ADELAIDE (ResourceInvestor.com) -- The ambitious plans of South Australia - that three decades ago was dubbed Australia's Cinderella State - are considered heading towards ambitious targets for $100 million worth of mineral exploration by 2007/08 and $A4 billion in mineral production and processing by 2020.
Mineral exploration was expected to reach $55.5 million in the current financial year and Paul Heithersay, executive director-minerals and energy for Primary Industry & Resources South Australia, said SA now holds 6% of Australian exploration expenditure and, with Western Australia and Victoria, bucked the search dollar downtrend that hit other States.
Heithersay said SA's mineral production and processing reached $2 billion in 2003/04 and a graph he presented at the SA Resources & Energy Investment Conference showed the value would hold in the current year and start an uplift next fiscal year.
The impact SA has as the dominant province in the world on supplying uranium - beaten only by all of Canada as a supplier - was made easy to understand in Heithersay's graph showing output from WMC Resources Ltd's Olympic Dam as a tower and all other global mines as mere two storey or bungalows in comparison.
In 2004 Olympic Dam produced 4,404 tonnes of U308 (we well as 224,731t of copper, 88,633 ounces of gold and 861,628 oz silver) from treating 8.88 million tonnes of ore.
By the end of calendar 2005 mine milling is expected to reach 10.5 mt per annum, and there is a blueprint to take production to 40 mtpa.
A costly pre-feasibility is determining the viability of underground or open cut extraction for accelerated production. Open cut is a big challenge because the world class deposit is under 300-400 metres of sterile cover.
Heithersay said project expansions are in the pipeline. OneSteel at Whyalla is converting from haematite to magnetite that will extend project life at least till 2027 with ore production at 9.6 mtpa.
Dominion Mining Ltd, the pioneering gold miner in the Gawler Craton, is now an underground operation that has lifted reserves 52% to 1.151 million tones grading 10.5 grams/tonne and Heithersay said the resource appears to be growing.
The Beverley uranium mine operated by North American Heathgate Resources is the largest in situ leach (ISL) mine in the world and production in 2003/04 was 740t of U308 and the company has intersected ore south and east of the mine.
The Mindarie mineral sands project, to commission in 2006, will put the SA sector of the Murray Basins heavy minerals (HM) province into focus. Mine life, based on current reserves of 60.5 mt at 4.21% HM.
The president of the Australasian Institute of Mining & Metallurgy, Doctor Ian Gould, told the conference the Federal Government should adopt South Australia's leadership in providing direct financial support to mining exploration if the sector is to maximise its contribution to the national economy.
Gould, applauded the SA Government's drilling subsidy scheme but lamented the lack of specific mining industry incentives at the Federal level.
"Why can't we, at the Federal level, get some financial incentives to this industry to generate the long-term momentum in exploration we need we need? If the State Government can do it, why can't the Federal Government?" he asked.
However, Gould said one promising sign was growing recognition by the Federal Treasury of the importance of the mining sector and the continuing contribution it made to the economy.
He said Treasury was now considering the issue of "flow through shares" where taxation benefits flowed to shareholders, not just to exploration companies if they are successful.
On this Gould was questioned why Treasury should have a change of heart when a major petroleum conference last month was told by Federal Resources Minister Ian Macfarlane not to expect any more concessions from Canberra in these times of buoyant commodity prices.
Gould agreed that the perception of good times would be a deterrent but he felt there was a chance the minerals sector might get a favourable response from Treasurer Peter Costello in the Budget on Tuesday week.
While cautious about the prospects of a decision on "flow through shares" for junior explorers being made in time for the forthcoming Federal Budget, Dr Gould said it was a major step forward that the Government was now giving the issue serious consideration.
He said a positive decision would put the Australian exploration sector "on a level playing field with its Canadian competitors" and help ensure the new discoveries were made that would sustain the industry in Australia in the decades to come.