Global exploration budgets for nonferrous metals across the board is estimated to have fallen by 29% in 2013.
This is according to preliminary results from a new Corporate Exploration Strategies study by SNL Metals Economics Group. Exploration budgets dropped to US$15.2 billion in 2013 from US$21.5 billion a year earlier, the SNL study found.
Junior exploration budgets fell 39% year over year, with its share of overall exploration falling to 34% from an all-time high of 55% in 2007. “Since early 2012, junior companies have struggled to attract investor interest, and have been forced to rein in spending as their coffers become depleted,” SNL said in an Oct. 24 statement.
Exploration budgets for major mining firms, meanwhile, dropped by 24% from 2012 levels, which SNL attributed to higher operating and capital costs, as well as shareholder pressure.
“Although most metals prices remain at or near 10-year averages, higher operating and capital costs, along with pressure from activist shareholders, have required major companies to focus on a return to healthy margins after years of growth-oriented spending,” it said.
Still, the study found that mining firms have continued to focus on exploration in medium- and high-risk regions, despite ongoing issues with security, policy, taxation and resource nationalism.