Administration levies on exploration licences have caused a drop in the number of applications, according to the Association of Mining and Exploration Companies (AMEC).
In the lead up to the NSW election AMEC has released a policy platform entitled ‘Creating a Globally Competitive Mineral Exploration and Mining Industry.
AMEC chief executive Simon Bennison said the state government needed to improve policy settings to reduce the cost of doing business, which would give encouragement to junior miners which are responsible for 80 per cent of exploration in the state.
“AMEC has identified thirteen key policy initiatives requiring the incoming Government’s immediate attention in order to create a vibrant mineral exploration and mining industry in the State,” Bennison said.
“The highly respected Fraser Institute report shows that New South Wales struggles to compete with other Australian States and Territories as the preferred investment destination.”
Bennison said there had been a drop off of 25 per cent in the number of exploration licences, which represented an area of 50 per cent since September 2012 (refer Figure 1 below).
The drop off was linked to the introduction of the Administration Levy and New Frontiers Levy in 2012.
The Administration Levy charges miners one per cent of their rehabilitation security deposits annually, and generated $11.2 million from the coal industry in FY13.
The New Frontiers Levy (rental levy) is calculated on the Annual Rental Fee Area, and raised $2.6 million from coal in FY13.
Bennison highlighted a number of proposals in the policy platform document, and said failure to take such policy action would result in reduction of global standings and inability to attract investment for projects.
“It is imperative that the New South Wales Government streamline the approvals processes, remove the Administration and Rental levies, maintain pro-uranium initiatives, introduce a mining rehabilitation fund, and reduce uncertainty with planning and sharing arbitration costs,” he said.
“AMEC looks forward to continuing the strong working relationship with the Government in order to tackle the major priorities to reinvigorate the industry and position New South Wales as an attractive investment destination.”
The policy initiatives are available on the AMEC website here.