Australia’s exploration spending down the slippery slope
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.