Despite a moderately up-beat outlook for Australian exploration levels, as identified in a survey of Australia’s top explorers, the industry remains acutely concerned about the lack of any mining policy in Australia. Jim Hawtin and Dave Gibson report.
THE lack of mining policy coming from Canberra, notably absent in the recent ‘family friendly’ Federal Budget, is a principal reason the industry believes exploration levels will remain low.
According to many in the sector, this dearth of policy is starving the industry of the discoveries it needs to support its long-term future, and its vital role in the nation’s economy.
Exploration spending in Australia fell in the March quarter, despite the resurgent level of investor interest in Australian mining stocks spilling into the first quarter of this year.
Although traditionally a quieter exploration period, the financial sustenance offered by hungry mining investors in 2003 did little to inspire explorers during the March quarter.
And it did even less to drive them into greenfields exploration, with industry sources suggesting most money was spent either repaying debts or buying or developing old brownfields ground.
In the longer term the mining industry is concerned about a lack of government support and is fearful of the troughs and peaks of capital raising.
Yet, despite the glimmer of hope in explorers’ June quarter budgeted expenditure, the mining industry has found its woes compounded in more recent weeks.
Firstly, some momentum has escaped strong equity markets and high commodity prices, drying up much of the investment.
And, secondly very little in the way of support for the industry came out of last month’s Federal Budget, a great concern to miners.
The industry is concerned about the continuing low levels of exploration and has been lobbying the State and Federal governments to set policies and implement tax breaks that make exploration in Australia more internationally competitive and attractive.
At this week’s Minerals Week in Canberra the mining industry had a chance to highlight its concerns.
Former Sons of Gwalia executive chairman Peter Lalor, who recently became a life member of the WA Chamber Of Minerals and Energy and chairman of the newly formed Minerals Institute, delivered a speech on declining exploration levels on Australia.
In his speech Mr Lalor accused Australian governments of a serious lack of transparent or growth-oriented policies directed at the mining and exploration sector – one of the key sectors of the Australian economy.
“It’s way beyond [current Resources Minister] Ian MacFarlane, it goes back to the past three or four governments,” Mr Lalor said.
He said despite the numerous high-level enquires that have identified impediments to mineral exploration in Australia and made recommendations, since their completion there had been a “deathly silence” from governments, both State and Federal.
The situation was quite the opposite in a number of other countries, according to Mr Lalor, particularly in Australia’s main rival Canada.
He asked how the government could continue to expect the mining industry to provide more than $40 billion in export earnings each year, and keep 300,000 people employed, without some form of government recognition.
“We are not out here looking for a pat on the head. The mining industry is big enough and ugly enough to look after itself, but there is clearly a need for appropriate policies which are going to overcome the various issues,” he said.
He said there had been no significant mineral discovery in Australia in more than 10 years and unless something was done, miners would continue eating into the national mineral inventory, leaving Australian mining to be made up of just coal, iron ore and alumina.
Although Mr Lalor conceded that much of Australia had been aggressively explored, he said the mining industry now needed encouragement to begin looking at depth.
The mining industry had specifically targeted the introduction of a flow-through share scheme and more funding to the Federal geoscientific body as key objectives.
Resources Minister Ian MacFarlane told WA Business News that pre-competitive geo-science received $61 million in funding last year, but that a big-ticket item such as a flow-through share scheme – estimated to cost several hundred million dollars – would have to wait.
He said he was prepared to continue arguing for the scheme and the Government had not ruled it out.
Mr MacFarlane suggested the Western Australian Government could be doing more to support its large exploration industry through the royalties it receives from the billion dollar iron ore industry and other terrestrial mining activities.
