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Resource exploration spending in Australia has hit a seven-year low, rising concerns over how these cost-cutting measures may delay the country’s next generation of mines, new data released by the Australian Bureau of Statistics shows.
The seasonally adjusted spending for the June quarter was down 7.5%, just a fraction of the peak quarterly exploration expenditure of the close to $1 billion recorded in March 2012.
The Association of Mining and Exploration Companies (Amec) said it was not surprised by the figures, calling industry players to restore Australia’s reputation.
“It is essential then that the Federal Government’s proposed Exploration Development Incentive initiative is quickly legislated. This along with the repeal of the mining tax will go a long way to restoring Australia’s international competitiveness and increasing investment to stimulate the sector,” the chief of the Association of Mining and Exploration Companies (Amec), Simon Bennison, said in a statement.
The industry leader warned the fall in exploration spending could have long-term effects if not enough mineral discoveries were made.
He added he hoped the government’s exploration development incentive, launched earlier this year, would help to increase investment in the sector.
The federal budget, unveiled in May, vowed to provide $100 million over four years for minerals exploration by giving small explorers that don’t make any taxable income access to a refundable tax offset for their Australian shareholders.
The exploration industry contributes 10% of Australia’s gross domestic product and employs around 250,000 people.
3 Comments
steve
Now that is concerning. It’s typical in that Australian companies do not invest in their own future. The strategy of buying someone out who has exploration success no longer exists as the majority of those companies have folded. A dip like this will hurt mining for decades to come, as costs to explore in the future will be considerably more than now.
Triantafillos Karageorgis
Are these domestic data or overseas exploration costs are also included?
Apple
I would bet that a chart of exploration in Canada would look the same. Where will the next generation of mines come from. At present the gap is being filled by rip and ship operations in Africa, mostly Asian operated. But soon more exploration will be needed.
Of equal concern is where the next generation of explorationists are going to come from. The older generation is leaving or retiring and very few young people are entering and even if they want to start there is no jobs.
A perfect storm coming