An independent MinEx Consulting Report on the 40-year outlook for Australia’s gold industry reinforces the critical need for increased greenfields mineral exploration to discover the mines of tomorrow, according to the Association of Mining and Exploration Companies (AMEC).
The organisation’s acting chief executive officer Graham Short said, “To maintain current production levels in the future, the Australian gold mining industry will have to either double expenditure on mineral exploration or halve the cost of discovery.
“In order for this to occur we need to increase investment in long-term greenfields exploration activity which relies on scarce equity capital in a globally competitive market place."
He said the Federal Government’s recently announced Junior Mineral Exploration Tax Credit (JMETC) which offers $100 million over four years was a timely and important step to boosting that investment in exploration. “This will allow eligible companies to renounce their losses in the form of tax credits back to their shareholders.
“Co-funded drilling programs adopted by Australia’s state and territory governments, investment in pre-competitive geoscience data, and innovation and technology development in greenfield mineral exploration are also vital.
“The MinEx report highlights the fact that discovery costs have been increasing. This decade, the costs of discovering a deposit are 50% higher than they were in the last decade. It now takes a weighted average of 13 years to progress a deposit from discovery to an operating mine.
“Given that the report predicts half of all gold production in 15 years will come from mines yet to be discovered, all government approval timelines must be made more efficient to support jobs, royalties and revenues.
“The report confirms AMEC`s expressed concerns during the recent gold royalty rate debate in Western Australia that we need to be exploring now for the mines and jobs of tomorrow. Any increase in the royalty rate would have seen a corresponding reduction in exploration, which would have cost Western Australia jobs and future revenue streams.
“All Australian governments should be focusing on maximising their resource potential to create new revenue streams, job opportunities and regional development.
“The future of Australian mining is in greenfields mineral exploration. The MinEx Consulting Report is a wake-up call to all governments to ensure gold mining continues to support regional communities, royalties and jobs,” Graham Short added.