By Jane Goldsmith
May 6, 2015
FOR every $1 million invested in the WA Government’s Exploration Incentive Scheme (EIS), the state receives $10.3 million in direct benefits, a report has found.
The Exploration Incentive Scheme Economic Impact Study, commissioned by the Department of Mines and Petroleum, also found that WA received about $6.2 million in taxation and royalties, and stood to gain about $3.9 million in greater construction activity and $3.3 million in new wealth, from each new project development.
The study found new pre-competitive geoscience was the main driver of private sector exploration investment.
It also considered the potential economic impact from the discovery and commercialisation of new mines as a result of increased exploration.
“This second stage of the modelling resulted in a further $13.4 million of benefits for every $1 million invested bringing the total impact figure to $23.7 million,” Mines and Petroleum minister Bill Marmion said.
“While these numbers appear large, they should be considered in the context of the high commodity prices we were experiencing over the study’s sample period. Nevertheless, the positive impact is massive.”
Mineral watchdogs across the state said the study provided concrete evidence that EIS had enhanced the long-term sustainability of the state’s resources sector.
Chamber of Minerals and Energy chief executive Reg Howard-Smith said that with WA’s current major construction projects – including Chevron’s Gorgon and Wheatstone LNG plants, and Roy Hill iron mine – soon entering production, WA needed to concentrate on securing the next wave of investment.
“The future pipeline of resources projects relies upon an increase in the current level of exploration activity here in WA,” Mr Howard-Smith said.
“Exploration is the lifeblood of future industry. Every resources project starts with a discovery and it’s great the Government recognise its importance.”
Association of Mining and Exploration Companies (AMEC), Chief Executive Simon Bennison echoed the sentiments.
“The EIS has provided the leverage for companies to invest millions of dollars in innovative greenfields exploration in WA,” he said.
“This has resulted in many successful discoveries including the Nova nickel, Tropicana East gold, Handpump gold, Webb diamonds, Oxley potash, Camelwood nickel, Yeneena copper, McIntosh graphite, Dusk Til Dawn gold and Millennium zinc.”
The $130 million EIS, initially supported by Royalties for Regions, is being funded from April 2009 to June 2017 and aims stimulate increased private sector resource exploration for new mineral and energy discoveries.