“What’s my reaction to how the sector has responded? Magnificent is the word that comes to mind, the way the industry came together through peak bodies in remarkable time, it was breathtaking to see,” executive director Dr Paul Heithersay said.
“The fact this industry, unlike in other countries, has just kept rolling along is an outstanding achievement.”
While many industries have struggled through the pandemic, the resource sector’s consistent performance has helped ensure Australia has been able to maintain a trade surplus in recent months.
Heithersay’s enthusiastic praise is tempered by recognition that the global pandemic is still throwing numerous challenges in front of industry players.
Explorers are struggling to capital raise in a far more risk-averse market and early on, some companies faced challenges scrambling together PPE and highly-trained onsite workers to continue functioning.
He singles out the oil and gas industry to acknowledge the three-pronged blow of very low oil and gas prices, high development and exploration costs plus the COVID-led challenges of staffing and market uncertainty.
Still, Heithersay believes the South Australian resources sector is emerging from the current COVID maelstrom in a strong position – backed by promising project announcements and the rewards from having taken swift action to keep essential operations happening.
Among those projects is BHP’s “very encouraging” discovery in the Gawler Craton of high-grade copper that was announced last year, with the world class find at Oak Dam – 65kms from Olympic Dam – a potential game changer for the state.
“When BHP announced fairly early results …. it stimulated quite a deal of interest overseas in South Australia, companies asked to come and have a look,” Heithersay said.
“Discovering high grade copper is a pretty important one, if you get one of those every 10 years you are doing very well.
“We have an online presence and we can see where activity is coming from, post that announcement we could see a big increase in the amount of activity on our data base, a number of enquires from overseas, there was quite a tangible change in attitude.”
Work on assessing the find is continuing amid COVID-19 market changes.
It has been the same story with onsite operations and exports along with planning for other new projects right across the state.
“In terms of exports, company supply lines are very well established, they didn’t really miss a beat,” he said.
“And South Australia happens to have the commodities that the world needs most so that puts us in particularly good shape.”
Heithersay uses copper as an example, telling of increasing demand globally, particularly with a push towards electric cars that use four times the amount used in traditional petrol cars.
By 2027, demand for copper from electric vehicles is expected to increase by 1.7 million tonnes.
A projection that can only benefit a state that already punches above its weight in copper production.
South Australia is the third largest producer of copper in the world and the state’s copper strategy launched in 2016 outlined a plan to triple production to one million tonnes per year within the next two decades.
The new copper find helps, along with BHP being on track with its proposal to increase copper production at its Olympic Dam mine in the state’s north from 200,000 to 350,000 tonnes per annum.
Assessment guidelines for the project that expects to support 1800 jobs during construction and an additional 600 ongoing operational jobs, were released last month.
Rex Mines is working through its own regulatory approvals for a copper mine on Yorke Peninsula.
OZ Minerals, which already mines copper at Prominent Hill, produced its first saleable copper-gold concentrate at its Carrapateena mine in December.
Production at Carrapateena is expected to continue to ramp up during 2020 in the range of 20,000 to 25,000 tonnes of copper and 35,000 to 40,000 ounces of gold.
Oz Minerals began stockpiling ore in late March so processing could continue if the pandemic closed underground mining but it so far hasn’t missed a beat.
Gold, silver, uranium and rare earths are also in the mix, Heithersay said, along with increasingly sought after magnetite iron ore.
Steelmakers are now looking to the magnetite product as an alternative to complement direct shipping ore and the State Government is working on a new magnetite strategy with the sector.
The strategy will aim to attract $10 billion of committed investment to unlock the resource and produce 50 million tonnes a year by 2030.
“Around the world, smelters are wanting to reduce emissions and energy costs and they are finding magnetite is the desirable commodity and a premium is paid for that,” Heithersay said.
About 2.3 million tonnes of magnetite was produced in South Australia in 2018 while there are several magnetite projects in various stages of development.
Heithersay said the industry and government had gained an advantage with its readiness to adapt quickly to market changes and COVID-19.
The department has switched its own global, flagship Copper to the World conference scheduled for this month to a 90-minute online offering with internationally renowned speakers.
Heithersay said the state government was also exploring ways to tweak its Advanced Discovery Initiative (ADI) grants program forward to support mining explorers in the hunt for new resource targets.
The move could help smaller companies with vital fund raising to get high potential projects off the ground.
“It adds to the credibility of their story,” Heithersay said.
“(Investors need to see) it’s a good idea in its own right, but the fact that the government has been through a process with experts under the ADI supports the project.
“(This is) where some of Australia’s best experts are on a review panel, investors know who they are, the fact that it then has approval for funding under the program gives a lot of weight, some of the risk has been taken out of the investment.”
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