Australia's economic demonstrated resources (EDR) of the following mineral commodities increased during 2006 - black coal, copper, gold, iron ore, rutile, zircon, platinum group metals, silver, tin, tungsten and vanadium. EDR of bauxite, cobalt, diamond (gem and industrial), lead, manganese, nickel, uranium and zinc decreased in the same period. EDR for brown coal, magnesite, molybdenum, niobium, shale oil and tantalum remained at levels similar to those reported in 2005. Estimates of Australia's resources of coal bed methane gas are reported for the first time in AIMR.
Increases in EDR were due to on-going 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. Sustained increases in prices for most metal and mineral commodities over recent years has allowed companies re-assess the economic viability of lower grade resources and deposits which were previously considered to be uneconomic. Overall this has contributed to an increase in EDR for many metal and mineral commodities.
World ranking: Australia's EDR of mineral sands (rutile and zircon), nickel, tantalum, uranium, thorium, zinc and lead remain the world's largest, while bauxite, black coal, brown coal, copper, gold, iron ore, ilmenite, 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 inaccessible for mining because of government policies or environmental and land access 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. AEDR of most major commodities can sustain current rates of mine production for many decades. While this is the longer term assessment, resource life based on ore reserves is shorter in duration reflecting a shorter term commercial outlook.
Based on AEDR, the resource lives for gold (an average of 22 years at current rates of production), lead (just over 30 years), zinc (around 30 years) and diamonds (about 7 years) are the lowest. These assessments continue to highlight the need for ongoing successful exploration in the short and medium terms to sustain production of these commodities at current levels.
Mineral exploration:Australian mineral exploration spending in 2006 rose by 29% to a record $1463.9 million. This growth reflects strong growth in prices for many commodities on the back of anticipated strong and growing demand, particularly from China.
While gold remained the predominant target in calendar year 2006 its share of total spending fell again to 29%. Gold exploration spending totalled $429.8 million in the year, an increase of almost $45 million. The base metal group had a substantial increase in its share of total spending to 29% with actual spending rising by $105.7 million to $426.1 million. The growth in base metals was driven by substantial increases in zinc-lead-silver exploration which more than doubled to $100.7 million and copper which rose by 68% to $177.5 million. A fall in the level of exploration for nickel-cobalt in 2006 prevented the base metals group from being the major exploration target. Spending on nickel exploration fell by $20.2 million to $147.9 million. Uranium exploration spending also more than doubled in 2006 rising from $37.7 million to $80.7 million. Iron ore exploration rose by $72.5 million to $224.7 million and its share of total spending increased to 15.3% in response to continuing strong international demand, particularly from China. Similarly coal exploration grew strongly rising from $145.6 million to $198.7 million in the year.
The increase in exploration activity saw strong growth in the number of reported intersections of mineralisation and several new discoveries. Indicative of the more significant announcements during the year were about Gullivers and Cooljarloo North (mineral sands), Saxon (nickel), Tekapo (gold-copper), Tandarra (gold), Cuttaburra (base metals), Swan (copper-gold-uranium), Rocklands (copper) and Tropicana (gold). Ongoing exploration also resulted in increases in resources in many known deposits.
Responding to world demand there was substantial activity in the iron ore sector with new resources and drilling results released for many smaller deposits and prospects. Similarly uranium exploration surged and the number of new companies with a focus on uranium is likely to ensure spending continues to grow.