Mining in Australia: Incentives and Initiatives

Mining in Australia: Western Australia

Home to key mining regions such as the Pilbara, Western Australia (WA) has drawn in major mining companies from around the world, including Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and BHP (ASX:BHP,NYSE:BHP,LSE:BHP). As Australia’s largest state, WA has shown its strength on the mining front with plentiful resources and widespread exploration.

One of WA’s government initiatives is its Exploration Incentive Scheme (EIS), which aims to encourage exploration in WA to help stimulate and sustain the resource sector. Founded in 2009, the EIS raises its funds through mining tenement rents. Recently, in 2021, its funds were increased to AU$12.5 million per year, up from AU$10 million per year.

The EIS consists of five different programs: co-funded exploration drilling and energy analysis, geophysical surveys, encouraging exploration through cover, 3D prospectivity mapping and promoting strategic research with industry.

While each component provides its own benefits, the exploration drilling program is considered a flagship of the EIS as it offers up to a 50 percent refund for innovative exploration drilling projects. AU$5 million are allocated to the exploration drilling program, almost half of the total EIS funds. Open for applications twice a year, costs are capped at AU$180,000 for general multi-hole applications, at AU$220,000 for a single or two deep-hole application and at AU$40,000 for a prospector application.

Mining in Australia: Tasmania

While Tasmania’s government puts a great deal of support into its agricultural and renewable energy sectors, the state has also directed resources towards its mining industry.

One of the island state’s initiatives is the Geoscience Initiative, a AU$2 million program spread out over four years. The initiative is intended to deliver new pre-competitive geoscience data and to improve the accuracy and completeness of historic geoscience data. In 2021, the re-elected Liberal government in Tasmania pledged to refresh this program, and did so, upgrading funding from AU$1.5 million to the now-current $AU2 million. The Australian government’s Exploring for the Future Program is expected to bolster that funding up to AU$3 million.

The government also offers the AU$3.5 million Exploration Drilling Grant Incentive was formed with the intention of increasing greenfield exploration in Tasmania through co-funding to applicants. Originally slated for 2018-2022, the EDGI has since been extended to run for another year until 2023. Depending on the uptake for the 7th round, the EDGI may be extended for an 8th round into 2024.

Mining in Australia: Victoria

One of the most heavily populated parts of Australia, Victoria offers a number of different initiatives and programs focused around the mining sector and energy technology.

The AU$15 million TARGET Minerals Exploration Initiative is one of Victoria’s main resource initiatives, designed to increase investment in exploration for gold, copper and other base metals. While it excludes exploration for coal, oil and gas — some of Australia’s biggest exports — it includes grants for companies to conduct co-funded mineral exploration programs. Grants from the initiative cover up to half the cost of eligible exploration activities, such as geophysical surveys and drilling and sampling analysis.

Additionally, Victoria’s government has a Low-emission Coal Program, which helps companies find innovative ways to reduce their carbon footprints. An example includes a AU$2 million contribution to Nippon Steel Engineering from Regional Development Victoria, meant to help the company investigate the feasibility of technology able to convert lignite (brown coal) into a natural gas substitute.

Mining in Australia: South Australia

South Australia’s (SA) government invests in what it refers to as “innovative initiatives” with the intent of bringing significant economic benefits to the state.

One of SA’s most prominent initiatives is its Plan for Accelerating Exploration (PACE) Copper, a AU$20 million investment intended to lead the transformation of SA’s mineral exploration industry over the next two years. While PACE was originally launched in 2004 as a AU$22.5 million five year initiative, the program’s immediate success led to several extensions and additional funding. PACE is currently renewed until 2025, with an additional AU$11.5 million per year. PACE supports innovative and collaborative geoscience projects, and the capture and interpretation of geophysical pre-competitive data sets, along with other factors.

Mining in Australia: Queensland

Home to marvels like the Great Barrier Reef and an almost 7,000 kilometer coastline, Northeastern Queensland also hosts several different mineral resources.

While some of Queensland’s initiatives are more generalised, such as tenure reforms and a resource roundtable, others are more proactive, such as the Strategic Resources Exploration Program (SREP). Through the program, the government invested AU$27.125 million over four years to boost exploration and support for resource development projects. This particular initiative ended in 2021.

The funding was divided up into different initiatives, such as AU$3.6 million going towards gas exploration in the Georgina, South Nicolson and Isa super basins, and AU$4.275 million for mineral geophysics to help locate new mineral prospects over wide areas.

Mining in Australia: Northern Territory

Known for housing Australia’s world-renowned Outback, the Northern Territory (NT) spans over 1.4 million kilometres and is ripe with mining and resource opportunities.

The NT government recently launched the Resourcing the Territory initiative, an ongoing game plan designed to underpin the long-term sustainability of the territory’s resource sector. It was formerly allocated AU$6.5 million per year, but that was recently upgraded to AU$9.5 million — an increase to almost 150 percent of its previously allocated amount. The initiative, which provides pre-competitive geoscience, investment attraction and exploration stimulus programs, replaces the previous AU$23.8 million Creating Opportunities for Resource Exploration initiative, which ran from 2014 to 2018.

Mining in Australia: New South Wales

Playing host to national hotspots like Sydney, Newcastle and Harbor Bridge, New South Wales’ (NSW) presence on the eastern coast also plays a big part in the mining and resource sector.

According to the NSW Department of Industry, the state government has allocated over AU$95 million to exploration initiatives in recent years. One example is the New Frontiers Exploration Initiative (NFEI), designed to provide significant stimulus to future exploration for mineral and petroleum resources. Launched in 2006, the initiative has been funded by annual rental fees since 2012, with projects under NFEI helping cover areas such as pre-competitive geophysical surveys and frontier geoscientific mapping. In 2022, the New Frontiers Exploration Initiative was renewed with AU$1.5 million.

Mining in Australia: Australian Capital Territory

As its name might suggest, Australian Capital Territory is a small territory spanning just less than 2,400 square kilometers between Sydney and Melbourne; it houses Canberra, the country’s capital.

Due to the territory’s size and proximity to other states like New South Wales and Victoria, there are no mining and resource initiatives available at this time.

Mining in Australia: Federal incentives

While almost every state and territory has designated incentives, there are also some available through the federal Australian government that apply to the entire country.

Formerly known as the Exploration Development Incentive, the federal government introduced the Junior Minerals Exploration Incentive in March 2018. The incentive was created to encourage investment in small mineral exploration companies, and allows eligible companies to generate tax credits by giving up a portion of their losses from greenfields mineral exploration expenditure. Following that, the tax credits can be distributed to investors who buy newly issued shares during a certain period. Exploration credits are capped at a total of AU$100 million over a four year period. Australia’s federal government announced in May 2021 that it would extend the program for four more years. The government followed through, extending the program out to 2025.

Australia also has an Industry Growth Centres Initiative that consists of six areas: advanced manufacturing; cybersecurity; food and agribusiness; medical technologies and pharmaceuticals; mining equipment, technology and services; and oil, gas and energy resources. Each growth centre is a not-for-profit organization with its own Sector Competitiveness Plan, entailing a 10 year strategy for the sector, identified regulatory reform opportunities and industry knowledge priorities like skills and research requirements. The centres have access to AU$63 million in funding to develop collaborative projects that help capability and competitiveness within each sector.