YPLOG’s concerns about Hillside raised at Liberal Party meeting

To:                  Rural and Regional

 

Re:                  Rex Minerals’ proposed copper/gold mine at Hillside, Yorke Peninsula

 

From:              Graham Mattschoss, President, Goyder SEC

 

Date                14th August 2015

 

NOTE:            This paper to be read in conjunction with papers from Graham Mattschoss submitted to:

• Rural and Regional: 17^th August 2014
• Liberal Party of SA: Policy Forum on Health and Social Issues, 15^th 2015

______________________________________________________________________

 

I wish to once again bring to Rural and Regional’s attention escalating opposition to the proposed Hillside copper/gold mine on Yorke Peninsula amongst local farmers and the community.    In doing so, I point out that YP is just one of many highly productive agricultural areas across SA now threatened by various mining and fracking proposals.

 

 

1. An update on Hillside

 

There are two major concerns re recent developments.

 

1.1       Likely Govt. approval for Rex to commence mining at Hillside without need to obtain waivers over all land within their mining lease

 

• Minister Koutsantonis and DSD representatives have indicated Rex may be given approval to begin mining operations on Hillside land they already own, without the need to obtain waivers of exemption on five farms within their Mining Lease which Rex have been unable to secure.

 

• This places the five farmers whose land sits within a Hillside Mining Lease but who have refused to sign a waiver in an untenable position. They do not know when their land will be required – whether in two years, five years, ten years or never.  This uncertainty makes it impossible for them to undertake any future planning for their farming business and exacerbates the considerable stress and anxiety these families are already subject to.

 

• This decision also seems to be contrary to the intent of S 9 of the Mining Act – namely that waivers over all exempt land must be obtained before mining can commence.

 

 

• No  information re the new mine plan for Hillside

 

• Rex Minerals’ recent release of results from their Extended Feasibility Study into a smaller-scale project at Hillside (necessitated by a failure to obtain finances for the original full scale plan) contained no information on the new mine plan, even though this will need to be completely reworked to exclude any operations on land not currently owned by Rex – (see Map 1).
• Farmers and others in the local community are still being kept in the dark and have no idea how they will be impacted by this new plan.
• Even the government has not been given any details, and has had to write to Rex seeking information on the new plan.
• This points to a complete lack of respect on the part of the mining company for the local community.

 

 

2. Why large scale copper mining should not go ahead on YP

 

The continuing support for the Hillside project from the State Labor Government and the Liberal Party does not, I believe, take account of two key issues:

• The importance of preserving highly productive cropping land such as YP at a time of growing food shortages caused by a rapidly expanding global population
• The diminished long-term viability of mining (as evidenced by a major drop in international commodity prices, China’s economic slow-down, and the end of the mining  boom).

 

 

• What agriculture means to YP and the state

 

• Agriculture has been the bedrock of YP’s and SA’s economic security since initial settlement.
• YP produces 25% of the State’s grain harvest each year on only 12% of the State’s cropping land
• In 2013-14, it produced 14% of the state’s wheat, 25% of barley, 39.5% of durum (wheat), 76% of lentils.
• It consistently contributes $400m+ to the State’s economy.
• It has an international reputation for high quality, ‘clean and green’ farm produce.
• In addition to those directly employed by the industry, farming supports a number of spin-off jobs in associated industries, such as farm machinery, chemicals, agri-businesses etc.
• While mining ventures have waxed and waned (eg copper mining in the Copper Triangle in the mid to late 1800s), agricultural productivity has continued to increase due to new farming techniques and knowledge. More importantly, productivity will continue to improve in the future.  It is, in effect, the most important renewable resource available.

 

 

• How much of YP agricultural land could be lost because of mining?

