EXPLORATION AND MINING IN AUSTRALIA Bernie Hogan Regional Manager Association of Mining & Exploration Companies
May 13, 2015
EXPLORATION AND MINING IN
AUSTRALIA
Bernie Hogan
Regional Manager
Association of Mining & Exploration Companies
About AMEC
• Established over years ago
• Over 300 company members and growing
• Members include explorers, producers, and service industries
• National coverage – offices in Brisbane, Perth and Sydney
• Policy development and advocacy
AMEC is totally committed to obtaining the best business
environment for the mining and exploration industry across
Australia
2
After 12 months…
3
This is what we have…
4
Australia’s challenge unchanged
• Australia is losing exploration market share
• Continued global competition
• Costs spiralling
• Certainty and regulation affecting investment
• Scarce capital
• EDI, ESS, 457
5
More capital in the system
• Exploration Development Incentive
• AMEC policy leading into 2013 election
• Tax deduction for investors – rewards risk takers
• $100M over 3 years
• Australian projects
• Australian Company (tax rate)
• Australian Investor
• Still with Dept of Industry
6
Helping start-ups
• Employee Share Schemes
• Ruined as a Long Term Incentive
• Difficult for explorers to compete
• Discussions with Government to return to 2009 legislation
• Opportunity for cross-bench “heroes”
7
Developing Northern Australia
• Opportunity must be grasped
• Committee has conducted wide ranging interviews
• Infrastructure and stranded assets
• Planned growth and incentives
• Funding options
• Remove legislative barriers to land access.
8
457
• Important debate for Northern Territory
• AMEC policy to support where labour supply is short – particularly skilled labour
• In some instances, skilled migration will be a valuable HR alternative
9
Estimated Remaining life for Major Australian Mines (based on all operations mining >1 Mt ore in 2010. Excludes Bulk Minerals)
10
2011 2015 2020 2025 2030 2035 2040
Closure Date based on current
Reserves
Estimated Mine Lives are approximate only and are based on dividing the current
P&P Reserves and MI&I Resources by the production rate reported for 2011
Half of Australia’s existing
mines could close down
within 7 to 18 years
Closure Date based on current Resources
Source: MinEx
Consulting © August
2012
Brownfield vs Greenfield
Exploration in Australia
0%
10%
20%
30%
40%
50%
60%
70%
80%Se
p-2
00
3
De
c-2
00
3
Mar
-20
04
Jun
-20
04
Sep
-20
04
De
c-2
00
4
Mar
-20
05
Jun
-20
05
Sep
-20
05
De
c-2
00
5
Mar
-20
06
Jun
-20
06
Sep
-20
06
De
c-2
00
6
Mar
-20
07
Jun
-20
07
Sep
-20
07
De
c-2
00
7
Mar
-20
08
Jun
-20
08
Sep
-20
08
De
c-2
00
8
Mar
-20
09
Jun
-20
09
Sep
-20
09
De
c-2
00
9
Mar
-20
10
Jun
-20
10
Sep
-20
10
De
c-2
01
0
Mar
-20
11
Jun
-20
11
Sep
-20
11
De
c-2
01
1
Mar
-20
12
Jun
-20
12
Sep
-20
12
De
c-2
01
2
Mar
-20
13
Jun
-20
13
Sep
-20
13
De
c-2
01
3
Mar
-20
14
Percentage of Total Metres
Drilled
% Green % BrownSource: ABS 8412.0
81%
64%
47%
61%
49%
33%
19%
36%
53%
39%
51%
67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2008 2009 2010 2011 2012 2013
Percentage
% Australian Projects % Global ProjectsSource:
To 31 October 2013
* Exploration includes Greenfields and Brownfields Exploration
Destination of Exploration Funds
Raised on ASX
12
ASX raised funds
for overseas
projects
More ASX raised
funds still heading
overseas!!
13
Australia’s Share of Worldwide
Exploration Expenditure (non-ferrous)
13 Source: Metals Economics Group
Source: Metals Economics Group
Australia 12%
Canada 16%
USA 8%
Latin America 18%
Pacific/SE Asia 16%
Rest of World 14%
Africa 16%
2012 Australia
20%
Canada 14%
USA 11%
Latin America 27%
Pacific/SE Asia 11%
Rest of World 6%
Africa 11%
1996
How to stifle exploration…
• Constant tinkering with regulation in all forms has
undermine investor confidence
• Land Access is major hurdle for Northern Territory
• Environmental Approvals has been highest profile battle
ground
• Uncertain taxation and transfer duties
• Overly prescriptive legislation. Regulatory creep.
14
Remove the barriers
• Cost recovery mantra from governments Territory and
Federal. Provide core services.
• Cultural and Heritage Surveys (estimated at over
$1Billion). Cannot become another opportunity to delay
• Infrastructure – capacity needs to build and access needs
to be assured for junior entrants.
• Senate uncertainties to key reforms
Remove obstructions to exploration and development with
outcome based policy. Gov’t to focus on compliance
instead of regulation
15
16
THANK YOU
Visit www.amec.org.au for more information
Bernie Hogan