A REPORT on mineral exploration released by government agency Geoscience Australia has drawn criticism from the Association of Mining & Exploration Companies (AMEC) for falling short on analysis of key factors.
Releasing the Australian Mineral Exploration Review 2011 on 17 February, the Minister for Resources and Energy Martin Ferguson said it confirms spending on mineral exploration in Australia continues at high levels with almost $3 billion invested during 2010/11.
“Positive exploration figures are good news and reflect the continued strength of the industry,” Mr Ferguson said.
The report indicated Western Australia enjoyed the highest level of investment with 54 per cent of the total expenditure in Australia followed by Queensland with 22 per cent and South Australia with 9 per cent.
AMEC CEO Simon Bennison responded to Mr Ferguson’s comments saying the report did not tell the whole story.
“(The report) shows mineral exploration expenditure for 2011 rose by 32 per cent. However, the report should have further analysed other factors, such as metres drilled and global exploration trends,” Mr Bennison said.
“It is inappropriate for government agencies to keep using ‘exploration expenditure’ as the key measurement of performance. It does not acknowledge that the rate and quality of discoveries has declined in recent years and that companies are going much deeper to find targets.
“Further analysis of ABS data shows that as a proportion of total metres drilled, the share of greenfields exploration has fallen from around 45 per cent to just over 30 per cent since 2003, while brownfields exploration has risen from 55 per cent to around 70 per cent.
“This shift is a result of companies actively shoring up their reserves and expanding production at brownfields sites due to increasing commodity prices over the last few years.
“The decline in greenfields exploration signals a threat to the long term growth of the Australian mining industry as the potential to discover the next operational mine decreases.”
AMEC wants exploration tax credit incentives that assist junior mining companies in raising new equity to be implemented to drive greenfields exploration development in the future.
The review is available from the Geoscience Australia website.
