Exploration budgets were slashed by 26 percent by mining companies in 2014, SNL Metals & Mining reported. The latest World Exploration Trends report from SNL Metals & Mining reveals mining companies responded to the poor market conditions with a sharp reduction in their exploration activity compared with the previous year.

In the 25th edition of its Corporate Exploration Strategies (CES) report, released during the annual Prospectors and Developer Association of Canada conference, SNL Metals & Mining calculated that the mining industry's total budget for nonferrous metals exploration was US$11.4 billion in 2014. This contrasts with the US$15.2 billion allocated in 2013 and the record US$21.5 billion budgeted in 2012. The steep plunge in exploration budgets was due to a combination of investor wariness of the junior sector, which made it difficult for most companies to raise funds, and a strong pullback by producing companies on capital and exploration spending to improve their margins.

SNL's 2014 exploration estimate was based on information collected from more than 3,500 mining and exploration companies worldwide, of which almost 2,000 had exploration budgets reported in the CES study. These companies (each budgeting at least US$100,000) together allocated US$10.74 billion for nonferrous exploration, which SNL estimates covers 95 percent of worldwide commercially-oriented nonferrous exploration spending. Adding estimates of budgets that SNL could not obtain, the 2014 worldwide total exploration budget reached US$11.36 billion.