Exploration spending by some of the top mining companies in the world is expected to rise in 2018 as is the competition among those companies. Melbourne, Australia-based MinEx Consulting Ltd. released a report that says it expects exploration spending to top $11 billion, up from a low of $9 billion in 2016.
Companies like Rio Tinto and Anglo American are searching for the next big find and remain guarded about their search. Mining companies are even turning to technology such satellite imagery to keep tabs on the competition. Bloomberg reported that while Rio Tinto is searching far and wide in Australia’s desert for copper Anglo American Plc has been scouring a 19,000-square kilometer package of land in Brazil.
To keep tabs on progress, investors last month pressed Anglo’s Chief Executive Officer Mark Cutifani for details on his company’s campaign, while others are monitoring traffic shuttling in and out of Rio’s expanding project in the Paterson district in Western Australia, and consulting satellite imagery of the region in an attempt to deduce the scale of the company’s activities.
Australia’s top gold producer Newcrest Mining Ltd. and iron ore exporter Fortescue Metals Group Ltd. are among others who’ve joined the quest for untapped gold and copper in the Paterson region.
The recent upturn is exploration is also reviving partnerships between the industry’s heavyweights and smaller, specialist companies, a strategy that “came to a screaming halt” at the start of the decade after the global financial crisis, according to Lynda Burnett, managing director of Sipa Resources Ltd., previously an exploration executive with Newmont Mining Corp.
“Exploration is certainly a key activity for us,” Fortescue CEO Elizabeth Gaines said in a speech in Kalgoorlie, Western Australia. The iron ore producer is searching for copper to lithium in projects spanning two continents.
South32 Ltd. has been among companies to lead the way on striking new pacts, Burnett said. It has made investments, or joint-venture agreements, with about six companies that have given it an interest in almost 20 prospects from Alaska to Peru, according to a May presentation. In June, the producer agreed a $1.3 billion deal to acquire one of the partners, Arizona Mining Inc.
Rio also has forged a raft of alliances in recent months, looking for copper and gold in Serbia and joining projects in the Paterson province with Alloy Resources Ltd. and Antipa Minerals Ltd. Newcrest has widened its exploration work to take in eight countries.
The partnerships also allow cash-strapped explorers -- which can have difficulty accessing funds -- to keep projects going, and retain at least some exposure when any eventual breakthrough is made.