An evaluation of the efficiency and effectiveness of the South Australian PACE initiative
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In order to fully understand the influence of PACE on South Australia’s resources sector, our economy and the community, South Australia's Department for State Development (then DMITRE) commissioned an independent expert review of all PACE programs for the period 2004 to 2013.
The report focused on the efficiency and effectiveness in the generation and delivery of precompetitive geoscientific research and data and the economic impact it has delivered.
It returned 21 major findings; 73 specific findings and 5 cautionary findings.
The review team outlined several high level findings including:
- The PACE programs have proven to be an outstanding success. PACE has been a visionary program that has reset the resource-exploration competitive agenda in Australia. It is broadly recognised as the benchmark of exploration initiatives. PACE has engendered a competitive advantage for South Australia over the past ten years. It has promoted hundreds of millions of dollars of exploration expenditure which directly benefits regional communities.
- As a Government Investment Attraction initiative, PACE has been well managed and is acknowledged globally as an exemplar for government stimulating exploration, creating a legacy of discoveries that will translate into benefits through both mine developments and mineral production well into the future.
- PACE is an investment in the economic well-being of the state leading to new discoveries and there is a compelling case for extending PACE to ensure that South Australia remains competitive in an increasingly complex, global, exploration-investment market.
Identified economic benefits that PACE has delivered to South Australia include:
- A much higher share of national mineral exploration expenditure.
- An increase in state mining revenue of $2400m for an expenditure of less than $50m.
- Exploration in excess of the State Strategic Plan Target of $200m a year for the past three years.
- A conservatively estimated $700m extra in private mineral exploration investment representing a leverage of at least 20:1 on PACE geoscience expenditure.
The major findings of the report include:
- PACE has proven to be immensely successful in promoting mineral exploration investment and sends the message to the global investment community that South Australia is open for business.
- The professional quality of management and governance framework which supports PACE has played an important role in ensuring the successful management, promotion and delivery of the initiative.
- PACE, as a Government Investment Attraction initiative, is recognised as the benchmark exploration initiative and acknowledged globally as an exemplar for government investment in stimulating exploration leading to new discoveries.
- PACE has proved to be not only effective, but also efficient, in that it delivered an extraordinary exploration boom at almost the lowest cost per square kilometre of any jurisdiction in Australia.
- PACE collaborative drilling proved to be the game changer in exploration promotion and has been the defining element of PACE.
- Emerging land access issues stemming from both the aboriginal community and the farming community have shaken confidence in South Australia’s resources industry.
- Extensive and long term holdings by some larger companies in highly prospective areas require close monitoring to ensure that these areas are being effectively explored.
- Lack of infrastructure (roads, rail and port facilities) was identified as an issue which limited interest in exploration in certain regions.
- PACE’s continued success very much hinges on its programs engaging the junior exploration sector.
- PACE has only modestly benefited from energy exploration investment because of the substantially higher costs involved in this industry.
The PACE evaluation also provided 12 key recommendations based on the reviews findings:
- Develop a revitalised PACE program through a consultation process with stakeholders.
- Focus on encouraging junior exploration companies, promoting greenfields/frontier exploration and addressing land access issues.
- Undertake a range of pre-competitive geoscience programs including geophysics, geochemistry, regional drilling, and geological mapping.
- Limit regional drilling in the eastern Gawler Craton to a one year pilot program to trial methodologies and technologies.
- Continue the collaborative drilling program to avoid South Australia being at a competitive disadvantage.
- Review the PACE collaborative drilling program to ensure that there is greater clarity for the reasons for approval/refusal and reduced administrative burden on industry.
- Review non-performance on exploration titles (tenements) with the view to liberating ground for exploration.
- Ensure that the Geological Survey of South Australia is appropriately resourced and structured to deliver future PACE programs.
- Commit to a strong policy of stakeholder engagement, plus legislative and regulatory change to address exploration access and costs in relation to restricted land areas including reserves, farmland, defence land and aboriginal areas.
- Restore the Geoscientist Assistance Program (GAP).
- Increase the current PACE dedicated resourcing levels from 2FTEs to 4 to strengthen the focus on further building national and international attention in the world resources market.
- Consider establishing an advisory committee to guide development and implementation of geoscience programs under PACE Plus.
The Terms of Reference for the report were:
- Quantify the economic impact and performance measures for the period 2004 to 2013.
- Assess external and internal factors that may assist and/or detract from the effectiveness of the programs.
- Benchmark the programs and activities and performance of the Department in delivering PACE outputs and outcomes against similar government-led initiatives and government agencies in and outside Australia (Fraser Institute rankings).
- Identify areas for improvement that will enhance private investment in resource exploration and add value to and potential for new discoveries.
- Provide a series of recommendations for a new generation of PACE-style initiative beyond 2013–14.
The review began in January 2014 and was completed in April of the same year. The review process included an extensive consultation schedule with numerous industry and key stakeholders to fully capture the influence of PACE.