earth resources sector indicators 2017–2018 · 2019-12-03 · 6 earth resources sector indicators...

EARTH RESOURCES SECTOR INDICATORS 2017–2018

Published by Department of Jobs, Precincts and Regions 1 Spring Street Melbourne, Victoria 3000 Telephone +61 (03) 9651 9999

December 2019

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3 EARTH RESOURCES SECTOR INDICATORS 2017–18

MINISTERIAL FOREWORD

Victoria’s resources sector is booming. Gold is being produced at record levels, quarry materials are supporting the state’s huge infrastructure agenda, and we’re growing jobs – particularly in the regions.

To keep developing the industry and make investments where they’re needed most, it’s vital that we have access to the latest, most reliable statistical and geoscientific data.

We’ve been working closely with industry to develop the annual Earth Resources Sector Indicators report, to celebrate the performance of the sector and highlight its important contribution to our regional communities and the Victorian economy.

This year’s report shows a number of strong positive trends – with growth in exploration spending well outpacing the national average, and the number of exploration licences granted over the 2017–18 period increased by more than 130 per cent – demonstrating the positivity within the industry, and its potential to grow further in the coming years.

Over the past 1.5 years, the Andrews Labor Government has released two strategies that will help our sector address its challenges and embrace the opportunities ahead to improve community outcomes across the minerals and extractives sectors – State of Discovery: Mineral Resources Strategy 2018–2023 and Helping Victoria Grow: Extractive Resources Strategy. The Earth Resources Sector Indicators provides the metrics that will track the actions identified in these strategies.

I’m proud that our government is continuing to invest in programs across the Resources portfolio. We’re committed to helping our regions thrive – and the job creation, investment attraction and economic growth the resources sector brings to Victoria is a crucial part of this.

I would like to thank everyone in the industry for a year of hard work and impressive growth – and I look forward to highlighting the sector’s continued growth in the future editions of this report.

Jaclyn Symes MP Minister for Resources

EARTH RESOURCES SECTOR INDICATORS 2017–18 5

INTRODUCTION

Each year, the Department of Jobs, Precincts and Regions (DJPR) compiles and publishes the Earth Resources Sector Indicators report to promote knowledge sharing and enable effective earth resource decision-making.

This report includes mineral and extractive resource information for the 2017–18 financial year and builds on foundations laid by last year’s inaugural publication.

Earth Resources Sector Indicators is intended to:

• establish a framework for collection and analysis of key information for the sector;

• provide a common and easily accessible set of metrics for stakeholder reference;

• complement existing earth resources reporting requirements; and

• highlight opportunities to develop additional sector indicators for future reports.


VICTORIAN GOVERNMENT POLICY

1 For more information see hydrogenenergysupplychain.com

The Victorian Government is engaged in work programs across the earth resources sector.

• The Statement on Future Uses of Brown Coal provides clarity to industry and local communities about uses of Victoria’s brown coal resource in a low-emission context.

Hydrogen derived from brown coal was identified as one alternative use consistent with the Statement. Developing a clearer understanding of the economic viability of large-scale export of hydrogen derived from brown coal for energy purposes is the primary goal of the Hydrogen Energy Supply Chain (HESC) pilot project.1 The HESC project is a joint effort by Victorian, Commonwealth and Japanese governments and a consortium of private energy and infrastructure companies. Construction of the HESC pilot phase will begin in 2019.

• Earth Resources Regulation is implementing a major reform program in response to the Commissioner for Better Regulation’s report Getting the Groundwork Right.

Key regulatory improvements flowing from this work include: simplifying assessment processes for proposed mines and quarries, providing clearer information to industry and the community about regulatory processes and decisions, and ensuring laws and regulations governing the earth resources sector are fit for purpose, based on modern technologies and best practice regulatory and governance frameworks.

• The Victorian Gas Program directed the Geological Survey of Victoria to undertake a scientific analysis of the prospective resource volumes of undiscovered onshore conventional gas and offshore gas available to the state.

To encourage new gas exploration in state waters, and potentially secure future gas supplies, the government invited applications to tender for petroleum exploration permits over five offshore areas. Applications closed on 15 February 2019 and submissions are now being assessed by the earth resources regulator. The Victorian Government expects that domestic consumers will be given the first genuine and reasonable offer to buy any new gas that is discovered from these areas.

