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Progress against objectives

Unlocking the full potential of South Australia’s resources, energy and renewable assets

2017 Objective

2 year Progress Review

Progress

Increase the value of our mineral and energy resources production from $7 billion (2013 baseline) to $8.5 billion per annum (by end of 2017), creating an additional 3,000 jobs.

Challenging

Mineral and petroleum production reached $5.5 billion in 2015-16. The resources sector has been affected by lower prices for the state’s major commodities including copper, iron ore and crude oil. Despite this, the sector continues as one of the State’s major export sectors, with copper exports and uranium production values reaching record highs in 2015–16. Commodity prices have increased since mid-2016 and should impact positively on 2016-17 production values.

For the 12 months to November 2016, the average number of people employed in the South Australian mining industry was 6,988 people (according to ABS estimates). It should be noted that a more rigorous, sector based DSD survey shows that employment in the resources sector is around 10,000 people.

Double the number of Aboriginal people working in the mineral and energy resources sectors from 250 to 500.

Challenging

The Annual Mining Industry Employment Survey in July 2016 showed 320 Aboriginal employees in the mining industry. However, this did not capture the petroleum resources sector, some Aboriginal Enterprises, and other groups that provide services to the mining sector. When this additional information is captured, employment data is expected to show that the number of Aboriginal people working in the mineral and energy resources sector is closer to the target of 500 people.

Maintain private investment in mineral and energy resources exploration expenditure above $650 million per annum in 2017.

Challenging

South Australia’s minerals and petroleum exploration expenditure for 12 months to September 2016 was $178.3 million.

In September 2016, the State Government introduced a new $24 million PACE Gas initiative designed to accelerate investment in gas projects in SA through targeted competitive grants with the aim of securing new and significant gas supplies to SA customers from SA gas fields by the end of 2019.

The South Australian Government’s $20 million PACE Copper initiative announced in November 2015 is focused on capturing precompetitive data with the aim of bringing forward mineral discoveries in the State.

Increase cumulative investment in South Australian offshore petroleum exploration to reach $700 million by end 2017.

Challenging

An extension has meant Chevron’s wells off the Great Australian Bight will now occur in 2018.

Increase cumulative investment in exploration and appraisal to $430 million within the South Australian Cooper – Eromanga basins.

Achieved

As at early December 2016 the accumulated exploration and appraisal expenditure for the period 2015–2016 has amounted to $432 million.

Expand investment in renewable energy to be on track to increase the proportion of electricity generated from renewable sources from 39% in 2013–14 to 50% in 2025.

On track

There has been approximately $7.1 billion in capital expenditure investment in renewable energy to date, driven predominantly by investment in utility-scale renewable generation. There are a number of potential utility-scale projects in the pipeline that will result in further investment should they proceed. During 2015-16, South Australia generated approximately 43% of its total electricity generation from renewable energy sources.

Create the foundations for a substantial and sustainable bioenergy industry.

Progress made

The Bioenergy Roadmap is an initiative to further develop South Australia’s bio-energy industry.

The State Government successfully launched and provided funding for the limestone coast region for pre-feasibility studies. The next step is to assist eligible businesses across the State in both the pre-feasibility and feasibility stage based on the success already achieved.

Attract 5 to 10 additional mining service companies to South Australia.

Challenging

Enerflex opened a new services facility in Adelaide in April 2016. The facility will provide Enerflex’s complete product and service offering including compression, process, and electric power equipment sales, after‐market service and support, and integrated asset management for the region.

A new company called Chrysos has established in Adelaide. The company is a CSIRO spin-off resulting from a Mining and Petroleum Services Centre of Excellence project. The company provides X-Ray luminescence for gold.

Attract a further 3 resource companies with head offices in Adelaide.

Achieved

OzMinerals, Hillgrove and Investigator Resources have re-located to Adelaide.

Position South Australia to become a leading mining and energy services hub for the nation.

Will not be achieved

The Mining Industry Participation Office (MIPO) has drafted a new Minerals and Energy Services Strategic Statement in consultation with multiple industry bodies, which identified areas where South Australia has a comparative advantage in its supply chains and academic endeavours. Over 230 businesses took part in the strategic review.

Five strategic themes will form the basis of a Services Futures Forum planned for February 2017. As part of this process, the State Government is working on establishing a Global Centre of Excellence for Minerals Exploration Technologies. This $20M initiative is looking to establish a global Technology Accelerator in Adelaide in partnership with Boart Longyear. In addition, the Mining and Petroleum Services Centre of Excellence has now commercialised multiple new technologies. Of most recent prominence is SRA Information Technology’s “Approvals, Obligations and Compliance” platform (AOC). In its first 6 months, the platform has generated $800,000 in addition revenue and created 6 new ongoing jobs for SRA Information Technology.

Successfully diversify 10 non mineral and energy suppliers into the minerals and energy resources sector.

Achieved

11 companies have successfully diversified into the resources sector. They are:

LABSA, Tooperang Quarry, IMPTEC, Hallet Concrete, Sigma Cranes, Laserbond, IPACS, Innodev, Nitschke Group, Consillium and QMS Connect.

Ensure $150 million of contracts are awarded through Industry Capability Network SA (ICNSA) to local suppliers for the minerals and energy sector over the next three years.

Challenging

As at the end of 2015–16 ICNSA needs to facilitate a further $65.5M in contracts to meet its objective of $150m.

Use regulatory and procurement resources to promote the deployment and uptake of electricity storage solutions.

On track

In July 2016 the State Government announced it had awarded a tender to Zen Energy for the installation of battery storage at three sites including the State Library, Art Gallery and Adelaide High School.

In July 2016 the State Government announced it will undertake a tender to procure 25% of its electricity load from dispatchable renewable energy sources that utilise technology such as battery storage. The tender was released on the State Procurement board website on 31 October 2016. Last call for submissions was on 22 December 2016 and the final date for submissions was 6 January 2017. The tender is now closed and proposals received are currently being assessed.

In December 2016, the State Government announced the establishment of the South Australian Energy Productivity Program, a $31 million initiative that assists large energy using businesses in the state to reduce their energy usage and related costs, and contribute energy supply benefits to the state.

Attract 5 sustainable energy service companies to South Australia.

Challenging

Enzen, a global energy and water engineering and business operations consulting company operating across 10 countries, established a small office in Adelaide in 2016 to pursue Australian market opportunities. A second company has advised of its intention to establish its Australian office in Adelaide.