2013/14 Earth Resources Regulation Statistical Review

By on August 16, 2016

Earth Resources Regulation (ERR) has just released the 2013/14 statistical review (available at http://earthresources.efirst.com.au/categories.asp?cID=46&c=151340).

An analysis of the data for the volume of extractive material sold in tonnes demonstrates the downturn has continued from 2012/13 down by 17% – this is probably of no surprise to all in the industry.

ERR attributed the decrease to a lack of major projects. Of interest is the average $/tonnes has actually increased over this period (2011/12 – 2013/14) after remaining relatively flat for a number
of years.This appears to be due to the increase in price for multi sized products. There has been a slight decrease in the price of aggregates, recently. See Chart 1 below.

Chart 1. Extractive material sold ($/tonne) and volume sold (tonnes) against the year


The following Chart 2 gives the status of extractive industry work authorities:
Current:            Work Authority granted under the MRSDA
Proposal:          Work Authority is at the proposal stage where an initial meeting has taken place attended by the inspector and other relevant parties
Application:    Where a Work Authority application is lodged with all requirements to obtain an approved Work Plan.

It can be seen from Chart 2 there has been little increase in total numbers of Work Authorities from 2003/04 to 2011/12, an increase of 4.0% after which these is a slight decrease to 2013/14. This is of concern with no significant increase in the number of approved Work Authorities despite projections of increased material being required due to population growth of ~100,000 per annum in
Victoria. Additionally, there has been a decrease in the number of proposals and the number of applications has remained static.

This indicates that there is a bottleneck occurring in the Work Authority approval process within ERR or at the planning permit stage with the Planning Authority. It must be wondered as to the impact of the risk based Work Plan process (introduced in December 2015) will have on the figures in 2015/16. See Chart 2 below.

CHART 2: Status of extractive industry Work Authorities

Status Chart

Rehabilitation bonds have become an increasing burden on the extractive industry. From 2003/04, as discussed previously there was a 4% increase in the number of approved Work Authorities, however, there was a 132% (to $90.9 million) increase in rehabilitation bonds from 2003/04 to 2013/14.

This was predicted by CMPA with rehabilitation bonds back in 2000. For mines the 2013/14 rehabilitation bonds figure is $183.4 million only twice that of the extractive industry. This is despite only ~$20K being spent on rehabilitation of quarries by the State Government over the past 20 years whilst for mines the figure is in the $millions.

The percentage annual increase appears to have a 2 year cycle which may be related to rehabilitation bond review program of ERR, when information is uploaded or payment of bank guarantees are made.

CHART 3: Rehabilitation bonds actual and % annual increase versus year

Rehabilitation Bonds Chart

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