The Australian Bureau of Statistics released data that shows exploration spending in Australia hit a near-decade low of $381 million in three months to March with the biggest decline coming in the iron ore sector with a 76 percent drop.
The total national investment dropped 13.4 percent during the March quarter.
This is the lowest estimated total spend the ABS has reported since September 2006, when investment was $380 million. It is down more than 60 percent from the high of $1 billion invested in the industry in March 2012.
The Sydney Morning Herald reported that during the quarter, Queensland led the decline across the states, with spending down 32 percent, or $31 million. Western Australia's exploration spending dropped $30 million, or 12 percent, led by a substantial drop in iron ore expenditure.
A breakdown of the original non-adjusted data revealed exploration on new, or greenfields, deposits hit a decade-low of $91 million during the quarter. After a slight recovery during the December quarter, which provided a glimmer of hope to some industry commentators, the spending on greenfield exploration declined 40 percent in the March quarter.
The data also showed the total spent on iron ore exploration declined the most by commodity, down 43.4 percent during the quarter.
A severe slide in the price of iron ore has put a freeze on much of the investment in iron ore exploration, with even the biggest miners holding off on plans to explore in order to conserve cash.
A mere $82.1 million was spent nationally on iron ore exploration in the March quarter, the lowest level in eight years. This is down 76 percent lower from the peak spent on the commodity in mid-2012 when the iron ore price was sitting around $US140/t.
The second-largest decrease by commodity was on coal exploration which was down more than 44 percent or $34 million.
Earlier this year Association of Mining and Exploration Companies chief executive Simon Bennison highlighted the importance of continued exploration, given the long lead time between exploration and production. Bennison said it often took companies seven to 10 years to progress from an initial exploration application to first production at a project.
The exploration downturn also has repercussions for contractors seeking work from the nation's explorers and miners. The decline in spending is so fierce it has forced some drilling contractors to diversify into other industries to find work.
Grain farmer Dan Cooper told Fairfax Media in April he was using mineral exploration drills to search for water on his property because they were offering better rates. The exploration downturn had provided him with the opportunity to cinch cheap drilling rates.
Cooper said he was able to get holes drilled for about half the rate he was quoted a year ago from traditional bore-hole drillers.
While it's a silver lining for Cooper, it isn't good news for drilling contractors such as locally listed Boart Longyear, which last month flagged ongoing price pressure in its drilling services division.
In its first-quarter results released in May, Boart said rig utilization averaged just 35 percent, with revenue lower year-on-year in both its drilling services and product sales divisions.