Spending on minerals and energy exploration is likely to reach record highs in 2008/2009, a report from the Australian Bureau of Agricultural and Resource Economics (ABARE) has found.
According to the report, exploration spending over the period is set to reach $5.64 billion, the highest ever in real terms and more than twice the annual average expenditure over the past 25 years.
ABARE found that iron ore expenditure rose, with an increase of 14% to $512 million, while spending on base metals such as copper, nickel, silver and lead, is estimated to have fallen 16% to $656 million.
These falls in exploration spending reflect the downward trends of base metals prices since the second half of 2008, the report read.
According to ABARE senior commodity analyst Alan Copeland however, lower commodity prices may take their toll in spite of the increased spending.
“We did see a slight softening in intended exploration expenditure in the first half of ‘09, compared to the second half of ‘08,” Copeland told AAP.
“There is a reasonable link between exploration expenditure and commodity prices,” he said.
“So it would not be surprising to see exploration expenditure fall in light of what we have seen happen to commodity prices.”