The Queensland Resource Council has urged federal and state governments to respond decisively to a substantial fall in expected mineral exploration activity reported by the Australian Bureau of Statistics.
Queensland Resources Council Chief Executive Michael Roche said a forecast 37% decline in Australian mineral exploration in the second half of 2008-09 was particularly troubling for Queensland with its dwindling inventory of discovered and commercially viable base and precious metal reserves.
“Without a concerted effort to encourage the discovery and development of new mines, Queensland could be out of the game as a gold, silver, copper, lead and zinc producer in less than 30 years,” Roche said.
“This is despite the fact that Queensland continues to rank internationally in the top 10 destinations for the quality of our mineral prospectivity.”
Roche said today’s ABS forecast should be the stimulus for the federal government’s announcement of a promised flow-through share scheme to support continuing investment in Australian mineral exploration companies.
“The Rudd Government committed to the introduction of a flow-through share scheme as part of its 2007 election platform with the intention of putting Australia on an even footing with countries like Canada, which is winning an increasing share of the global exploration dollar at our expense on the back of a highly successful flow through shares scheme,” he said.
“The forecast fall in exploration activity comes as little surprise as the QRC’s junior resource company members are reporting extreme difficulties in raising capital to fund their exploration activities.
“A flow through share scheme would make it more attractive for investors to subscribe to capital raisings by junior explorers because companies without taxable income would be able to pass through a tax credit to their shareholders.
“This would help to smooth out the troughs in exploration expenditures caused by price cycles and, in turn, assist job retention.”
Roche said that in the state election campaign to date, no plan had been articulated by either major party to encourage mineral exploration in Queensland.
“Queensland is clearly on the wrong end of the equation when it’s creating 25% of the country’s mineral wealth while attracting just 16% of the exploration spending in what geologists everywhere recognise as one of the most highly mineralised regions in the world,” he said.