Mining in the Territory: Cutting Red Tape

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 18 Dec 2017   Posted by admin


Image: NT Department of Industry and Resources.

 

BY CAMERON DRUMMOND

 

SPURRED on by rising commodity prices and booming battery-a?liated raw material markets, the Northern Territory is seeing a marked rise in exploration and the number of projects moving towards development.

 

ON the back of a global increase in demand for raw materials the NT Government is wasting no time reforming its mining industry processes to make the region more attractive for investment.

Behind construction, the resources sector is the top end’s second biggest industry, accounting for about 13 per cent of gross state product (GSP).

NT Resources minister Ken Vowles said mining and exploration remained a “key element” of economic development and employment in remote and regional areas, as the value of mineral production in the Territory hit a new record of $3.63 billion in FY17.

 

“The NT has eight major operating mines, with our manganese, zinc and gold mines all benefiting from strong commodity prices that have led to record values of production,” he said.

 

“Newmont has recently completed a major expansion of its gold operations in the Tanami Desert, which will increase production to around half a million ounces of gold per year.

“In Tennant Creek we saw the opening of the Edna Beryl gold mine earlier this year, the first new mine to open in the area in over a decade.”

Currently, mining creates about 4800 direct jobs, with many more indirect jobs in the service and supply industries.

Mr Vowles said that figure could more than double in the near future, with reforms aimed to help the 17 projects across the Territory currently at various stages of development.

This includes changes to the current royalties system, streamlining processes for miners to gain necessary approvals, and the continuation of its Creating Opportunities for Resource Exploration (CORE) initiative.

“The Territory has strong bipartisan support for the mining sector, and the NT Government is focused on cutting red and green tape to continually improve our competitiveness in attracting investment,” Mr Vowles said.

“The Territory has significant resources of valuable metals and minerals that are used in high-technology and clean energy industries, such as rare earths, vanadium and lithium.

“This presents a major opportunity, and we see a strong outlook for the Territory in supplying the industries of the future.

“In five years, there is every reason to believe the Territory can be producing rare earths for use in magnets, and lithium and vanadium electrolyte for battery storage.”

 

Reforms

The NT Government recently released its Northern Territory Revenue Discussion Paper to look at policy changes that could increase own-source revenue, including changes that could be made to increase mining royalty returns for its community.

The paper reported that mineral royalties could provide significant amounts of revenue to the Territory; however as most mines in the Territory currently pay profit-based royalties, the levels of revenue were unpredictable, with some mines closing before incurring royalty liabilities.

“Some options put forward by the Government include an adjustment to the mineral royalty rate (while acknowledging that a high royalty rate may act as a disincentive to mining activities), the introduction of a value based minimum royalty (ensuring a return to the Territory for mining, regardless of the profitability of the mine) and the replacement of the profit based scheme with a value based scheme,” the report stated.

Apart from the Commonwealth’s Petroleum Resource Rent Tax (PRRT) and the royalty arrangement for Barrow Island in WA, the Territory is the only Australian jurisdiction that has a wholly profit-based royalty.

“One of the main advantages offered by value-based royalties is they are simpler and more transparent for Government and miners to administer, while also providing a more predictable source of revenue,” the report stated.

The NT Government said it was open to dialogue with the community, industry and peak bodies regarding any changes to the royalty system.

In efforts to minimise red tape, the NT Government said it would conduct a review of Mine Management Plans (MMP) to ensure they are fit-for-purpose, and to streamline the procedure for lodgement and assessment.

Mr Vowles said key mining industry groups would be consulted to ensure the revised MMPs met the needs of both industry and Government.

Also on the agenda would be reforms to the environmental approval process.

“More broadly we are looking at restructuring environmental approval, which is likely to involve legislative change,” Mr Vowles said.

“Industry is calling for a more streamlined and efficient process and complex issues are being worked through to achieve contemporary, transparent and effective regulation of the resources sector.

“This work will align with broader environmental regulatory reforms being developed by the NT Department of Environment and Natural Resources.”

Mr Vowles also said the reforms would be aimed to ensure the benefits of mining would be maximised within the local economy by encouraging participation instead of relying on FIFO workers.

“We are developing Tennant Creek as a mining services hub, with programs to stimulate exploration in the region, and we are supporting the development of a common-user milling facility that can help the development of small mines in the area,” he said.

“This has the potential to revitalise the local economy and provide much-needed business and employment opportunities.

“Aboriginal communities are also benefiting, with the development of a new bauxite mining operation near Gove in Arnhem Land after the granting of a mining lease to the Gulkula Mining Company.

“This is the first Aboriginal-owned mining operation in the Territory and is expected to provide valuable employment and training opportunities for local people.”

 

(L to R) Roric Smith, NT Resources minister Ken Vowles, Member for Fong Lim Jeff Collins and Rob Bills from Emmerson Resources at the Edna Beryl gold mine.   Image: NT Department of Primary Industry and Resources.


CORE

Soon to be in its fifth year, the CORE initiative involves a range of programs aimed at improving the Territory’s competitiveness in attracting exploration investment by lowering the cost and risk of exploration.

This has included providing baseline geoscientific data and interpretations to underpin exploration decision-making.

It also provides collaborative grants for exploration to reward innovation and share the risk of greenfields exploration.

So far under the initiative the NT Government has co-funded more than 15,000m of drilling, as well as a diverse range of seismic and airborne geophysical surveys.

Mr Vowles said there had also been a focus on improving accessibility of data and information for the global exploration industry.

“Earlier this year, every industry report on mineral exploration in the NT since 1901 was put online – around 23,000 reports can now be viewed from anywhere in the world,” Mr Vowles said.

“Under CORE, the Territory is co-investing with Geoscience Australia under the $100m Exploring for the Future initiative, with major new collaborative geoscience programs underway to investigate the poorly known geology that sits beneath the Barkly Tablelands between Tennant Creek and Mount Isa.

“This has the potential to open up new mineral provinces for the Territory.

 

There are currently 17 mining projects in various stages of approvals in the Territory with a combined potential to deliver $6.15 billion CAPEX, up to 4050 construction jobs, and 3081 operational jobs. 9 of these projects have an expected 15+ mine life.