Downward trend for Australian mineral exploration

IN THE LOBBY: The latest figures from the Australian Bureau of Statistics (ABS) for Mineral and Petroleum Exploration Australia – March quarter 2014 show a consistent decline in expenditure on mineral exploration.

Pouncing on the figures, Association of Mining and Exploration Companies (AMEC) CEO Simon Bennison said the steady decrease in exploration of recent years was causing extreme concern and hardship for those in the sector.

“The ABS figures for the March quarter show a 25 per cent decrease in expenditure and a 35 per cent decrease in metres drilled on total deposits in Australia,” Bennison said.

“The level of exploration expenditure on new deposits for the March 2014 quarter, at $121 million, is lower than the post GFC March 2009 quarter ($148.8 million).

“This decrease in greenfields exploration expenditure and metres drilled is extremely concerning as it takes on average seven years to convert a discovery into an operating mine, according to research undertaken by the University of Western Australia.

“These figures should be a wake-up call for all levels of Government, highlighting the need for the Coalition’s proposed Exploration Development Incentive (EDI), and repeal of the carbon and mining taxes.”

AMEC is keen to see the EDI introduced, which it said will allow investors to deduct a proportion of the eligible exploration expenditure against their personal taxable income, increasing the attractiveness of investing in exploration companies.

“It is essential to increase Australia’s attractiveness as an investment destination to secure the mines of tomorrow and revenue streams for the benefit of all Australians,” Bennison said.

All sides of Government must take action now, providing smooth passage of the repeal of the carbon and mining tax, and the introduction of the EDI though the senate.”

AMEC followed that release with another to commend the Queensland Government for bringing down a budget that is focussed on the long-term economic development of Queensland.

There’s no argument that the current state of global investment markets for mid-tier miners and explorers is difficult.

AMEC said the budget handed down by the Queensland Government has recognised the issues facing its members while it also resisted raising royalties in an attempt to balance the budget.

“Through the Strong Choices program, The Treasurer and Minister for Trade Hon. Tim Nicholls has received a clear message that Queenslanders understand the importance of the mineral exploration and mining sector,” AMEC regional manager Bernie Hogan said.

“To continually raise taxes on this sector will not secure the state’s prosperity for years to come.

“The identification of some assets to be leased or sold, such as ports and the Mount Isa to Townsville rail line, will be of great importance to Queensland’s developing miners.

“AMEC looks forward to solid consultation to ensure that access to vital infrastructure stays open to as many companies as possible.”

AMEC pointed out that the budget focus on reducing duplication in environmental approvals through the implementation of a one-stop-shop, reducing red tape, and investigating a pooled fund approach to financial assurance, are strategies it has been pushing to be introduced for some time.

“The Queensland Government must maintain its focus on making the state the attractive for investment,” Hogan said.

“This includes keeping fees, charges and any potential cost-recovery measures to an absolute minimum.

“The mineral exploration and mining industry look for investment projects that deliver certainty and long-term dependable returns.

“The Queensland Government has demonstrated it is working to establish the state as the location of choice when investment confidence returns.”