The department has also begun work to deliver on the Andrews Government election commitment to enshrine the legislated ban on hydraulic fracturing in the Constitution of Victoria.

• Helping Victoria Grow: Extractive Resources Strategy will ensure that high-quality extractive resources are available at a competitive price to support Victoria’s continued growth.

The government announced $13.2 million in the 2019–20 State Budget to deliver on key actions of the Extractive Resources Strategy, enabling the quarry industry to grow when and where its materials are needed.

• State of Discovery: Mineral Resources Strategy 2018–2023 will help grow investment and jobs in Victoria’s minerals sector, while meeting the social and environmental expectations of the community.

New land released for mineral exploration in western Victoria (the Stavely Arc) underscores the government’s ongoing commitment to attract investment and support economic growth in Victoria’s small towns and regional communities.


The government announced $2.3 million in the 2019–20 State Budget to support action on the Mineral Resources Strategy. The new funding will establish a business accelerator and a Mining Equipment, Technology and Services hub and develop a community benefit scheme to share benefits from resource operations.

• In the 2019–20 Victorian Budget, the government announced the royalty exemption for gold would be removed from 1 January 2020. The gold royalty rate will be set at 2.75 per cent, consistent with the general royalty rate for minerals, and the royalty will not apply to the first 2,500 ounces of gold production each year.

• In May 2019, the department released a package of land access tools to help rural landholders negotiate with mineral explorers searching for gold, copper and other valuable metals on private land. These new tools are being piloted for exploration at the Stavely Ground Release in western Victoria.

• On 30 June 2019, the Mineral Resources (Sustainable Development) (Mineral Industries) Interim Regulations 2018 sunset. A Regulatory Impact Statement (RIS) and proposed draft regulations were open for public consultation between 25 March and 23 April 2019. New minerals regulations commenced on 1 July 2019.

• On 27 January 2020, the Mineral Resources (Sustainable Development) (Extractive Industries) Regulations 2010 will sunset. A RIS is out for public consultation until 21 October 2019.

7


MINERALS

2 United States Geological Survey (Mineral Commodity Summaries 2019), Geoscience Australia.

The minerals sector in Victoria comprises the exploration, mining and processing of gold and other precious metals, base metals, heavy mineral sands, antimony and coal.

Industry sentiment surrounding the sector was positive during the 2017–18 financial year. This was clearly demonstrated by a significant (81 per cent) uplift in year-on-year exploration expenditure, the state’s highest level since 2009–10. New land released for mineral exploration in western Victoria (the Stavely Arc) aims to continue the positive industry sentiment into the future.

The government has driven private sector exploration investment through the provision of precompetitive geoscience data, which details geological characteristics and resource potential of targeted areas. Precompetitive geoscience data reduces the costs and risks for the private sector of exploration, enables better informed minerals sector planning and decision making and stimulates exploration investment, which in turn creates jobs and investment.

Gold and precious metals

Victoria is a globally significant gold province. Since it was first discovered in Victoria in 1850, over 80 million ounces of gold has been mined from fields across the state. In 2017–18, Victoria’s gold endowment continued to be a source of economic development, particularly in regional areas. The recently announced expansion of Fosterville Gold Mine is creating new jobs and opportunities for the Greater Bendigo community. The expansion and recently upgraded reserve estimates are likely to place Fosterville as one of the top five gold producing operations in the country.

Base metals

The geological environment in Victoria is favourable for base metal prospectivity, with identified deposits in the state’s east and early stage exploration in the west for copper, lead, zinc, molybdenum, nickel, and tin.

The Geological Survey of Victoria (GSV) has recently identified several areas in western Victoria which may contain significant base metal deposits, particularly copper. In an area known collectively as the Stavely Arc, GSV identified a belt of rock types consistent with the presence of large, disseminated resources, potentially similar in type to those found in base metal-rich areas of South America. The region is prospective for both porphyry and volcanic-hosted massive sulphide copper-gold systems.

Antimony

Over the past decade Victoria has emerged as one of the top antimony producers in the world. Antimony is used primarily in products such as airplane seats and in the dashboards of cars to make them resistant to fire.

