‘Sunshine State’ wants to lure explorers to find more than just coal
The Queensland government is making more land available to explorers in a bid to increase jobs and cash flow for the Sunshine State.
Queensland is better known for its vast coal reserves and its highly active oil and gas industry.
The Bowen Basin, a 60,000 sq km area in central Queensland, hosts Australia’s biggest coal reserves and virtually all of the known mineable prime coking coal, according to the Bowen Basin Underground Geotechnical Society.
Queensland shipped a record 223 million tonnes of coal last year, and a recent geological report shows the state still has 63 billion tonnes of coal in the ground — 29 billion tonnes more than the previous estimate.
The 2018 “Queensland Exploration Scorecard” released by the Queensland Resources Council (QRC) showed coal exploration had increased for the first time since 2011-12, climbing 27 percent.
We’re more than just coal
But it’s not just about coal and gas in Queensland, there are currently just over 100 small caps exploring for everything from gold and copper to manganese and cobalt.
Last year total mineral exploration spend rose 35 per cent and petroleum exploration spend was up 5 per cent.
Association of Mining and Exploration Companies (AMEC) CEO Warren Pearce told Stockhead it was good to see the State government starting to encourage explorers to look for other minerals.
“We all know that Queensland is incredibly prospective for coal, but it’s really good to see them focusing on a bit of diversity in that space and starting to see some of those base metal opportunities starting to emerge,” he said.
“I think there’s a lot of companies actually looking to move into that space and with Queensland there is a real opportunity, particularly in the North-West minerals province.”
Junior explorer Red Metal (ASX:RDM) was among the successful tenderers who can now explore for zinc, lead, copper and silver across 400 sq km of land located 250km north of Mount Isa.
Red Metal last week announced it had nabbed $3.4 billion market cap miner Oz Minerals (ASX:OZL) as its partner.
Oz Minerals will shell out $8m over two years to fast track the search for major new discoveries at six of Red Metal’s early stage base and battery metals projects in Western Australia and Queensland.
Meanwhile, four other private companies will begin exploration on 369 sq km in the Bowen and Surat basins.
“Unlocking land for resource exploration — whether it is to uncover coal, gas or minerals — is vital to continuing resource development, whether it’s for mining jobs or royalties to fund our hospitals and schools,” mines minister Dr Anthony Lynham said.
The State government has also made available another $2m in “Collaborative Exploration Initiative” grants to kick-start 15 exploration projects in the North-West.
‘No room for complacency’
QRC CEO Ian Macfarlane said the resources sector contributed $62.9 billion to the Queensland economy and supports more than 316,000 jobs across the state.
This year it is expected to contribute $5.2 billion in royalties.
“Those royalty taxes build roads, schools and hospitals and pay the wages of nurses, teachers and police,” Mr McFarlane said.
But he said that while Queensland had always been a “resources powerhouse”, there was “no room for complacency”.
“It’s essential that we continue to encourage new exploration which will lead to the next round of investments,” he said.
Could be better on the gold front
While Queensland has a pretty good reputation for a mining jurisdiction, its gold royalty rates are just a little too high, according to AMEC’s Mr Pearce.
“It’s got a good framework to work through and largely speaking the approvals framework is relatively well understood,” he said.
“I think probably it’s not quite as competitive as it could be on some of the royalty rates, particularly around gold.
“That’s driven a lot of gold exploration to other places in Australia, particularly WA and the NT, but with that exception it is generally understood to be a pretty certain environment.”