PERTH (miningweekly.com) – Australia’s investment in exploration expenditure continues to be at historically low levels, the Association of Mining and Exploration Companies (Amec) commented on Tuesday as the Australian Bureau of Statistics (ABS) published the latest quarterly mineral exploration figures.
The trend estimate for total mineral exploration fell by 9.6% during the three months to June, or by about A$46.8-million, to $438.8-million. Compared with the previous corresponding period, the trend estimate declined by 34.3% year-on-year.
Western Australia saw the biggest downturn in terms of the trend estimate with exploration spend dropping about A$38.4-million, or 14.5% quarter-on-quarter.
The trend estimate for metres drilled fell 4.9% in the June quarter 2014, compared with the previous quarter, and by 19.5% compared with the June quarter 2013 estimate.
In original terms, mineral exploration expenditure rose 16.2%, or A$66-million, quarter-on-quarter to $474-million in the June quarter, while metres drilled rose 39.6%.
Exploration on areas of new deposits rose 19%, or around A$23-million, while expenditure on areas of existing deposits rose 15.3%, or A$44-million. Drilling in areas of new deposits rose 14.7% and drilling in areas of existing deposits rose 48.3%.
Amec warned that despite the slight increase in spend, in original terms, Australia’s investment into exploration expenditure continued to be historically low.
“Investment in exploration on new deposits is similar to post global financial crisis levels in the March 2009 quarter which reflects the challenges currently facing the industry,” said Amec CEO Simon Bennison.
“Given the long lead time from discovery to a producing mine, these figures are extremely concerning. Investment in greenfield exploration is essential for new discoveries to secure the future of the Australian mining industry.”
Bennison pointed out that the exploration industry contributes 10% of Australia’s gross domestic product and employs around 250 000 people in Australia, adding that the industry was essential to support Australia’s economy and government revenue streams into the future.
“Australia’s reputation must be restored. In 2013, 67% of exploration funds raised on the ASX went to international projects. The number of initial public offerings on the ASX also dropped from 126 in 2007 to just three this year.
“It is essential then that the federal government’s proposed Exploration Development Incentive initiative is quickly legislated. This along with the repeal of the mining tax will go a long way to restoring Australia’s international competitiveness and increasing investment to stimulate the sector,” said Bennison.