THE resource industry will face more challenges in exploration and prospecting after the Western Australian state government announced the implementation of new fees for assessing mining proposals and programs of works.
From 1 July 2015, resource industry explorers will face a $6,950 fee for applications to assess a mining proposal, while program of work will attract a fee of $590 for a four-year duration, contributing a predicted $2.7 million annually to the state government.
In response to criticism from the mining, oil and gas sectors, the Department of Mines and Petroleum made a minor amendment that would see companies exempt from the fee if conducting prospecting work on .25ha or less of land not classified as a reserve.
State minister for mines and petroleum Bill Marmion said the new fee would help ‘manage and care for WA’s unique environment.’
“These fees are being introduced to help meet those standards and ensure the mining industry retains its strong community support to continue building our State’s future,” he said.
“It is part of our wide-ranging Reforming Environmental Regulation program, which is forecast to save the Western Australian resources industry more than $30 million a year from now on.”
The Association of Mining and Exploration Companies (AMEC), however, argued the $30m saving was ‘based on guesses of unsubstantiated and perceived savings to industry’.
“AMEC has opposed the ad hoc approach to back calculating fees for mining proposals and programs of works since the concept was first floated and the ‘low impact’ threshold of .25ha is also ridiculously small and inadequate for exploration activity,” AMEC chief Simon Bennison said.
“This is encouraging poor business practice and sets a precedent on how the agency will finance future shortfalls in its budget.
“Industry has been cutting costs and increasing productivity wherever possible, and the agency must be seeking to do the same.”
Urging the state government to reverse the fee immediately, Mr Bennison said it posed a threat to Western Australia’s attractiveness to investors.
“Exploration and mining companies have already seen increases of up to 800 per cent in one year in their shire rate notices, increasing tenement fees and rising costs of Aboriginal Heritage Surveys,” AMEC chief Simon Bennison said.
“There is also the threat of an increase to royalty rates in Western Australia.
“With escalating costs in the state, investors will be reviewing their investment decisions and potentially looking at more competitive jurisdictions with Australia and overseas.
“These new fees will be yet another financial impost on industry and potential deterrent to investment in Western Australia.”