PERTH (miningweekly.com) – Queensland coal explorers could save up to A$114-million through a concession introduced by the state government.
Minister for State Development and Natural Resources and Mines Dr Anthony Lynham said on Thursday that the concession, which would apply from January 1, 2016, would provide financial relief to coal explorers and ensure meaningful exploration did not stall in Queensland, despite the current downturn in commodity prices.
“This concession will provide up to a 50% reduction over 2016 and 2017 in the expenditure a coal explorer is required to commit under their exploration permit.”
“For example, say there is a coal explorer in the Bowen basin who holds multiple exploration permits with a combined committed expenditure of A$2-million for its milestone period within 2016/17. The concession means up to A$1-million of reduced expenditure they don’t have to spend to meet their exploration permit conditions.”
Lynham said the coal concession came on top of the concession already extended to mineral explorers, which could save them A$160-million over two years.
“Exploration is vital to discovering the resources that will drive the resources industry and sustain economic growth for Queensland and our communities,” the Minister added.
“We’re taken on board what industry, including the Queensland Exploration Council, the Queensland Resources Council and the Association of Mining and Exploration Companies, is telling us, and that is explorers are under stress with low commodity prices and difficulty attracting investment capital.
“This concession alleviates fiscal pressure and gives coal explorers more flexibility to respond to investment conditions and spend their exploration dollars on the ground where it is needed most.”
Lynham said, similarly to mineral explorers, coal explorers would still be expected to undertake meaningful exploration and meet their other obligations, including environmental obligations, annual rents and relinquishing sub-blocks.
The Association of Mining and Exploration Companies (Amec) has welcomed the concession, saying that if the programme could preserve its targeted A$100-million in company funds to be used for exploration activities, it would be a positive outcome and underlined the importance of a vibrant resources sector in Queensland.
“The Department of Natural Resources and Mines has worked with Amec to ensure that explorers can continue to operate and make the discoveries that provide employment and royalties to Queensland,” said Amec CEO Simon Bennison.
“Just as the mineral explorers rely heavily upon investors having faith in the future of the industry, coal explorers are also facing a number of challenges. Equity markets have been difficult, anti-development and divestment campaigns have crippled many companies and destroyed opportunities for jobs in regional areas.”