of taxpayers money.......
SOUTH Australian taxpayers will pay $10 million over three years in a move designed to lure Prominent Hill copper-gold miner OZ Minerals to establish its headquarters in Adelaide.
Melbourne-based OZ Minerals and the SA government have announced a research partnership which the government says will create 60 jobs in SA and lead to the construction of a resources demonstration plant.
OZ Minerals’ Prominent Hill gold-copper mine, south of Coober Pedy, employs close to 1300 people, and it also has a support office at Parkside.
Premier Jay Weatherill and Treasurer Tom Koutsantonis said bringing Australia’s third largest copper producer to Adelaide was a clear signal that SA wants to be the nation’s resources hub.
“The heart of OZ Minerals’ operations have always been in South Australia and it is great news the company has now chosen to call Adelaide its home,” Mr Weatherill said.
“The move makes sense as OZ Minerals’ two major copper assets, Prominent Hill and Carrapateena, are here in South Australia,” he said.
Mr Weatherill justified the incentive to OZ Minerals, which has no debt and a cash balance of $219 million at the end of December.
He said the government was required to “step up and take the lead” for economic growth.
“It wouldn’t be happening if we didn’t pursue them,” he said.
“We pursued them in a range of ways providing them with a range of incentives, one of which is co-investing.”
The commitment will be funded out of the budget, the government said.
Mr Koutsantonis said the State Government would “collaborate” with OZ Minerals to develop infrastructure in the state’s Far North “that could further improve the economic case for proceeding with Carrapateena”.
In its feasibility study released last year, OZ Minerals estimated the Carrapateena deposit could be developed into a $2.98 billion mine that would run for 24 years - delivering more copper than Prominent Hill and more jobs.
OZ Minerals new chief executive Andrew Cole refused to confirm the number of corporate positions being created at Parkside, saying the structure of the new office was yet to be finalised.
“We are still working through it. I have no view on the jobs numbers (stated by the Premier), he said.
Mr Cole also couldn’t say if the proposed new demonstration plant - linked to the $10 million from the State Government and $18 million from OZ Minerals - would be based in South Australia.
Initial test work had been done at a facility in Perth.
In its market announcement, OZ said it was downsizing its “corporate structure and cost base” for the move to SA, which will take six months.
Most of the 45 staff based in Melbourne were unlikely to move, including 12-year company veteran and chief financial officer Andrew Coles, who has decided to stand down.
OZ Minerals had also begun a strategic review of its business operations, to be completed by April.
Mr Cole said the review would look at all options, including selling assets or the company itself.
“All options are on the table. If the right bid is made for an organisation or asset, we are open to it,” he said.
“You have to keep the emotion aside when you make a decision like this. It is a right decision for the company and its shareholders.”
The changes were designed to “meet the challenges of a changing resource sector and to position the company for further growth”, Mr Cole said.
A key factor in the relocation decision was the “valuable partnership” agreement with the State Government, he said.
“Not only is this an innovative partnership.... it makes sense to be based there and I’m confident we can develop future local, national and international projects from Adelaide,” he said.
The company’s market update saw OZ exceed its production forecasts.
Would it be unreasonable for the people of SA to ask for the 10 million back ?