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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Expenditure on land access for mineral exploration - 2001-02

In recent years the level of mineral exploration activity in Australia has decreased significantly. A number of factors have been suggested for this, including increasing costs associated with access to land for exploration purposes. There are concerns that expenses associated with legislative requirements on native title, environment protection and cultural heritage are adding to the other costs of land access incurred in mineral exploration. For this reason, the issue of the costs of land access has been identified by government and the industry as being an important area for which statistical information is needed.

In 2002, the Ministerial Council on Mineral and Petroleum Resources (MCMPR) through the Department of Industry, Tourism and Resources (DITR) commissioned the Australian Bureau of Statistics (ABS) to undertake a survey to collect land access expenditure for mineral exploration. The initiative was made possible by a DITR Regional Minerals Program (RMP) grant. The RMP sponsors projects that encourage a coordinated approach by industry and government to facilitate regional mining and mineral processing activities.

The survey was supported by the Minerals Council of Australia (MCA) and the Association of Mining and Exploration Companies (Inc.) (AMEC).

Information gained from the survey, which was conducted in respect of 2001-02, will serve to inform the DITR Mineral Exploration Action Agenda process and could support a broader role for the MCMPR in addressing issues associated with land access for mineral exploration.

It should be noted, however, that the survey did not provide any information on how land access expenditure in 2001-02 compared to those in earlier years, so care should be used in relating the results from the survey to changes in total mineral exploration expenditure over time.

The survey was based on a feasibility study completed in October 2001 which investigated the types of land access expenditure that mineral explorers incurred in accessing land for exploration purposes. It also determined the availability of such information in the exploration industry.

In the 2001-02 land access expenditure survey, about 700 private sector businesses were approached with a mailed questionnaire. These businesses were predominantly sourced from the ABS quarterly Mineral Exploration Survey with supplementation from the MCA, AMEC, Geoscience Australia and the Australian Stock Exchange's new and recent listings. The land access expenditure survey was, in effect, a complete census of mineral exploration undertaken in Australia during 2001-02.

Definition of land access expenditure

Land access expenditure includes all 2001-02 financial year expenses incurred in obtaining (or attempting to obtain) access to land for mineral exploration purposes. Expenses may include payments made at the commencement of the exploration cycle (such as exploration licence application fees) through to notification, negotiation, and other processes up to the point where access to land is obtained to physically commence the mineral exploration or attempts to access land have been abandoned. Land access expenditure also includes any on-going payments made in 2001-02 for land access (for mineral exploration purposes) for which an agreement had been made prior to 1 July 2001.

Relationship with Mineral Exploration Survey

The ABS conducts a quarterly Survey of Mineral Exploration. Two of the items collected in this survey are mineral exploration expenditure undertaken on 'production leases' and on 'all other areas'. Production leases are areas where production is underway (mine sites) or where development is taking place. All other areas include exploration leases, and in this article they are referred to as 'non-production leases'. Land access expenditure was collected in the 2001-02 survey in respect of exploration in the areas under non-production leases. The comparisons below are therefore related to mineral exploration expenditure in non-production leases as reported in the quarterly Survey of Mineral Exploration.

When determining the contribution of exploration businesses by size, exploration expenditure collected in the Mineral Exploration Survey was used as a proxy measure of business size.

Exploration businesses in the survey were classified into three size groupings according to their 2001-02 mineral exploration expenditure in non-production leases. These groupings are:

  • large businesses with expenditure of $5m and over
  • medium size businesses with expenditure of $1m to less than $5m
  • small businesses with expenditure of less than $1m.

Magnitude of land access expenditure

Mineral exploration land access expenditure amounted to $38.1m in 2001-02. This represented 7.5% of the total mineral exploration expenditure on Australia's non-production leases in 2001-02. On a regional basis, land access expenditure as a proportion of mineral exploration expenditure was highest in Queensland (9.9%), followed by Northern Territory (8.2%), Western Australia (7.8%), South Australia (7.2%), New South Wales and Tasmania (both 4.3%) and Victoria (2.3%) (table 16.14).

