Mining exploration is making a comeback after four-year slump

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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.

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