Investment still not at 1997 levels

Western Australia is losing its share of global investment in mineral exploration, according to Association of Mining & Exploration Companies CEO Justin Walawski.

“Given the present surge in commodity prices, one would expect to see dramatic improvements in investment in mineral exploration,” Mr Walawski said. 

“Unfortunately, based on these exploration expenditure figures [which include amounts invested off-shore and in other Australian states] and others, current investment levels within WA are still some $80 million shy of those in the 1997 June quarter, and that’s hardly cause for optimism. 

“The loss of WA’s global mineral investment share is consistent with international commentators, such as the Fraser Institute, which refer to Australia as having some of the best geology in the world, but one of the more unattractive regulatory and policy frameworks.”

Rising costs and the failure to come to grips with the retention and training of skilled workers continues to add to the malaise.

The industry acknowledges it has treated staff as a discretionary cost, laying them off in the cyclical lean times and then grabbing them back, if they can, in the good. However, many have been lost in the interim, contributing greatly to the current skills shortage. To offset this boom-bust cycle, AMEC and other industry bodies, with the support of the WA Government, have been pushing for the introduction of flow-through shares to encourage investment in good and bad times to take the pressure off companies.

The instigation of flow-through shares, successfully used in Canada, allows company costs incurred during the non-income earning exploration phase to be passed onto shareholders to claim as tax losses.

And there are other issues.

“The policy framework in Australia is just not conducive to mineral exploration,” Mr Walawski said.

Perhaps the best example of this is the mostly state Labor government opposition to uranium mining.

Greater uranium mining is seen by many, including the Federal Government, as inevitable as world energy demands rise.