A Tasmanian nickel producer says the commodity needs up to three times the funds spent on exploration in Australia than is currently budgeted for if the nickel shortfall is to be addressed.

Allegiance Mining Ltd chairman, Tony Howland-Rose addressed the 2006 Paydirt Australian Nickel Conference in Perth recently, telling the gathered audience that base metals exploration expenditure Australia was down to 25% in constant dollar terms compared to the previous resources boom in the late 1960s early 1970s.

"The names we have been hearing about on new nickel projects anticipated to come on stream are, for the most part, the same project names we have been hearing about over the past 35 years," Tony Howland-Rose said.

"New nickel provinces are not emerging with any significance.

"Unless we spend substantially more on nickel exploration, we will not make those discoveries of the size where Australian mines can contribute to minimising the widening gap between supply and demand."

Allegiance is developing the Avebury nickel project in Tasmania and has started trial mining, with first concentrate shipments due to be exported by the third quarter next year.