Minerals and Energy

The South Australian minerals and energy industry encompasses:

• Mining (coal, metal ore, oil and gas extraction, services to mining).

• Resource exploration.

• Traditional energy generation (coal and gas-based electricity).

• Sustainable forms of energy generation (solar, wind turbine, geothermal).

Overview

South Australia is a key minerals supplier, with almost 40% of the world’s known recoverable uranium reserves and significant volumes of copper, gold and silver.

South Australia has moved from 18th to 4th place in world mining potential¹ and exceeded its $100 million mineral exploration expenditure target a year ahead of schedule.

South Australia has also attracted about 80% of all geothermal licences and exploration investment in Australia.

In 2007-08, 16.9% of South Australia’s electricity production and 15.9% of electricity consumption will be derived from renewable energy.²

South Australia currently has approximately $13 billion worth of projects at various stages of development in the minerals and energy sector, including:

• BHP Billiton’s potential Olympic Dam mine expansion, at the pre-feasibility stage.

• Oxiana’s Prominent Hill, at the mine development stage.

• Iluka Resources' Jacinth/Ambrosia Heavy Mineral Sands Project, at the definitive feasibility stage.

• Terramin Australia’s Angas Zinc project, at the mine development stage.

• Uranium One’s Honeymoon uranium mine at the mine development stage.

• Exco Resources’ White Dam gold mine project, at the mine development stage.

• Several iron ore projects within the Gawler Craton that are at feasibility stages.

For a full list on mining and energy projects visit:

www.minerals.pir.sa.gov.au and

www.pir.sa.gov.au/petroleum_and_geothermal

The growth of the minerals sector continues to generate increased demand for services such as mine planning, engineering, procurement and logistics, project and construction management, maintenance, information and communications technology (ICT), technical support and environmental management and rehabilitation. 

Equipment and infrastructure are needed to support new, large-scale projects.

Output

• $2.6 billion in mining value-added in 2006-07, or 4.3% of the total State output.³

• $344 million in mining exploration expenditure in the 12 months to March 2008 - a 48% increase over the 12 months to March 2007.⁴

• $779 million forecast for upstream petroleum and geothermal exploration, development and production in 2007.⁵

• Since 2002, about $2 billion has been invested in wind farms in South Australia.

• South Australia is home to about 53% of Australia’s wind-generated electricity.

• South Austraia has about 40% of Australia’s grid-connected solar power.⁶

Exports

• $2.6 billion in mineral exports in 2006-07, or 29% of total goods exports.⁷

• Copper exports alone accounted for 52% of all minerals exports and 15% of all goods exports in 2006-07.⁸

• 90% growth in mining exports from 2002-03 to 2006-07.⁹

• Key markets for mining exports include China and Japan.

Employment

• 10,714 people employed directly in mining in 2007, or 1.4% of the State total. ¹⁰

• Mining employment expected to double by 2013.¹¹

• 4,100 people employed in electricity and gas supply in 2006-07.¹²

Workforce Information Service

Number of businesses

• 480 businesses operating directly in mining in 2006-07 listed South Australia as their main state of business.¹³

Geographic focus

• South Australia’s mines and energy generation facilities are located in the regions, while businesses supporting these operations are mostly located in Adelaide and the Upper Spencer Gulf. ¹⁴

• Mining and exploration operations are spread over much of the State, particularly the Gawler Craton in central Australia and the Curnamona Province in the State’s east.   Petroleum operations are focussed in the Cooper Basin (in the State’s northeast) and Otway Basin (southeast).

Research and development

• In 2005-06, the South Australian mining industry invested $77 million in research and development, or 12% of South Australia’s total business expenditure on research and development.¹⁵

• As at 31st December 2007, 193 licensees held 875 Exploration Licences covering 438,428 km2 or 45% of the State.¹⁶

• South Australia has attracted more than 80% of all Geothermal Exploration Licence (GELs) applications in Australia, with 23 companies operating 235 licence areas and more expected.  The aggregate potential investment from 2002-2013 is estimated to be more than $681 million, excluding deployment projects.¹⁷

• Extensive work is being undertaken on the development of geothermal energy resources right across South Australia, including the far northeast; adjacent to the Flinders Ranges; the Iron Triangle (Port Pirie, Port Augusta and Whyalla); the Murraylands; around Lake Torrens and Lake Frome; and in the lower south east.

• Nearly all of the State's petroleum prospective areas were under licence or application at the end of 2007 with the lodgement of 11 applications for Petroleum Exploration Licences (PELs).  Forty nine PELs were current over the State's onshore petroleum prospective areas, including the producitve Otway and Cooper basins and frontier Officer, Arrowie, Stansbuy and Arcaringa basins and over Cenozoic basins with coal steam methan potential.

• Mature producing basins such as the Otway and Cooper remain the focus of onshore exploration and the next major acreage releases in these basins are planned in 2008 and 2009. Last year a new phase of exploration started in the frontier Officer Basin when Officer Basin Energy commenced acquisition of 1,250 km of 2D seismic in October. 

• Up to 45 petroleum exploration wells are included in licensee work programs in South Australia in 2008, the bulk of which will be drilled in the Cooper and Otway basins. Significant drilling and seismic are also programmed in the State’s frontier basins, some of which have not been explored for over 20 years.

• The University of Adelaide is a major centre for mining and petroleum research and education, with the Australian School of Petroleum, Centre for Exploration Under Cover and three key Chairs.

Case studies

BHP Billiton – Olympic Dam
Oxiana – Prominent Hill
Geodynamics
Petratherm
Santos
Cooper Basin New Entrants

Industry groups
Austmine
Minerals Council of Australia
Mining Equipment and Services Council of Australia
Association of Mining and Exploration Companies
Australian Petroleum Production and Exploration Association
Energy Supply Association of Australia
Australian Business Council for Sustainable Energy
South Australian Chamber of Mines and Energy

 

1. Fraser Institute, Survey of Mining Companies, 2007-08, Feb 2008.

2. Electricity Supply Industry Planning Council, 2006-07 Annual Planning Report.

3. Australian Bureau of Statistics, Cat. No. 5220.0, Table 5.

4. Australian Bureau of Statistics, Cat. No. 8412.0, Table 3b.

5. South Australian Government, Department of Primary Industry and Resources (PIRSA), South Australia, Minerals Division.

6. Department of Environment, Water, Heritage and the Arts, Renewable Energy, Solar Homes and Communities Plan, Statistics, Watts Installed by Month,
www.environment.gov.au/settlements/renewable/pv/index.html

7. Australian Bureau of Statistics, Cat. No. 5368.0, unpublished.

8. ibid.

9. ibid.

10. Australian Bureau of Statistics, Cat. No. 6291.0.55.003, Table 05.

11. DTED 2006, South Australia. Mining and Energy – Your Future is Here, publication.

12. Australian Bureau of Statistics, Cat. no. 6291.0.55.003, supertable cube E06.

13. Australian Bureau of Statistics, Cat. no. 8165.0, datacube “Businesses by Industry Class by Main State by Employment Size Ranges.

14. PIRSA website www.pir.sa.gov.au/minerals

15. Australian Bureau of Statistics, Cat. No. 8104.0.

16. PIRSA

17. ibid.

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