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Western Australia continues to top the nation in resources exploration, with new data revealing the state is spending more than all others combined – with a particular focus on gold and iron ore.
However, the Association of Mining and Exploration Companies has warned the impact of capital gains tax changes, announced in the May federal budget, are yet to trickle down.
Australian Bureau of Statistics figures released on Monday show explorers in WA spent $843.6 million in the search for mineral deposits throughout the June quarter, taking up more than 70 per cent of the nation’s total mineral exploration expenditure.
The amount spent across the nation on mineral exploration jumped almost 25 per cent compared to the previous three-month period.
Australia-wide, a total of almost $1.19 billion was spent from April to the end of June on mineral exploration, with gold taking out the majority of the spend at $565.6 million, followed by iron ore with $234.7 million and selected base metals taking out $177.9 million.
Locally, WA explorers spent more than $460 million in the search for gold – a record exploration investment in the precious yellow metal since the data became available in 1988.
Iron ore continued to contribute strongly to the exploration budget, with more than $230 million invested in the June quarter – and the largest amount since the March quarter of 2013.
Perth-based AMEC acting chief executive Neil van Drunen said he was particularly impressed with the latest figures in terms of the gold numbers.
“It’s a stonking gold result,” he said.
“Costs are going up, but people are drilling. You can’t get a drill rig at the moment for love or money, at least not for the next month or so.
“People are people looking for gold everywhere, which is good.”
Nickel has dipped to its lowest exploration spend since March 2017, although the combined base metals figures had climbed from an eight-year low during the March quarter.
However, van Drunen said the organisation’s members had not given up on nickel.
“We’ve got members that are still holding nickel assets, but people can only explore for one thing at one time,” he said.
“A lot of that money that would have chased nickel is chasing gold at the moment.
“So they’re drilling for gold, and that maybe they’ll drill for nickel when the price continues to rise.
“There will be nickel expiration in the future, but not this quarter, and it’s hard to blame companies for that – the gold price is astronomical.”
While van Drunen said the latest figures spoke of confidence within the exploration sector, he warned that there would be a significant lag effect from the federal government’s changes to CGT.
“We don’t expect it’ll affect mineral exploration statistics in this quarter or next quarter, or maybe even the quarter after that,” he said.
“But by the time it comes in, it will start affecting directly into how investors choose to invest, and as a consequence, there’s going to be less cash for explorers to spend on drilling.”
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