Mineral deposits in Australia are generally owned by states. Exploration licenses and mining leases are granted to private firms. They are not sold to the highest bidder but are awarded according to a system of "work program bidding". Such bids entail a promise to undertake a certain amount of exploration expenditure within a specified time interval. Typically a firm that finds a commercially viable mineral deposit is given preference in obtaining a lease to exploit this deposit, but the lease is subject to the conditio that the firm spend at least some specified minimum on developing the lease within a specified time period. This paper proposes that the leases be auctioned and considers the advantages and disadvantages of auctioning relative to the current policy.