Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Bill

The Hon. H.J. GUMBYS (16:08): I am pleased to add my support to the Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Bill 2026, and I want to use my contribution today to focus on something quite specific: what this bill actually unlocks on the ground at Olympic Dam and what that means for the economic future of this state. For all the talk of indentures and other matters, these special mining leases and regulatory frameworks, important matters which the select committee has examined in detail, at its core this bill was about two enormous projects that between them could transform Olympic Dam from a major South Australian mine into one of the largest integrated copper operations on the planet.

The first is the smelter refinery expansion (SRE) project. This project involves the construction of a new modern two-stage smelter at Olympic Dam designed to handle the changing characteristics of the ore body as mining continues. At its first phase alone, the SRE is expected to lift Olympic Dam smelting capacity up to 1.4 million tonnes of concentrate a year, producing around 500,000 tonnes of copper cathode annually. BHP's own estimates put the capital cost of phase 1 at around $5 billion. The second phase would lift smelting capacity further still to around two million tonnes of concentrate, supporting the production of up to 650,000 tonnes of copper cathode a year, aligned with the future growth from Oak Dam and Olympic Dam itself.

To put that in perspective, when complete, Olympic Dam would become one of the largest copper smelters and refineries anywhere in the world. The SRE alone is expected to create hundreds of additional ongoing skilled jobs at Olympic Dam on top of the construction workforce required to build it.

The second project is the mine and concentrator growth (MCG) project, which expands mining and processing at Olympic Dam itself and is designed specifically to feed the additional capacity created by the SRE. Add it together, and BHP has flagged potential capital investment in this state across these projects alone of up to $25.3 billion, with a potential growth to employment from around 8,000 to 12,000 full-time equivalent roles.

Importantly, the proposed indenture is not an approval for any proposed project. Rather, it will allow for applications to be made for assessment under South Australian and commonwealth legislative pathways, pathways that are not currently available to BHP.

In addition to regulatory pathways, projects at this scale also require water security, and the government has been working in parallel on a commercial alternative water supply for the Upper Spencer Gulf and Far North: the Northern Water project. While that project sits outside the scope of this indenture, the bill recognises its importance. If an alternative sustainable water source becomes available, it provides the mechanism for BHP to reduce its reliance on Great Artesian Basin groundwater accordingly. A secure water supply for Olympic Dam is also a secure water supply with benefits for the broader Upper Spencer Gulf region, another example of how the investment this bill helps unlock radiates well beyond the mine itself.

None of this happens by accident, and none of it happens under the indenture as it currently stands. The current indenture was written in 1982 for a single mine with a fixed lease boundary. It cannot accommodate an expanded special mining lease. It does not provide the staged milestone-based certainty that a company like BHP needs before its board will commit tens of billions of dollars against competing projects in Chile, Peru and the Democratic Republic of the Congo, or anywhere else copper is found for that matter.

This bill fixes that. It links an expanded special mining lease directly to final investment decisions on the SRE and MCG projects, with the lease term extending by 10 years on the first decision and by a further 40 years on the second. That is precisely the kind of long-dated future-thinking milestone-linked certainty that underpins genuinely transformational investment decisions.

It also resolves a longstanding constraint on processing. Under the current arrangements there are real limits on how much ore from outside the original mining lease can be processed at Olympic Dam. This bill removes that constraint, opening the door for Olympic Dam to process concentrate not just from Prominent Hill, Carrapateena and the Oak Dam prospect but potentially from third-party mines as well.

In effect, this bill is what turns Olympic Dam from a mine with a smelter attached into a processing hub for a South Australian copper province, adding value, adding complexity and keeping that value-adding activity here in South Australia rather than seeing our concentrate shipped interstate or overseas for processing. For South Australians, the economic significance of that shift cannot be overstated. Every tonne of copper concentrate that is smelted and refined here rather than somewhere else represents jobs, contracts, training places and supply chain spending that stays in this state.

The bill also establishes a formal industry and workforce development group tasked with developing a plan to maximise local employment, local supplier participation, Aboriginal economic development, and research and innovation opportunities arising from these projects. To give members some sense of the scale already underway, in October last year BHP committed more than $840 million just to improve underground mining productivity at Olympic Dam, including a new decline to unlock additional ore movement, a new backfill system, an extended underground rail network with six new locomotives and a new oxygen plant to lift smelting performance.

Let us not forget the potential return for the state itself. Royalties on Olympic Dam's production already total in the hundreds of millions of dollars a year. Last month, a $25.6 million royalty payment was the largest in the department's history. As production scales towards 650,000 tonnes of refined copper cathode annually, that royalty system and the broader contribution to our gross state product will grow with it.

This bill modernises the regulatory settings, bringing Olympic Dam into line with the Mining Act, which governs every other mine in this state and, in doing so, removes the single biggest piece of uncertainty standing between South Australia and tens of billions of dollars of private investment. I commend this bill to the house.