The latest Quarterly Economic Brief from the Chamber of Energy and Minerals of Western Australia (CME), prepared in conjunction with Deloitte Access Economics, is a stark reminder of transition underway in the Western Australian resources sector.
The report highlights the collective downward trend in global commodity prices continued during the three months to January 2015, in particular the price of crude oil.
“Notwithstanding issues around price, it was pleasing to see production increases for bulk commodities of iron ore and gas,” said CME Chief Executive Reg Howard-Smith.
“The significant investment made over the past few years is delivering record production and export numbers in Western Australia,” said Mr Howard-Smith.
Exploration expenditure in Western Australia fell 3.9 per cent (seasonally adjusted) in the September quarter 2014. Commodities driving the overall decline in exploration include petroleum, iron ore and uranium, with only copper and mineral sands recording slight increases.
“Investment in exploration is the lifeblood of future industry,” said Mr Howard-Smith.
“CME is hopeful the Federal Government’s new Exploration Development Incentive will provide a boost to the exploration sector,” said Mr Howard-Smith.
The incentive will allow eligible exploration companies to convert a portion of their tax loss to exploration credits which can be provided to shareholders to entitle the shareholders to an equivalent tax benefit.
“Together with the State Government Exploration Incentive Scheme, these initiatives should enable new exploration programs to get underway,” said Mr Howard-Smith.
The Quarterly Economic Brief can be found here.
