Coal explorers have gained a government concession that could save them up to $114 million in the face of the global mining downturn.
Minister for State Development and Minister for Natural Resources and Mines Dr Anthony Lynham today said the concession would provide financial relief to coal explorers and ensure meaningful exploration did not stall in Queensland.
“This concession will provide up to a 50 per cent reduction over 2016 and 2017 in the expenditure a coal explorer is required to commit under their exploration permit,” Dr Lynham said.
“For example, say there is a coal explorer in the Bowen Basin who holds multiple exploration permits with a combined committed expenditure of $2 million for its milestone period within 2016/17.
“The concession means up to $1 million of reduced expenditure they don’t have to spend to meet their exploration permit conditions.”
Dr Lynham said the coal concession came on top of the concession already extended to mineral explorers, which could save them $160 million over two years.
“Exploration is vital to discovering the resources that will drive the resources industry and sustain economic growth for Queensland and our communities,” Dr Lynham said.
“We’re taken on board what industry, including the Queensland Exploration Council, the Queensland Resources Council and the Association of Mining and Exploration Companies, is telling us, and that is explorers are under stress with low commodity prices and difficulty attracting investment capital.
“This concession alleviates fiscal pressure and gives coal explorers more flexibility to respond to investment conditions and spend their exploration dollars on the ground where it is needed most.”
Dr Lynham said, similarly to mineral explorers, coal explorers would still be expected to undertake meaningful exploration and meet their other obligations, including environmental obligations, annual rents and relinquishing sub-blocks.
Queensland Resources Council Chief Executive Michael Roche welcome the news to reduce the expenditure requirements for coal explorers.
“These initiatives are a sensible response to the prevailing challenging times facing all explorers where it is almost impossible to attract new capital. Most explorers are carefully husbanding scarce cash reserves to simply survive the current severe market downturn,” Mr Roche said.
“This initiative is a perfect example of what governments can do to provide some relief to resources sector companies in some of the toughest conditions for several decades.”
The concession applies from 1 January 2016.