MERCHANDISER
The resulting $5.77 billion (42%) drop in exploration spending in 2009 from 2008’s high was the largest year- on-year decline, in both dollar and percentage terms, since SNL Metals & Mining began producing the CES in 1989.
... markets were even less willing to support junior
companies, and producers pulled back on capital and exploration spending in order to strengthen margins
The global economy improved markedly through 2009 and 2010, and with it metals prices, most of which traded well above their long-term averages through 2011. In response, most companies aggressively increased their exploration budgets, lifting the industry’s budget total by 44% in 2010 to $11.51 billion, and by a further 50% in 2011 to $17.25 billion. Continued uncertainty in Europe and the US, along
with concerns over waning demand in China, caused most metals prices to dip or at best level off through 2012. Nevertheless, most metals prices remained well above their ten-year averages, and exploration budgets continued to increase in 2012 (up 19%), setting a new all-time high of $20.53 billion.
Despite the increase, 2012
represented a year of change for the industry. Beginning in April, investors became increasingly wary of the junior
sector, causing many companies to struggle to raise funds for their ongoing programs and forcing them to cut actual spending below their budgets for the year. Throughout 2013, markets were even less willing to support junior companies, and producers pulled back on capital and exploration spending in order to strengthen margins. As a result, the exploration budget total fell to $14.43 billion in 2013, down 30% year on year.
Corporate Exploration Strategies
SNL Metals & Mining’s 2013 exploration estimate is based on information collected from more than 3,500 mining and exploration companies worldwide, of which more than 2,100 had exploration budgets reported in the CES study. These companies (each
budgeting at least $100,000) together allocated $14.43 billion for nonferrous exploration, which we estimate covers about 95% of worldwide commercially oriented nonferrous exploration spending. Adding our estimates of budgets that we could not obtain, the 2013 worldwide total exploration budget reached $15.19 billion.
www.SNLMetals.com
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