In 2017–18, Victoria had the fourth largest identified antimony endowment and was the fourth largest producer worldwide.2 Australia’s total antimony production is from the Costerfield operation located in Central Victoria.


Mineral sands (and rare-earth elements)

Victoria is a world-class heavy mineral sands province, offering developers demonstrated mineral endowment. Heavy mineral sands contain elevated concentrations of zircon, rutile, leucoxene, ilmenite and monazite, and may contain significant rare-earth element concentrations. Most mineral sands activity is currently focused on the Murray Basin in western Victoria, but exploration opportunities also exist in the Gippsland and Otway basins.

The demand for rare-earth elements is expected to increase in line with advances in new high-technology products. The strategic importance of rare-earth elements signals potential economic opportunities for Victoria in the future.

Other minerals

Lithium exploration continues in eastern Victoria, which could enable the state to access growth opportunities in energy storage technologies for expanding renewable and electric vehicle markets.

Coal

Brown coal continues to be an important economic resource for Victoria.

Historically, demand for brown coal has been driven by Victoria’s electricity needs, which have been met from coal-fired generators located in the Latrobe Valley.

Beyond power generation, brown coal can be used as an alternative feedstock to produce a variety of high value products including carbon fibre, graphene, hydrogen and fertiliser. Domestic and international interest in using brown coal to produce these products is strong and the Victorian Government’s Statement on Future Uses of Brown Coal outlines the state’s policy position on projects that seek to use brown coal in a low emissions context.

3 PwC, Extractive Resources in Victoria: Demand and Supply Study 2015-2050, May 2016.

EXTRACTIVES

Victoria is endowed with a range of extractive resources, including basalt, hornfels, granite, sand, gypsum, kaolin and fine clay. Extractives are key inputs to vital construction products such as concrete, cement, bricks and road paving.

Demand for extractives was high during 2017–18 and if this trend continues, demand is expected to nearly double by 2050.3 Residential and commercial development along with transport and energy infrastructure, are all key drivers for extractive material demand.

The Victorian Government’s pipeline of significant infrastructure projects, e.g. the Metro Tunnel, the North East Link, and the West Gate Tunnel projects, is also expected to drive demand for extractive resources in the short to medium-term. If the supply of extractives is unable to respond to increasing demand, supply shortfalls may place these infrastructure projects at risk. The government’s Helping Victoria Grow: Extractive Resources Strategy sets out a plan to ensure that extractive resources continue to be available to support the state’s growth.

Hard rock

Hard rock production in Victoria is comprised primarily of basalt, granite and hornfels. Hard rock is typically used in the construction industry for road surfacing, building blocks or in groundwork. Critical suppliers of hard rock are located across the state including South Gippsland, Mitchell and Wyndham—where most of the basalt for the Melbourne supply area is sourced from.

Soft rock

Soft rock production in Victoria is comprised primarily of sand and gravel. Soft rock is typically used in glass and cement manufacturing, and construction services. Soft rock production is concentrated in similar areas of the state to hard rock, with South Gippsland identified as a key supplier of sand and gravel resources to Greater Melbourne, along with other South-Eastern locations including Cardinia and Baw Baw.


GAS

Victoria has the highest number of natural gas users in Australia, with over 2 million connected households and businesses relying on natural gas for heating, cooking and hot water services. Currently, most of Victoria’s gas demand is met from offshore gas reserves in Commonwealth jurisdiction waters in the Bass Strait.

In 2017–18, Victoria and the Commonwealth, through a Joint Authority, approved four significant new gas projects in offshore Commonwealth waters.4

Victoria has a permanent ban on hydraulic fracturing and onshore coal seam gas development, and a moratorium on onshore conventional gas development until 30 June 2020.

The only gas production in Victorian state waters is from the Halladale and Speculant Project, about 30 kilometres east of Warrnambool. The operation is an offshore petroleum operation accessed from a land base (under a Special Drilling Authorisation for the well-head site onshore) to access reservoirs five kilometres off the coast in the Otway Basin.

Additional new offshore gas developments are being pursued in Victoria following the government’s release of five new oil and gas exploration blocks in the Otway Basin. Any gas produced in these areas will be made available to domestic households and businesses as a priority.

