Investment in Western Australian mineral exploration falls to pre-mining boom levels

Investment in Western Australia's once-burgeoning mining sector has fallen to its lowest level in eight years, the Australian Bureau of Statistics (ABS) has revealed.

New mineral exploration investment has fallen to just 139 million U.S dollars for the March 2015 quarter, a 30 percent decline from the last quarter of 2014, according to the ABS report released on Tuesday.

Falling iron ore prices, less demand for raw materials from Asian powerhouses such as China and India and high costs associated with mineral exploration has ended a mining boom which started in the middle of the last decade.

The level of investment in exploration is the lowest recorded in Western Australia since the same quarter in 2007, and is more than three times lower than the highest investment levels which were recorded in 2012 -- at the height of the boom.

Resources analyst Peter Strachan said the writing has been on the wall for the mining sector for some time, but the statistics were still damning.

"Since the global financial crisis people are not investing, they have not found the risk-reward ratio to be rewarding enough to be investing in pure exploration companies," he told the ABC on Tuesday.

Strachan said he expected the amount of money that would be invested in exploration to fall even further before it rises again.

"Investors are just not stumping up for exploration spending... and I cannot say that we have seen it bottom out," he said.

The news has forced the closure and bankruptcy of some companies, but the news might not be too bleak for the greater Western Australian economy.

Strachan said the lack of current investment could signal a shortfall of resources before the end of the decade, so while he expects further decline in the short term, long term prospects are not as grim.

"With the lack of money being spent on developing new projects it's almost certain that by late 2016 or early 2017 there will be a shortage of supply of these commodities," he said.

"So our next priority must be attracting the next wave of investment and that starts with exploration programs." Endi