16.14 LAND ACCESS AND MINERAL EXPLORATION EXPENDITURE,
Non-production leases - 2001-02


Land access
expenditure
Mineral exploration
expenditure
Land access expenditure
as a proportion of mineral
exploration expenditure
$'000
$'000
%

New South Wales
1,716
40,088
4.3
Victoria
602
26,328
2.3
Queensland
6,515
65,708
9.9
South Australia
2,157
29,943
7.2
Western Australia
23,771
305,233
7.8
Tasmania
120
2,770
4.3
Northern Territory
3,191
39,040
8.2
Australia
38,072
509,110
7.5

Source: Mineral and Petroleum Exploration, Australia, March quarter 2003 (8412.0).

Western Australia contributed the largest share of Australia's land access expenditure at 62.4% ($23.8m), followed by Queensland with 17.1% ($6.5m). The shares contributed by the remaining states and territory were significantly lower: Northern Territory (8.4%), South Australia (5.7%), New South Wales (4.5%), Victoria (1.6%) and Tasmania (0.3%).

Types of land access expenditure

Mineral exploration businesses spent a third ($12.6m) of their land access expenditure on native title requirements. Most of this ($8.0m or 63.0%) was incurred on notification, consultation and negotiation expenses (table 16.15).

The second largest land access expense item was government charges ($11.2m or 29.3%). Government charges include application fees, rents and rates incurred by explorers on mineral tenements where access to explore was being negotiated during the 2001-02 financial year.

Cultural heritage expenditure amounted to $5.0m, which was 13.2% of total land access expenditure.

Mineral exploration businesses spent 26.6% of their land access expenditure on tasks outsourced to third parties (other businesses) during 2001-02. The largest expenditure on outsourced tasks was for native title requirements ($4.0m), cultural heritage expenses ($2.5m) and tenement management expenses ($1.7m).

These three items were also significant in terms of expenditure undertaken by the exploration businesses themselves (internal to the business) with expenditure on native title requirements at $8.6m, cultural heritage expenses ($2.5m) and tenement management expenses ($2.4m). However, these internal expenses were each less than expenses for government charges at $10.8m.

16.15 LAND ACCESS EXPENDITURE, By nature of expenditure - 2001-02

Internal to the business
Outsourced to a third party
Total



$'000
%
$'000
%
$'000
%

Native title requirements
Notification, consultation and negotiation expenses
4,836
12.7
3,124
8.2
7,960
20.9
Compensation expenses
2,456
6.5
. .
. .
2,456
6.5
Community relations expenses
n.p.
n.p.
n.p.
n.p.
2,177
5.7
Other expenses
n.p.
n.p.
n.p.
n.p.
39
0.1
Total
8,647
22.7
3,985
10.5
12,632
33.2
Other land-holder consultation and negotiation expenses
1,310
3.4
326
0.9
1,636
4.3
Government charges for tenements where exploration access not yet obtained
10,816
28.4
357
0.9
11,173
29.3
Cultural heritage expenses
2,543
6.7
2,496
6.6
5,039
13.2
Tenement management expenses for tenements where exploration access not yet obtained
2,383
6.3
1,722
4.5
4,105
10.8
Environment and rehabilitation bonds expenses
1,460
3.8
861
2.3
2,321
6.1
Other land access expenses
782
2.1
384
1.0
1,166
3.1
Total
27,941
73.4
10,131
26.6
38,072
100.0

Source: Mineral and Petroleum Exploration, Australia, March quarter 2003 (8412.0).

Land access expenditure by business size

Large businesses contributed most (39.3%) of the land access expenditure, followed by small businesses (37.0%) and medium size businesses (23.8%) table 16.16).

In analysing the types of land access expenditure by size of business, the results indicate the larger the business, the more capable it appeared to be in pursuing land access without assistance from other businesses. Outsourcing accounted for 23.6% of land access expenditure for large businesses, 26.3% for medium size businesses and 30.1% for small businesses.

