PERTH (miningweekly.com) – The Productivity Commission warned that the productivity of Australia’s resource exploration industry was falling, while operating costs were continuing to increase.

In a draft report titled ‘Mineral and Energy Resource Exploration’, the Productivity Commission noted that Australia was becoming less attractive to international resource explorers as an investment destination.

According to the Australian Bureau of Statistics, A$89.3-million less was spent on mineral exploration, other than petroleum, in the final quarter of 2012. Expenditure fell by 10.2% to A$790.2-million in the December quarter, with Western Australia the largest contributor to the estimated drop.

The commission’s deputy chairperson, Mike Woods, pointed out that there were several key areas where regulations could be made less burdensome for explorers, while maintaining important safeguards.

“In particular, the commonwealth, state and territory governments have overlapping and duplicative environmental and indigenous heritage regimes, but they have it in their power to agree on more efficient accreditation arrangements,” Woods said.

The draft report also proposed that the criteria for awarding exploration licences and the outcomes of tender processes should be published; adding that Ministers should be required to give reasons for their decisions regarding exploration licences, while heritage registers should be established to avoid repetitive heritage surveys.

The report also outlines several recommendations to improve the certainty and transparency of the development and administration of regulations.

“There needs to be greater community engagement when governments make land access decisions, but the debate needs to be grounded in sound evidence about the environmental, social and economic impacts of particular exploration activities.”

“Regulation needs to evolve alongside gains in the scientific knowledge base,” Woods added.

The commission was seeking responses to this draft report and would be holding public hearings.

Meanwhile, the Association of Mining and Exploration Companies (Amec) on Friday welcomed the report, saying that it highlighted issues that the association had been concerned about for some time.

“The report acknowledges that the Australian exploration industry is experiencing declining discovery rates, rising costs, lower productivity and that Australia is less attractive as an exploration destination,” Amec national policy manager Graham Short said.

“We are pleased the Productivity Commission has independently recognised the nonfinancial barriers currently facing industry, and hindering the discovery of resources for Australia.”

Short pointed out that Amec had been calling for progressive reforms across all Australian jurisdictions, with the result that some progresswais being made in several states.

“We anticipate that this independent report will be heard by all levels of government and the necessary reform programmes implemented as a matter of priority,” he added.