SA, NT showing no signs of slowing

Written by Mining News Premium.net

Created on Friday, 22 January 2010 18:10

IT is typically Western Australia and Queensland that are noted as the resource powerhouse states, but government co-funding for exploration and some promising discoveries ensured that activity in South Australia and the Northern Territory continued at record levels during the financial crisis.

According to the 2009 RESOURCESTOCKS World Risk Survey, South Australia was rated the second-least risky jurisdiction in Australia in which to invest, and fifth internationally.

Missing out on a mention in the international top 10, the Northern Territory was ranked 11th least risky, ahead of Western Australia, New Zealand and Victoria.

The Fraser Institute’s 2008-09 annual survey of mining companies ranked South Australia in the world’s top 10 jurisdictions for mineral potential for the fourth year in a row.

South Australian Premier Mike Rann said the impact of the global economic downturn had been felt by the state, but the economy had proved among the most resilient of any in the developed world and remained well placed to strengthen further as international markets continued to recover.

“Indeed, recent economic commentary lists Australia as a standout global performer over the past year, and also rates South Australia as one of the strongest and best-placed economies in the nation,” he said.

“There are several reasons for this optimism and for our position of comparative strength.

“Chief among them is the South Australian government’s commitment to diversifying and strengthening the state’s economic base, and building on our existing strengths.

“Our wealth of mining and energy resources has attracted many developments to the state, such as OZ Minerals’ Prominent Hill and Iluka Resources’ Jacinth-Ambrosia mining projects, and, of course, the proposed expansion of BHP Billiton’s Olympic Dam mine.”

Rann added that South Australia remained the most cost-competitive place to do business in Australia, and had the highest proportion in the nation of businesses undertaking innovation through research and development.

“The South Australian government has also introduced initiatives and activity across business and industry, including $170 million worth of red tape reduction and planning reforms, and we have announced a new target of a further $150 million reduction in red tape over three years,” he said.

Deputy premier Kevin Foley said the state’s mining landscape had been completely transformed due to the government’s encouragement of exploration and the streamlining of assessment processes.

“Seven years ago, South Australia was home to just four operating mines” he said.

“In 2009, the number increased to 11, with the likelihood of growing to 16 mines in 2010.

“Back in 2002, there were fewer than 3500 people employed full-time in our state’s mining industry – and today it directly employs about 7700 people.

“This demonstrates that South Australia’s mining boom is off and running.”

Northern Territory Resources Council's chief Scott Perkins told MiningNews.net the territory was lucky to escape much of the wrath of the global financial crisis with its coinciding wet season, although times were worrying.

“It is very difficult to separate the impact of the global financial crisis from the dip in normal activity we experience in the wet season, but the worrying thing we experienced was the forward order book for drilling rigs started to look scarce,” he said.

“As it turned out by the time the wet season ended, the territory returned to a more normal level than previously expected.

“So happily the major issues arising out of the GFC did not substantially affect the resources industry in the NT, although there were some worrying signs over commodity prices and activity, but as it transpired it did not have an overwhelming impact.”

Northern Territory Minister for Resources Kon Vatskalis commented that while all other jurisdictions seemed to have taken a beating during the GFC with expenditure decreasing, the territory’s exploration strategy had ensured that money continued to flow.

Like South Australia’s successful Plan for Accelerating Exploration scheme, the Northern Territory government has its own exploration incentives, with the Bringing Forward Discovery initiative aimed at attracting greater mineral investment.

Vatskalis said the strategy was encouraging companies to look to the NT’s vast under-explored land for their next exploration project and the success of the strategy could be seen in the ever increasing mineral exploration expenditure in the territory.

The Australian Bureau of Statistics Mineral Exploration Expenditure figures show there was a 21% increase in expenditure in the NT in the three months to September 2009, compared to the same quarter last year.

This compares with Tasmania, which dropped 52%, South Australia down 36% and Western Australia down 22%.

"While all other jurisdictions have had significant falls in exploration expenditure, the NT has gone in the opposite direction with $49.2 million spent in the three months to September 2009, which represents a 21 per cent increase on the same quarter last year," Vatskalis said.

"Much of this increase in expenditure can be attributed to our $14.4 million four-year Bringing Forward Discovery investment attraction strategy, which has promoted the Northern Territory as the preferred destination for exploration.

"The mining and exploration industries are major contributors to our local economy, and the territory government will continue to promote our vast under-explored land as the preferred destination for mineral and petroleum exploration."

The minister said the territory government was a strong supporter of the resources industry, with the mining and petroleum sectors combined contributing around 25% of the gross state product and directly employing around 4000 people.

Source: MNP