A new report shows that in 2016 the mining industry’s total budget for exploration was $7.2 billion, a far cry from the record year of 2012 in which the industry has a budget of $21.5 billion. It marked the fourth consecutive year that the budgets fell for exploration, according to the World Exploration Trends (WET) report from S&P Global Market Intelligence.
The WET report is based on S&P Global Market Intelligence's 27th Corporate Exploration Strategies (CES) study, which calculated that the mining industry's total budget for nonferrous metals exploration was just US$7.2 billion in 2016, compared with the record US$21.5 billion budgeted in 2012.
Despite the steep plunge in annual exploration budgets, the past three quarters have brought signs of optimism for a long-struggling industry. Since last March, exploration companies have increasingly been able to raise funds and restart focused programs. The steep plunge in exploration budgets can be attributed to investor wariness of exploration and a significant reduction in spending by producing companies as they sought to improve profit margins.
The exploration estimate for 2016 is based on information collected from more than 2,000 mining and exploration companies worldwide, of which almost 1,600 had exploration budgets of at least US$100,000. These reported budgets amounted to US$6.89 billion, with a further US$310 million estimated to have been budgeted by companies for which data was unavailable.
Additional findings from the report found that Canada was the top target, accounting for 14 percent of the global total. Ontario accounted for 23 percent of the overall Canadian exploration budget, followed by Quebec with 18 percent.
Globally, gold remained the top-explored commodity last year, with the yellow metal accounting for 48 percent of the global exploration budget, matching the record high of 2011.
In dollar terms, gold exploration declined to its lowest level since 2006, dropping US$643 million, or more than 16 percent, to US$3.30 billion.
The annual World Exploration Trends report is available for download here.