1. Introduction

Australia's Mineral Resource Assessment 2013 is a new product jointly compiled by Geoscience Australia and the Bureau of Resources and Energy Economics. It is intended to be a regular publication. Production of minerals relies on a series of stages that form a project pipeline. This report breaks the pipeline into four parts – exploration, identification of resources, new mining and associated infrastructure projects and, finally, mineral production.

Australia is one of the world's leading exploration and mining nations and a major source of minerals and metals. Australia produces 43 elements and has known resources of another 13 elements. In addition to these 56 elements, Australia is prospective for another 9 elements. Figure 1.1 provides a snap shot of Australia's diverse inventory of commodities from exploration projects through to production.

Australia has the world's largest resources of gold, iron ore, lead, nickel, rutile, uranium, zinc and zircon as well as the second largest resources of bauxite, cobalt, copper, ilmenite, niobium, silver, tantalum and thorium. Australia's resources of black coal, brown coal, magnesite, tungsten, lithium, manganese ore, rare earths and vanadium are ranked in the top five in the world.

In 2012, Australia accounted for about 13% of global exploration expenditure, ranking it in the top five regions in the world for exploration expenditure. On a country-by-country basis, Australia has the second highest mineral exploration expenditure after Canada. Australia is one of the leading regions in the share of discoveries, with over 16% of the global discoveries in recent years (Table 1.1). Over the period from 2003 to 2012, Australia's exploration productivity, measured in terms of the ratio of exploration spend to the number of discoveries, was one of the best in the world (Table 1.1).

Figure 1 is the periodic table of elements coloured to show which elements Australia produces, has under development or explores for. There are five colours: blue, green, orange, grey and white. Elements coloured blue are those for which Australia has known resources, produces and explores for. These elements are helium, lithium, carbon, magnesium, aluminium, silicon, phosphorus, calcium, scandium, thorium, vanadium, chromium, manganese, iron, cobalt, nickel, copper, zinc, yttrium, zirconium, palladium, silver, tin, antimony, tantalum, tungsten, platinum, gold, lead, lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and uranium. Elements coloured green are those for which Australia has known resources and explores for. These elements are fluorine, sulphur, potassium, arsenic, niobium, molybdenum, cadmium, indium, rhenium, mercury, bismuth, lutetium and thorium. Elements coloured orange are those for which Australia is exploring. These elements are gallium, selenium, strontium, ruthenium, rhodium, tellurium, hafnium, osmium and iridium. Elements coloured grey are gases or artificial produced elements. These elements are hydrogen, nitrogen, oxygen, neon, chlorine, argon, krypton, xenon, promethium, radon, neptunium, plutonium, americium, curium, berkelium, californium, einsteinium, fermium, mendelevium, nobelium, lawrencium, rutherfordium, dubnium, seaborgium, bohrium, hassium, darmstadtium, roentgenium, copernicium, ununtrium, flerovium, ununpentium, livermorium, ununseptium and ununoctium. Elements coloured white are not defined. These elements are beryllium, boron, sodium, germanium, bromine, rubidium, iodine, caesium, barium, thallium, polonium, astatine, francium, radium, actinium and protactinium.

Figure 1.1 Periodic table of elements showing the status of production, development and exploration in Australia.

Table 1.1 Global mineral exploration spend and resource discoveries 2003 to 2012.
Region Exploration spend ($billion) Percentage of world exploration spend Number of discoveries Percentage of world discoveries Spend/Discovery Ratio ($million)
Source: MinEx Consulting, Long-term outlook for the global exploration industry, July 2013.
Latin America 28 23% 118 23% 237
Canada 22 18% 65 12% 338
China, Eastern Europe, former Soviet Union and Rest of the world 22 19% 77 15% 286
Africa 17 14% 116 22% 147
Australia 12 10% 83 16% 145
United States of America 9 8% 20 4% 450
Pacific and Southeast Asia 6 5% 23 4% 260
Western Europe 3 3% 22 4% 136
Total 119 100% 524 100% 227

Exploration spending has risen sharply over the past decade but has recently started to fall back both globally and in Australia. Although exploration expenditure on greenfield areas has increased in the period since the global financial crisis of 2007–08, a greater focus on expanding existing mines has resulted in a more rapid rise in exploration expenditure near known deposits and mines (brownfields). Thus, the share of exploration expenditure committed to greenfield (frontier) regions has declined in the past five years.

In response to this recent decline, the Council of Australian Government's Standing Council on Energy and Resources released the National Mineral Exploration Strategy1 in 2012. The strategy's objective is to improve Australia's discovery rate, make Australia competitive in attracting mineral exploration investment and ensure the longevity of Australia's minerals industry and the country's continuing prosperity by addressing Australia's covered greenfields exploration challenge. The National Mineral Exploration Strategy includes a renewed commitment to generation and delivery of government-funded pre-competitive geoscience from all jurisdictions.

