The government agency charged with driving the reform of Western Australia’s $121 billion a year resources industry says it is essential that the current reforms within the sector continue – and in close consultation with the industry – if the sector is to emerge successfully from the current easing in mineral commodities demand and pricing.
Addressing the Paydirt 2014 Australian Nickel Conference in Perth today, the Director General of WA’s Department of Mines and Petroleum, Richard Sellers, said it was essential however, that any reforms did not add to the cost of doing business in Western Australia, nor detracted from its appeal as a destination for global investment in exploration and mining.
"One of the most successful outcomes to date of our reform is the slashing of the tenement titles approvals processes and backlog to its best level in more than two decades," Sellers said.
"When you consider there are more than 22 000 active mineral titles operating in Western Australia covering an area of almost 550 000 square kilometres, or just over one fifth of the State’s land mass, the Department’s moves to cut the backlog of outstanding titles applications have seen this drop from more than 18 000 in 2007 to just over 4000 today," he said.
"This will reduce even further under our current push to expand the existing approvals transparency to other related government agencies including Aboriginal Affairs, Water, Environment Regulation, the Environmental Protection Authority and Parks and Wildlife."
Sellers said he could not stress enough the importance of consultation in shaping WA’s resources future.
"Resources projects are having to be developed in an increasingly complex and challenging social and community environment," Sellers said.
"This environment demands that industry has greater environmental, economic and social accountability which in itself highlights the importance of transparent decision making and community engagement for the successful delivery of new resources projects," he said.
"The challenge Western Australia now faces is the ability to sustain growth of the resources sector and remain an attractive investment destination and that includes agencies such as ours helping build confidence with stakeholders and the community."
He said the value of Western Australia’s resources in 2013-14 was a record $121.6 billion with nickel coming in as the State’s fourth most valuable mineral sector at $3.5 billion.
For the first half of that year, US dollar prices negatively impacted the sector but a combination of rising prices and the weakening Australian dollar resulted in an increased price of around 2 per cent for nickel producers in 2013-14.
In the same period, the quantity of WA nickel sales fell by 9 per cent to 209,000 tonnes, while the total value fell by 4 per cent.
However, nickel had particularly benefited from the State’s Exploration Incentive Scheme (EIS) which had, since 2009, seen its flagship Co-funded Exploration Drilling Program offer more than $50 million to over 460 resources projects in Western Australia, with many projects including nickel and base metals targets.
In 2013-14, there were 33 nickel discoveries across the State – part now of a total of 271 projects where nickel or base metals are being targeted.
Sellers also noted that the Mining Rehabilitation Fund – introduced on a voluntary ‘opt-in’ basis in July last year and made compulsory this July to boost WA’s exploration and mining investment – saw more than 95 per cent of tenement holders meet the 30 June 2014 compliance deadline.
The Department has already retired more than $290 million in environmental bonds over the past year and a further $900 million in bonds should be retired Sellers says, over the next 12 months.
"This will free up much needed funds for new exploration or mine development," he said.
Interest earned on the Fund will be used to pay for its administration and to undertake rehabilitation works on abandoned mine sites throughout the State, leading to better environmental and community safety outcomes.
Sellers said the Fund was a world first and was now under review by other Australian states as to its possible introduction there.
*Kevin Skinner work with Field Public Relations.