The data also suggest larger businesses were more likely to access land subject to native title. For large businesses, expenditure on native title requirements was 47.3% of their total land access expenditure, while for medium size businesses the figure was 29.8% and for small businesses it was 20.3%. Similarly, cultural heritage expenses amounted to 19.7% of total land access expenditure for large businesses, 7.8% for medium size businesses and 9.8% for small businesses.

Government charges were a large proportion of total land access expenditure for small and medium size businesses (38.5% and 37.7% respectively) while for large businesses they represented 15.7% of total land access expenditure.

16.16 LAND ACCESS EXPENDITURE, By size of business and nature of expenditure - 2001-02

Internal to the business
Outsourced to a third party
Total
$'000
$'000
$'000

SMALL BUSINESSES(a)

Native title requirements
Notification, consultation and negotiation expenses
1,145
1,114
2,259
Compensation expenses
481
. .
481
Community relations expenses
n.p.
n.p.
98
Other expenses
n.p.
n.p.
25
Total
1,740
1,123
2,863
Other land-holder consultation and negotiation expenses
517
238
755
Government charges for tenements where exploration access not yet obtained
5,104
310
5,414
Cultural heritage expenses
464
920
1,384
Tenement management expenses for tenements where exploration access not yet obtained
1,324
1,137
2,461
Environment and rehabilitation bonds expenses
315
293
608
Other land access expenses
384
210
594
Total
9,848
4,231
14,079

MEDIUM SIZE BUSINESSES(b)

Native title requirements
Notification, consultation and negotiation expenses
845
970
1,815
Compensation expenses
664
. .
664
Community relations expenses
n.p.
n.p.
n.p.
Other expenses
n.p.
n.p.
n.p.
Total
1,698
1,002
2,700
Other land-holder consultation and negotiation expenses
n.p.
n.p.
454
Government charges for tenements where exploration access not yet obtained
n.p.
n.p.
3,412
Cultural heritage expenses
251
454
705
Tenement management expenses for tenements where exploration access not yet obtained
469
482
951
Environment and rehabilitation bonds expenses
290
198
488
Other land access expenses
183
156
339
Total
6,669
2,380
9,049

LARGE BUSINESSES(c)

Native title requirements
Notification, consultation and negotiation expenses
2,846
1,040
3,886
Compensation expenses
1,311
. .
1,311
Community relations expenses
n.p.
n.p.
n.p.
Other expenses
n.p.
n.p.
n.p.
Total
5,209
1,860
7,069
Other land-holder consultation and negotiation expenses
n.p.
n.p.
427
Government charges for tenements where exploration access not yet obtained
n.p.
n.p.
2,347
Cultural heritage expenses
1,828
1,122
2,950
Tenement management expenses for tenements where exploration access not yet obtained
590
103
693
Environment and rehabilitation bonds expenses
855
370
1,225
Other land access expenses
215
18
233
Total
11,424
3,520
14,944

ALL BUSINESSESES

Native title requirements
Notification, consultation and negotiation expenses
4,836
3,124
7,960
Compensation expenses
2,456
. .
2,456
Community relations expenses
n.p.
n.p.
2,177
Other expenses
n.p.
n.p.
39
Total
8,647
3,985
12,632
Other land-holder consultation and negotiation expenses
1,310
326
1,636
Government charges for tenements where exploration access not yet obtained
10,816
357
11,173
Cultural heritage expenses
2,543
2,496
5,039
Tenement management expenses for tenements where exploration access not yet obtained
2,383
1,722
4,105
Environment and rehabilitation bonds expenses
1,460
861
2,321
Other land access expenses
782
384
1,166
Total
27,941
10,131
38,072

(a) Small businesses are those with exploration expenditure less than $1m.
(b) Medium size businesses are those with exploration expenditure of $1m but less than $5m.
(c) Large businesses are those with exploration expenditure of $5m or more.
Source: Mineral and Petroleum Exploration, Australia, March quarter 2003 (8412.0).


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