Today, the Centre for Exploration Targeting at the University of Western Australia released a paper written by Professor Pietro Guj and Richard Schodde that questioned the sustainability of Australia’s non-bulk commodity mining industry in light of reduced discovery rates and a dwindling share of global exploration expenditure.
AMEC chief executive Simon Bennison said the well-researched paper highlighted numerous trends that prompted questions such as; where are Australia’s mines of tomorrow coming from?
According to the paper, Australia’s share of global exploration expenditure had slid from 21% to 12% in the past five years.
The paper said the shift of funding from greenfield exploration to brownfield exploration was worrying and was putting Australia’s future role as a resource powerhouse at risk.
“It is estimated that in the absence of new significant discoveries, based on current reserve and resources, about half of Australia`s non-bulk commodities mines would be exhausted between 7 and 18 years,” the paper said.
In addition to this, the paper highlighted the trend of Australian-based companies to devote an increasing amount of their budgets to exploring in prospective destinations such as Africa and Latin America.
Bennison said that while state and territory governments had started co-funded drilling programs aimed at encouraging greenfields exploration, this didn’t go far enough.
“More needs to be done, particularly by the commonwealth government,” Bennison said.
“Action needs to be taken now to ensure the continued sustainability of the industry, recognising that Australia is in competition with a growing number of jurisdictions globally that encourage mineral exploration.”
According to Bennison, the development of a National Exploration strategy was an essential policy initiative to reverse the drop in greenfields exploration in Australia.
“A crucial element of such a strategy will be the implementation of mechanisms that will encourage investment in minerals exploration, such as the Exploration Tax Credit model previously proposed by AMEC,” he said.
“This model was designed to promote greenfields exploration expenditure by Australian junior minerals exploration companies by providing them with the ability to voluntarily pass ‘trapped losses’ from eligible exploration expenditure activities to their shareholders in the form of a tax credit.
“Noting that it takes an average of 7 years from discovery to a producing mine, it is now time to implement the strategies to ensure that there is a sufficient level of greenfields exploration expenditure to find the mines of tomorrow.”
The release of the research paper ties in with the three-day AMEC conference in Perth, which starts today.
This article first appeared in ILN's sister publication MiningNews.net.