Territory Stories

Budget Paper No5 Northern Territory Economy 1998/99



Budget Paper No5 Northern Territory Economy 1998/99

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Tabled Paper 382


Tabled papers for 8th Assembly 1997 - 2001; Tabled papers; ParliamentNT




Tabled by Michael Reed


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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DME forecasts suggest that the Territorys mineral exploration expenditure will decline further to less than $80 million in 1997-98, while total exploration expenditure for Australia is forecast to continue to increase. A survey of the Top 10 mineral explorers in the Territory in 1996-97 confirms that exploration expenditures will soften in 1997-98 and 1998-99. The reasons cited were gold prices and native title uncertainties, coupled with increasing competition from elsewhere for finite exploration expenditure. Declining exploration expenditure is a serious concern, as a clear relationship exists between exploration expenditure and the commissioning of new mines. No new mines were commissioned in the Territory in 1997. MINERALS OUTLOOK The Australian Bureau of Agriculture and Resource Economics (ABARE) states that Average world prices for Australias major minerals and energy commodities are forecast to fall by between 6 and 25 per cent in 1998. There are two main reasons for the expected price decline. First, the increasing world supply of mineral and energy commodities, and second, Asian mineral and energy demand is expected to weaken further in 1998 following the financial upheavals in 1997. The gold price reached a 19-year low in early 1998, when it fell below US$280. The significant decline in the United States dollar gold price has already led to the closure of the Mt Todd gold mine in November 1997. For Mt Todd, the fall in gold prices was exacerbated by low ore grades, technical problems and a lack of forward sales contracts. The Rustlers Roost and Orlando goldmines closed in 1997-98. Reprocessing of lowgrade stockpiles at the White Range gold mining project began in early 1998. Toms Gully and Burnside goldmines are under consideration for production in 1998-99, although gold prices will influence the final decision. The impact of the slump in gold prices on gold production is expected to continue into 41 Mining 0 10 20 30 40 50 60 70 80 90 100 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 Other Uranium Diamonds Base Metals Gold $ million Figure 8.3 MINERAL EXPLORATION Source: Department of Mines and Energy

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