WA has become a more attractive jurisdiction for the resources sector, but more can be done.
The latest Fraser Institute ranking of mining industry regions, combined with a new Productivity Commission report, provides a good handle on where Western Australia is at currently and the opportunity to make the state more business friendly.
The need to act is highlighted by this week’s cover feature on the junior mining sector.
The feature analyses the challenges facing junior mining and exploration companies struggling to raise capital.
The ‘capital strike’ combined with weak commodity prices has led to a sharp cut-back in exploration and development spending, and that in turn has flowed through to mining services contractors.
Governments can’t magically change financial or commodity markets but they can ensure the regulatory and fiscal regime in their jurisdiction is the best possible, to maximise the chances that businesses can attract scarce investment dollars from around the world.
One of the best guides to that is the Fraser Institute’s annual survey of mining industry executives.
The latest survey, released this month, shows Scandinavian countries are the most attractive jurisdictions for mining investment worldwide.
Sweden and Finland are one and two respectively, with Norway number 10.
This indicates that it’s possible to enact sound environmental protections and still maintain a successful mining industry.
WA was the highest ranked state in Australia, coming in at number six out of 112 jurisdictions, and up from 15 last year.
South Australia, which a few years ago was luring explorers away from WA with financial incentives and quick approvals, came in 11th.
Victoria was the only Australian state to decrease in ranking, falling from 24th to 33rd.
As a result, Australia improved from a combined average of 30th to 22nd in the latest survey.
Association of Mining and Exploration Companies president Will Robinson said the Fraser Institute survey highlighted areas that each of the states and territories should work to improve.
For example, on the question of uncertainty concerning environmental regulations, 69 per cent of respondents said that this was a deterrent to investment in NSW, 59 per cent in Queensland and only 25 per cent in WA.
The Productivity Commission Report, ‘Non-financial Barriers to Mineral and Petroleum Exploration’ released this month, highlighted the potential to create a clearer, more transparent regulatory framework.
It mapped out a series of changes designed to increase efficiency and reduce duplication, and streamline environmental and heritage approvals processes through bilateral agreements.
It also called for a stronger focus on evidence-based decision-making – a goal that always creates tension with the mindset of most politicians, who are more worried about community reactions.
Pleasingly, one of the Productivity Commission’s recommendations has already been acted upon, with the federal government endorsing a streamlined approvals process for offshore oil and gas operations.
The National Offshore Petroleum Safety and Environmental Management Authority has been endorsed as the sole environmental approvals assessor for offshore petroleum activities in Commonwealth waters.
This concludes a process initiated in 2013 by the Gillard Government.
Previously, companies required equivalent approvals from two federal government bodies – NOPSEMA and the Department of Environment.
This is the type of change that ticks all the boxes – it should improve business efficiency while maintaining environmental standards, and should also directly reduce costs incurred by business and taxpayers.
