South Australia's property investment opportunities far from finished: Terry Ryder

Journalists with a 24-hour news cycle and a 30-minute attention span declared the end of life as we know it in South Australia when BHP Billiton had its recent panic attack over falling prices for some commodities. 

Those with a simplistic mindset and the analysis skills of a Footy Show star reasoned that the Olympic Dam expansion was the biggest thing – no, wait, the only thing – happening the SA economy, therefore the BHP decision to delay – hang on, let’s change that to “scrap” – the project meant that SA was basically finished. 

We even heard that a range of property developments planned for the Adelaide CBD would die because everything depended on Olympic Dam. 

You have to wonder – is your average journalist really that dumb, or do they simply not give a damn? 

To paraphrase Shakespeare: The first thing we do, let’s kill all the journalists. Then most of the economists. 

South Australia, let me tell you, is far from finished. It’s our most under-rated state. It leads the nation in several important industries and it’s now our third big resources state, though few people appear to realise it. 

Let’s not dwell too long on SA’s status as the leading state for Defence contracts (including the current $8 billion AWD project and the upcoming $20 billion submarine project) and also for alternative energy facilities, particularly wind farms. Nor on the fact that Adelaide has more infrastructure projects under construction than Sydney, although that’s more an indictment on New South Wales than a credit for SA. 

Let’s focus on resources. Anyone who thinks Olympic Dam is the only show in town for SA hasn’t been paying attention. It’s not even the biggest show. 

By far the biggest single factor likely to impact the SA economy is the decision to open up the Woomera Prohibited Area for mining. The potential outcome from this decision, first announced a year ago, will make Olympic Dam look puny. 

This is topical because there was a further federal-state announcement about this last week. The October 4 announcement by Defence Minister Stephen Smith and SA Premier Jay Weatherill gave mining companies formal approval to explore the giant WPA. They say it will become “one of Australia’s most significant resource provinces”, with minerals worth over $1 trillion, according to one guesstimate. 

This vast area (it comprises 13% of the state) is believed to contain Australia’s largest copper and uranium resources, considerably more than those at Olympic Dam. The WPA also has big gold and iron ore reserves. 

The move to grant exploration licences comes after negotiations between the federal government and the state to reconcile weapons testing and defence training (the reasons this is a prohibited area) with full-scale mining operations.

Weatherill said the approval was "one of the most significant milestones for the advancement of South Australia's resources sector". This area already has 150 exploration licences, with 80 more applications in the pipeline.

Yet media coverage of the announcement was somewhat muted and underplayed the importance of the event. I imagine if Smith and Weatherill had announced they were scrapping the plan it would have been on the front page of The Australian, the nation’s most relentlessly negative newspaper, and many others as well. 

The location best-positioned to benefit from mining in the WPA and elsewhere in the state is Port Augusta, a crossroads town which is a logical place to fly-in-fly-out workers to base themselves. Port Augusta is well-situated for the growing number of iron ore mines emerging on the Eyre Peninsula, as well as what’s happening in the WPA and will happen, eventually, at Roxby Downs with some form of expansion of Olympic Dam. 

Whyalla also has a big future, for similar reasons.

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.