Recommendations outlined in the policy platform included reinstating the diesel fuel credit to its pre-carbon tax levels, government withdrawal of the proposed amendments to the Native Title Act 1993, rescinding of the minerals resource rent tax, rescinding of the carbon tax, and addressing concerns surrounding environmental reform, regional infrastructure and industrial relations and workplace issues.

The report by Port Jackson Partners found that capital costs in Australia were rising more rapidly than in the rest of the world, with iron ore projects now 30% more expensive than the global average and thermal coal 66% more expensive.

By 2020, Australian projects beyond Western Australia’s Pilbara region are projected to cost up to 75% more to build than projects in West Africa.

AMEC chief executive Simon Bennison said policy reform was critical in order to maintain and enhance Australia`s position as an attractive jurisdiction for mineral exploration and mining investment.

“Australian explorers are increasingly heading overseas to apply their skills and finance to find new resources in countries that are in direct competition to Australia,” he said.

Over the past few years, more than half of funds raised from Australian investors on the ASX through new IPOs has been for overseas projects.

“Australia`s mining industry is no longer internationally competitive with production costs continuing to rise dramatically,” Bennison said.

“In 2007 it cost $61 to produce a tonne of thermal coal in Australia. Today it is $176 with a global average of $106.

“Australia is also experiencing a very concerning situation where discoveries are reducing, getting deeper and harder to find, and critical equity investment is being lost to competitive offshore projects.

AMEC said small mining and junior mineral exploration companies were experiencing increased cost pressures due to a range of taxes, levies, approvals and additional operating expenses.

Discoveries are reducing and getting deeper and harder to find, while equity investment is being lost to competitive offshore projects.

The group’s policy platform cited Bauxite Resources chairman Barry Carbon, who said it costs $1.5 million a month for a new develop to stay active and afloat while the company seeks approvals for a medium-sized project.

“It takes about five years in most of our jurisdictions to get approval processes to the stage of starting the project,” Carbon wrote to AMEC.

“You do the simple mathematics over 60 month. If you have less than $90 million when you start your proposal, you will go broke or you will sell your company or your control, probably overseas.”

The government’s productivity commission cited that it takes 500-1000 grassroots exploration projects to identify 100 targets for advanced exploration, which in turn leads to 10 development projects, one of which becomes a profitable mine.

“Considering that it also takes on average seven years once a viable discovery is made to mining production, we must act now,” Bennison said.

“The challenge for industry is encouraging politicians to think about the long-term vision when creating investment strategies.

“These strategies will generate revenue streams for government, reduce the national debt and create regional employment opportunities 10-15 years down the line.”

AMEC’s key initiative at the federal level though is the implementation of a minerals exploration tax credit (METC) reform measure to provide an incentive for investment in much needed greenfield minerals exploration in Australia.

“The METC model is a combination of the spectacularly successful Canadian Flow Through Shares model, Australia`s franking system and a tax credit,” Bennison said.

“It will be ‘voluntary’ and at the discretion of the company on whether they wish to forego their current ‘trapped losses/future tax benefit’ to their Australian resident shareholders, and will only be available for Australian companies with ‘no taxable income’ conducting greenfield exploration in Australia.

“AMEC is looking forward to working with relevant federal ministers and decision makers to ensure that the numerous policy issues raised are implemented as a matter of urgency to develop the mines of tomorrow.”