South Australia risks becoming like Tasmania, permanently stuck in the slow lane of a two-speed economy, if the Olympic Dam mine is not expanded, says federal Opposition Leader Tony Abbott.
His South Australian counterpart, Isobel Redmond, agreed, saying most of the economic indicators put SA just above Tasmania and "our relevance as a state has all but vanished" under the state Labor government.
"There are rumblings through the community and business sector at the moment to the effect that it (the expansion) may well not go ahead at this stage," she told reporters on Saturday at the state Liberal annual general meeting in Adelaide.
Earlier, Ms Redmond confidently confronted speculation about her leadership, saying that unlike Elvis Presley "I have not left the building". She told the party faithful she would be the next premier.
Mr Abbott told the meeting the proposed Olympic Dam mine expansion was vital to the economic future of South Australia, but the only way to make it happen was to abolish mining taxes.
South Australia was a great state with a great future, he said. However, the proposed expansion of the copper and uranium mine would determine whether it became more like Western Australia or more like Tasmania.
"This is a great state, but it is a great state at the crossroads," Mr Abbott said.
"If we want to ensure that South Australia is not permanently stuck in the slow lane of a two-speed economy, we have got to have the Olympic Dam expansion.
"That is vital for the economic future of the state."
BHP Billiton has until the end of the year to give the $30 billion expansion the final go-ahead or face the need to renegotiate approvals with the state government.
There was growing concern global economic conditions would force the company to put its plans on hold, and South Australian Premier Jay Weatherill has said he cannot see any justification for granting the mining giants an extension.
Mr Abbott said the mine expansion was being threatened by the federal government's new mining taxes.
"The very best we can say of the Olympic Dam expansion is it is on a knife edge," he said.
"And the best thing that we can do in this country to ensure that that project goes ahead ... is to get rid of the taxes that stand in its way."
The Olympic Dam expansion would create the world's largest open cut mine, with annual copper production tripling to 750,000 tonnes and uranium oxide production rising to 19,000 tonnes.
Ms Redmond told the meeting she had the confidence of the party, but noted any party room would have those who believed they could do a better job than their leader.
"Indeed, if a vote were taken at any time, and especially after long periods in opposition, there will rarely be unanimity," she said.
But she told reporters: "I will be leader this week, next week, next year, up until the election, when I will become premier."