5 minute read
2023 - the year of collaboration and innovation
from BBMC Yearbook 2022
by bbminingclub
The exploration industry has always been the barometer of how the whole resources industry is ticking along. Now coming to the end of 2022, Queensland exploration activity continues to be riding high on top of the wave. We have seen this evidenced in our yearly data outlined in QEC’s Scorecard publication, where year on year, exploration spend displays a positive correlation with commodity prices.
Let’s look at copper as an example. (Image below). Copper exploration expenditure grew by 70% in 2021-22 on the back of soaring prices. Queensland saw the largest annual increase for copper exploration spend over the last 12 years, taking the exploration spend to three times the levels it was just five years ago. Even though two-thirds of the world’s 550 million tonnes of copper mined since 1900 is still in productive use today, the global appetite for copper continues to grow, leading to a greater emphasis on new copper discovery. The figures for other critical minerals mirror the growth trajectories for copper. As the International Energy Agency (IEA) has outlined, this clear trend is due to the world’s ambitions to move to a lower emission economy complete with electric cars, renewable energy sources as well as advanced technologies being used in everyday products. It is worth noting uranium prices also remained strong throughout the year as global energy security concerns continued. Countries like Japan are now planning to re-start reactors that have been dormant since 2011.
How does this impact Queensland’s exploration sector?
Without doubt, high commodity prices are translating into increased exploration activity. What we are seeing now is reminiscent of the start of the bull market off the back of the Global Financial Crisis in 2009. For mineral exploration, we are starting to see a steady increase in new Exploration Permits for Minerals applications lodged with the Queensland Department of Resources.
Price (U$/t)
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0 Exploration (A$m)
Since 2020, there’s been an average 20% annual increase in new mineral applications (image below), with the majority in northern Queensland. The increase has not reached the same volumes we saw after the Global Financial Crisis in 2009, and I doubt we will see these volumes again. There are two key reasons for this, (1) availability of new prospective land is becoming difficult with the turnover of land slow; and (2) we would need to see consistently high commodity prices, at least over the next couple of years, to maintain access to capital.
It’s an exciting time to be a mineral explorer or investor in Queensland. Right now, the industry is taking full advantage of where it is sitting on the wave with open access to capital and the Queensland Government’s clear ambition for a vibrant exploration industry for commodities like critical minerals. We are seeing many new entrants in Queensland’s minerals sector as well as welcoming back some global heavyweights like Anglo American and Rio Tinto. With these larger corporations back in the explorer ‘ecosystem’, they bring with them more opportunities to the region, such as greater access to data and infrastructure. Hopefully, we will also see greater collaboration within industry. An excellent example of a recent successful collaboration was the Julia Creek vanadium explorers and developers, who worked together to submit their proposal for a minerals processing demonstration plant in 2021. This resulted in $10 million in funding from the Queensland Government. With activity in North Queensland reinvigorated, we are hoping to see more collaborative industry proposals like this one gaining government approval and support. We are seeing an uptick in exploration activity in three key geographic areas of Queensland. These areas all have good access to pre-competitive geoscience data, yet require more investigation at greater depths - • The Southern part of the Mt Isa Northwest Minerals
Province • Georgetown • Southwest Bowen Going back to uranium, late this year we saw the Georgetown Ben Lomond uranium site sold to a Canadian consortium, Consolidated Uranium. The site has never been mined and in Queensland, only uranium exploration is permitted.
Number of Applications 1200
1100
1000
900
800
700
600
500
400
300
200
100
0
EPM Lodgement EPM Lodgement
2007 1090 1008 825 2009 502 2010 557 2011 468 2012 405 2013 335 2014 373 2015 288 2016 315 2017 311 2018 432 2019 287 2020 344 2021 446 2022 500
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Photo: Turnbull Photography What are some of the challenging conditions Queensland explorers are facing?
There are a couple of impediments to drilling activity currently – namely, labour and equipment shortages. The availability of drill rigs has been problematic over the last two years, with the scorecard results last year also reporting no further capacity available. The Council has heard from its members there are long wait times and costs associated with just getting a rig into Queensland – one figured reported was $7 million. This didn’t include on the ground costs once deployed. Access to equipment will likely impact Queensland reaching its full potential for mineral exploration activity in the next few years. Other exploration activities will be used, and it might even be the perfect breeding ground for new innovations, something explorers are known for. The Queensland Exploration Council is the representative body for mineral, coal and petroleum explorers in Queensland. We have 98 members - 73% are explorers or producers, and 27% are companies that service the industry, including investment groups, auditing, legal services, and other consulting services. Our role is to promote and enhance collaboration and investment in the sector. In 2022 we delivered a number of events in support of our membership, including the July Technical Summit, four investment showcase events as a space for explorers to pitch to a group of investors and the annual Exploration Breakfast, to name a few. We have another ambitious agenda for 2023 for our minerals members, which will kick off with the Queensland Government’s Critical Minerals Strategy and QEC’s ESG collateral in the early part of the new year.
