Minister for Defence
Stephen Smith, MP
Minister for Resouces and Energy
Martin Ferguson MP
Premier of South Australia
Mike Rann MP
SA Minister for Mineral Resouces Development
Tom Koutsantonis
Transcript: Press Conference, Woomera Prohibited Area
Transcription: Proof Copy E & OE
Smith: Well thanks very much for coming. I'm joined at Woomera with my federal colleague, the Minister for Resources Martin Ferguson, the Premier of South Australia, Mike Rann and the South Australian Mineral Resources Minister Tom Koutsantonis.
This is a very good day for the Commonwealth and a very good day for South Australia. It's a very good day for our national security interests and it's a very good day for our economic prosperity. That's because today, Minister Ferguson and I have announced together with Premier Rann and Minister Koutsantonis that the Commonwealth has agreed to accept the vast bulk of the recommendations of the Hawke Review, which opens up the prospect of shared arrangements and shared use and shared access so far as the Woomera Prohibited Area is concerned. This opens up very substantial minerals resources prospectivity and potential for South Australia and I'll leave further detail on that to the Premier and to Minister Ferguson.
This has been the result of very good work by Allan Hawke, a former Secretary of the Department of Defence and a team from Defence which has been the subject to exhaustive consultation both within Defence and within the national security apparatus of the Commonwealth but also within the mineral resources industry of South Australia and more generally.
As you know, Woomera as a prohibited area has been in operation for about 60 years performing a vital role so far as training and experimentation of assets and weapons is concerned- a most important testing ground for the Commonwealth. And other than allowing access for pastoral lease purposes and for Indigenous use, effectively the area has been excluded from use at the discretion of the Commonwealth.
The Hawke review which we adopt today now allows for graduated access- and again I'll allow the Premier and Minister Ferguson to go through some of the shared access arrangements- but essentially there will be a red zone where the area is prohibited for defence purposes and green and amber zones where there will be shared arrangements and timesharing access to enable minerals resources development.
So this is a terrific result. It has been also a result of very close cooperation and good work between the Commonwealth and the state of South Australia led by the Premier and he and I have had a number of conversations about this. But the work that we've done and the decision that we announced today will serve the Commonwealth and the people of Australia and the state of South Australia and the people of South Australia. Not just having the ongoing national security benefits that come from having Woomera as a testing ground, but also the economic benefit that comes from the result of substantial minerals resources development. I'll hand over to the Premier, and then Martin and Tom will say a few words.
Rann: Thank you very much Stephen. Well thank you to Stephen Smith and Martin Ferguson. This has been the result of a number of negotiations over a number of years and we just want to thank the Federal Government and particularly these two Ministers, Stephen Smith and Martin Ferguson.
This is critically important for our state. And Defence is important for our state. We've now got about 30 per cent of Australia's capital expenditure on defence with warfare destroyers and submarines but also of course mining has now become our number one export. In fact if you look at agriculture and food and wine, our mining exports are almost double these days - a big change in the space of a couple of years. We've gone from four mines to 16 mines in the last 6 years and we’ve got another 30 in various stages of application.
And of course next year, next March, the biggest of them all, we hope to see the approval for the world's biggest ever mine at Olympic Dam.
But here at Woomera, so critical to our defence we also know that there is at least, at least, $35 billion worth of minerals that have been discovered here. There are also about 120 exploration licences. So for South Australia this decision by the Federal Government is like a new frontier unlocking and finding a new country that is bigger than England and which previously has been largely prohibited from mining.
So apart from the Olympic Dam expansion which we hope will be in about March of next year this would be the biggest economic boost that our state has ever had in terms of unlocking the potential for the Woomera Protected Area for mining.
So these two industries, defence and mining, both important for our state, they touch here at Woomera and this unlocking of the potential for the future I think is going to pay dividends for South Australia for decades to come. So thank you Stephen and thank you Martin.
Ferguson: I just want to reinforce that today's coexistence model between the Department of Defence and the resources sector represents a potential financial bonanza for South Australia and for the nation.
On the basis of known reserves we are talking about potential developments to the tune of $35 billion, the area is largely unexplored. It is rich in mineralogy especially from a gold, copper, iron ore and uranium potential.
