A new report suggests an “aggressive rush of capital” has hit Australia’s exploration sector as governments and investors move to strengthen and diversify critical mineral supply chains.
The September quarterly cash update report, released by professional services company BDO, shows $3.49 billion flowing into the sector as a result of investors and governments moving “more decisively” to reinforce long-term critical minerals supply capabilities.
“Australia’s traditional September fundraising slump did not materialise, with the quarter instead breaking a decade-long pattern of weakness,” the report said.
The report marks the first time in four years that explorers have experienced consecutive quarterly increases in funding – going against a “usual downturn” of cash inflow.
The quarter delivered an 81 per cent rise in funding from June, driven by 78 companies raising more than $10 million each and capturing $2.88 billion of the total inflow.
These positive numbers have been described as a turning point for exploration in Australia, with the race for strategic resources accelerating at a pace the market has not seen in years.
“The scale of these raisings tells you exactly where global priorities are shifting,” BDO global natural resources and energy leader Sherif Andrawes said.
“Investors are backing assets that matter to energy security, electrification and industrial capability.”
Both copper and gold performed strongly in the quarter, the report stated, with gold remaining the largest contributor – 21 explorers are said to have raised over $500 million on the back of record gold prices and increased global demand.
Copper-linked companies are also said to have performed strongly, reflecting the metal’s central role in electrification.
Exploration spending climbed to $843.66 million, a 16 per cent rise driven by gold and copper explorers. Cash balances rose to an average of $11.02 million, the first lift in a year.
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