4 National Offshore Petroleum Titles Administrator, National Electronic Approvals Tracking System.

11


MINERAL EXPLORATION ACTIVITY

5 Geological Survey of Victoria. Note: Minerals only (excludes extractives, coal, gas and oil).

6 ABS, 8412.0, Mineral and Petroleum Exploration, released 4/03/2019. Note: Mineral and Petroleum Exploration (8412.0) is based on a Census of onshore and offshore operations, however, the petroleum exploration number for Victoria has been suppressed for confidentiality reasons.

7 ABS, 8412.0, Mineral and Petroleum Exploration.

Metres drilled: 191,229Exploration expenditure: $73.7m

Mineral exploration activity in Victoria increased year-on-year in 2017–18:

• metres drilled was largely unchanged – 191,658 metres in 2016–17 to 191,229 metres in 2017–185, and

• mineral exploration expenditure increased by 81% – $40.7 million in 2016–17 to $73.7 million in 2017–18.6

In 2017–18, annual mineral exploration expenditure in Victoria increased to $73.7 million, representing the largest exploration investment in the state’s mineral resources for the past eight years and an 81 per cent investment increase year-on-year.

Victoria’s share of total Australian mineral exploration expenditure increased in 2017–18, from 2.6 per cent in 2016–17 to 3.7 per cent in 2017–18. Over the past five years, the rate of exploration expenditure growth in Victoria has outpaced the national average significantly.

While the total metres of exploration drilling that occurred in 2017–18 was largely unchanged with respect to 2016–17 levels, 2017–18 saw a significant shift towards exploration for new deposits. In previous years, exploration drilling accounted for 40 per cent of all drilling activity. In 2017–18, drilling under exploration licence substantially increased and now the split between mining and exploration licence drilling is about even.

Figure 1: Mineral exploration expenditure ($ million, seasonally adjusted)7

Note: Earth Resources Sector Indicators only include information on mineral exploration expenditure. The petroleum exploration data for Victoria is not reported for confidentiality reasons. The recent release of offshore areas for gas exploration may result in an increase in exploration expenditure in the future if these blocks are taken up.

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LICENCES

8 Earth Resources Regulation, 2017-18 Statistical Report, p. 6.

New mineral licences granted: 85 Renewed mineral licences: 55 Number of miner’s rights: 5,341

Mineral licences granted and renewed increased significantly year-on-year in 2017–18:

• new mineral licences granted increased by 136% – 36 new licences in 2016–17 up to 85 in 2017–18; and

• renewed mineral licences increased by 72% – 32 renewed licences in 2016–17 up to 55 in 2017–18.

There has been a significant increase in the number of licences granted or renewed during 2017–18. An increasing number of licences provides a reliable lead indicator of potential mining activity increases in the future. The total number of licences granted and renewed increased from 68 in 2016–17 to 140 in 2017–18, representing a 106 per cent increase year-on-year.

Exploration licence applications and renewals increased from 38 in 2016–17 to 92 in 2017–18, indicating a likely increase in future exploration activities. The increase in mining licence applications and renewals, from 15 in 2016–17 to 29 in 2017–18, indicates a likely increase in future mining production activities.

Figure 2: Licences granted or renewed8

Figure 2 clearly illustrates the significant increase in exploration licences granted during 2017–18. This increase is largely related to the renewed interest in gold exploration activities in Victoria. If some of the licences associated with exploration result in the discovery of commercially recoverable minerals, this can be expected to translate to an increase uptake of licences associated with production in the future.

Exploration Licences Granted

Exploration Licences Renewed

Mining Licences Granted

Mining Licences Renewed

Prospecting Licences Granted

Retention Licences Granted

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Table 1: Mineral licences as at 30 June 20189


Tenement Type 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18

Exploration Licences

326 311 271 247 211 180 200

Mining Licences

208 212 191 171 170 162 156

Prospecting Licences

1 13 31 41 51 54 59

Retention Licences

0 1 1 8 11 15 20

Totals 535 537 494 467 443 411 435

Change year-on-year (%)

+2.9 +0.4 -8.0 -5.5 -5.1 -7.2 +5.8


MINER’S RIGHTS

The number of miner’s rights in Victoria decreased year-on-year in 2017–18:

• miner’s rights decreased by 27% – 7,293 in 2016–17 down to 5,341 in 2017–18.

