The South Australian mining industry has swelled in recent years. There are 12 operating mines in the state, compared to just four in 2004.

This number is expected to grow even further before the end of the year to 16, and there are up to 30 other mines in various stages of construction and development.

Favourable commodity prices, more accessible land and better infrastructure have contributed to the increase.

However, the South Australian Government's Plan for Accelerating Exploration program would have to be oneof the main factors that has been attracting every man and his shovel to the state in recent years.

PACE started in 2004 as a five-year program on a $22.5 million budget.

Its aim was to help kick-start exploration by offering funding for drilling in high risk greenfields areas.

Prospector Rudy Gomez is a case in point for the success of PACE.

He used his entire superannuation, $160,000, to help fund and uncover the world-class Carrapateena copper-gold discovery - 100 kilometres east of Olympic Dam.

"I would not have discovered Carrapateena without the support from the government," Gomez said.

"The government gave me $100,000 under the PACE program - without that I couldnot have drilled the two holes."

Gomez is in negotiations with several mining companies to sell the Carrapateena site, with a decision expected by the end of the year.

He said the state Labor government, which had been in power since 2002, was instrumental in growing the South Australian mining sector.

"The government now is realising the problems that explorers are facing, which is land access," Gomez said.

"The government is really moving strongly to make more land available.

"Quite recently, there was a company, Straits Resources, that was granted permission to drill on Lake Torrens, and Lake Torrens is one of the difficult areas to gain access and the Rann Government gave them permission.

"So hopefully things are going to move a lot faster, whereas before, governments were very careful, to say the least, when dealing with these Aboriginal issues.

"But you need exploration to discover big deposits."

South Australian Chamber of Mines and Energy chief executive Jason Kuchel agreed the government had been proactive, but was critical of the government's conservation legislation.

"I wouldn't call him [Premier Mike Rann] lax, because they have increased the size of some parks and they have introduced the marines parks legislation as well," Kuchel said.

"I think previous governments have been positively disposed towards the mining industry, but they haven't been overt about it and also in terms of the PACE program and the competitive data, I think this government has ramped it up a notch."

Kuchel said the PACE program had helped exploration in the state increase 10-fold.

"I think the government has just gone out and spruiked the opportunities here in South Australia and there are genuine opportunities and I think the industry has started to realise it is a good place," he said.

"If you look at the Fraser Institute rankings, South Australia ranks as the best mining jurisdiction in Australia too.

"If the fundamentals are good then I suppose you are going to look positively towards making an investment here and so having the premier talk about it I think that's often what gets people to have a look in the first place."

However, while the number of producing mines has significantly increased, the state's infrastructure has remained stagnant.

Many in the industry are calling for the government to make upgrades to existing infrastructure and build facilities to help transport resources to the market more easily.

On the top of the wish list is a deepwater port closer to the mining activity, which is chiefly in the state's mid-north.

In August Rann announced the government was in the early stages of talking to numerous "international interests" to help fund such a port in the Spencer Gulf.

However, Kuchel believes Labor already has missed the boat and the state is paying for the government's inaction.

"I think quite frankly we would have more mines if it wasn't for the lack of infrastructure," he said.

"Particularly in the iron ore space, I think we would have three or four more mines already established.

"For that matter, I think that our exploration of iron ore would at least double, if not treble, if we already had a deepsea bulk commodities port.

"At the moment we can't get a vessel larger than a Panamax out of South Australia without barging.

"If we were able to it would certainly encourage those potential miners, both in terms of their exploration spend as well as you would make it a lot easier for them to actually get their mines up and running."

Although he would not say where, Gomez has made an application to the minister of infrastructure to build an import-export deepwater port.

This would most likely be at the tip of the Spencer Gulf near Whyalla or Port Augusta.

Approval of such a port would sweeten the deal for Carrapateena, which would otherwise have to export through Port Adelaide, as most other miners do, which is another 300km from Port Augusta.

"Being way up there at Carrapateena in the mid-north, the only real receiving port is Port Adelaide and that's quite far," Gomez said.

"You are going to clog the highway between Adelaide and Port Augusta, so you need other port facilities.

"This is where governments have to really relax. Over the years South Australia has been a really conservative state with a lot of environmental things.

"I think we are suffering from all those years of neglect and we need to do a lot of catching up."

But just as South Australia is on the cusp of becoming a fully fledged mining state it is in danger of folding before the cards have even been dealt.

The most prominent issue facing the South Australian mining industry, and the country's entire resource sector, is the Minerals Resource Rent Tax.

"The RSPT [resources super-profits tax] was an absolute disaster for the state," Kuchel said. He believed South Australia was hit hardest by the proposed RSPT.

With ore bodies generally deep underground and a lack of infrastructure, Kuchel said mining projects were already hard enough to establish in the state without the RSPT.

"The MRRT of course is still very much bad news for our iron ore explorers and miners and coal as well, but of course we have a lot of other commodities," he said.

"Having said that though, we do see South Australia as a potentially significant iron ore province."

Carrapateena is exempt from the MRRT.

Gomez sympathised with smaller explorers and miners, saying the MRRT would discourage greenfield projects.

"The big problem with mining is it's already a risky industry," he said.

"You can't control your markets, the price of the commodities, the consumption, the demand, and so you invest say several million dollars into a project and it will be six or seven years before you see money coming in.

"If the regime changes in the meantime then it creates a major problem for investors, particularly those that have to borrow money."

The most recent hit to the state's mining sector though has been the rise in royalties from 3.5% to 5%.

While this may not have been the optimum time for the government to make the increase, it would seem it was forced to to aid its ailing budget after it took a massive blow during the global financial crisis.

"I think that's going to be a negative thing [the royalty rise] - that's a major increase," Gomez said.

"Of course, Western Australia is 7%, but Western Australia is way ahead and minesite established.

"It's very different when you are starting and you face a large royalty like that.

"The royalty was never 7% right from the start, it just grew as companies could afford it."

Gomez said with the royalties increase prospectors might look at exploration in other states or even overseas.

However, Kuchel said an increase in royalties was not necessarily a bad move and pointed to the WA Government, which injected royalties back into mining infrastructure.

"The infrastructure is actually more of a concern than the royalties," he said.

"If they were to spend the money on seed funding some infrastructure, the industry would see it as money well spent.

"Whereas if they just take the royalties without recognising that need then obviously the industry would not be happy.

Another problem for South Australia is the Greens' intentions to prohibit uranium exploration, mining and exportation.

While the Green's uranium policy is nothing new, the threat came another step closer to reality thanks to its alliance with Labor and its newfound Senate power.

"We would certainly hope the federal Labor government doesn't shift on its policies in relation to [state] Labor," Kuchel said.

"I don't think it's of an immediate concern, but it's more about future mines and we don't need that sort of view purveyed in the political landscape in Australia."

Despite the MRRT distraction, the increase in royalties and the Greens uranium threat, Kuchel rejected the idea that South Australia's mining industry was on shaky legs.

"I wouldn't say it is shaky but I think it's all about the difference between actually having a real boom in South Australia or just steady growth," he said.

"I think we will continue to see steady growth, but the governments, particularly the federal government, needs to be careful what it does with the MRRT.

"We need to be very very clear about policy around uranium and any other policies that might affect the industry.

"Then following on from having stability, we need both state and federal governments being a bit more proactive particularly on the infrastructure side to ensure we can have wealth creation that the governments themselves want to see occur."

This article first appeared in the October 2010 edition of Australia's Mining Monthly