PERTH (miningweekly.com) – The future of Australia’s junior miners was under threat, a report from auditing firm Grant Thornton found this week.
The 'International Mining Report 2013', which surveyed mining executives in Australia, Canada, South Africa and the UK, revealed that a range of factors were currently influencing the sector internationally.
One key finding was the impact of federal government intervention on junior miners and explorers in Australia.
Grant Thornton Australia’s national head of energy and resources, Simon Gray, said the Australian government needed to be more mindful of its influence on the junior mining sector.
“Federal government intervention is such a key issue here in Australia. The current government is doing little to support exploration companies and it doesn’t really have the interests of junior miners on its agenda.
“This is a concern, as a prolonged period of reduced exploration has the potential to set back future discoveries, impacting the viability of the industry.”
Gray advised the Australian government to consider increasing incentives to encourage exploration, ensuring the industry continues to progress and the mines of the future were identified.
The report found that 58% of Australian mining executives rate increased government involvement or regulation as a major constraint to growth, the highest of all countries surveyed. In addition, only 47% of Australian respondents believed public policy in Australia supported exploration, compared with 73% of respondents overall, revealing what Gray called a distinct disadvantage for explorers in Australia.
“Increased regulation and the impost of new taxes have placed more demands on executives to prove the viability of projects, and has dampened the enthusiasm of international investors in the Australian mining sector,” he said.
Furthermore, 84% of Australian mining executives believed the government should be doing more to support the exploration sector and junior miners, such as through increasing grants for exploration and providing incentives to encourage investment in juniors.
Complex and lengthy licensing procedures also continued to be a major constraint on growth in the sector, the report found.
However, Gray noted this week that conditions in the Australian resources sector were not entirely negative, with mining executives remaining optimistic about prices.
Around half of those surveyed expected the price of their key commodities to increase in the coming year, and two-thirds were planning to increase exploration expenditure.