In 2011, Australia accounted for 13% of global mineral exploration spending. Africa accounted for a slightly bigger proportion, 15% in all, which is neither here nor there, really.

Ask yourself, which region got more bangs for its buck? How exciting have been the finds in Australia over the past few years as compared with what has been turned up in Africa? The answer is pretty obvious.

You have until March to make submissions to the Productivity Commission’s inquiry into mineral and energy resource exploration.

This is going to be an important investigation, not so much for action that may follow – it’s almost certain to be very little, or even none – but for what is turned up when the submissions are received and the public hearings held.

Meanwhile, the brawling over the mining tax continues to preoccupy Canberra. The Prime Minister says she will not vary the terms, Tony Abbott says he will scrap it. The only question is what Kevin 24/7 will do once he’s back in The Lodge, as now seems increasingly possible.

Rudd has used the tax’s failure as a bludgeon with which to beat Gillard and Wayne Swan. But no clue has been given to what he will do if given the reins of power again.

What we should demand is that they just settle it once and for all. Then we can get on to the issue that really matters – the future of the mining sector.

Unfortunately, the Productivity Commission will be able to address only part of the problem, such as state legislation and various regulatory options.

The terms handed by the government to the commission specify “non-financial” issues such as state legislation. It will not deal with flow-through shares, which somewhat negates the whole point. Do the politicians really think it’s just a case of “give them better regulations and they’ll come and explore”

I have castigated the mining sector many times for the appalling returns from part of the sector to shareholders who have invested their hard-earned in these mining companies. Being a producer does not necessarily mean passing on the earnings to the stock holders.

But there’s another side, it seems.

Peter Strachan of Perth-based StockAnalysis says in this week’s client note that even with a rebound in commodity prices, “the miners have been cutting back on capital spending for new projects and ongoing work”. This is a result of the message finally getting through to directors, that boards should focus on shareholder returns.

Strachan notes there has been cost-cutting, which, along with higher commodity prices, “could lead to dividends and less willful spending on growth for growth’s sake”.

The danger is that some worthwhile exploration projects may also be thrown out with the bath water.

The other problem facing us is the issue of what sort of exploration is being done, grassroots exploration having dropped from 50% of all exploration spending in 2003 to 34% now.

In their paper delivered last year called Where are Australia’s Mines of Tomorrow?, University of Western Australia’s Richard Schodde and Pietro Guj noted this shift from greenfield to brownfield exploration in Australia.

Over the first decade of this century figures from the Australian Bureau of Statistics showed Australia’s exploration spending increased fourfold but, as the authors point out, that figure masks the “critical decline in greenfield exploration, the kind of exploration needed to find large new mines”

The number of discoveries per dollar invested has gradually fallen for all deposit sizes, Schodde and Guj reported, with a virtual absence of recent giant discoveries.

If you really want to give yourself a figurative cold shower, take a look at Figure 19 in the report as to the expected life of 42 mines now operating in Australia. The caption says it all: “Half of Australia’s mines could close down within seven to 18 years”

Will there be replacements?

This brings us full circle to the comparative spending in Australia and Africa. The difference in the end result is that companies in Africa are, in the majority, exploring new projects rather than trying to eke a few more years out of some “historic” mining district or looking for satellite deposits.

Will the Productivity Commission have a solution for that little conundrum?