PERTH (miningweekly.com) – The Association of Mining and Exploration Companies (Amec) has expressed concern for the future of the Australian exploration industry, and the impact that Covid-19 will have.
“While the health, safety and wellbeing of Australians must remain the focus through Covid-19, mineral exploration companies are really doing it tough,” said Amec CEO Warren Pearce.
He noted that since Covid-19 restrictions were imposed a month ago, nearly half of the exploration companies recently surveyed had ceased all exploration operations, and over a quarter more had ceased most exploration operations.
“This at a time, two years into the exploration cycle, when new discoveries are being made and when the next year of mineral exploration could well kick-start the next mining boom and help recharge Australia’s damaged economy.”
“While partially exempt from travel restrictions, for which we are fortunate, we are not immune from other impacts of Covid-19, which has all but killed investment appetite, meaning that companies are unable to attract private investment to fund ongoing exploration.”
The survey of 63 exploration companies found that nearly half reported having already laid off staff or that they expected to be forced to in the next six months. The survey found that 75% of companies had already reduced wages or adjusted salaries down for their employees or offered shares in lieu of salary.
Furthermore, 74% of companies think that their cash reserves would not last the year and 69% did not believe it would be possible to capital raise in the next six months.
“Explorers are being dealt an added blow, with mineral exploration companies being excluded from the Jobkeeper Initiative, because of the definition used in the eligibility criteria,” said Pearce.
“Our mineral exploration companies are at the heart of our minerals industry; they find around two-thirds of the discoveries that provide the pipeline of new projects for development.”
“Without greater cost relief or financial assistance, there will be dire consequences for the exploration industry in Australia, and for the ability of Australia’s mining industry to identify and develop new major projects ready for investment to support Australia’s economic recovery.”
Western Australia, Queensland, South Australia and New South Wales governments have provided some support, but further relief is still needed.