Australia’s mining industry continues to spend more on exploration after several years in the doldrums for the sector.
The latest mineral exploration data, from the Australian Bureau of Statistics (ABS), revealed that exploration expenditure increased by 6.6 per cent to $428.5 million in the June quarter.
Western Australia was the largest contributor to this growth, increasing its spend by 6.5 per cent or $17.4 million. The June quarter performance is 23.5 per cent higher than the same period in 2016.
Copper was the biggest improver of the commodities being explored for in Australia, with a 73 per cent increase, or $39.7 million.
The encouraging ABS data follow the Australian Government’s announcement of the $100 million Junior Mineral Exploration Tax Credit (JMETC) scheme, which will aim to secure additional investment in greenfields exploration.
JMETC will provide tax incentives for exploration companies, encouraging the investment and risk taking needed to underpin the future of the resources industry, according to the government.
Association of Mining and Exploration Companies (AMEC) acting chief executive Graham Short said the ABS statistics showed the JMETC was needed to lift greenfields exploration.
“Despite the positive growth, the percentage of greenfields mineral exploration of metres drilled remained fixed at 30 per cent,” Short said.
“Nearly 70 per cent of mineral exploration activity in Australia is extending existing deposits or drilling nearby an existing deposit.”
JMETC replaces the Exploration Development Incentive (EDI), starting in the 2018 financial year over four years.
“The JMETC is a tax credit arrangement which allows mineral exploration companies (with no mining income) to renounce and pass future tax deductions (losses) to their Australian resident investors,” Short explained.
The Chamber of Minerals and Energy of WA (CME) also backed the JMETC, saying it would significantly boost investment and job creation in Western Australia.
CME acting deputy chief executive Kane Moyle said the JMETC, as well as WA’s $10 million Exploration Incentive Scheme (EIS), was crucial for companies planning to explore greenfields areas.
“The long-term future of the resources sector in Australia requires a healthy pipeline of active exploration of the state, however this is costly and capital intensive,” Moyle said.