Explorers still rushing in

ASSOCIATION of Mining and Exploration Companies CEO Warren Pearce has praised Australia’s minerals sector for its resilience throughout COVID-19, as mineral exploration statistics for the June 2022 quarter show continued demand for the country’s minerals and a healthy appetite for Western Australia’s iron ore.

 Explorers spend big as exploration booms

Explorers spend big as exploration booms

Australian Bureau of Statistics data shows mineral exploration expenditure across the country was up 23.18% to $1.05 billion in the quarter, compared to the previous quarter's $198.3 million spend.

This was backed by record exploration spend of $673.1 million in WA, up 28% on the previous quarter for the state's highest level of expenditure recorded.

The ABS data shows that since the previous quarter, total national expenditure increased 23%, with rises seen in all states.

Tasmania's exploration spend increased 92% while the Northern Territory's went up 48%.

Exploration spend was up 16% for South Australia, 14% for New South Wales, 9% for Queensland and 1% for Victoria.

Iron ore exploration across the country was up 44% on the previous quarter to $201 million, while nickel and cobalt exploration was also up 24% to $80.2 million.

Greenfield exploration expenditure was also up 20% to $312.9 million, while exploration on existing deposits increased 24.49% to $740.7 million.

Pearce said despite ongoing COVID-19 challenges impacting the ability to staff operations and access tenements, greenfield expenditure grew 1.85% and brownfield expenditure by 22.3%, year-on-year.

"Metres drilled for this quarter increased by 17.43%, with drilling of existing deposits increasing by 20.88% and greenfield drilling by 9.87%," he said.

"While staffing shortages have significantly impacted drilling programs across the nation for the quarter, heightened demand for drill rigs and exploration drilling remains."

Pearce said even though the industry was being impacted by labour and skill shortages, mineral exploration remained key.

"Our ability to remain the investment destination of choice is paramount if we are to discover the mines of the future and deliver long-term, wide-ranging benefits to Australia," he said.

"Continued strength in mineral exploration expenditure is underpinned by a high level of confidence that the mining and investment cycle still has a long way to run."

Minerals Council of Australia CEO Tania Constable said the ABS data confirmed the mining industry was also making significant investments to ensure these contributions continue.

"This has included investment records for commodities essential to modern technologies, including gold [$1.6 billion], copper [$586 million] and other deposits such as lithium and rare earth elements [$364 million]," she said.

"Recent estimates from the Bank of America show more than US$3 trillion of mining investment is needed to supply these minerals, and Australia must act now to maximise its share of this opportunity."

Constable said while the ABS exploration expenditure figures were encouraging, more had to be done for Australia to compete with emerging, low-cost mining jurisdictions around the world.

She said the government should provide competitive regulatory settings on tax, workplace relations, safeguards mechanism and streamlined environmental assessments and approvals with states and the Northern Territory.

"Greater business investment in new technology and projects is essential to ensure Australia's skilled workforce can drive higher wages and a stronger economy," Constable said.

According to the MCA's latest Economic Series report, in the past decade Australia slipped from being one of the best performing countries for private sector capital investment to one of the poorest, with performance and labour productivity growth falling 2.5%.

The report said that since the end of the previous mining investment boom, growth in the economy's real net capital stock substantially slowed and was now growing at its lowest rate in 60 years.

Constable said unless that was turned around, the country was at risk of suffering further weakness in business investment.

MCA's report calls for economic reforms that deliver internationally competitive tax settings; expanded trade and investment opportunities; efficient and effective regulatory settings; practical and beneficial workplace relations rules; an efficient transformation to net zero emissions; and industry-focused skills and training programs.

Just a 1% lift in productivity by 2030 would deliver a $200 billion boost to the economy and 9.4% increase in real wages, the report says.

Miners paid a record $26.5 billion to the Australian Tax Office in 2020-21.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.


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