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Signs point to continuing strong performance by Australia’s mining industry

Exploration expenditure has increased, mineral exports have improved and investment attractiveness is better.
Investment attractiveness index
The Fraser Institute’s Investment Attractiveness Index for Australia and Oceania

There are signs that Australia’s mining industry is performing strongly with exploration spend increasing, mineral exports rising and investment attractiveness on the way up.

It is a trend mirrored around the world as evidenced by the optimism displayed at last month’s annual Investing in African Mining Indaba in South Africa and this week’s PDAC in Toronto, Canada.

READ: Exploration core foundation of mining industry’s future: RIU Explorers Conference

This was also very evident at the RIU Explorers Conference in Fremantle in late February.

S&P Global Market Intelligence’s World Exploration Trends 2018 report shows that global exploration budgets in 2018 increased by 19% to US$10.1 billion with a further 5-10% rise expected in 2019.

Australia up one place

Latin America topped the regions with exploration spend accounting for 28% of the global total while ‘rest of the world’ covering Europe and Asia was second with 17% and Canada was third with 15%.

Australia had 14% and increased one place above Africa.

Companies domiciled in Australia were the second biggest spenders on exploration in 2018, up 20% to $1.71 billion, behind Canadian companies whose allocation rose 34% to $3.52 billion.

Gold is biggest source

Gold was the biggest source of exploration expenditure in Australia with 56% while base metals were up to 27% from 21%.

Geoscience Australia’s latest edition of Australia’s Identified Mineral Resources (AIMR) shows that mineral exports in 2017 earned the nation $179 billion.

Exports up 19% in 2017

In launching AIMR, Minister for Resources and Northern Australia Matt Canavan said: “After growing significantly in 2016, export earnings grew a further 19% in 2017.”

He said major commodities such as iron ore, coal, gold, aluminium and copper contributed $157 billion of the total.

“We know that mineral resources have been a mainstay of our economy for many years and the latest AIMR figures confirm the sector is still essential to Australia’s growth,” the Minister said.

“One of this year’s insights was an increase to the long-term potential for platinum group elements, critical for industrial applications across the globe. This shows companies could benefit from further investment in the capture of critical minerals.

“Also putting us in a good position in the global market is that Australia holds the largest identified resources of nine valuable commodities, including gold, iron ore, zircon and zinc.”

Canavan continued: “While our most recent figures remain positive, AIMR also shows that continued investment in Australian resources is key to our industry remaining a leader in the global market.

“With over 300 operating mines producing 26 major and minor mineral commodities, Australia remains one of the best locations for investing in mineral resources,” he said.

Fraser survey shows improvement

Meantime, the Fraser Institute’s Annual Survey of Mining Companies shows improvement in the investment attractiveness of a number of Australian mining regions.

Western Australia was second of 83 regions in the Investment Attractiveness Index, up from fifth in the previous survey and behind top place newcomer Nevada.

Fraser Institute regional median Investment Attractiveness scores 2017 and 2018.

The state was fifth in the Policy Perception Index behind Saskatchewan, Nevada, Finland and Ireland, up from 17th in 2017.

In the Investment index, Queensland was at 13, down one place from the 2017 result, while Northern Territory moved to 23 from 27, South Australia dropped to 24 from 14, NSW rose to 42 from 46, Victoria was up to 54 from 71 and Tasmania fell to 55 from 50.

The Policy index saw South Australia improve four places to 22, Queensland was stable at 31 as was Tasmania at 32, Northern Territory dropped eight places to 41, Victoria rose nine places to 43 and NSW was six places better in 47.

Fraser Institute regional median Policy Perception Index scores for 2017 and 2018.

The Fraser survey showed that Australia still has some work to do in terms of permitting times for exploration with all jurisdictions performing poorly compared to those in Canada.

Fraser Institute permitting times for mining exploration.

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