Greenfield exploration on the rise in Australia

JOHANNESBURG (miningweekly.com) – The search for new mineral deposits in Australia is starting to recover, with greenfield exploration expenditure increasing by 16.9% and exploration drilling by 23.3% in the September quarter.

In original terms, total mineral exploration expenditure rose 6.8% to A$475.2-million, the Australian Bureau of Statistics reported on Monday.

The largest increase in minerals sought came from expenditure on selected base metals, which increased by 18.7% in the quarter under review.

Drilling in areas of new deposits increased by 23.3% and, although an improvement, the Association of Mining and Exploration Companies (Amec) said that a significant imbalance still persisted between greenfield and brownfield exploration. The metres drilled at existing deposits still exceed that of the metres drilled at new deposits.

Amec CEO Warren Pearce said that 67% of mineral exploration was undertaken in a brownfield setting. “This imbalance must be addressed if Australia is to find the mines of tomorrow.”

Greenfield mineral exploration is a long-term, high-risk activity, which needs to attract scarce equity capital in a globally competitive market place.”

Pearce said that the proposed Junior Mineral Exploration Incentive (JMEI), which Prime Minister Malcolm Turnbull announced in September, should go a long way to increase greenfield exploration in the country.

“The proposed JMEI needs to urgently pass Parliament before the end of the year so that the JMEI can proceed on January 1, 2018 as originally proposed.”

The JMEI is a tax credit arrangement which allows mineral exploration companies to renounce and pass future tax deductions (losses) to their Australian resident investors.

“The ABS statistics today reinforce the need for the JMEI to continue the momentum and grow greenfield mineral exploration,” said Pearce.

In seasonally adjusted terms, mineral exploration expenditure rose by 0.4% to A$439.9-million in the September quarter. The largest contributor to the rise in the quarter was Queensland.  The seasonally adjusted estimate for metres drilled rose by 1.7%.

PETROLEUM EXPLORATION
The trend estimate for total petroleum exploration expenditure fell 3.5% to A$315.9-million in the September quarter. Exploration expenditure on production leases rose by 12.9% and exploration expenditure on all other areas fell 6%.

The seasonally adjusted estimate for total petroleum exploration expenditure fell 15.6% to A$293.8-million. Exploration expenditure on production leases fell 16.7% and exploration expenditure on all other areas fell 15.5%.

The largest contributor to the decrease in the trend estimate was Northern Territory, down 15.6%, and the largest contributor to the fall in the seasonally adjusted estimate was Northern Territory, down 58.4%.