... consistent with the the national approach to economic, environmental and social stewardship.

Minerals Industry Performance

The Victorian minerals industry is undergoing a period of change with expenditure on minerals exploration decreasing in recent years following a brief period of expansion1. Due to the industry’s relatively small size when compared to other jurisdictions, single mines, companies or exploration projects can have a significant effect on overall industry performance in Victoria.

The minerals industry is a relatively small employer when compared to the industry in other jurisdictions and with other industries in Victoria. In 2010-11 the Victorian sector accounted for less than 5 per cent of the minerals industry’s total workforce at a national level. The industry’s personnel in Victoria only accounted for 0.65 per cent of the State’s workforce2.

Figure 3: National minerals industry employees by jurisdiction (‘000)3

The minerals industry pays royalties directly to the State Government as mineral resources in the ground are the property of the Crown. The industry’s contribution to the State’s income has risen dramatically over the previous decade. In 2002-03 the industry paid $8.5m in royalties to the state, by 2010-11 this had risen to $45m, an increase of 429 per cent4.

Figure 4: Royalties paid by the minerals industry in Victoria $m5

Overall the Victorian economy has failed to capitalise on the mining boom for a variety of reasons. This has been partially due to the recent focus on the bulk commodities of iron ore and black coal in Western Australia and Queensland. However, Victoria does have world class deposits of other resources which are in high demand, most prominently mineral sands, gold, and a significant potential brown coal export industry.

The most significant impediment to increasing the size of the Victorian minerals industry, and therefore its benefit to the Victorian economy, are the barriers to doing business in Victoria for the industry. For the most part Victoria’s perception as a potential mining jurisdiction is dismal. In the Fraser Institute’s annual survey of mining companies for 2011-12 Victoria ranked 82nd out of 93 defined mining regional jurisdictions in the world on composite policy and mineral potential. This ranking was 21 below Tasmania; 23 below New Zealand and 34 below NSW. It is recognised that there are many influences on this index and these are addressed by 22 specific index rankings ranging from political stability, prospectively, effectiveness of regulation, availability of labour and access to infrastructure to name a few.

Melbourne however, is one of a few international mining capitals. A number of international head offices of mining houses are located here, including the world’s largest mining house. Wherever international headquarters are located, the support and service sectors follow. Melbourne has a wealth of expertise focused on the international, national and State industry. Large businesses in insurance, financial services, technical services, engineering, and equipment and materials manufacturers all call Melbourne home. Victoria must capitalise on this and encourage further investment into mineral extraction.

Mineral Exploration and Mining Licences

Mineral Production

Investment

Health and Safety

____________
1 ABS – 8412.0 – Minerals and Petroleum Exploration
2 Ibid ABS – 8412.0
3 ABS – 8155.0 - Australian Industry, 2010-11.
4 DPI Statistic Review 2010-11
5 Compiled from DPI Statistical Review reports 2002 to 2011
6 Data for table and graphs sourced from DPI Statistical Review reports 2002 to 2011. Note: There is no data yet available for the new retention licences and prospecting licences. The total licence data in Table 3 is as of June 30 of each year.
7 Many ELs are held by individuals or small private companies with financial and or technological limitations to their exploration capacity.
8 Graph compiled from ABS data: 8412.0 – Minerals and Petroleum Exploration Note: ABS figures for type of exploration do not exist prior to 2003-4.
9 Calculated using ABS exploration expenditure data from (8412.0 – Minerals and Petroleum Exploration) and Reserve Bank of Australia inflation calculator.
10 Calculated from 2002-2012 releases of ABS 8412.0 – Minerals and Petroleum Exploration - Expenditure and metres drilled.
11 Calculated by dividing national total exploration spend by total metres drilled to get an approximate cost per metre. The Victorian total exploration was then divided by the national approximate cost per metre amount.
12 Compiled from DPI Statistical Review reports 2002-03 to 2010-11 13 World Gold Council, gold price statistics: http://www.gold.org/investment/statistics/ Note: The price for 2012 is the average for quarters 1 to 3 as the yearly average was not yet available at the time of analysis. 14 Compiled from DPI Statistical Review reports 2002 to 2011.
15 DPI Statistical Review 2011.
16 Graphs compiled from: ABS 5625.0 - Private New Capital Expenditure and Expected Expenditure, Australia, June 2012
17 Ibid ABS 5625.0.
18 .2006-07 and 2007-08 data from Department of Primary Industries, Mining Safety Statistics (by sector) 2008; 2008-10 data from WorkSafe Victoria, Extractives Industry Incident Statistics (by sector) 2010. Note: Prior to 2008 Data was collected by DPI on a financial year basis, it has subsequently been collected by WorkSafe Victoria on a calendar year basis. As such the 2007-08 and 2008 data overlaps however, for the purposes of showing employment trends the data is sufficient.
19 .Ibid WSV and DPI. See footnote 34 for clarification on data year inconsistency.