Record Aussie exploration spend

Exploration & Development

Exploration spending on Australian projects during the fiscal year to end-June was the highest on record, and more than double the average over the past 30 years. The rate of growth in spending, however, was at its lowest since 2003-04.

The Australian Bureau of Agricultural and Resource Economics (ABARE) said the slowing growth reflected "a sharp decline in prices of most commodities".

The record A$6 billion (US$5.5 billion) spent included A$3.8 billion for petroleum exploration, which rose by 26%, while exploration for coal also rose by 27% to nearly A$300 million. The amount spent on uranium exploration fell by 20%, partially attributed by ABARE to a declining price during the period.

Excepting iron-ore exploration, the expenditure for all other major commodities fell during the period. Iron-ore exploration rose by 30% to A$589 million, but base-metals spend fell by 34% to about A$519 million, and that for gold declined by 26% to A$438 million. The organisation attributed the fall to declining prices and lack of access to capital.

Mining development expenditure during the period rose by 30% to A$35.7 billion, which ABARE said was about three and a half times the average real spend since 1980-81.

In the six months to October this year, ABARE recorded completion of five mining projects at a capital cost totalling A$904 million, of which the largest was the US$350 million, 8Mt/y expansion of Hope Downs, the iron-ore joint venture between Rio Tinto and Hancock Prospecting Pty Ltd.

Atlas Iron Ltd's 1Mt/y Pardoo direct-shipping iron-ore project was also completed, as was Iluka Resources Ltd's A$240 million expansion of its Murray Basin minerals sands operation in Victoria/New South Wales, raising annual output by 200,000t of rutile and 180,000t of zircon.

Iluka also completed its Jacinth-Ambrosia mineral sands project in the Eucla Basin of South Australia this month, which the company said was achieved ahead of schedule, and at a cost of less than A$390 million, compared with the budgeted A$420 million.

Jacinth-Ambrosia was scheduled to produce about 2.8Mt of zircon, 350,000t of rutile and 1.5Mt of ilmenite over ten years.