Just in terms of known reserves in Australia, it represents 62 per cent of our known copper reserves and 78 per cent of our known uranium reserves.
I must say I have worked with Mike Rann on this for some years now having inherited what was a longstanding problem from the resources sector's point of view. How we actually put in place a coexistence model with the Department of Defence which we maintain a proper focus on our national interest from a defence perspective but also create the wealth which enables us to actually function as a nation.
In essence it is a timeshare model. I might say as the Federal Minister for Resources – nothing new to the resources sector. If you go to Northern Australia, for example you go to the uranium reserves at Jabiru at the moment with the wet we haven’t mined there for about the last 20 weeks. So it is very much akin to the way that we operate in Northern Australia from a mining perspective.
I simply say to all those involved thanks for what is a really great outcome. It is good for defence but I must say it is exceptionally good for the future of South Australia. Mining is important but so is defence from a South Australian employment and wealth creation point of view.
Koutsantonis: Well today marks a great step forward for South Australia. It’s the equivalent of South Australia increasing its border size. It took a Defence Minister from Western Australia, a mining state, to understand the capacity that South Australia requires. It took a Federal Resources Minister who understands the importance of our future prosperity linked to mining. And it takes a Premier to make sure that South Australia's interests are always at the centre stage of our national government.
I think you'll find our copper resources, our uranium resource exploration will exponentially grow here at Woomera. It is basically another undiscovered country, a new frontier. It is a great result for the people of South Australia. And I think 20 years from now when we look back it will be this decision today that really changed the face of South Australia forever.
Journalist: Minister, when do you expect to see the issue of new – it might actually be to the Premier – when can we see, when are we likely to see the issuing of exploration permits to facilitate this?
Smith: As a general proposition there are already a number of exploration permits already over the area. What we need to do is to make judgements and decisions under our new decision making processes, under essentially the shared arrangements, the joint arrangements between the Commonwealth and South Australia. We'll immediately set up essentially a joint office, a joint coordinating office for the Prohibited Area, which will essentially be resourced by Defence, with the Department of Resources and by South Australia and start progressing these matters.
To make these changes permanent will require legislation, which Martin and I will bring forward over the next 12 months or so.
I'm not proposing to put a timetable on when we might start to see the benefits, but we are looking at essentially a transition period over the next 6 months where we can deal with some of the applications that are already in and then legislation following that. Mike you may want to add to that?
RANN: There are 120 exploration licences that have been issued and therein lies the problem. We already know that there are massive resources here particularly of copper, uranium and iron ore as Martin said. If you just look at the Woomera ProhibitedArea which has been largely closed off for the past 60 plus years, we've got 62 per cent of Australia's known copper reserves, 78 per cent of Australia's known uranium reserves so we've got an extraordinary opportunity.
One of the things various international rating agencies have come out and said is that South Australia is the fastest jurisdiction in the world in going from exploration and discovery to actually mining so we are keen to get cracking as soon as we can where already a number of companies have found and identified substantial deposits and we'll work with the Commonwealth with the change of legislation to make sure we can get cracking as soon as possible.
Journalist: When would you like to see some mines Premier?
Rann: Well it's obviously going to mean thousands of jobs and we are talking about long term jobs as well. I mean Olympic Dam which is just outside of the border of the Woomera Prohibited Area, we are talking about thousands of jobs for more than 100 years and it is a resource that is valued at more than $1.4 trillion. We’ve already got a couple of mines that are within the Woomera Prohibited area, just within the boundaries, for instance Cairn Hill near Cooper Pedy, Prominent Hill, which is being expanded and of course what everyone is saying is that you know you’ve got an elephant there you are know looking for the herd and the herd is believed to be here at Woomera.
Jouranlist: Tom was saying 20 years from now people will look back and see this day as an important day, would it be too much of a stretch to say that South Australia is heading the way of the other big resource states, Queensland and WA? Will it be in that league?
Rann: Well if you think about it we've seen a doubling in the exports from minerals just in the last few years alone. It’s now our biggest export and of course we've only just gone from four mines to approvals for 16 mines. Now we approved 3 new mines on Christmas Eve alone and we’ve got a whole line up of another 30 or so, so what we're seeing South Australia changing. South Australia in terms of Adelaide's manufacturing base that was critically important for us to win defence projects in order to maintain our strong manufacturing base in Adelaide but with high tech. But in terms of mining we are now becoming the new resource state of Australia and this is the new frontier for us. The Woomera Prohibited Area, bigger than England in area, 127,000 square kilometres offers unlimited potential for the future.