Miner’s rights enable recreational prospectors to search for minerals on Crown land or private land where the activity is allowed.

Recreational prospecting is often conducted on public land and has health and wellbeing benefits for users. According to the Victorian Environmental Assessment Council recreational prospectors contribute to local economies in terms of spending on consumables and accommodation, in prospecting supply shops and through participation on prospecting tours.10

Figure 3: Number of miner’s rights11

10 Victorian Environmental Assessment Council, Investigation into additional prospecting areas in parks, June 2013.11 Earth Resources Regulation, unpublished data.12 Prior to 2014, miner’s rights were limited to two years.

Figure 3 illustrates the downward trend in miner’s rights issued each year continued in 2017–18. The government introduced ten-year duration miner’s rights in 2014.12 Due to this change, the frequency that recreational prospectors need to apply for licences has reduced and this is reflected in lower annual sales of miner‘s rights.

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CAPITAL EXPENDITURE

13 ABS, 5625.0, Private New Capital Expenditure and Expected Expenditure, released 28/02/2019. Note: Private New Capital Expenditure and Expected Expenditure (5625.0) reports on mining in its entirety, therefore the data is inclusive of exploration expenditure.

New capital expenditure: $468m

Earth resources sector capital expenditure decreased year-on-year in 2017–18:

• private new capital expenditure in the Victorian resources sector decreased in real terms by 43.7% – $832 million in 2016–17 down to $468 million in 2017–18 (real 2017–18 dollars).

Private new capital expenditure in Victoria’s resources sector declined to a ten-year low in 2017–18, consistent with lows also observed in national capital expenditure (see Figure 4).

Given the significant increases in exploration expenditure and licences granted or renewed (Figure 1 and Figure 2 respectively), the likelihood of discovering prospects which can be responsibly and economically developed in Victoria is improving. The discovery of new economically viable prospects will attract new capital expenditure and may lead to a reversal of the declining trend in the coming years.

Figure 4: New capital expenditure ($ million, real ‘18)13

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PRODUCTION

Quantity: Minerals – see Table 2, Extractives – 57.9 million tonnes (Table 5) Value: Total – $1,773.7m14, Minerals – $825.9m (Table 3), Extractives – $947.8m (Table 5)

Table 2: Mineral production15

Commodity Unit 2016–17 2017–18 Change (%)

Brown coal Tonnes (thousand)

56,095 45,062 -19.716

Gold Ounce 312,229 364,225 +16.7

Antimony Tonnes 5,138 2,570 -50.0

Zircon Tonnes 45,597 27,515 -39.7

Rutile Tonnes 73,812 48,381 -34.5

IImenite Tonnes 44,944 24,390 -45.7

Gypsum Cubic metres 282,720 395,707 +40.0

Kaolin & fine clay Tonnes 192,150 171,932 -10.5

14 Total excludes the value of gas production due to commercial sensitivity.15 Earth Resources Regulation, 2017-18 Statistical Report, p. 11.16 The reduction in brown coal production observed in 2017-18 is attributable to the decommissioning

of the Hazelwood Power Station in March 2017.


Table 3: Mineral production sales values ($ million)17

17 No unit value is assigned to brown coal for the purposes of determining its production value. Brown coal is almost entirely used for electricity production and is largely an internal transfer within mining/generation entities. As such, there is no available market price for brown coal.

18 Office of the Chief Economist, Resources and Energy Quarterly, 2018.

Commodity 2016–17 2017–18 Change (%)

Gold 519.8 613.3 +18.0

Antimony 33.6 28.2 -16.1

Heavy Minerals (incl. zircon, rutile, ilmenite)

188.5 172.6 -8.4

Industrial Minerals (incl. gypsum, kaolin and fine clay)

8 11.6 +45.0

Other Minerals (incl. silver, peat and quartz)

0.2 0.2 0.0

Total (excl. brown coal) 750.1 825.9 +10.1

GOLD

Victoria’s gold industry continued to build on the successes of recent years during 2017–18. Gold production increased by 16.7 per cent and the value of production increased by 18.0 per cent, with respect to 2016–17 levels.

The recent resurgence of gold exploration activity in Victoria may result in further production level increases in the future.

