Will the exploration spend continue?
Money has been flowing onto the ASX in recent weeks as confidence and commodity prices strengthen in the new mining boom.
Meanwhile different jurisdictions are offering varying incentives to encourage resource companies’ exploration dollars to be spent within their borders.
In Western Australia, applications close at 4pm today (FRI FEB 27) for the state government’s latest round of the Exploration Incentive Scheme, with the budget doubled in a 2025 Cook election commitment to A$18 million per year.
But across the border in South Australia, access to minerals has become a political hot potato in the lead up to the state election on March 21.
SA Labor said it would invest $12 million in a new Plan for Accelerating Exploration (PACE) partnership program, to “support industry through co-funding grants for drilling, geophysics, research programs and groundwater investigations, with a strong focus on partnerships in under-explored and prospective provinces across the state”.
“A re-elected Malinauskas Labor government will commit $3 million per year over the next four years to accelerate exploration, recognising the importance of the mineral resources industry and the need to drive new discovery,” it said.
Meanwhile the SA Liberal party has copped criticism for its plan to commission an independent vulnerability assessment into the impacts of rare earth strip mining on the Limestone Coast within the first 100 days, if elected.
“Only a Hurn Liberal Government will ensure responsible development and long-term regional prosperity for our state,” Liberal candidate for Mount Gambier Lamorna Alexander said.
The Association of Mining and Exploration Companies slammed the plan, labelling the direct attack on industry as out of touch and a cynical vote grabbing exercise at the expense of South Australia’s economic prosperity.
To the east, New South Wales has awarded $2.5 million in grants over two years under its Critical Minerals and High-Tech Metals Exploration Program and Queensland has funding available until June 2027 under its Collaborative Exploration Initiative.
In the north, the Northern Territory has funding available until April 22 under its Geophysics and Drilling Collaborations program, while to the south, applications are open until March 26 in Tasmania’s latest round of Exploration Drilling Grant Initiative grants.
The national Junior Minerals Exploration Incentive, which provided tax credits for exploration expenditure, was scrapped last year and industry groups want it reinstated.
“To sustain and build on Australia’s potential as a tier one resources jurisdiction and top 10 global producer of many resource commodities, the Australian Government will need to invest heavily in research and exploration,” the Chamber of Minerals and Energy WA said in its Federal Pre-Budget submission last month.
As for how the state incentives and market support are translating into exploration activity on the ground, the Australian Bureau of Statistics’ next data release is
March 3.
Its December release showed mineral exploration rose 2.4% seasonally adjusted in the September quarter, with national expenditure (on an original basis) reaching $1.07 billion, its highest level since December 2023.
Unsurprisingly given the soaring precious metals prices, the gold sector recorded the largest rise in exploration spend over the period, up 7.2% to $431.5 million.
WA saw the lion’s share of the overall exploration spend at $734.3 million, with Queensland a distant second at $138.5 million.
Next week’s data will reveal whether the exploration spend is sustained.
