Preparing for the next surge: the need for increased drilling in Queensland's resource sector

Kim Wainwright, Chairperson

Queensland Exploration Council

Global demand for energy and raw materials continues, and Queensland finds itself at a crucial juncture in the exploration of its resources reserves for coal, gas, metals and critical minerals.

The state’s rich geological landscape provides significant opportunities for resource discovery, and to capitalise, Queensland must intensify its exploration. Drilling is the backbone of resource discovery—it’s the primary way exploration companies confirm reserves, validate geological models, and secure future projects.

Ramping up drilling activities now is essential for positioning the state to take advantage of the next commodities surge.

The role of drilling in resource development

Drilling serves as the foundation for future resource projects when it comes to exploration. While some geological surveys, seismic imaging, and surface sampling can provide valuable data, drilling confirms the existence, quality, and quantity of the resources underground.

A bold approach to drilling, supported by a favourable investment climate and streamlined regulatory processes, will ensure Queensland has development-ready projects ready to meet global demand.

It is through drilling that explorers can pinpoint viable deposits, quantify reserves, and determine the economic feasibility of projects. Without sufficient drilling, projects can stall in preliminary phases, as companies lack the data to move forward with confidence. A robust drilling strategy, combined with regulatory certainty, is important to keeping Queensland competitive in its exploration efforts and encouraging investment in high-quality reserves.

Challenges facing Queensland’s exploration sector

Queensland can take advantage of its natural, high-quality reserves when the right policy settings are in place. Currently, explorers face barriers that can delay drilling and, ultimately, new project development.

Regulation, extended timelines for land access approvals, and high compliance costs can slow down project momentum. Since 2013, the number of resource projects progressing through Environmental Impact Statement (EIS) processes has steadily declined, according to data compiled from the Canberra-based Office of the Chief Economist within the Department of Industry, Science and Resources.

Ten years ago, Queensland had over 440 million tonnes of coal projects in the pipeline, supported by 30 projects moving through the EIS process; today, this has dropped to just 172 million tonnes and only eight projects within EIS evaluation. This decline is an illustration of deferred or lost investment opportunities.

The state’s junior exploration market, essential for initial drilling and discovery, has also seen the challenges of raising capital and securing land access for drilling.

Unlocking Queensland’s potential through increased drilling

Unlocking Queensland’s full exploration potential requires a renewed focus on intensified drilling programs. Increased drilling activity could help discover new deposits, build a stronger reserve base, and allow resource companies to better map and quantify existing resources.

Queensland will need active exploration in the near term to meet the global demand for resources required for energy needs and renewable energy technologies. Longer term, our success will depend on fully assessed, high-quality reserves ready to supply at scale.

Increasing drilling will also provide crucial insights into deposits of critical and strategic minerals, such as copper and rare earth elements. These minerals are essential for renewable energy technologies, including batteries, electric vehicles and wind turbines.

To meet the growing demand for new energy technologies, more than 300 new mines could be needed globally over the next decade, according to Benchmark Mineral Intelligence. This includes the production of critical minerals like graphite, lithium, nickel, and cobalt.

In line with this, the International Energy Agency reports that demand for these same minerals saw significant growth in 2023, with lithium demand rising by 30%, while demand for nickel, cobalt, graphite, and rare earth elements all increased by 8% to 15%.

As demand for critical minerals is expected to rise, Queensland has a significant opportunity to supply the global clean energy market. Drilling to map and develop reserves of these minerals presents not only an economic opportunity but also a strategic advantage, positioning Queensland competitively in the global marketplace.

Supporting junior explorers to spur discovery

Junior exploration companies play a vital role in Queensland’s exploration sector with their agility and eagerness to drill new areas. These explorers test innovative approaches and, in some cases, take on the riskier projects that larger companies may avoid. However, in recent years, the junior market has faced unprecedented challenges. Limited access to capital has hindered smaller companies from conducting the high-cost, high-risk drilling activities necessary to confirm new deposits.

A proactive approach to support junior explorers through streamlined land access approvals, reduced regulatory burdens, and targeted financial incentives can significantly enhance exploration efforts.

Government support, particularly in the form of grants or co-funding for exploration projects, can be transformative for junior explorers and help to overcome financial barriers. Such support not only benefits the companies but also contributes to a stronger, more vibrant resource sector, ultimately enhancing Queensland’s overall competitiveness.

Collaborating with the new government for a thriving resource future

Working with all stakeholders will be important for developing a pipeline of resources projects and the regulatory settings that support drilling and exploration. The Queensland Exploration Council (QEC) will work with the incoming government on key priorities to encourage investment and drilling programs. The priorities include streamlining land access processes, reducing regulatory delays, and creating a more predictable pathway to production, and targeted investment incentives.

Recently, the Fraser Institute’s Investment Attractiveness Index showed that Australia has fallen behind the United States as the most attractive region for mining investment. With the right reforms, Queensland has a significant opportunity to reclaim its standing, drawing in investors eager to support energy and resource projects in a favourable business environment.

Building a sustainable future for Queensland’s resource sector

Increasing drilling efforts today can secure a sustainable future for Queensland’s resources sector by discovering new reserves and confirming known resources. A bold approach to drilling, supported by a favourable investment climate and streamlined regulatory processes, will ensure Queensland has development-ready projects ready to meet global demand.

Through collaboration between industry and government, Queensland’s exploration sector can achieve a vibrant and sustainable future, positioning the state to lead the charge in supplying resources for the global economy.

By embracing a bold approach to drilling, supported by a favourable investment climate and streamlined regulatory processes, Queensland will be well-equipped to capitalise on the next surge, ensuring its continued place as a powerhouse in the evolving energy landscape. 