With gold prices and demand projected to rise gradually over the next five years,18 and significant upgrades to reserves announced at the state’s largest gold operation, Fosterville Gold Mine, Victoria’s gold sector is expected to remain strong into the next decade.


GAS

Gas production in Victorian jurisdiction coastal waters decreased by 33.1 per cent year-on-year in 2017–18. All Victorian jurisdiction gas production currently occurs at the Halladale and Speculant Project in the south west of the state.

In a recent report published by the Australian Energy Market Operator (AEMO), the gas supply-demand balance is forecast to tighten over the next few years.19 This will reduce Victoria’s ability to export surplus gas supplies to South Australia and New South Wales.

Table 4: Gas production20

Commodity Unit 2016–17 2017–18 Change (%)

Gas Petajoules (PJe) 20.8 13.91 -33.1

19 AEMO, Gas Statement of Opportunities, March 2019.20 Earth Resources Regulation, 2017-18 Statistical Report, p. 24.

Note: Gas production data only includes gas sourced from Victorian jurisdiction coastal waters. Around 95 per cent of gas processed in Victoria is produced in Commonwealth jurisdiction waters.

EARTH RESOURCES SECTOR INDICATORS 2017–18 21

EXTRACTIVES

Extractives sales volume and value rose 0.8 per cent and 11.6 per cent respectively year-on-year in 2017–18, reflecting increasing demand for resources.

The number of new extractive industry work authorities granted increased from 9 in 2016–17 to 13 in 2017–18.21 This increase is partly attributable to recent regulatory improvements that ensure the approval of new and expanded quarries is accelerated. These improvements also provide guidance and other support to help industry navigate complex approval processes.

The department is working in consultation with the government-industry Extractive Industries Taskforce on a comprehensive demand and supply analysis to develop a better understanding of the challenges faced by the extractives sector. This analysis will help identify and manage risks around potential supply shortfalls and price increases. The results will be published through the department’s website and future editions of this report.

21 Earth Resources Regulation, unpublished data.


Table 5: Extractives volume and value of production22

Product Group

Product Type

2016–17 Sales Volume (thousand tonnes)

2017–18 Sales Volume (thousand tonnes)

Change(%)

2016–17 Sales Value ($ million)

2017–18 Sales Value ($ million)

Change(%)

Hard Rock Basalt 20,720 23,021 +11.1 334.0 377.0 +12.9

Gneiss 30 5 -83.3 0.0 0.0 –

Granite 5,730 5,347 -6.7 101.1 122.9 +21.5

Hornfels 5,000 4,462 -10.8 73.1 75.1 +2.7

Quartzite 50 30 -40.0 0.5 0.4 -33.3

Rhyodacite 1,800 1,779 -1.2 38.0 43.6 +14.8

Schist 210 273 +30.0 4.0 5.9 +45.0

Slate 30 43 +43.3 1.0 0.7 -32.7

Trachyte 30 38 +26.7 0.5 0.8 +48.1

Sub-total 33,600 34,998 +4.2 552.3 626.2 +13.4

Soft RockClay & clay shale

1,080 1,475 +36.6 2.6 3.9 +47.7

Limestone 1,780 1,424 -20.0 25.6 26.2 +2.4

Sand & gravel

16,590 15,503 -6.6 216.7 236.5 +9.1

Scoria 670 1,128 +68.4 37.1 18.0 -51.6

Sedimentary 2,950 2,755 -6.6 11.1 32.0 +188.6

Soil 30 24 -20.0 0.4 0.3 -38.1

Tuff 720 562 -21.9 3.4 4.7 +36.3

Sub-total 23,820 22,871 -4.0 297.0 321.5 +8.3

GRAND TOTAL

57,420 57,869 +0.8 849.3 947.8 +11.6


Note: Because of rounding, numbers may not add.


EXTRACTIVES: DEMAND & SUPPLY

23 DJPR, Helping Victoria Grow: Extractive Resources Strategy, June 2018.24 Earth Resources Regulation, Statistical Reports, 2008-2018 ABS, 8755.0, Construction Work Done, released 27/02/2019.

