few more hurdles? The answer is straightforward: attracting mining investment is globally very competitive, and adding further impediments can easily swing the pendulum in favour of other mining jurisdictions. The Government has done much to encourage mining investment in SA with its successful PACE program, which is now being emulated elsewhere (high praise indeed), and rather than adding more hurdles, we need to look for the next edge that will make this state stand out as a great place for mining investment. So what could give SA the next edge? The obvious answer is a comprehensive, clearly articulated Government policy on how it will ensure timely access to the necessary infrastructure to secure the viability of minerals and energy projects. Protecting our low sovereign risk is important, and with the Fraser Institute's annual global survey of mining jurisdictions to be released in March, it will be interesting to see if our fourth-place ranking stands. What could give SA the next edge? Service provider directory The SACOME 2010 service provider directory is out now. This is a valuable tool for those procuring goods and services for the mining industry. If your copy is not enclosed, you can obtain one or more from us at no cost. Email sacome@ sacome.org.au or phone (08) 8202 9999.