The state budget, handed down yesterday, committed $A30 million from the 2018 financial year to FY20 for the Exploration Incentive Scheme.

Chamber of Minerals and Energy of Western Australia CEO Reg Howard-Smith said the continuation of the scheme was an encouraging sign.

“The EIS ensures resources companies can continue to make significant new discoveries,” he said.

There was also $41 million of funding over three years for the struggling magnetite sector, including a 50% royalty rebate.

“In view of the current economic climate, there is a clear case for a similar scheme to be made available for other commodity groups, such as nickel,” Association of Mining and Exploration Companies national policy manager Graham Short said.

But both groups hit out at an increase in tenement rental charges.
 
“In addition, as the Valuer General uses the Department of Mines and Petroleum tenement rental schedule to determine property values it will lead to an increase in land property values for shire rating purposes and higher rates notices from most regional local authorities,” Short said.

“This is an unintended double hit for mining and exploration companies which could have been avoided with prior consultation with industry.
 
“It is disappointing that this approach has been taken to meet the $2.77 million shortfall in budget revenue for the 2016/17 year caused by additional staff being appointed to implement the Reforming Environmental Regulation (RER) agenda – which has also been held up by the stalling of the Amendment Bill in Parliament.”

AMEC said any budget shortfall could have been dealt with through more efficiency improvements or by using some of the $80.4 million that is forecast to be collected from tenement rentals in FY17.
 
“One of the objectives of the RER was that a risk-based outcome-focussed model should lead to greater efficiency within DMP, and not a need for extra funds,” Short said.
 
“The sensible plans to cut waste, reduce unnecessary spending and red tape in government are essential, as there are limited opportunities to increase revenue in the current economic climate. There cannot be a ‘business as usual approach’, as times have changed considerably.
 
“All Australian mining and exploration companies have had to implement significant savings and efficiency measures to control cash flow and keep their operations viable and sustainable. Governments at all levels have to do the same.”