Additionally, the Australian Academy of Science has launched the national geoscience initiative, the UNCOVER program2, which is a collaborative network between the exploration industry, university research groups, the Commonwealth Scientific and Industrial Research Organisation, government geoscience agencies and cooperative research centres. UNCOVER is focussed on four key research themes to bring competitive advantage to Australian mineral exploration:

  1. Characterising Australia's cover — new knowledge to confidently explore beneath the cover.
  2. Investigating Australia's lithospheric architecture a whole-of-lithosphere architectural framework for mineral systems exploration.
  3. Resolving the 4D geodynamic and metallogenic evolution of Australia — understanding ore deposit origins for better prediction.
  4. Characterising and detecting the distal footprints of ore deposits — towards a toolkit for minerals exploration.

Mineral endowment and public policy factors affect exploration investment sentiment. The policy potential index (PPI) is assessed in the Fraser Institute's annual survey of mining companies. The PPI measures the overall policy attractiveness of the 96 jurisdictions in the 2012–2013 survey, which is normalised to a maximum score of 100. All Australian states and the Northern Territory rank above 50 on the PPI, with Western Australia, South Australia, Northern Territory and Victoria in the top 25 (Table 1.2). In the survey's evaluation of the mineral potential of each jurisdiction, Western Australian and the Northern Territory were ranked 9th and 10th as an attractive destination for investment, respectively, with South Australia and Queensland, 20th and 25th (Table 1.2).

Table 1.2 How Australian states and the Northern Territory are ranked by a global survey of mining companies.
Australian Jurisdiction Policy Potential Index
(max. value = 100)
Policy Potential Index
Global Rank out of 96
Global Rank of Mineral
Potential out of 96
Source: Fraser Institute, Annual Survey of Mining Companies 2012–2013.
New South Wales 56.4 44 46
Northern Territory 68.5 22 10
Queensland 62.8 32 25
South Australia 75.5 20 20
Tasmania 54.1 49 61
Victoria 66.0 24 57
Western Australia 79.3 15 9

Australia's minerals sector has a strong professional code of practice, the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (referred to as the JORC Code), which sets minimum standards for public reporting. The JORC Code provides a system for the classification of Exploration Results, Mineral Resources and Ore Reserves according to the levels of confidence in geological knowledge and technical and economic considerations for the purpose of informing investors or potential investors. The revised JORC Code (2012 Edition)3 and the new Australian Securities Exchange (ASX)4 Listing Rules strengthen the disclosure of reserves and resources information by ASX-listed mining and production companies.

The public reports of mineral resources under the JORC Code provide the foundational information for the annual assessment of the national mineral resources inventory. Australia's resources for most of the major commodities can sustain current rates of mine production for many decades. Australia's Economic Demonstrated Resources (EDR) for most major mineral commodities have increased as a result of new discoveries and incremental increases in resources at known deposits over the past three decades.

This increase in EDR has supported a substantial increase in the production of mineral commodities over the past decade. This period, often referred to as the 'mining boom' has delivered substantial economic benefits to Australia. In the period from 2003–04 to 2012–13, over 150 000 new jobs were created in the Australian mining sector and export revenues from mineral commodities have tripled to around $150 billion. Based on estimates from the Reserve Bank of Australia5, the Australian resources economy (including both minerals and petroleum products) accounted for around 18% of Australia's GDP in 2011–12. With many identified resources yet to be fully developed, there is still significant potential for further growth in the Australian mining sector and the economic benefits it delivers.

Australia's mineral endowment (Figure 1.1) includes many of the elements regarded as 'critical' by other countries, reflecting a combination of risk of supply and the importance of a particular commodity to the country's economy and security6. Critical commodities are reflected in Australia's mineral production, resource and exploration. Australia's Mineral Resource Assessment 2013 presents a selection of commodities – bauxite, coal, copper, gold, iron ore, nickel, rare earth elements and uranium – that are of strategic importance to Australia.


Notes

  1. The National Mineral Exploration Strategy: http://www.scer.gov.au/workstreams/geoscience/national-exploration-strategy/
  2. aUNCOVER: http://science.org.au/policy/uncover.html
  3. JORC Code (2012 Edition): http://www.jorc.org/docs/jorc_code2012.pdf
  4. Australian Securities Exchange: http://www.asx.com.au
  5. Rayner, V. and Bishop, J., (2013) Industry Dimensions of the Resource Boom: An Input-Output Analysis. http://www.rba.gov.au/publications/rdp/2013/2013-02.html
  6. Critical commodities for a high-tech world. http://www.ga.gov.au/metadata-gateway/metadata/record/gcat_76526/