Louise Wallace writes for Australian Mining.
Cumbersome approvals processes and seemingly-endless red tape has been a common complaint among the Western Australian mining community.
While other states adopt incentive schemes to kick start exploration projects and initiatives to minimise approval times, WA has so far been left in the shadows, fighting a losing game of catch-up to its competitors.
Advocates have long been campaigning for State-based exploration incentives in WA to redress a significant decline in WA’s exploration expenditure over the last decade.
As other states offer increasing support to their mining industries and tap into untouched resources, a wider array of metals and minerals are becoming available with shorter approvals times, making them particularly attractive to investors.
While WA still leads national expenditure, The WA Department for Mines and Petroleum (DMP) says the current economic downturn has further reduced exploration activity over the last six months.
In a bid to remain competitive and answer for a slowing market, the WA government has introduced an $80 million Exploration Incentive Scheme (EIS) as part of the Royalties for Regions initiative to revitalise exploration within the state.
The five-year EIS initiative aims to encourage exploration in WA’s greenfield and frontier regions and re-position the State as a competitive player within the mining industry.
The scheme will include a co-funded drilling program and an integrated online system for customised geoscience maps and reports.
It will also promote strategic research and work towards building sustainable working relationships with Indigenous communities.
Association of Mining and Exploration Companies (AMEC) CEO, Simon Bennison, told Australian Mining the program will allow WA’s mining industry to catch up with other states that have had similar initiatives in place for some time.
“Western Australia is lagging far behind,” he said.
“EIS will immediately stimulate the sector and deliver significant short and long-term benefits to WA as a whole.”
Bennison says current approvals processes, including environmental and Indigenous affairs, are a “real mess”, which makes investors nervous and pushes them to spend their money on more secure assets elsewhere.
“Insufficient processes and approvals, teamed with high commodity prices and an unstable market, is prompting investors to take their business to other states or abroad to claim the best deal,” he said.
“Ultimately, the State’s economy suffers, which adversely affects mining companies, explorers, and the wider community.”
Bennison believes the initiative will help restore investor confidence in the WA resources sector and secure “more local jobs for longer”.
Benefits
EIS coordinator, Margaret Ellis, told Australian Mining the program will encourage companies to explore in WA, which will stimulate the private sector and open up work in a wide range of industries.
“It will reduce perceived risks involved with exploring by providing resources and support networks to explorers and miners who are in need,” she said.
Ellis said miners and explorers have become increasingly reluctant to embark on expensive exploration projects, as they run the risk of returning limited results for potential projects.
“Some drilling companies and explorers have been eagerly waiting for EIS funding to boost the viability of potential operations and allow them to go ahead,” Ellis said.
“The scheme will kick-start a range of projects, which will have a trickle-down effect on a range of other industries.”
“The spin-off will be widely beneficial… Pretty much everyone will benefit, from large mining companies and laboratories, to small businesses and the wider community.”
Program access
The initiative will comprise six different programs to promote strategic research, improve application processes, and gather more information on the State’s geology.
Exploration and environmental co-ordination, 3D geological mapping, sustainable relations with Indigenous communities, geophysical and geochemical surveys, promoting strategic research with industry, and innovative drilling will be the focus of the program.
Ellis said the wide scope of the initiative will deliver benefits to a range of workers, including miners, explorers and contractors, which will ultimately benefit the wider community, including the State’s economy.
Exploration companies will be required to apply for funding under the drilling program, which may potentially provide businesses with dollar-for-dollar financial support.
The program will fund ‘high-quality’, technical and economically based projects to promote new exploration concepts and technologies.
According to Ellis, proposals will be assessed by a panel on the basis of geo-scientific and exploration targeting merit.
“While some companies will benefit from direct funding, others will certainly benefit from improved approvals processes and easier access to geographical information,” she said.
Time frame
While exploration programs will not return revenue immediately, AMEC predicts the program will create a pipeline of income that will generate more royalties in the long term.
“It will generate millions, if not billions in revenue, and will get the wheels in motion for a strong future for Western Australia,” Bennison said.
“It will also create secure employment, which is becoming increasingly important with the current economic climate.”
Experts expect results will be seen within ‘several months’ when funding and details of the plan is finalised.
According to Ellis, approvals improvements will be in motion “nearly straight away” in the lead up to the co-funded drilling program, which commences from 01 July 2009.
“If drilling companies and explorers are prepared with the appropriate documentation and funding applications, they can hit the ground running in July and hopefully start drilling sooner,” she said.
The program, which was officially launched recently, is currently being finalised, with details regarding funding allocation yet to be released.
For more information, contact the Department of Mines and Petroleum website (http://www.dmp.wa.gov.au/7743.aspx).