Share

Mining exploration is making a comeback after four-year slump

London - After a four-year slump, mining companies are spending on exploration again as interest in base metals rebounds and clean technologies boost demand for niche battery ingredients.

Miners spent $8.4bn searching for new metal deposits last year, about 15% more than in 2016, according to a report published on Monday by S&P Global Market Intelligence. That exploration spending, which doesn’t include money used searching for iron ore, could increase again by as much as 20% this year, S&P said.

"Improved equity market support for explorers allowed many companies to launch or resume drill programmes," said Mark Ferguson, associate director of research for metals and mining at S&P. "Our year-end measure of exploration-sector activity reached levels not seen since early 2013."

Gold led the way, accounting for more than 70% of the year-on-year increase in spending, followed by base metals copper, nickel, and zinc, all trading at multiyear highs.

Exploration for battery ingredients lithium and cobalt surged at smaller mining companies. Spending on lithium projects across 136 junior miners doubled, while expenditure on cobalt exploration quadrupled.

Still, the world’s biggest mining companies kept exploration spending at low levels, preferring to return cash to shareholders. Miners with revenues of more than $1bn last year likely spent roughly the same percentage of revenue as 2016, when the figure reached 1.8%, down from 3.2% in 2012.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.92
-0.1%
Rand - Euro
20.47
+0.0%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.3%
Platinum
911.60
+1.6%
Palladium
1,012.97
+1.1%
Gold
2,213.47
+0.9%
Silver
24.80
+0.6%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders