Victoria’s mining investment ranking on the way up but more work to do

The latest Fraser Institute survey shows an improvement in Victoria’s ranking on mining investment policy perceptions up from 56th in 2020 to 39th in 2021 out of 84 mining jurisdictions.

While this is a welcome improvement, Victoria has a lot of work to do to improve the regulatory environment and tax regime to attract investment into the state with Victoria ranking lowest of all Australian states.

The overall improvement investment attractiveness has been driven by Victoria’s minerals potential and exploration effort by industry.

Victoria’s ranking was negatively impacted by a decline in policy perceptions driven by poor government regulation and skills challenges, particularly uncertainty concerning the administration of regulations.

Victoria is still dealing with the repercussions of the State Government’s gold royalty which imposed a higher royalty on Victoria than Western Australia – Australia’s biggest gold mining state. Victoria’s reputation as a high taxing jurisdiction ranks the state as the worst in Australia on tax.

Victoria’s minerals potential means the state is well placed to continue to see exploration spending remain strong.

A growing minerals industry is good for all Victorians. Minerals projects play an important role in regional development by creating high paying jobs, and supporting a supply chain of Victorian businesses to the tune of over $300 million in 2021.

Victoria is home to two of the world’s highest grade gold mines and gold production has more than doubled in the last five years. There are a number of potential new projects across the state in mineral sands, and copper and zinc.

Exploration spending is at a record high with $220.4 million spent in 2021 – an 822 per cent increase since 2015.

However, the record investment in exploration in recent years must be able to be converted into new mines where clear and consistent environmental, social and safety requirements are met.

Investors require clarity on approval processes and timeframes and certainty that meeting or exceeding environmental, safety and social requirements should lead to a project being developed.

As a highly regulated industry, efficient government policy and regulation is critical to ensure the minerals industry can contribute to regional development. Delays in approvals and additional or changing unnecessary regulation has significant impacts in investment and jobs.

A well-funded regulator that meets its own timelines for permit approvals, confidence in the permitting and environmental approvals, and clear regulations will help improve Victoria’s policy perceptions.

The 2021 Fraser survey is a reminder that Victoria requires modernisation of the regulatory framework to improve approvals timeframes, urgent reforms to the exploration licensing regime to bring Victoria’s licencing in line with other states on longer licence terms and less land relinquishments, and royalty reform to bring the effective rate into line with other states tailored to Victoria’s geology.

Mining and exploration needs to be a high priority for Victoria so that the state can compete for investment in this global industry to the benefit regional jobs.

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