This is about jobs. It's about an economy that's now on the move. It's about never again hearing South Australia being referred to as the rust belt state. No one does that anymore. This is a guarantee of wealth for the future.
Journalist: Minister Smith and Minister Ferguson, what does this mean for Chinese foreign investment bids? One has been knocked back before. What does this really mean? Does it mean they are off the table or they’ll have trouble processing those requests?
Smith: Well what it will mean will be any foreign investment, I don't identify any particular source of investment, but any foreign investment will be treated in accordance with the Foreign Investment Review Board requirements. Ultimately of course, in a small number of cases, that can mean the Treasurer himself exercising a national interest decision so the question of foreign investment will be separate.
What the changes here will do will be to open up greater access to potential mining projects which can be authorised under our changed arrangements. We have had in the past one example that I am aware of where a foreign investment decision was not approved on the basis of being within the prohibited area and not agreed to on national security or national security considerations.
Now that we have the capacity for greater access and the capacity for what I regard as a better model which balances both national security considerations and economic considerations once a project has been given approval under our new arrangements any issues of foreign investment will be dealt with in accordance with the usual procedures and requirements.
Journalist: Was that the Minmetals bid you were talking about?
Smith: I'm not pretending to remember it but I think that was the one.
Ferguson: It was Minmetals and it actually related to Prominent Hill but look the key to today's outcome in terms of be it foreign or domestic investment is actually certainty. What we've established now is something that has been sought by industry over many, many decades is the rules of engagement. Industry now knows that in terms of operating in this region there are zones on the basis of which we have established the potential method of operation. That gives certainty for investment. Don't just think about the potential development that will occur in the years to come just think about exploration. And I was just in a meeting yesterday where the company in South Australia was looking at geothermal. Just that exploration to date in terms of drilling represents a spend of $200 million.
This area is yet to be really opened up from an exploration point of view let alone going to the three mines we've already got here. It's going to create real jobs on the ground.
Journalist: Can you explain basically how the system will work with the permits?
Ferguson: Effectively it's I suppose best described as a timeshare. There is a red zone which is a no go area. But then we’ve got the green and amber zones which effectively means other than 8 weeks in the green zone, it will be open for operations. Then in the amber zone that ranges from 10 to 20 weeks. But can I also indicate that there will be a major geological survey to be conducted by the South Australian Government, which will lead to a further potential review in 5 years time as to the potential capacity in the red zone. And then we'll again reassess whether there is a need for us to I suppose again revisit the rules of engagement with the Department of Defence from a potential wealth point of view as to whether or not we should build in more flexibility. But for the immediate future having dealt with the industry, especially with people like Tom and Mike, this is a huge outcome for them and it actually means they've got certainty plus a new area that was no go opened up to exploration and development.
Journalist: So basically they'll apply for permits?
Ferguson: They'll apply for permits, which is no different to the normal processes of actually getting a permit for mining. And in this particular circumstance, an additional permit over and above the normal environmental and regulatory approvals in terms of sensitivity and safety, which means you can operate here but there are additional requirements that you must exercise a duty of care with respect to it.
Journalist: What's your message to those companies that maybe have had an interest in the past but have been dissuaded by how hard it was? What is your message to them now?
Ferguson: To be fair the Hawke Report, which the Government has signed off on, has been one that has attracted a lot of interest. It has been closely followed by industry both in South Australia and nationally. It involved a considerable amount of consultation – written reports and face to face meetings – the industry is going to be pleased with the outcome they now know they have a green light to proceed with mineral development in South Australia in an area equivalent to England. And when you think about it that is a huge area rich in resource capacity – previously untapped – great wealth and job opportunities for South Australia.
And I must say as the Federal Minister the real opening of South Australia from a mining point of view – and it was a mining state 100 years ago – has actually occurred under the leadership of Mike Rann. He has completely changed the economic nature of South Australia, attracting the defence jobs and huge investment in the resources industry which has enabled us to actually handle for example a diversification of the economy as a result of us pulling back in the automotive industry.