Mining is in flux.
We have witnessed what may be the last great commodity boom for decades; the implementation of multiple mining taxes at federal and state levels; and a massive culling of mining CEOs over the last two years which has now seen Australians installed at the helm of two of the largest mining houses in the world.
All eyes have been on the majors – their trials and tribulations, how the now clearly toothless Mineral Resources Rent Tax has affected them, and how it has impacted investor confidence.
The mining industry is now under siege from all angles: the government, investors, environmentalists, and the man in the street – all of whom see the industry as a cash cow from the worker at the face through to the seats in the boardroom, all the while ignoring the high costs of doing business.
But all these hardships have never really threatened the future of these mining giants, companies which are able to simply pack up and look elsewhere overseas where prospects, and operating costs, are better.
Those who have been truly affected, the mining juniors, have seemingly been forgotten in the turmoil of these past two years.
But if the industry and the government continues to ignore the issues facing junior miners they do so at their own peril, and put the future of Australia's mining industry in jeopardy.
As mining investor confidence shrinks those who need a strong financial backing, explorers and junior miners – those willing to go out and uncover the new prospects and mining regions, are now unable to achieve this.
Only recently mining junior Gold Road Resources uncovered what may be a completely new gold bearing region, the Yarmana greenstone belt, yet if the situation proceeds it is unlikely we will be seeing another discovery like Gold Road any time soon. This was supported by the Queensland Resources Council which stated that “history has shown that the small explorers are the best at making discoveries, the best at juggling the risks. They have the best track record of delivering discoveries of new deposits".
Speaking to the Association of Mining and Exploration Companies head, Simon Bennison, he told Australian Mining that many junior miners are essentially operating without a net and that if support for these smaller companies disappears then the very future of the industry is under a cloud.
The high cost of exploration and a lack of governmental support as well as almost kafkaesque level of bureaucracy is already putting the future of Western Australia's gold sector at risk.
Bennison explained that many of the state's operating gold mines have declining reserves and lower ore quality as they dig deeper.
This is despite the rising price of gold, which is predicted by the likes of Silver Lake Resources managing director Les Davis to remain well above $1600 per ounce and even to hit $2000 per ounce soon.
He added that many miners are struggling to explore in greenfields areas because of the high costs of exploration.
While some of the cost is offset by continuing rounds of exploration and drilling funding from the WA government, Bennison said the Federal Government must lend its support.
He went on to say that unless an exploration incentive scheme is implemented, the mining industry may not exist in Australia in the coming decades.
"The Government has to look at its policies," Bennison stated.
"But if they do it will enhance the appetite for exploration, and encourage companies to access equity and debt finance and bring confidence back."
He explained that in 2012 there were only 32 successful IPOs, which "is one of the lowest on record, and highlights that it will be difficult this year".
"The Government should consider propositions such as changing the approvals process and tax credits, while it won’t act a panacea it will encourage greenfields exploration.
"This needs to be happening at all levels of government, as they need to be aware that not all miners are enjoying the high commodity prices; a lot are feeling it tough right now."
It is not just gold and Western Australia's juniors that are facing an uncertain future.
Coal in New South Wales, Queensland, and Victoria is also being fought against from the state of early drilling through to actual mining.
Support from the top
However there are some who are actively fighting against the odds that juniors face.
Queensland's member for Mt Isa, Robbie Katter (the son of well known politician Bob Katter), has tabled a bill to cut both the green and red tape that is strangling much exploration and junior mining in the state.
Katter had tabled the Environment Protection (Greentape Reduction) and other Legislation Amendment Bill 2012 to assist miners and farmers.
The amendment seeks to make changes to a wide number of existing acts, including the Aboriginal Cultural Heritage Act 2003, the Mineral Resources Act 1989, and the Petroleum Act 1923.
A major focus of the bill is the "streamlining and clarifying [of] information requirements".
It also seeks to combine the single application requirements that previously applied separately to mining and chapter 5A projects.
The bill aims "to ensure that projects are assessed as a whole, rather than separate environmental authorities being applied for and assessed at different times".
It will mainly affect smaller projects, rather than larger scale projects.
Bennison added that it is encouraging to see some support as the approvals process is in dire need of streamlining and "cutting of duplication".
"We need to get approvals processed quicker, but we can't compromise on them, it just needs to move more efficiently, but in saying that juniors need to do their homework before applying," he added.
The Northern Territory is also standing out amongst the states for actively encouraging mining.
Both Territory Governments have demonstrated support for the industry.
The recently installed mining minister Willem Westra van Holthe even stated that the Northern Territory is 'open for business', a comment in stark contrast to the actions of those in Victoria where mining and exploration seems to almost be actively discouraged.
This openness and support of smaller miners and exploration companies is behind the region recently coming ahead of Western Australia in the global Fraser Survey, ranking higher for prospectivity.
Different country, same story
While it seems as Australia has turned against the junior miners and supporting fledgling companies, it unfortunately appears to be a global problem in first world nations known for mining.
In Canada junior miners are experiencing the same problems.
Kirk McKinnon, the head of MacDonald Mines recently took his government and the financing industry to task over its current stance on the industry, stating that "we find it extremely ironic that both the prime minister and the Ontario premier have outlined natural resources as a prime catalyst for growth in the country".
In much the same way Australia's Federal Government has pegged its fortunes on a mining industry it is more than gouge.
In a letter to the company's shareholders and the government Mckinnon asks "what is happening to junior exploration companies?"
Answering his own questions he states that "in capsulated form, financings are becoming increasingly difficult to arrange, the stocks are at much lower prices versus historical levels; mostly because credible information and exploration success is not resonating and consequently the junior resource stocks have little or no resulting upward movement".
He adds that there is an environment of super dilution and a growing lack of investment in this sector, a situation that mirrors that in Australia.
McKinnon then goes on to make a statement that could have come directly from an Australian explorer.
"There are dire predictions that over half of the junior mining companies will disappear within the next few years, and [our company] is not sure whether our political leaders realise or care that the disappearance of such a large amount of these companies will constitute major layoffs in personnel and the country will likely lose key exploration scientists such as geologist and geophysicists."
He added that "most discoveries come about through small exploration companies as they are more nimble, and focus solely on discovery."
If we lose the juniors, then who becomes our future leaders?
Our mining future
The question remains – what is the future for Australian mining if we don't support our junior mining and exploration companies now?
As the number of historically known deposits are mined, ore body grades decline, and commodity prices slide and stabilise at lower levels we need explorers willing to take the risks and enter unknown regions to possibly uncover new deposits.
Mining needs juniors, and if support dries up in Australia we are unlikely to see anything similar to the discoveries of Chuck Fipke – who uncovered Canada's Diavik diamond mine after ten years of exploration, as the support for explorers willing to take a risk simply does not exist.
Australia's mining future is being shackled by poor governmental decisions and unless support is provided – both in terms of approvals as well as to a degree monetarily, then our mining future is at risk.
Confidence needs to be brought back to the sector, and with that confidence comes investment and future growth.
Juniors can become majors, but not if they are not given the opportunity.