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PERTH (miningweekly.com) – An economic impact study into the Western Australian Exploration Incentive Scheme (EIS) has revealed that for every A$1-million invested by the state government, the EIS stimulated exploration activity generating A$10.3-million in direct benefits to the state.
The study also found that for every A$1-million spent, the EIS generated 12.5 full-time jobs in minerals exploration for a period of three years. It also considered the potential economic impact from the discovery and commercialisation of new mines as a result of increased exploration.
“This second stage of the modelling resulted in a further A$13.4-million of benefits for every A$1-million invested, bringing the total impact figure to A$23.7-million,” said Mines and Petroleum Minister Bill Marmion.
“While these numbers appear large, they should be considered in the context of the high commodity prices we were experiencing over the study’s sample period. Nevertheless, the positive impact is massive.”
Marmion said on Friday that the study, conducted by ACIL Allen Consulting, highlighted new pre-competitive geoscience as the main driver of private sector exploration investment.
“The lion’s share of publicity goes to the scheme’s flagship co-funded drilling programme that refunds up to 50% of greenfields drilling costs. But the quiet achiever is the Department of Mines and Petroleum’s Geological Survey of Western Australia.”
The A$33.3-million EIS funding for geophysical and geochemical surveys meant almost the entire state was now covered by airborne magnetic and radiometric survey data, providing invaluable information for explorers.
“This has led to innovative mineral system studies in a number of areas, most recently Gascoyne province, Edmund basin, in the Capricorn Orogen; Speewah basin, in the east Kimberley; and the Yilgarn Craton,” Marmion said.
The state government created the EIS in 2009, to attract exploration investment leading to new discoveries, and Marmion said on Friday that by encouraging more drilling, the government had increased the likelihood of major discoveries, such as the Nova nickel deposit, leading to a mine and the jobs and royalties providing long-term benefits to the state.
The state government had renewed its commitment to the EIS by approving yearly funding of A$10-million over three financial years from July 2014 until June 2017.
“This brings total funding for the scheme to about A$130-million and as this review confirms, we are certainly getting tremendous bang for our buck,” the Minister said.
The co-funded drilling programme had offered over A$54-million to more than 500 projects, of which about A$21-million had already been refunded to more than 260 projects.
The Western Australian Chamber of Minerals and Energy (CME) has welcomed the verification of the EIS, with CEO Reg Howard-Smith saying that the future pipeline of resource projects relied upon an increase in the current level of expenditure.
“Exploration is the lifeblood of future industry. Every resources project starts with a discovery and it’s great the government recognises its importance,” said Howard-Smith.
He also pointed out that with major projects such as Chevron’s Gorgon and Wheatstone liquefied natural gas plants, along with the Roy Hill iron-ore mine soon finishing construction, Western Australia’s priority must be attracting the next wave of significant investment.