Global non-ferrous metal exploration budgets have plummeted almost 30 per cent this year, new research suggests.
SNL Metal Economics Group’s Corporate Exploration Strategies surveyed almost 3500 mining companies around the world.
The group found total non-ferrous exploration budgets fell to $US15.2 billion.
Major miners recorded a 24 per cent drop in exploration spend.
But juniors took a bigger hit, with exploration budgets falling 39 per cent over 2012, miningnews.net reports.
“In contrast, many junior companies sharply curtailed late-stage and feasibility programs in an effort to conserve cash, while some majors made strategic decisions to scale back late-stage exploration due to near and medium-term uncertainty,” SNL Metal Economics Group said.
With mining investment drying up and internal fights for capital heating up many miners are cutting costs and reallocating capital to productivity improvement projects as well as looking to improve investor returns.
“Although most metals prices remain at or near 10-year averages, higher operating and capital costs, along with pressure from activist shareholders, have required major companies to focus on a return to healthy margins after years of growth-oriented spending,” SNL Metal Economics Group said.
Topping the list for exploration spend is Australia and Canada, closely followed by the US, Mexico and Chile.
The report found exploration activities are still planned for 127 counties in 2013, slightly down from 129 recorded in 2012.
Despite a drop in exploration funding, the research predicts the number of asset sales to climb as miners attempt to improve their financial standing.
“With many companies facing tough financial and strategic choices, the pool of early and late-stage assets available for sale is likely near an all-time high—a situation yet to be taken advantage of by potential buyers, such as mid-tier producers, new industry entrants, or companies based in emerging economies.”