Adelaide
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Premier Rann, Minister Koutsantonis, Monsignor Cappo, Mr Roberts, Mr Kuchel, other distinguished guests, Ladies and Gentlemen.
It is a pleasure to have the opportunity to address you all tonight.
SACOME is an effective advocate for the industry here in South Australia and the value of your contributions is recognised not only by your members but across all levels of Government.
WPA Review
This is my second visit to South Australia in as many days.
Yesterday, I had the pleasure of travelling to Woomera with the Premier, Minister Koutsantonis and my federal colleague, Defence Minister Stephen Smith.
As you would no doubt be aware we released the final report of Dr Allan Hawke’s Woomera Prohibited Area Review and the Government's response.
The Government has accepted all the recommendations, as we believe together they form a workable shared-user framework.
What this effectively means for South Australia's resources industry is the opening up of vast new possibilities for exploration and indeed potential development – something long sought after by industry.
A band from Carrapatena through Olympic Dam to Cairn Hill and beyond covers some of the most prospective geology in Australia.
Indeed Geoscience Australia estimates that 62 per cent of Australia's known copper resources are located in the Woomera Prohibited Area, as well as 78 per cent of our known uranium resources; proportions that they believe will enlarge, as a result of further exploration opportunities.
The South Australian Government estimates that implementing the recommendations of the Hawke report could potentially bring on some $35 billion worth of resource developments.
Importantly, however the report also balances the importance of the Defence test and evaluation facility in Woomera for which there is a genuine and increasing need.
It is not in Australia's interests for the work of Defence to end at Woomera.
Nor is it in Australia's interests to prevent development in the Gawlor Craton.
Striking a balance between national security and economic interests has not been easy but I believe we have reached the right outcome through a process of detailed consultation.
The Government will implement the recommendations from the report through a joint Commonwealth/State government coordination office.
We expect the resources sector to be active participants in the framework’s development.
A users' reference group will advise the coordination office on the necessary regulation and administrative procedures needed to make co-existence a success.
SA Resources and Energy snapshot
So yesterday was a good day for South Australia's resources and energy industries.
Industries that are growing both in this state and around the country.
People tend to think of Western Australia and Queensland when talking about Australia’s resource states but South Australia should never be overlooked.
In the December quarter we saw growth of over 25 per cent in South Australian mineral exploration expenditure against the previous quarter.
We have a truly impressive pipeline of investment, which includes the expansion of Olympic Dam.
This offers great potential for creating new jobs.
The proposed expansion of Olympic Dam would increase output eight-fold.
That would mean 730,000 tonnes of refined copper, 19,000 tonnes of uranium at its peak and 800,000 ounces of gold a year.
On the subject of uranium can I also say that clearly events in Japan have led to a global re-assessment of the nuclear industry.
Safety must always be the number one priority and we therefore welcome the reviews and any measures to strengthen and improve nuclear power systems that Fukushima has prompted.
But what I do not agree with are the comments by some that Fukushima spells the end of nuclear power and the end of uranium mining.
There will undoubtedly be some changes in potential energy generation mixes globally but for some countries nuclear will remain an important part of the energy mix.
In 2008 nuclear power accounted for 5.8 per cent of total global energy supply.
It powers the homes and businesses for millions of people.
And it will continue to do so because it goes to the question of energy security.
South Australia plays an important role in ensuring our own energy security.
In terms of petroleum the awarding of four exploration permits in the Great Australian Bight - following the most comprehensive geological analysis of the area ever undertaken - and further acreage currently under assessment heralds a potential expansion in South Australia's offshore petroleum sector.
We are also progressing reforms to further strengthen regulation and operation within this sector.
The main tenet of this reform is the introduction of a single national regulator and I thank the South Australian Government and industry for their support for this important work.
The development needs of our trading partners go hand-in-hand with the aspirations of Australia's resources sector.
Whether it's demand for petroleum, gas, zircon and mineral sands, copper, iron ore, uranium or gold – they’re all here in South Australia.
I congratulate you on your efforts through measures such as South Australia’s Plan for Accelerating Exploration, to take a compelling investment case to a global audience.
Through investment seminars, you're pinpointing the strong potential in South Australia’s minerals and energy sectors.
Renewable Energy
This includes South Australia's potential in renewable energy.
There is already 868 megawatts of installed wind energy capacity in this state – that's nearly half the capacity in the whole of Australia.
The Government is investing in a 40 megawatt solar thermal facility in Whyalla, where 300 dishes will use technology developed here in Australia.
At the same time, the nation’s largest share of geothermal business is in South Australia.
The Renewable Energy Demonstration Program has committed over $150 million in geothermal demonstration projects at Innamincka and Paralana.
