Fall in Australia's greenfield minerals exploration worrying - Amec

JOHANNESBURG (miningweekly.com) - In the December 2017 quarter, Australian mineral exploration expenditure rose by 4.4% or A$20.9-million, compared with the last quarter, to A$496.1-million in original terms, the Australian Bureau of Statistics (ABS) reported on Tuesday.

In its Australia mineral exploration statistics for the December 2017 quarter, the ABS noted that greenfield mineral exploration expenditure lifted by 5.4%, or A$17.1-million and expenditure on brownfield exploration expenditure rose by the same.

Compared with the previous quarter, the total metres drilled fell by 5.1% with brownfield drilling falling by 2.9%, and greenfield mineral exploration drilling by 9%.

"While the rise in mineral exploration expenditure is good, the fall in metres drilled is a concern. The fall in greenfields mineral exploration is particularly worrying," said Association of Mining and Exploration Companies (Amec) CEO Warren Pearce.

"There is some clear good news though - there has been a clear increase in gold exploration - up by 8.3%," he added.

Overall, an imbalance between greenfield and brownfield exploration remained, with 67% of drilling happening in already explored brownfield locations. "This imbalance must be addressed if Australia is to find the future mines."

Further, Pearce noted that this downturn was driven by the fact that greenfield mineral exploration was a long-term, high-risk activity, which needed to attract scarce equity capital in a globally competitive market place.

To counter this downturn, Australia Prime Minister Malcolm Turnbull in September last year announced the Junior Mineral Exploration Incentive (JMEI), aimed at attracting much needed equity capital to increase greenfield mineral exploration. The proposed JMEI now needed to pass the Senate in the coming sitting so that it can be accessed by mineral exploration companies this financial year.

"The JMEI is a tax credit arrangement, which allows mineral exploration companies with no mining income to renounce and pass future tax deductions to their Australian resident investors," said Pearce.

He added that the exploration statistics reinforce the need for the JMEI to support Australian mineral exploration.