Mining exploration plunges Spending on new mines declined in the past year. Spending on mineral exploration in Australia declined by 27 per cent between June and December, according to new government reports that show the sector was already in decline before the Gillard government tightened the tax rules on exploration. Statistics from the Bureau of Resources and Energy Economics (BREE) come barely one week after the federal budget reduced the scope of tax deductions available to companies acquiring small exploration companies. While junior explorers can still claim their existing tax deductions, mining lobby groups said juniors would still be hurt by the changes because they would become less attractive to suitors under the new regime. Today's BREE report shows that high risk "greenfield" exploration spending in the December quarter was $264 million; a 16 per cent reduction compared to the September quarter and a 27 per cent reduction on the June quarter. It is likely to have fallen further since then given the accelerated spending cuts announced by many companies, including the new bosses of both BHP Billiton and Rio Tinto. Lower risk "brownfield exploration" also declined but not as severely during the period. The December spend of $561 million was 8 per cent lower than the September quarter and 21 per cent lower than the June quarter. Brownfield exploration is where companies explore for new minerals within a close range of existing mining infrastructure, whereas greenfields exploration means drilling in completely new territory. Executive director of Havilah Resources, Peter Reeve, a South Australian copper and gold explorer with a market capitalisation of $31.3 million, said the changes to exploration tax deductions were a significant blow to the junior end of the market. These measures just show a continuing lack of understanding by this Treasurer and this government on how hard it is to explore for metal. They must think it grows on trees," he said. Exploration and mining are core to the long term growth of any economy and the government should be laying the policy infrastructure to enable the industry, not stop it. As expected, the BREE report also confirmed that major project spending in Australia had peaked this year. The bureau said there were 73 big projects in Australia that were fully committed to, and those projects were worth a combined $268 billion. But that total is tipped to decline by $8 billion next year and a further $63 billion in 2015. The bureau calculated that over the past year about $150 billion of projects "had either been delayed, cancelled or have had re-assessed development plans." That list includes BHP's deferred expansion of Olympic Dam, plus the company's deferred Outer Harbour project at Port Hedland.