Australia's Identified Mineral Resources 2004

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Summary

Australia’s economic demonstrated resources (EDR) of the following mineral commodities increased during 2003 – bauxite, copper, diamonds (both gem and industrial), ilmenite, lead, nickel, niobium, silver, tantalum, tin, zinc and zircon. EDR of black coal, iron ore, lithium, magnesite, manganese, platinum group metals, rare earth elements, rutile and uranium decreased during the year. EDR for brown coal, cobalt, gold, molybdenum, phosphate rock, shale oil, tungsten and vanadium remained at levels similar to those reported in 2002.

Increases in EDR were due to ongoing drilling and evaluation of known deposits resulting in the transfer (re-assessment) of resources from inferred or sub-economic categories into EDR, and discoveries of new deposits or extensions of known deposits. The large increase in EDR for copper during the year resulted from a re-assessment of measured and indicated resources for Olympic Dam deposit (SA), and the discovery of additional economic resources at Mount Isa and Ernest Henry deposits (Qld).

Decreases in EDR of black coal and iron ore during 2003 reflect increased rates of mine production. In addition, mining companies re-estimated their ore reserves and mineral resources more conservatively so as to comply with the requirements of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code).

World ranking: Australia’s EDR of zinc, lead, nickel, mineral sands (ilmenite, rutile, zircon), tantalum and uranium remain the world’s largest, while bauxite, black coal, brown coal, copper, gold, iron ore, lithium, manganese ore, niobium, silver and industrial diamond rank in the top six worldwide.

Accessible economic demonstrated resources (AEDR): A relatively small number of mineral deposits are currently inaccessible for mining because of government policies, or environmental and land-use restrictions that prevent mining. In particular, this is the case for some mineral sands and uranium deposits.

Resources and current rates of mine production: Ratios of AEDR to current mine production provide rough estimates for the resource life. These indicate that AEDR of most major commodities can sustain current rates of mine production for many decades.

The resource lives for gold (just under 20 years at current rates of production), lead (less than 30 years) and zinc (less than 25 years) are amongst the lowest. There is a need for ongoing successful exploration in the short and medium terms to maintain gold as one of Australia’s main export commodities. Similarly, new discoveries of large lead and zinc deposits are needed in the not too distant future to sustain production of these commodities at current levels, given that almost all existing base metal mines will have closed, and also that there is typically a period of 10 years between initial discovery of a deposit and commencement of production for large base metal mines.

Mineral exploration: Mineral exploration expenditures in Australia rose by $75 million to $732.6 million in 2002–03. Spending for calendar year 2003 rose by just over $57 million to $735.3 million. These modest rises follow a decrease of 51% (from $1340.26 to $657.60 million) during the period 1996–97 to 2001–02.

Gold was again the principal commodity sought and its share of total exploration remained steady at 51.7% in 2002–03. While retaining its dominant position, exploration expenditure on gold rose by $47.1 million to $378.4 million, its highest level since 1998–99.

Exploration spending on coal and iron ore increased substantially in 2002–03. Coal exploration rose by almost 55% to $77.9 million, surpassing the previous high of $70.5 million recorded in 1996–97. Iron ore exploration spending increased by 76.6% to $44.5 million which was the highest expenditure reported in the last decade.

In response to nickel prices and export earnings, which have increased progressively since mid-2002, spending on exploration for nickel-cobalt in Australia rose by almost 23% to $65.9 million in 2002–03. Zinc-lead-silver exploration expenditure of $36.6 million was $1.0 million less than in 2001–02.

A world survey of exploration budgets for 2003 by the Metals Economics Group showed a worrying trend – Australia’s share of global exploration expenditure continued to fall, decreasing to 15.5% from 17.6% in 2002, while Canada was again the leading country with 21.5% of world budgets. The decreases in mineral exploration expenditure in Australia over the period 1996–97 to 2001–02, and the following increase, broadly reflect global trends. However, most other mining countries experienced less significant falls in exploration and a more significant rebound in this period. If this trend is sustained, Australia’s mineral production and exports will decline over the medium to long-term.

To address the decline in exploration, the Minister for Industry, Tourism and Resources, the Hon. Ian Macfarlane, MP, announced the Mineral Exploration Action Agenda on 12 September 2002. A Strategic Leaders Group made up of industry and government representatives was formed to identify the priority issues impacting exploration investment in Australia, and possible solutions.

The group made 12 recommendations to address issues that it considered critical to the viability of the mineral exploration industry and the long-term sustainability of the mineral resources sector. These recommendations, which were presented in July 2003 in Mineral Exploration in Australia, were to:

1. develop regional template agreements to resolve native title and heritage issues;
2. encourage use of the expedited procedure in the Native Title Act 1993;
3. amend the Aboriginal Land Rights (NT) Act 1976 to facilitate the decision-making process;
4. develop a coordinated national approach to resolve impediments to land access;
5. introduce a flow-through share scheme;
6. introduce a general tax deduction uplift factor for greenfields exploration expenditure;
7. implement the full deductibility of all costs associated with Native Title requirements;
8. undertake a major pre-competitive geoscience survey program to achieve national coverage to modern standards of basic geoscience datasets;
9. develop nation-wide protocols, standards and systems for internet-based access to all exploration related data;
10. launch a "50 early-career explorer" scheme for new graduates and holders of doctorates;
11. increase higher education funding for geoscience; and
12. establish a deep ore discovery research and development program.