Demand: Value of building work done – $35.6b Supply: 57.9 million tonnes

Victoria is growing rapidly, with population forecast to exceed 10 million people by 2050. This rapid rate of growth has contributed to unprecedented demand for building work and extractive materials. In 2017–18, the value of building work undertaken in Victoria was $35.6 billion, a 7.9 per cent year-on-year increase. Current projections suggest that the increasing demand trend will continue over the long-term and demand for extractives will nearly double by 2050.23

Extractive materials are vital inputs to build new houses, roads, rail lines and other public infrastructure. On average, extractives make up around 35 per cent of construction costs. To ensure that Victoria’s current rate of growth can be sustained, the supply of extractives will need to expand to meet the growing demand.

Barriers that may constrain the supply of extractive materials in the short to medium-term, include:

• complex and lengthy regulatory and approvals processes;

• regulatory constraints on new and existing quarrying operations;

• potential sterilisation of prospective extractive resources by urban and regional development;

• encroachment of urban and regional development into existing quarrying areas; and

• insufficient transport infrastructure to support haulage of extractives from quarry to site.

The government is implementing the Extractive Resources Strategy to address these barriers and the department is actively engaged with the extractive industry to find better ways to streamline approval processes, without compromising environmental and community standards. Key action areas of the Extractive Resources Strategy are being supported through funding in the 2019–20 State Budget.

Figure 5: Extractive resources demand & supply24

Extractive sales volume Value of building work done

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EMPLOYMENT

Number of resources sector jobs: 12,100

During 2017–18, the average number of persons employed in the Victorian resources sector decreased by 1.7 per cent compared to 2016–17—down from 11,500 to 11,300 (see Figure 6). However, by the end of the May 2018 quarter, the number of persons employed had increased to 12,100.25 —800 more than the yearly average. The jobs increase observed toward the end of the 2017–18 financial year may translate to higher average employment numbers in the next period.

Headline earth resources sector employment facts:

• Over the past decade, yearly average employment has ranged between 9,200 and 13,800.

• Around 50% of Victoria’s resources jobs are outside Greater Melbourne, in rural and regional areas.

• 42% of Victoria’s resources jobs are in mining, with the rest in oil and gas extraction, coal mining, exploration, non-metallic mineral mining and quarrying and other mining services.

Figure 6: Earth resources sector employment (thousand, yearly average)26

25 Sector defined as the “Mining Division” by the Australian and New Zealand Standard Industrial Classification, 2006 (Revision 2.0).26 ABS, 6291.0.55.003, Labour Force, released 28/03/2019.

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27 CSIRO, Australian attitudes toward mining: Citizen Survey, 2017.

Victorian acceptance of the mining industry remains positive

Every three years, CSIRO conducts a national survey to understand citizen attitudes toward the mining industry.27 The most recent survey was conducted during 2016–17. In May 2018, the government engaged CSIRO to focus its analysis on Victorian respondent data and provide a report isolating Victorians’ perspectives.

CSIRO analysed data from 1,612 Victorians to examine a broad range of issues related to mining including, perceptions of benefits and negative impacts related to the industry, levels of trust in the industry, government and other relevant industry stakeholders, and acceptance of the industry overall.

CSIRO’s key findings include, Victorians:

• have a moderately positive acceptance of the mining industry, although reported lower levels of acceptance of the industry in their local communities when compared with the rest of Australia;

• view mining as less important for current and future economic prosperity than the rest of the country;

• view job creation, general benefits for regional areas and infrastructure improvements as the three most positive benefits from the mining industry;

• rate environmental impacts, negative impacts on other industry sectors, and impacts on the health of community members living near mining operations as the three most negative impacts of the mining industry; and

• strongly feel the benefits from mining outweigh the costs and mining is worthwhile to continue in Australia.

Contrasting the 2017 responses with those from 2014, key differences in the data relate to the position of mining in Australian life. Specifically, Victorians acceptance of the mining industry remained positive and steady, agreement that mining will support future prosperity and our way of life decreased and Victorians felt that the role of mining in supporting youth development and employment opportunities increased.

Securing enduring community benefits

The CSIRO research highlights that procedural fairness is a key driver of trust and acceptance of the mining industry for Victorians. The department is developing a range of programs to support community confidence in the sector, its regulation and deliver on the actions outlined in the Mineral Resources Strategy.

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earth resources sector indicators 2017–2018 · 2019-12-03 · 6 earth resources sector indicators...

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