Mineral exploration down amid COVID-19

The Australian minerals sector has experienced a 20 per cent drop in exploration spending over the March quarter, with industry groups calling for more government support.

Exploration expenditure fell by $151 million to $602.1 million in the three months to March 31, according to the latest data from the Australian Bureau of Statistics, with greenfield expenditure down 26 per cent and brownfield exploration falling by 16 per cent.

Association of Mining & Exploration Companies chief executive Warren Pearce said the declines revealed the early impacts of COVID-19 on the sector's ability to raise capital capital.

He also noted businesses' difficulty in accessing tenements, as well as having to reduce staff in a bid to save money.

“Today’s figures show that without greater cost relief or financial assistance, there will be consequences for the exploration industry in Australia, and for the ability of Australia’s mining industry to identify and develop new major projects for investment to support Australia’s economic recovery,” Mr Pearce said.

“We anticipate the next quarter’s statistics will more accurately reflect the full impact of COVID-19 on our industry.”

Minerals Council of Australia agreed the declines reinforced a case for government to extend assistance and do more to attract investment in mineral exploration.

“Exploration investment is the foundation of the mining industry, which generates $290 billion in export revenue, supports 1.1 million direct and indirect jobs and pays $39 billion in royalties and taxes every year to governments across Australia,” the council said.

“If these benefits are to continue in the future, more must be done to attract exploration investment to Australia.”

MCA said the government should expand its investment in early-stage exploration programs across regional Australia, noting the Geoscience Australia’s Exploring for the Future program as a funding priority.

“Investment in exploration will deliver economic returns for future generations while supporting exploration jobs through the COVID-19 pandemic and during Australia’s recovery,” the council said.