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Highlights:
AMEC calls for reforms to South Australia's Mining Act to extend exploration licence terms
Industry stakeholders highlight a decline in exploration spending and insufficient budget support
The delayed release of a Critical Minerals Strategy continues to draw industry concern
South Australia's mining and resources sector, a contributor to the S&P/ASX 200 Index through companies like BHP Group (ASX:BHP) and OZ Minerals (ASX:OZL), is under scrutiny following the release of the 2025 state budget. The Association of Mining and Exploration Companies (AMEC) has raised concerns regarding the absence of investment attraction incentives and has renewed calls for reforms to the state’s Mining Act.
The key issue flagged by AMEC is the current structure of exploration licence terms, which includes a fixed expiry period. AMEC CEO Warren Pearce highlighted that the mandatory termination of exploration licences after a set period, often referred to as the “drop dead” clause, is a deterrent to long-term mineral discovery initiatives.
Licence Extensions Deemed Vital for Exploration Continuity
AMEC is urging the state government to revise existing exploration policies and allow for extensions beyond the current maximum term. The association maintains that exploration cycles often exceed the existing term limit due to the time and complexity involved in identifying viable mineral resources.
Without legislative flexibility, companies may face premature cessation of projects, undermining the sector's growth and economic contributions. Pearce emphasized that the outcome of ongoing reviews of the Mining Act will have a significant impact on the future of exploration activity in South Australia.
Exploration Spend on the Decline
Recent figures from the Australian Bureau of Statistics show a notable decline in exploration spending in South Australia, further compounding industry concerns. According to data from the March 2025 quarter, the sector has experienced a measurable drop in financial outlay, reflecting reduced confidence and activity across the region.
AMEC stated that the state budget does not provide adequate support to reverse this trend. While funding has been directed toward industrial preservation efforts, such as the Whyalla Steelworks rescue package, there is little allocation specifically aimed at revitalising mineral exploration.
Critical Minerals Strategy Still Pending
The continued delay in releasing South Australia's Critical Minerals Strategy remains a significant concern for stakeholders. AMEC noted that despite being in development for several years, the strategy has not been finalised or published. This stands in contrast to other jurisdictions across Australia, which have already released their respective frameworks in line with federal energy transition goals.
AMEC insists that releasing and funding the Critical Minerals Strategy is essential for aligning South Australia's policies with national priorities. The association is also advocating for improved tenement administration, increased exploration funding, and co-funded drilling programs as part of a comprehensive approach to support the sector.
Broader Industry Implications
South Australia’s mineral sector includes numerous exploration and production companies that contribute to regional employment and national export income. Companies such as Hillgrove Resources (ASX:HGO), Renascor Resources (ASX:RNU), and Argonaut Resources (ASX:ARE) are part of the landscape impacted by current policy and funding decisions.
