AMEC Association of Mining and Exploration Compa : Production up but mineral exploration down

January 9, 2017

'In 2016 -2017, Australian resources exports grew by a further A$14.76 billion on 2015-16 figures - a full 15% higher,' said Mr Simon Bennison, Chief Executive Officer, Association of Mining and Exploration Companies (AMEC).

Every Australian will benefit from this increase through jobs, taxes and royalties.

The figures released yesterday by the Office of the Chief Economist in the Department of Industry, Innovation and Sciences' Resource and Energy Quarterly December 2016 edition, also highlighted the continued decline in mineral exploration expenditure.

The pace of decline in mineral exploration expenditure, which has shrunk by over ten per cent year-on-year since late 2012, has slowed noticeably in recent quarters. Australian mineral exploration fell by 3.7 per cent in the September quarter 2016, to $380 million. The main cause was a 34 per cent year on year fall in coal exploration.

The headline figure of a 3.7 per cent contraction in exploration hides the different speeds underway in the Australian mining sector.

'Minerals exploration expenditure rose year-on-year in Western Australia (up 6.7 per cent to $249 million), New South Wales (up 8.5 per cent to $32 million) and Victoria (up 23 per cent to $7.9 million) in the September quarter 2016. While exploration continued to shrink in the Northern Territory (down 34 per cent to $22 million), Queensland (down 28 per cent to 55 million), Tasmania (down 18 per cent to $3.2 million) and South Australia (down 5.5 per cent to $10 million).

'Gold exploration expenditure increased by 19 per cent year-on-year, to $159 million; while copper exploration expenditure increased by 15 per cent to $35 million.

'The Resource and Energy Quarterly clearly shows that exploration is beginning to grow in certain parts of the country and in certain commodity groups.

'The investment made in co-funded drilling schemes by Governments has helped reduce the cost of drilling, and makes it easier for companies exploring remote Australia to decide to drill and discover the mines of tomorrow.'

'Each new mine creates thousands of jobs and generates significant economic and social dividends for the nation and local communities.'

'The mines of tomorrow have to be discovered to replace the existing producing mines.'

'The Federal Government's Exploration Development Incentive (EDI), program has also stimulated investment in eligible Australian junior mineral exploration companies, making it more attractive for investors to decide to support the next generation of mines.'

AMEC has called on the Federal government to continue its support of the EDI, which is currently under review. The EDI has provided shareholders with a tax offset equivalent to the company tax rate.

The mining and mineral exploration sector in Australia continues to face a number of barriers, including land access, increasing red tape and rising costs.

'Today's figures show that mining is an important part of Australia's economy, creating jobs, royalties and revenue,' said Mr Bennison