2015/16 Earth Resources Regulation Statistical Review

By on August 10, 2017

DR ELIZABETH GIBSON, General Manager of CMPA provides a summary on the 2015/16 Earth Resources Statistical Review.

Earth Resources Regulation (ERR) has just released the 2015/16 statistical review and late last year the 2014/15 statistical review (available at www.earthresources.vic.gov.au). An analysis of the data for the volume of extractive material sold in tonnes demonstrates the downturn appears to have ended with an upturn in volume sold shown for 2014/15 and 2015/16 (albeit slightly lower than 2014/15).

ERR attributed the fluctuation due to demand in the domestic building and construction sector. However, it is not clear whether there may be some discrepancy in the data in that only 535
quarries reported in 2015/16 as opposed to 554 in 2014/15. Overall, the volume sold is expected to improve in 2016/17 with major infrastructure projects coming on line. Of interest is the average $/tonnes has actually decreased in 2014/15 but picked up again in 2015/16. See Chart 1 below.

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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.

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Chart 2 Status of extractive industry Work Authorities

It can be seen from Chart 2 there has been little increase in total numbers of Work Authorities from 2011/12 to 2015/16. This is of concern with no significant increase in the number of approved Work Authorities despite projections of increased material (equivalent to ~1 million additional tonnes/annum being required) due to population growth of ~100,000 per annum in Victoria. ERR has changed the way reporting on the status of extractive industry work authorities occurs. The Work Authority proposals are no longer included: where the initial site meeting has taken place. For 2014/15, as in previous years, the application stage is defined by ERR as “when a Work Authority application is lodged with all requirements to obtain an approved Work Plan”. It must be wondered whether the impact of the risk based Work Plan process being introduced in December 2015 led to the spike in applications prior to this date. In 2015/16 the Work Authority proposal is defined by ERR as “This is when an applicant has paid a Work Authority application fee or a Work Plan fee”.

Obviously, this is confusing with an individual Work Authority applications also having a Work Plan fee.
Rehabilitation bonds have become an increasing burden on the extractive industry. From 2005/06, as discussed previously there was a 3% increase in the number of current Work Authorities, however, there was a 79% (to $88.6 million) increase in rehabilitation bonds from 2005/06 to 2015/16. This was predicted by CMPA when rehabilitation bond back in 2000. For mines the 2015/16 rehabilitation bond figure is $239.6 million only 3 times 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.

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Chart 3 Rehabilitation bonds actual and % annual increase versus year

The CMPA looks forward to the publishing of the 2016/17 statistical review by ERR.

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