JOHANNESBURG (miningweekly.com) – The Western Australian Chamber of Minerals and Energy (CME) on Monday welcomed the state government’s announcement of a new exploration incentive scheme (EIS) to assist in regional exploration.

Mines and Petroleum Minister Bill Marmion said that 46 exploration drilling projects would receive grants from the government to help find the next generation of resource projects in Australia.

Marmion said the current round of grants had been very competitive, attracting a record 101 applications requesting A$11.1-million in co-funding.

“The EIS co-funded drilling programme provides incentives to drill in underexplored areas to ensure the continued prosperity of the state’s resources industry, particularly in the current difficult financial environment being experienced by exploration companies,” Marmion said.

“In the past, the co-funded drilling programme has helped unearth substantial new resource discoveries. Some discoveries such as Sirius’ Nova are expected to be mined within a few years and others, such as Beadell’s West Musgrave Handpump discovery, were instrumental in promoting interest in a region which had previously been underexplored.”

The programme refunds up to 50% of direct drilling costs with caps of A$150 000 for a multi-hole project, A$200 000 for a single deep hole, and A$30 000 for a prospector’s project.

“The EIS is just one of the many reasons why Western Australia is ranked as the destination of choice in Australia for explorers as measured by the world-renowned Fraser Institute Survey,” the Minister said.

CME CEO Reg Howard-Smith said on Monday that the future pipeline of projects was reliant upon increasing the current level of exploration activity in the state.

He noted that the sector’s major challenge is on the high cost of doing business in Australia and maintaining Western Australian resource project international competiveness is crucial.

“When combined with decreasing ore grades and new minerals and energy rich regions emerging around the world, the level of competition in the global resources sector is increasing for Western Australia,” said Howard-Smith.

“Programmes such as the EIS are welcomed by the resources sector and will deliver a significant return to the people of Western Australia.”

In total, the government has allocated A$130.27-million to the EIS from 2008/9 to 2016/17.  This round of the Co-funded Drilling programme sees $5.6-million being offered to 46 projects, including three prospecting projects.