An economic impact study into the State Government’s Exploration Incentive Scheme (EIS) has found that every $1 million invested in the EIS stimulates exploration activity generating $10.3 million in direct benefits for Western Australia.
The EIS is a $130 million initiative that aims to encourage exploration in Western Australia for the long-term sustainability of the State’s resources sector.
The initiative, initially supported by Royalties for Regions, is being funded from April 2009 to June 2017, to stimulate increased private sector resource exploration leading to new mineral and energy discoveries.
Mines and Petroleum Minister Bill Marmion said the review by ACIL Allen Consulting highlighted new pre-competitive geoscience as the main driver of private sector exploration investment.
“The Government has known for some time the scheme is having a strong multiplier effect on our economy, and now we have verification through independent modelling,” Mr Marmion said in a press release.
“The lion’s share of publicity goes to the scheme’s flagship Co-funded Drilling Program that refunds up to 50% of greenfields drilling costs. But the quiet achiever is the Department of Mines and Petroleum’s Geological Survey of Western Australia (GSWA).”
He said the $33.3 million EIS funding for geophysical and geochemical surveys meant that almost the entire State was now covered by airborne magnetic and radiometric survey data, providing invaluable information for explorers.
“This has led to innovative mineral system studies in a number of areas, most recently Gascoyne Province, Edmund Basin in the Capricorn Orogen, Speewah Basin in the east Kimberley and the Yilgarn Craton,” Mr Marmion said.
The study found that every $1 million spent under the EIS generated 12.5 full-time jobs in minerals exploration for three years and also considered the potential economic impact from the discovery and commercialisation of new mines as a result of increased exploration.
“This second stage of the modelling resulted in a further $13.4 million of benefits for every $1 million invested bringing the total impact figure to $23.7 million,” Mr Marmion said.
“While these numbers appear large, they should be considered in the context of the high commodity prices we were experiencing over the study’s sample period. Nevertheless, the positive impact is massive.”
The State Government has renewed its commitment to the EIS by approving annual funding of $10 million over three financial years from July 2014 until June 2017.
“This brings total funding for the scheme to about $130 million and as this review confirms, we are certainly getting tremendous bang for our buck,” the Minister said.
The co-funded Drilling Program has offered over $54 million to more than 500 projects, of which about $21 million have already been refunded to more than 260 projects.