WA calls for more mining while SA pulls away

The Association of Mining and Exploration Companies (AMEC) has called for more greenfields exploration in Western Australia as South Australia economists tell the state not to put all its eggs into the mining basket.

AMEC has said it is vital that the WA government encourages juniors and greenfields exploration into new mining regions, the ABC reports.

It comes just months after the WA Department of Mines and Petroleum released its latest round of funding for drilling exploration.

The release is part of the wider Exploration Incentive Scheme, which is providing $80 million for greater exploration in Western Australia.

This latest release of $5 million supports drilling projects carried out between July 2012 and June 2013.

According to the executive director of the Geological Survey, Rick Rogerson, "the successful projects will promote new exploration concepts and technologies.

"The program refunds up to half of direct drilling costs. The refunds are capped at $30 000 for prospectors and $150 000 for general projects, increasing to $200 000 where the project consists of a single deep hole."

The program is now into its fifth round of funding, and has already offered more than $18 million in funding grants to more than 200 exploration drilling projects in the previous rounds.

AMEC chief Simon Bennison said despite this funding a lot of juniors were still hitting a financial wall.

"A lot of smaller exploration companies are finding it a lot more difficult to access equity finance," he said.

"As a consequence there are less companies out there carrying out greenfields exploration, so it's a bit of a vicious circle.

"We've got to do as much as we can to get equity finance more freely available."

However, while more mining is pushed in the west, South Australian economics are warning against lumping the state's future on mining.

Economists from Adelaide and Flinders Universities have released a new report into the state's financial future, according to the ABC.

The report found that South Australia only had .5% of the country's advanced new mining projects.

How it did concede that once Olympic Dam was expanded it would represent close to 10%.

"We're worried that there might be a bit of an impression in parts of South Australia that people can sit back and just wait for the mining boom to be a locomotive to carry us forward," associate professor Owen Covick explained.

"That is probably not a wise thing to think. We need the whole of the private enterprise economy in South Australia to be firing well and carrying us all forward."

This position was disputed by South Australian treasurer Jack Snelling, who posited a more financially secure future for the state, and questioned the report's assessment.

"[I'm] not privy to the methodology that the Centre for Economics Studies has used, but it just stands in contrast to not only what State Treasury forecasts are for state economic growth in 2012-13 but what other independent, private economic commentators are saying as well," he said.

The report was released as the state looks towards a positive boom in exploration.

Earlier this year news surfaced that Pilbara iron ore miner Fortescue Metals Group had even taken notice.

BHP is also exploring land adjacent to Olympic Dam, the world's largest uranium deposit and fourth largest copper deposit. 

Several of these exploration tenements were bought by BHP from Archer Exploration last year for around $3 million. 

These expansions form part of the resources giant's plans to develop more sites around the Olympic Dam project. 

Earlier this year news emerged BHP may have found a good deposit at Wirrda Well, 20km south of Olympic Dam. 

The find spurred speculation on the company's plans for SA and the Stuart Shelf/Olympic Dam region. 

Several companies have identified the Stuart Shelf as "highly prospective," including UXA Resources and Straits Resources. 

Some industry observers speculated BHP's expanding interest in the region, including the earlier acquisition of Archer's tenements, indicates a desire to control the area. 

But the potential of this lower part of central South Australia expands beyond Olympic Dam.

WPG Resources has also had success in developing its Peculiar Knob project and Oz Minerals' Prominent Hill operation is well known throughout the industry. 

With players like FMG and BHP, as well as other competent juniors spending in the region, more mines may soon come online. 

 

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