In the latest edition of the WA resources and economics report, CMEWA tracked a 22% drop in total exploration spending over the period to $A1.1 billion.

It represented the third consecutive quarter of declines for mineral exploration, at 14% lower than it was a year ago.

“This consistent loss of growth is of concern to the sector and must be addressed by government through the implementation of a minerals exploration tax credit and other mechanisms such as the continuation of the Western Australian government’s exploration incentive scheme,” CMEWA chief executive Reg Howard-Smith said.

The exploration incentive scheme initiative includes six programs which intend to stimulate private sector exploration with a focus on underexplored greenfield regions.

Most recently CMEWA called for the introduction of a flowthrough share scheme or mining exploration tax credit to incentivise exploration in the state’s Goldfields area.

“While the decline over three quarters in exploration expenditure is likely due to the weak commodity prices and high costs environment, every effort should be made to arrest this decline,” CMEWA acting chief executive Nicole Roocke said.

“Notwithstanding the transition underway in many major projects from construction to operational phase, the future pipeline of projects relies upon increasing the current level of exploration activity here in Western Australia.”

The report otherwise recorded broad decreases in production for several commodities compared to the previous quarter.

Total iron ore production for the state decreased by 4.6% quarter on quarter to 129 million tonnes.

It was, however, 12% higher than the March 2012 quarter, reflecting significant production expansions of Rio Tinto, BHP Billiton and Fortescue Metals Group over the last year.

Rio reported the quarter’s production was slowed by three tropical cyclones, with production at its Pilbara region operations 7% down compared to the December quarter.

BHP said production was 5% lower quarter on quarter while FMG confirmed an 11% reduction during the period in ore processed.

The volume of iron ore exported declined by about 7% over the quarter.

However, the export value of iron ore registered a 14.9% increase as a result of recovering contract and spot prices for the commodity.

Chinese demand for housing and infrastructure was projected to continue supporting strong demand.

The average export unit value of iron ore increased by 23% to $US112 per tonne, hitting a high of $159/t in February.

Based on an expected increase in global seaborne export volumes, CMEWA projects iron ore prices remaining on a downward path for the next three years after increasing during the first quarter of 2013.

Gold production decreased by 10% during the quarter, hit hard by the metal’s fall in price and ongoing high production costs.

The Bureau of Resources and Energy Economics forecast that over 2013 as a whole, the price of gold was expected to average around $1444 per ounce, 13% lower than in 2012.

The export value of gold fell by 5.4% over the June quarter.

Newcrest Mining reported that production at its Telfer operation was 4% lower than the previous quarter due to the combined impacts of lower mill throughput and reduced head grade.

The company also marked an 18% decrease in production at its Boddington mine.

Despite the difficult price environment for gold, four gold projects were completed during the period including Silver Lake’s Murchison project and Reed Resources’ Meekatharra project.

CMEWA noted in the report’s “spotlight” section a number of federal election issues particularly relevant to the resources sector.

The group called for policy discussions across all major political parties about how to reduce the costs of doing business and strengthening the Australian resources sector’s international competitiveness.

Policies highlighted included research and development provisions in the federal budget, removal of the Minerals Resource Rent Tax and a mineral exploration tax credit to encourage investment activity.