The Grant Thornton 2016 JUMEX survey launched last week shows some positive sentiment returning to the market. The Association of Mining & Exploration Companies (AMEC) says the survey indicates that investor sentiment is returning as commodity prices begin to rebound.
AMEC CEO Simon Bennison said, “IPOs are still very thin on the ground in the mining and exploration sectors although there appears to be a bottoming in 2015 with an increase in late 2016.
“Capital is still scarce and the governments must continue with the various co-funded drilling programs to ensure that greenfields mineral exploration prospers and new discoveries drive employment and revenue streams for companies and the nation’s economy.
“AMEC is committed to reducing the cost of doing business for the industry and this has been reflected in government support across the exploration and mining sectors in various jurisdictions.
“These have included discounts on port charges (WA) to reductions in tenement expenditure (Qld). However, much still remains to lock in these arrangements for the longer term and in particular to reduce the over-regulation of the industry.
“The Federal Government must roll over the Exploration Development Incentive post June 2017. It will take nearly a decade for this program to demonstrate its true value. This has been in part supported by the ACIL Allens report of 2015 that clearly demonstrated the returns of $20 million for every $1 million invested by the WA Government.”
Simon Bennison said state, territory and Federal governments must commit to the deregulation of the industry. “They must improve efficiencies across the agencies that reduce costs through shorter approval timelines. Approval delays and administrative costs continue to cripple projects and constrain investment. Governments must do more to streamline approval processes and reduce timelines.
“A recent Productivity Commission report stated that government reforms resulted in far greater layers of regulation. This simply should not be an outcome of Government reforms. Many of these reforms have also resulted in higher administrative costs to industry. Governments must eradicate the mindset that they can simply load additional costs on to industry,” he said.