While not the largest state, recent exploration uptakes in Victoria have worked to solidify its status as a front runner in mineral opportunity, and the Victorian Government’s mineral resources strategy – released on August 28th 2018 – benchmarked this apparent exploration renaissance.

Data from the Australian Bureau of Statistics shows the state’s general exploration spending growth far outpaces that of other regions in the country, and is currently almost seven times higher than it was in 2014 – reaching $34.7m in March this year. A simultaneous rise in employment opportunities has helped to foster an atmosphere of great opportunity, with particular attention turned to the state’s booming gold industry. In such an environment, expectations are set for Victoria to continue going from strength to strength.

Victoria’s mineral wealth

Confidence in Victoria’s minerals industry is flying high, with Earth Resources Sector Indicators showing there was a 136% increase in the number of minerals exploration licences granted between 2017and 2018. Such a significant rise in interest has meant Victoria is beginning to outpace other regions in growth – with its expenditure on minerals exploration reaching a state record high in the December 2019 quarter.

Speaking with John Krbaleski, Head of Resources for the Victoria State Government, he says this growth in Victoria has been ‘three times the national average’ since 2015, pointing to successful exploration programs in the northern, central and western parts of the state as attracting gold and copper miners.

“This ongoing confidence is reflected by 30 exploration license applications submitted to Earth Resources Regulation in February,” he says, “the highest monthly total in five years.”

Employment stability in the sector is similarly promising, with the number of people working in earth resources found to be 800 more than the yearly average at the end of the May 2018 quarter.

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The industry’s building momentum in the state is partially due to a series of major government infrastructure projects driving demand for construction materials, with the sale of quarry materials growing by 11.6% in 2017-2018. Another focus of exploration is mineral sands, and several companies are currently investigating potential sites in Gippsland, Otways and Murray basins.

“While mineral sands are not receiving as much in terms of expenditure, there is certainly a lot of activity in this area” says James Sorahan, Victorian Director at the Minerals Council Australia (MCA). “It has the potential to be a really big industry, and it’s one sector Victoria could prove a major player.”

However, most significant is the state’s gold resources – representing one of the world’s major gold provinces. It is in this mineral that the state is truly thriving.

A golden state

In a media statement, Minister for Resources Jaclyn Symes described Victoria as experiencing its ‘next gold rush’, and it is a sentiment echoed throughout the industry.

“Mineral exploration in Victoria is booming,” says Krbaleski, “with more gold being found every year, explorers queuing up to search for the next viable deposit and those already mining having estimated healthy reserves. Geological evidence suggests there may be as much as 32 million ounces of undiscovered gold across the Bendigo region alone.”

Of total global gold output, Victoria makes up 1.3% of all-time production, despite representing only 0.15% of global land area. Its central goldfield geology is 100 times richer in gold than the global average, and estimates from the Geological Survey of Victoria suggest that only half the gold that may exist in Victoria has been found.

Most lucrative is the Fosterville mine, which has an estimated deposit of around nine million ounces, and which produced more than 610,000 ounces of gold in 2019.

“The success of Fosterville has really put Victoria on the map,” says Sorahan. “It’s been a huge success which has certainly drawn attention to Victoria – that alongside the price of gold, which has gone up over time.”

The push to find gold in the state is certainly evident – with production increasing 16.7% between 2016-2017 and 2017-2018, and currently sitting at almost double what it was less than five years ago. The only hindrance is a gold royalty imposed last year, which Sorahan says could prove a deterrent to investors.

“There was the unfortunate imposition of a gold royalty without any consultation last year in Victoria,” he says. “Those sorts of policy interventions create some uncertainty, when really we need policy certainty and stability to be attractive to investors. The gold royalty was very unhelpful in that.”

Another factor to consider in the gold sector’s rapid expansion is that of responsible practice – a caveat that has gained increased significance as the state’s industry continues to grow.

A responsible expansion?

Sustainable exploration has been highlighted as a necessity going forwards, particularly given the state’s ‘intensively developed’ landscape, as cited in the Victorian Government’s report.

“The MCA and its members are very committed to responsible practice, and we just wouldn’t have the social license if we weren’t seen as having acted as a responsible industry,” says Sorahan.

Perhaps most interestingly, engagement with traditional owners is to be part of the evaluation selection process for prospective companies seeking to explore for gold in the state. This new rule will allow indigenous communities to assess the miners’ ability to develop relationships with traditional owners and work with consideration of cultural heritage.

“Engagement with Indigenous Australians in Victoria is critical to responsible practice,” says Sorahan. “Given the growth of mining in the state, it is something that the industry has to do extremely well.”

“It’s not just Indigenous engagement,” he adds, “it’s also environmental management and community interaction – it’s making sure we’re doing the right thing environmentally for these local communities. From air quality and noise pollution to water usage – it is one of our main aims to lift standards and ensure mining is doing the right thing.”