JOHANNESBURG (miningweekly.com) – Australia’s total mineral expenditure decreased significantly during the three months ended December 2013, the latest figures from the Australian Bureau of Statistics (ABS) have shown.

This was of concern to the exploration and mining sector, the Association of Mining and Exploration Companies (Amec) said on Wednesday, adding that the implementation of the government’s Exploration Development Incentive (EDI) “cannot come soon enough for Australia’s mineral explorers”.

Amec CEO Simon Bennison pointed out that the largest contributor to the decrease in expenditure, as shown in ABS’s ‘Mineral and Petroleum Exploration Australia – December quarter 2013’ report, was greenfield exploration, with expenditure having declined by 27.5% or $66.5-million quarter-on-quarter.

Metres drilled also declined by 33%, or nearly 2-million metres, compared with the previous quarter.

“This follows on from the significant downward trends in both the June 2013 and September 2013 quarters. The level of greenfield exploration metres drilled is nearly on a par with the March 2009 levels,” he said.

Bennison said that the decrease in greenfield exploration expenditure and metres drilled was “extremely concerning” as it took on average seven years to convert a discovery into an operating mine, according to research undertaken by the University of Western Australia.

“In order to reverse this downward trend, Amec has been advocating for policy changes that will make Australia a more desirable place to invest, such as the implementation of the EDI announced by the [federal coalition government] in its Resources and Energy Policy paper,” he said.

He added that Amec had been instrumental in the federal coalition government adopting the EDI and continued to assist the government on the implementation of the initiative.

“The EDI will allow investors to deduct a proportion of the eligible exploration expenditure against their personal taxable income.

“When the EDI is introduced on July 1, 2014, it will provide a much needed boost to investor confidence, which is vital to sustain junior exploration and midtier mining companies,” Bennison said, adding that it would also provide an incentive for capital to flow into the sector. 

“Investors are looking for positive signs through federal government policy changes such as the repeal of the carbon tax and mining tax, exploration deductibility, employee share schemes, and streamlining approvals processes.

“We must take action now to secure the mines of tomorrow and revenue streams for the benefit of all Australians,” Bennison concluded.