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Monday, 15 September 2003
Page: 19983

Mr ADAMS (12:45 PM) —This report of the Standing Committee on Industry and Resources looks at impediments to increasing investment in minerals and petroleum exploration in Australia. The inquiry commenced in May 2002 with the referral of eight terms of reference by the Minister for Industry, Tourism and Resources. It is well known that the resources industry overall is a very important contributor to the national economy, but it is noteworthy that the industry's exploration phase has a relatively low profile, even though in 2001 and 2002 over $1.5 billion was spent by all explorers—mineral and petroleum—in Australia. The industry, however, has expressed concern that this total investment expenditure on resources exploration has fallen significantly since the mid-1990s, when annual expenditures topped the $2 billion mark.

In establishing the scope of its inquiry, the committee committed to maintaining its focus on exploration issues. It did not digress unduly into investigation of production issues or their impacts, except where the production issues had a significant influence on the exploration strategies that companies pursued. For clarity, the committee adopted the following definitions: `resources industry' is composed of a minerals sector and a petroleum sector; when referring to resources product or output, the term `production' was used rather than the term `mining' in recognition that the inquiry covered both the minerals and the petroleum sectors; and the distinction between `greenfields'—high risk, remote—and `brownfields'—lower risk, near the mine—exploration projects was noted for possible future policy implications.

There were 120 submissions and 59 exhibits received and accepted by the committee, representing a pleasing spread of interest from major companies and junior companies from both the minerals sector and the petroleum sector, peak bodies and professional associations, government agencies, research organisations, environmental groups, land councils and individuals. There were 10 public hearings held across the continent—in Darwin, Brisbane, Kalgoorlie, Perth and Adelaide and five in Canberra. Two industry inspections were arranged for the Kalgoorlie region—a greenfields nickel project and a brownfields gold project.

In summary, the committee concluded that the exploration industry's prospects for recovery and growth were being hampered principally by a lack of investment funding, nationally inconsistent resources titles and cultural heritage management standards and processes, land access negotiation delays, and less than optimal efficiency in the acquisition and storage of geoscientific data. It was felt that, after discussions with Indigenous leaders and the mining companies, both sides were maturing in their viewpoints and were much more aware of the need to work together transparently on land rights issues so that all could benefit. However, some relationships are better than others, and additional resources should be provided to native title representative bodies that would facilitate negotiation procedures.

The committee itself identified possible actions by government agencies, the industry itself, researchers and educators, and land claimants. It believes that certain policy measures for implementation at both Commonwealth and state government levels may facilitate the recovery of the resources exploration activity and lead to new minerals and petroleum discoveries. The committee recognises that the fundamental challenge for Australian explorers is to `see through' the unconsolidated settlements covering much of the continent of Australia and explore deepwater, offshore frontier basins. Hence, in order for Australia to maintain its global geoscientific leadership and especially overcome the `cover' problem, it needs to foster a first-class intellectual culture that can drive superior conceptual thinking and cause geoscientific breakthroughs. Further, there needs to be a significant boost to geoscience data acquisition by the public sector.

Key recommendations by the committee included increased funding for airborne geophysical surveys and ground truthing drill programs—that was for Geoscience Australia—and conceptual research involving the nation's leading R&D agencies, especially the CSIRO. Tax based incentives were recommended, including the introduction of flow-through share schemes to encourage investment in resource stock, particularly juniors, which would allow smaller companies to invest and take part in exploration; and amendments to the petroleum resource rent taxation provisions to encourage investment in offshore petroleum exploration plays. The committee is of the view that the additional geoscience data required would also be of benefit to researchers seeking solutions to other natural resource problems that face the nation, especially dryland salinity. I thank my colleagues on this committee and the secretariat staff. I recommend the report to the House. (Time expired)