Photo by: Bloombeg
PERTH (miningweekly.com) – Australia has reported a marked improvement in greenfields exploration in the December quarter, while the cost of searching for minerals has come down in the current commodity market downturn.
The Australian Bureau of Statistics (ABS) reported on Monday that metres drilled increased by 6.9% during the quarter under review, with drilling in areas of new deposits increasing by 29.6%.
Mineral exploration expenditure fell by 3%, or A$12-million, to A$382-million in the December quarter. Exploration on areas of new deposits fell 7.8%, or A$9-million, and expenditure on areas of existing deposits fell by 1.1%, or A$3-million.
In original terms, the largest decrease came from expenditure on iron-ore exploration, which was down 9.4%, or A$7.7-million, as well as uranium, which was down 30.5%, or A$4.7-million.
In seasonally adjusted terms, total petroleum exploration expenditure decreased 22.5%, or A$132.1-million, to A$455.5-million in the December quarter, with Western Australia reporting the largest fall at 17.6%, or A$70.5-million.
The Association of Mining and Exploration Companies (Amec) commented that the ABS figures showed positive signs for greenfields exploration.
“In what is traditionally a negative quarter for mineral exploration, this year we have seen an increase in metres drilled driven by exploration on new deposits,” Amec CEO Simon Bennison said.
“Compared with the September 2015 quarter, greenfields metres drilled is up 30% in the December quarter while expenditure is down 8%. The cost of exploration is coming down as would be expected in the current market conditions.”
Bennison said that the increase in greenfields mineral exploration highlighted that the federal government’s exploration development incentive, which was effective from July 2015, was having the intended positive impact on greenfields mineral exploration.
“Territory and state exploration incentive schemes have also been crucial in encouraging mineral exploration. They are highly regarded by the industry and have demonstrated significant economic returns to the jurisdictions,” said Bennison.
The Western Australian Chamber of Minerals and Energy (CME) added that despite the tough market and capital raising conditions, opportunities still existed for minerals exploration.
“In order to secure the long-term future of the resources sector in Western Australia it is vital the next pipeline of resource projects are discovered through active exploration of the state,” said CME CEO Reg Howard-Smith.
“Critical to achieving this aim is ensuring policies which advance exploration through incentives or credits.”
Howard-Smith warned that without ongoing investment in exploration activities, many resources would remain undiscovered, stifling the growth and prosperity of the sector and the economy in the future, and risking employment, investment and government revenue.