Figures from the Australian Bureau of Statistics indicated that the trend for total mineral exploration expenditure rose by 3% or $A9.7 million to $364 million in the December quarter 2015.
That’s despite the Australia wide seasonally adjusted trend being 12% lower than the previous corresponding quarter. Seasonal exploration expenditure also fell 1% or $5 million to $365 million while in original terms, expenditure was 3% or $12 million down from $394 million in September.
Western Australia led the increased trend estimated exploration expenditure with a jump of 3.1% or $6.5 million, helping to reverse the $12 million dollar fall to $344 million in September, however it also decreased the most in seasonally adjusted figures, falling 2% or $4.6 million.
The Chamber of Minerals and Energy Western Australia reported that the latest data reinforced the importance of the WA government’s co-funded drilling program, the Exploration Incentive Scheme, which assisted in driving greenfield exploration discoveries.
“In order to secure the long-term future of the resources sector in Western Australia it is vital the next pipeline of resource projects are discovered through active exploration of the state,” CEO Reg Howard-Smith said.
Unfortunately, Australia-wide exploration on areas of new deposits fell in original terms by 8% or $9 million to $106 million while existing deposits fell 1%, down $3 million to $276 million.
As to be expected, iron ore was hit the hardest with a decrease in minerals sought of 9% or $8 million to $74 million. Despite the fairly positive results from the South Australian royal commission’s tentative report, political hot potato uranium exploration fell a big 30%, down $5 million to $11 million.
Yet there was some good news on the horizon. Metres of trend estimated drilling were up 4%, to 1.5 million metres . Drilling was also the only exploration area to see its seasonally adjusted estimate increased, rising 9% to 1.6 million metres.
Association of Mining and Exploration Companies CEO Simon Bennison says increased drilling at greenfields deposits shows the success of the federal government’s Exploration Development Incentive, which came into effect from July 1 2015.
“In what is traditionally a negative quarter for mineral exploration, this year we have seen an increase in metres drilled driven by exploration on new deposits,” he said.
“Compared with the September 2015 quarter, greenfields’ metres drilled is up 30% in the December 2015 quarter whilst expenditure is down 8%. The cost of exploration is coming down as would be expected in the current market conditions.”
AMEC reported it has been working with the Australian Taxation Office, Treasury and the Department of Science to review the EDI and make it more effective.
The CME warned that without ongoing investment in exploration activities many resources would remain undiscovered, stifling the growth and prosperity of the sector and the economy into the future, risking employment, investment and government revenue.