A further $14 million is committed to the sector through the Geothermal Drilling Program for projects at Penola and Parachilna.
And, from next year, geothermal exploration will enjoy the same income tax treatment as exploration in the hydrocarbon industry.
The Government's acceptance of the Policy Transition Group's recommendation to provide an immediate tax deduction for exploration of geothermal energy sources from 1 July 2012 will provide a significant boost for this industry.
Challenges and reform
While on the subject of the PTG I would like to take this opportunity to thank SACOME for its constructive engagement in this consultation process.
I acknowledge that you have some outstanding concerns, but in my view your contribution, along with that of others in the industry, helped the PTG to shape a balanced package of recommendations, all of which the Government has now accepted.
This package maintains the competitiveness of our mining industry and looks at ways to minimise compliance costs, especially for small miners.
Revenue from the profits-based taxes will allow the Government to support the broader Australian community through boosting superannuation for workers, delivering company tax cuts for all Australian businesses and tax breaks for small business.
Importantly, revenue from the Government’s mining tax reforms will also be invested in the new infrastructure that our mining sector needs.
I would encourage you to continue this engagement as we move through the next steps in this process – the next significant milestone being the release of the draft exposure legislation for further consultation around the middle of this year.
Carbon price
The next issue I want to touch on tonight is the question of pricing carbon.
This is a reform Prime Minister has said the Australian Government is committed to pursuing.
This includes undertaking proper consultation with industry and our energy intensive and trade exposed sectors through the Business Roundtable and its associated forums.
We are taking note of the issues being raised by industry.
Here in South Australia, the impact of a carbon price on steel manufacturing has been a specific point of debate.
I know that my ministerial colleague Greg Combet is working through these issues closely with the steel sector.
We have made clear our commitment to provide assistance to trade-exposed, emissions-intensive industries, including steel, to support jobs and maintain competitiveness.
Clearly, as with the debate around the mining tax, the challenge now is to work through the detail and continue to consult as we move towards an appropriate outcome.
Skills
Along with the many and varied opportunities the scale and number of Australia's resources and energy projects offer come some specific challenges that we all must work together to manage.
Not least of these is the issue of skills and labour.
This of course is an area where SACOME does a lot of very valuable work.
Your annual Industry Skills Survey is a valuable tool and the results mirror many of the findings from the body of work recently undertaken by the Australian Government through the National Resources Sector Taskforce.
Once again I would thank SACOME for participating in this process.
The Government has accepted all the recommendations of the Taskforce's Report.
We are considering the use of Enterprise Migration Agreements to support the biggest resources projects.
At the same time, the Department of Immigration and Citizenship is working to streamline the processing of 457 visas for the resources sector.
While Temporary migration can supplement the local labour force – it shouldn't replace it.
So companies will still need to invest in Australian workers to meet longer-term skilling needs. It is about industry and all levels of Government both working together to get the right outcome.
Improving Indigenous employment is also vital for many reasons, not least the benefits for a skills-hungry industry.
I note SACOME's efforts through the Careers Promotion Program which delivers career workshops, talks and expos to schools in local communities to encourage students, including particularly indigenous students, to consider mining and energy sector jobs and training.
Building long-term relationships with Aboriginal communities is now widely regarded by the resources industry as a core part of its business, and rightly so.
Alongside skills and labour, maintaining a social licence to operate ranks high among the challenges facing industry.
Increasingly companies are aware of the need to better engage with communities in the course of their operations.
The major imperative for any project is delivery on time and on budget. Lack of effective consultation can lead to protracted disputes, which in turn disrupt both the timelines and economics of projects – even after permits have been granted.
Maintaining a social licence to operate is therefore increasingly important to a company's economic indicators – its share price, risk status and recruitment performance, to name a few.
Social inclusion
This in turn brings me to the inaugural award for social inclusion.
I won't steal the Premier's thunder, but I do want to express my support for this important initiative.
Social inclusion is a basic obligation of all organisations in Australia, and it's why the Australian Government is embracing and supporting projects that enhance it.
Education and training, voluntary work, caring for vulnerable people, voicing opinions and engaging with the local community – all these things foster social inclusion.
It brings the full breadth of our diverse community into everything we do, and shares the benefits of taking part.
Conclusion
In closing, I simply say that now is a great time to be part of the resources and energy industries in Australia.
Investment, growth and expansion are our catch words.
New horizons such as Woomera hold the promise of continued prosperity.
Together we can make the most of this period by working in partnership to manage the strains and pressures that come with it.
I thank you for your efforts to date and wish you all the best for the coming year.
Thank you.