PERTH (miningweekly.com) – On a ‘business-as-usual’ approach, Queensland is unlikely to oust Western Australia as the country’s greenfield exploration capital by 2020, Queensland Resources Council (QRC) CEO Michael Roche said on Wednesday.

Queensland would need to plug a A$1,1-billion shortfall in projected exploration expenditure if the state were to achieve Premier Anna Bligh’s target of becoming the exploration capital by 2020.

Western Australia currently reigns as Australia’s greenfield exploration capital. Roche said that a straight line extrapolation of the rates of growth in exploration expenditure over the past four years suggested that by 2020, Queensland’s greenfield exploration would have grown from A$131-million in 2008 to A$400-million in 2020.

However, this would still be less than Western Australia’s 2008 spending of A$576-million.

“At the current rate of growth, Western Australia would have grown to around A$1,5-billion in greenfield exploration by 2020. On this forecast, business as usual delivers Queensland a greenfield exploration shortfall of A$1,1-billion in 2020.”

“Clearly, business-as-usual policy settings are not going to be sufficient to achieve the greenfield exploration target,” Roche warned.

He noted that with its three-year A$29-million ‘Smart Mining’ exploration initiative set to expire at the end of 2009/10, the QRC was calling on the government to provide the Geological Survey of Queensland (GSQ) with stable ongoing funding for its exploration support programmes of A$25-million a year, as well as a new marketing capability of between $3-million and A$4-million a year.

He said that minerals production rates in Queensland were out-stripping the state’s ability to find new resources, driving the need for a “well-funded and highly active” GSQ, turning out high-quality information about the state’s minerals and energy prospectivity.

“It is the quality of this geo-science information that will attract exploration capital into Queensland and boost our chances of major new minerals and energy discoveries,” he said.

Though Queensland is highly prospective, Roche said that the state was in danger of falling further behind more active jurisdictions elsewhere in Australia and in parts of Canada and Africa.

Junior exploration companies are playing an increasingly significant role, accounting for approximately 70% of greenfield exploration and 50% of all exploration.

However, Roche said that the junior exploration sector was “severely constrained” because of the way Australian taxation law treats tax losses.

“Currently, junior exploration companies, who often have little or no taxable income, are unable to immediately deduct exploration expenses. Without such deductions, exploration costs are pushed higher resulting in lower levels of activity,” Roche said.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.