 

• As well as the direct loss of cropping land within the footprint of a mine, evidence from other mine sites across the world suggests there could be significant reductions in productivity in surrounding farmland from dust contamination, groundwater and surface water contamination etc. This means that, in addition to the area directly impacted by Hillside, potentially a very high proportion of YP farmland could experience significant productivity declines.
• Hillside is not the only target on YP
  • Rex Minerals have already identified 50 other potential ‘satellite’ targets within their exploration licence.
  • At least 12 other exploration companies have tenements on YP, with some (eg Adelaide Resources, Marmota) already announcing promising copper discoveries.
  • If only 10% of these new ‘targets’ end up being mined, the amount of YP cropping land lost to farming (either directly or indirectly) will be substantial.
• The loss will be permanent.  Evidence points to literally thousands and thousands of unrehabilitated mine sites across Australia that have little or no economic value once the mining companies move on.  Hillside is likely to be no different with Rex’s current rehabilitation plans being described by a rehabilitation expert as ‘minimalist’ and reflective of 19^th Century technology and thinking.

 

 

• Why mining is not the answer to SA’s economic problems

 

• It is now widely acknowledged in Australia and overseas that the mining boom is over.
• The South Australian Government’s focus on promoting mining in this state at the expense of other industries such as agriculture has not yielded the benefits predicted.
• A number of mines across this state have either closed or downsized resulting in significant job losses, with the most recent being the loss of 380 jobs at the State’s largest copper/uranium mine at Olympic Dam. In addition, new projects are not proceeding because of an inability to attract finances.
• As a result, the Labor Government’s target of creating 5000 new mining jobs by 2017 has ‘no chance of being achieved’  (the Advertiser, Tuesday 10^th August).
• Given these trends, the economic viability of Rex Minerals’ Hillside project is highly questionable.
  • It has not been able to obtain financial backing for its full scale operation or even its small scale start up project.
  • Unlike the big miners such as BHP Billiton and Rio Tinto, it has no capital reserves to cushion it against any market downturns, with the result that even if Hillside gets off the ground, it may fold within a short period of time.
• The promised benefits to the State’s economy generated by Hillside seem to be evaporating. For example;
  • Royalties: Rex’s predicted payment of $30m per annum in royalties to the SA Govt. will be considerably lower, given that
    • its downsized plan and decision not to focus on iron ore will reduce its annual revenue, and
    • if it acquires ‘new mine’ status (which it undoubtedly will), its royalty payments for the first 5 years will be reduced from 3.5% to 1.4% per annum
  • Job opportunities: Its promise that the smaller start up will still generate 500 ongoing jobs seems unlikely given that the full scale operation was only going to produce 600 jobs.    Added to this is that if Australia becomes a signatory to the Trans Pacific Partnership Agreement and if Rex obtain Chinese investment of $150m+,  the Chinese company will be allowed to bring in their own workforce.  It is therefore highly unlikely there will be any real increase in employment opportunities for YP residents.

 

 

2.2.4   Why risk prime cropping land for mineral resources that can be obtained elsewhere in the state?

 

The main mineral to be extracted at Hillside is copper.   Yet huge copper deposits exist and are already being mined at Olympic Dam.  This mine, located in remote SA where no cropping land is impacted, is one of the largest copper mines in the world and could, according to BHP Billiton, continue to produce copper for at least the next 100+  years.

 

So why risk destroying highly productive cropping land when the same mineral can be obtained elsewhere from an existing mine, with no associated risks to agricultural productivity?

 

 

 

Conclusion and recommendations: 

 

In light of international demands for greater food production, any political preferencing mining over agriculture  in regions such as YP makes no economic sense.

 

• Agriculture on YP has a long-term future with productivity continuing to improve for many, many decades to come.   It is, as noted, an infinitely renewable resource.
• In contrast, mining is a short term enterprise which, based on countless examples elsewhere, will leave a damaged landscape that can never be returned to full productivity.

 

I therefore recommend that the Liberal Party,

• Endorse, as a matter of policy, the position advocated by the Shadow Minister for Agriculture, Food and Fisheries, David Ridgway MLC, that, while mining should be supported, “this should not be at the expense of an industry (ie agriculture)  which has been South Australia’s economic backbone” (YPCT, 2/2/15).
• Endorse the principle that prime agricultural land (especially cropping land) should be exempt from mining especially in those situations where large deposits of the target  mineral(s) are available from elsewhere in the state (eg copper from Olympic dam)
• If it wins government, redirect the high level of government support, investment and incentives currently given to the mining industry to agriculture, in recognition of its pre-eminent place in the SA economy and its long-term sustainability.

 

 

 

 

Signed

 

 

 

 

Graham Mattschoss