With powerful financial backing from the debt and equity markets, significant new support from governments at a federal, state and territory level and a string of major new discoveries across a range of commodities, there is no doubt that Australia is going through a mining “boom” at present.
That boom is being reflected in export earnings, with resource and energy exports estimated to reach a record A$349B in 2021–22, up from A$310B in 2020–21.
It has also been highlighted in the funds pouring into the mining sector, with the Australian Bureau of Statistics’ (ABS) Private New Capital Expenditure and Expected Expenditure survey for the June quarter 2021 showing that the mining industry invested A$9.1B in the quarter. This is up by 1.0% in the quarter (seasonally adjusted), and up 2.8% from the June quarter 2020.
Notably, minerals exploration investment has increased 14% to A$3.2B in 2020-21, the highest spending since the peak of the previous mining boom in 2012. Gold exploration – up 32% – has been the main driver of this growth, accounting for 48% of all exploration investment in Australia last financial year.
This surge in mining activity is spreading across the nation and we will take a quick look at activities in some of the states and territories. Western Australia, which is the dominant mining jurisdiction in the country.
Exploration leads to more projects and jobs in the future, which is important as part of our economic recovery plan from COVID-19
New South Wales
New research by the NSW Minerals Council has revealed mining has the potential to significantly boost New South Wales’s (NSW) economic recovery from COVID-19, with 32 mining projects currently at various stages in the state’s planning system.
“These projects have the potential to deliver almost A$13B in investment and over 17,500 jobs for NSW to help support and rebuild the economy and boost regional development across the state,” NSW Minerals Council CEO Stephen Galilee said.
“There is growing demand for our high-quality metals and rare earths. Technological advances in industries such as telecommunications, medicine, defence, renewables, and energy storage are driving demand for critical metals and minerals. This is providing new opportunities for regional communities across the state.”
The number of metals projects in the NSW planning pipeline has increased to 13 in 2021, up from 11 projects in 2020, highlighting the strong ongoing interest in the metals sector in the state. Eight of these are proposals for new mines, including new gold, silver, nickel, cobalt, and scandium mines. This is the highest number of proposed new metals mines for NSW in at least a decade. Coal continues to be the state’s most valuable export commodity, worth around A$16B in exports in 2021, as well as A$1.6B in royalties to the NSW government.
Victoria
Victorian minerals exploration expenditure has reached record levels, with A$52.1M spent in the June 2021 quarter, bringing total minerals exploration expenditure in the state for the 2020-21 financial year to A$183.8M, up by more than 35%.
Since 2016, the average quarterly growth rate for exploration expenditure in the state has been more than double the national average.
Meanwhile, a major new ground release in North Central Victoria is set to be benefit from more than A$100M to be spent on minerals exploration in the region over the coming years.
The Victorian government’s successful North Central Victorian Goldfields Ground Release saw leading tenderers Fosterville Gold Mine Pty Ltd successful in bidding for blocks 1, 2 and 3, while Southern Star Exploration Pty Ltd the successful tenderer for block 4.
Across the three blocks for which it was the successful tenderer, Fosterville Gold Mine will spend more than A$90M, while Southern Star will spend more than $10M across one block over a five-year period.
The Geological Survey of Victoria predicts there may be as much as 75M oz of undiscovered gold across northern Victoria. If exploration is successful, mining could bring a boom to the region.
Northern Territory
Northern Territory (NT) minerals exploration expenditure has continued to drive towards record highs based on the latest Australian Bureau of Statistics (ABS).
In the June 2021 quarter, A$40.4M was spent on minerals exploration in the NT, an increase of total minerals exploration expenditure in 2020-21 of nearly 5% to A$128.3M – despite a COVID-constrained operational environment.
This is amongst the highest annual expenditures on record since the ABS commenced exploration data collection in 1988, and the highest quarterly expenditure in nine years.
There are now several tier-one operations now actively exploring in the territory, with nearly 350 exploration licences currently granted.
Queensland
The Queensland government has offered up to A$2.5M worth of funding to help explorers in the state find the minerals needed to charge the renewable energy revolution.
Queensland Resources Minister Scott Stewart said round six of the Collaborative Exploration Initiative will provide explorers with valuable support to assist in new mineral discovery.
“Exploration leads to more projects and jobs in the future, which is important as part of our economic recovery plan from COVID-19,” Mr Stewart said.
“Right now, we are in the midst of an exploration boom right here in Queensland.”
Mr Stewart said priority would be given to new economy minerals projects, with a strong focus on the northwest and northeast minerals provinces.
South Australia
South Australia’s Department for Energy and Mining recently reported a steady increase in exploration spending and activities for South Australia, including a renewed interest in nickel, copper, rare earths, graphite, magnetite, and uranium – all of which will play a vital role in an electrified society.
“There has been a definite pivot in exploration trends, while traditional commodities and metals still dominate, the landscape is changing to meet the needs of the looming decarbonization and electrification of our lives,” said South Australia’s Department for Energy and Mining.
South Australia remains among the world’s top performing mining jurisdictions according to the Fraser Institute’s latest global survey on mining investment attractiveness.
“South Australia climbed to 8th in the latest survey for Mineral Potential based on geological attractiveness which is a critical factor in future exploration expenditure,” the state’s minister for energy and mining, Dan van Holst Pellekaan, noted.
The energy and mining sector employs 14,000 South Australians, generates over A$300M of royalties per annum, and had A$7B in sales in 2020.
Mr van Holst Pellekaan said South Australia’s copper strategy aims to boost production to 1M tonnes over the next two decades.
Tasmania
Mining and minerals processing are still the biggest contributors to Tasmania’s strong economy and played an important role in the state recently breaking A$4B in exports for the first time.
The sector made up 63% of these exports in the year to August 2021, or more than A$2.6B annually, to the economy.
Over the past two years it also returned A$96M to the Tasmanian people through royalties, fees and rentals, which support the provision of essential services like health and education.
The Tasmanian government is helping to help unlock the full economic potential of the sector and recently opened the latest round of our Exploration Drilling Grant Initiative (EDGI).
The EDGI programme provides co-funding of up to A$50,000 for direct drilling costs and A$20,000 for helicopter support, if required, for the exploration of new greenfield sites as well as greenfields exploration of existing mine or mining lease sites.
Tasmania’s minister for resources, Guy Barnett, said by supporting exploration in both new and existing areas, the state is maximizing the chances of finding new deposits of valuable minerals that are sitting untouched, which could translate into big dollars for the state’s finances.
