Government called to plug exploration shortfall

“We share the government’s desire for Queensland to become Australia’s greenfield exploration capital by 2020,” said Queensland Resources Council (QRC) chief executive Michael Roche.
“However, the government needs to plug a $1.1 billion shortfall in projected exploration expenditure if it’s to achieve the target announced by the Bligh Government just before the 2009 election in March last year.
With its three-year $29 million ‘Smart Mining’ exploration initiative set to expire at the end of 2009-10, the QRC has called on the government to provide the Geological Survey of Queensland (GSQ) with stable ongoing funding. Funds in the order of $25 million per annum for its exploration support programs, plus a new marketing capability of $3-4 million annually.
“Western Australia currently reigns as Australia’s greenfield exploration capital. A straight line extrapolation of the rates of growth in exploration expenditure over the past four years suggests that by 2020, Queensland’s greenfield exploration would have grown to around $400m, while WA’s would have grown to around $1.5 billion leaving a $1.1 billion shortfall.
“Clearly ‘business-as-usual’ policy settings are not going to be sufficient to achieve the greenfield exploration target,” said Roche.
He said the minerals production rates in Queensland are out-stripping its ability to find new resources.
“That’s why we need a well-funded and highly active GSQ, turning out high-quality information about the state’s minerals and energy prospectivity.
“It is the quality of this geo-science information that will attract exploration capital into Queensland and boost our chances of major new minerals and energy discoveries,” said Roche.
The QRC’s latest CEOs sentiment index shows that confidence is returning in the industry, with the worst of the Global Financial Crisis all but over.
The optimism is being reflected in the long-term expected capital expenditure of the Queensland mining industry. According to the Australian Bureau of Statistics, the industry anticipates spending almost $13 billion on projects over the next 12 months, according the QRC’s just released State of the Sector report for the March quarter.
“…this is far n excess of any previous year’s anticipated expenditure. In effect, the industry, and Queensland more broadly is in uncharted territory in terms of expectations and growth potential,” the report stated.
More information on exploration and what Queensland resources CEOs are thinking can be found in the latest edition of the QRC’s State of the Sector Report.

To read the report click here.