WA exploration spending plunges

Mining exploration in WA has fallen to a near four-year low as resource companies focus on their existing assets.

Australian Bureau of Statistics figures showed mining exploration spending nationally fell 12.5 per cent in the December quarter to $533 million. It was driven by a 19.3 per cent, or $73.4 million, drop in spending in WA.

Total spending in the State was at its lowest level since the March 2010 quarter.

The fall in WA was led by a sharp decline in iron ore exploration, with spending falling to less than $160 million in the December quarter, its lowest quarterly performance in almost four years.

Exploration for iron ore in the State peaked at more than $1 billion in 2011-12. For the 2013 calendar year it had dropped to $784 million.

Economists at St George remain relatively upbeat about the WA economy despite the looming slowdown in mining construction.

Senior economist Besa Deda said much would hinge on how the State transitioned from construction to domestic-focused economic activity.

"As the mining boom continues to transition from the investment phase to the production phase, job prospects are expected to weaken and could dampen consumption growth," she said.

"A further pick-up in both consumer sentiment and consumer spending may require ongoing improvement in the labour market and a good news flow regarding employment and project development."

It is not only iron ore, which is now below the $120 a tonne mark, that is contributing to the fall in exploration. Spending by miners looking for gold dropped to its mid-2009 low during the quarter. Spending on base metals exploration also fell to mid-2009 levels.

In WA, the amount spent on gold exploration dropped to $76.9 billion, half of where it stood 18 months earlier.

While miners wind back on exploration, spending by oil and gas companies remains relatively solid. Total petroleum exploration fell 10 per cent in the quarter to more than $1 billion.

Exploration spending on production leases rose 9.2 per cent.

Spending in WA dropped by 17.6 per cent, or more than $135 million.

The West Australian

Popular videos

Compare & Save

Our Picks

Compare & Save

More from The West