The State Government has struck a multi-million-dollar deal with major mining player OZ Minerals, which will see the company relocate its head office from Melbourne to Adelaide.

The move – a boon for the state’s business and mining credentials – hasn’t come cheap, with the State Government gifting the company $10 million for “exciting testwork” at a demonstration plant, a “key factor in the relocation decision”. The company will contribute $18 million.

OZ Minerals’ quarterly report, released to the Australian Stock Exchange today, flags a major strategic review of all the company’s operations, including a reduction in the size of its corporate office, which will be shifted into an existing satellite office in Parkside. It will also embark on “a multi-million dollar incentive partnership with the SA Government to further develop innovative extraction opportunities of OZ Minerals’ significant assets”.

The company is already a major player in SA, with its Prominent Hill mine – 130km south-east of Coober Pedy in the state’s north-west – producing 92,615 tons of copper and 148,192 ounces of gold in 2014, exceeding guidance for both minerals.

The arrangement with the Weatherill Government – which is desperate to lure big players to headquarter in SA — would open future opportunities and help “develop a new copper production process which delivers a highly attractive end product”.

Premier Jay Weatherill said the $10 million funding from the State Government involved a research partnership with OZ Minerals and local universities to improve the quality of copper concentrates produced in SA. The research would be “of benefit to mining companies both here in Australia and also around the world”.

He said OZ Minerals was the first company to move to SA following his announcement of a target to attract three resource company head offices to Adelaide, but denied he had now set a price benchmark for potential suitors.

The company, he said, was also enticed by “the jurisdiction itself, the fact their largest investment in Australia is in SA and the attitude of the SA Government”.

“But of course (it was also) the fact we were prepared to step up.

“It was pretty clear it wouldn’t be happening if we didn’t pursue them; getting people to come here to SA is something that requires the Government to step up and take a lead.

“It’s a small jurisdiction away from large population centres: that requires Government to step up and take the lead. It’s always been thus, and people who hope you can just stand around and wait for something to happen in SA are likely to be disappointed.”

The Premier said the Adelaide office would expand by about 60, but it was unclear how many of them would be existing employees relocating from Melbourne.

“If this company expands around the world, it will be the head office here in SA that will benefit,” he said.

New OZ Minerals CEO Andrew Cole said while the company’s production figures suggest a sound footing, “all of those I’ve spoken with understand we need to respond to the changing dynamics of the sector we’re operating in”.

The company is rebounding after posting a $294 million net loss for the 2013 calendar year, compared to a profit of $152 million in 2012.