One-third of WA miners freeze exploration applications as excessive gas costs chunk, in line with AMEC survey | UNW

Most West Australian mining companies feel they can get fuel beyond next month, yet soaring costs have forced a large chunk of them to stop searching for pay dirt.

This is according to results on Friday from a rolling survey by the Association of Mining and Exploration Companies, which painted a picture of juniors struggling under the weight of ballooning fuel prices — particularly diesel.

Responses from 27 WA-focused mining companies found more than half are taking some form of action to reduce fuel usage, despite the majority having confidence of supply beyond May.

These actions to reduce fuel consumption include encouraging the use of lighter vehicles, picking clients who have fuel reserves, reducing corporate travel, and delaying expansion or exploration campaigns.

About a third reported that rising diesel and petrol costs forced them to cancel or delay drilling programs.

More than two thirds declared they have some sort of fuel reserve varying from one to two days, all the way up to six weeks.

“Mining companies are expressing confidence in being able to meet their near-term fuel needs, but the 200 per cent increase in fuel price is starting to have impacts right across the sector,” AMEC chief executive Warren Pearce told The West Australian.

“What members are telling us, is that price impacts are particularly affecting exploration and drilling programs, with many being wound back, delayed or cancelled.

“The WA Government has done a good job of managing distribution, and so far, the Commonwealth has been able to keep fuel supply coming. Right now, it’s price, not supply, that is creating challenges.”

AMEC’s members are mainly at the smaller end of town and its those companies which would bear the brunt of any fuel shortages, with farmers preferenced for emergency supplies and giants like BHP and Rio Tinto holding large stockpiles.

Meanwhile, the State and Commonwealth are diverging in confidence about fuel security.

When questioned over the fragility of the WA’s fuel supplies and whether the national emergency level 2 measures would be increased to the next stage, Premier Roger Cook on Thursday said he had “no confidence we won’t go to level three”.

Level three would likely mean targeted fuel rationing instead of the current voluntary measures.

But Prime Minister Anthony Albanese on Thursday ruled out a bump up to level three in the wake of a blaze that tore through Viva Energy’s refinery in Geelong – one of only two major oil refineries left in Australia.