Is this greatest mine of them all? [12mar06]

THE biggest mining project in history is set to transform South Australia into the "Saudi Arabia of the south" as the boundaries and depth of the Olympic Dam project grow by the day.

It has been revealed 16 drilling rigs, working round the clock trying to determine the extent of one of the world's richest mines, so far have failed to find the boundaries of the deposit.

The supposed edges of the field continue to return rich ore, while wells sunk to 1200m are showing good returns. There now are plans to drill as deep as 2km.

Estimates of the copper, uranium, gold and silver ore reserves have risen to almost four billion tonnes.

Mine owner BHP Billiton puts the life of the mine at "70-plus years", but Treasurer Kevin Foley said that was a conservative estimate.









"This will operate for more than a century and help turn SA into an economic powerhouse," he said.

"Mining is the third pillar we need, along with manufacturing and agriculture."

Industry experts say SA is poised to become the "Saudi Arabia of the south" as an energy-hungry world looks to the mine which holds 40 per cent of global uranium reserves as well as enormous copper, gold and silver lodes.

The proposed $5 billion expansion of the mine by 2013, turning it from an underground operation to the biggest open pit in the world, would be the biggest single such project in history and deliver a bonanza for SA from royalties, taxes, infrastructure and more than 20,000 jobs.

It would turn the existing underground mine returning revenue of $1 billion a year into an open pit, larger than the Adelaide CBD, returning $3 billion annual revenue.

Revenue would triple to $3 billion a year, royalties to the State Government would triple to $100 million and the projected annual contribution to the Gross State Product of $2.5 billion is more than the nation's wool exports.

The plan includes a $700 million desalination plant and pipeline, and a $1 billion order for 110 of the biggest dump trucks in the world.

The plan faces several hurdles, ranging from its impact on the fragile Outback environment to the political fallout of exporting uranium. If it does proceed there also is the question of finding an army of skilled workers.

A huge shortfall of workers means many are likely to be sourced from overseas, while a bidding war has already erupted for graduates.

University students in mining courses in Queensland are being offered up to $50,000 "sign on" fees by mining companies, then can walk into six-figure salaries, a move likely to be mirrored in SA, according to industry experts.

Few people fully appreciate how the planned project will change SA, according to Mr Foley.

"We've got strong manufacturing and agricultural sectors and this will be the third pillar coming into its own," he said.

"This third economic pillar of a powerful mining industry will give us economic firepower and muscle that states like Queensland have.

"No state will have a diversified economy like we have with powerful manufacturing, rural and mining industries.

"The life of this mine will go on and on and most royalties will be ploughed back into infrastructure in the north. There will be a need for schools, medical facilities, roads, police, housing, and that means significant numbers of new jobs.

Mr Foley said there might be "more Olympic Dams out there", a view backed by the SA Chamber of Mines and Energy. "The level of exploration has quadrupled in the past few years and these people don't do it unless they believe there are big deposits to be found," he said.

A feasibility study of the planned expansion is under way, before an environmental impact statement.