Australian mineral exploration retreats from record high

In constant dollar terms this was a fall of 12.4 per cent from the 2007–08 record. World-wide mineral exploration fell more sharply.
World non-ferrous mineral (including base metals, precious metals, diamonds, uranium but not coal or iron ore) exploration budgets reported by the Metals Economics Group (MEG) fell from a record US$14.4 billion in 2008 to an estimated US$8.4 billion in 2009, a fall of 42 per cent.
This directly reflects the impact of the global economic downturn which resulted in reduced demand for most minerals, especially base metals, and consequent substantial price falls for many of those commodities.
The fall in exploration in Australia has been less than that experienced globally because demand for Australia’s iron ore and coal resources has maintained both high levels of exports and exploration for these commodities.
The Northern Territory was the only Australian jurisdiction which recorded an increase in exploration in 2008–09 with spending rising by 10 per cent. The fall in Western Australia was limited to 1 per cent as iron ore exploration underpinned activity in that jurisdiction. High levels of coal exploration in New South Wales and Queensland limited the overall falls in mineral exploration expenditure in those states to 7.7 per cent and 11.6 per cent respectively. In the other states, with limited or no exploration for iron ore and/or coal, mineral exploration expenditure fell by more than 30 per cent.
Canada remained the largest single country in terms of total non-ferrous mineral exploration budgets. It accounted for some 17.1 per cent of the world total budget (including uranium) while Australia retained second position with an unchanged share of 13.6 per cent. This was despite a 36 per cent fall in Australia’s budgets from 2008. In contrast, Canadian non-ferrous metal exploration budgets fell by 43 per cent and Canada’s share of the total exploration budget fell from 19.1 per cent in 2008.
Worldwide, grassroots exploration fell from a share of 36.1 per cent in 2008 to 33.8 per cent in 2009 whereas mine-site exploration rose in 2009 to 25.8 per cent of the total compared to 22.4 per cent in 2008, according to MEG estimates. While slightly higher than the world average, the pattern in Australia was similar with the MEG data indicating that only 38.6 per cent of exploration budgets were designated as grassroots. This trend is especially the case for the major mining companies where the proportion of exploration budgets allocated for grassroots exploration is around 30 per cent (MEG).
In Australia, both the exploration expenditure and the drilling data confirm the continuing dominance of brownfields exploration. The ABS data confirms that exploration drilling fell by 19 per cent to 7.888 million metres in 2008-09. However, greenfields drilling fell by 30.6 per cent to 2.720 million metres whereas brownfields drilling fell by only 11.5 per cent to 6.167 million metres.

For more information: Lynton Jaques, lynton.jaques@ga.gov.au
Mike Huleatt, mike.huleatt@ga.gov.au