PERTH (miningweekly.com) – The Western Australian resources sector has welcomed the state government’s decision to continue to fund the A$10-million-a-year Exploration Incentive Scheme (EIS).

"I'm thrilled to announce the Exploration Incentive Scheme will continue following an increase in mineral exploration activities; this is encouraging news for the Western Australian mining industry,” Mines and Petroleum Minister Bill Johnston said on Thursday.

The scheme consists of a number of programmes that promote resource exploration in Western Australia, particularly on greenfield areas and frontier petroleum basins.

It provides refunds of up to 50% for innovative exploration drilling projects to a value of more than A$150 000.

The EIS has contributed to at least 25 new discoveries including the Nova nickel project and Gruyere gold project.

Johnston noted that for every A$1-million invested by the government, towards major new projects, the scheme generated A$10.3-million in exploration activities and created 48 jobs over 18 years.

"Western Australia's mineral industry is in its best shape since 2012, in the first half of 2017; there were 15 mineral initial public offerings on the ASX, four more than 2016.

"The surge of investor interest in gold and battery metals - lithium, graphite and cobalt - is helping Western Australia to emerge more rapidly from the equity funding doldrums,” the Minister said.

The Department of Mines, Industry Regulation and Safety received a 40% increase in the number of mineral exploration applications during the March and June quarters of 2017, compared to the last half of 2016.

A total of 7 584 mining and petroleum applications were received during the 2016/17 financial year, including 2 232 Programme of Work applications.

The Western Australian Chamber of Minerals and Energy (CME) on Thursday said that the government’s decision to continue funding the EIS came at a critical time for the state’s resources industry.

“The long-term future of the resources sector in Western Australia requires a healthy pipeline of active exploration of the state. Critical to achieving this aim is ensuring policies that advance exploration through incentives or credits,” CME acting CEO Nicole Rooke said.

“After falling to decade-low levels, exploration expenditure in the state is beginning to show some positive growth and confidence is returning to the sector.”

The Association of Mining and Exploration Companies also welcomed the news, with CEO Simon Bennison saying that roughly 80% of Australia’s current mineral production was from mines discovered before 1980.

“Eventually these mines will have to be replaced, and given that it can take over ten years to develop a deposit into a working mine, the mines of tomorrow need to be discovered now.”

“The vast majority of Australian greenfields mineral exploration is done by small, ASX-listed mineral exploration companies reliant on retail investors. Increasing the attractiveness of mineral exploration companies to these investors will lead to an increase in Australian greenfields mineral exploration.”