Mineral exploration expenditure has increased by 33 per cent in the year to June 2021, according to data from the Australian Bureau of Statistics (ABS).
Total mineral exploration rose to $912 million in the June 2020-21 quarter, up from $658.7 million last year.
According to BIS Oxford Economics principal economist Nicholas Fearnley, the exploration data has shown promising signs for the industry.
“The latest exploration data affirms our positive outlook for the mining industry, as exploration activity is a key driver of future investment and production,” Fearnley said.
“Mineral exploration increased 33 per cent year-on-year over the June quarter to $912 million, to be $1.64 billion over the first six months of the year.
“The expectations survey points to $1.67 billion in activity over the second half of the year, but actual expenditure tends to be around 10 per cent higher than expectations.”
Gold exploration activity has increased by 41 per cent to $430 million in the June quarter.
Fearnley said a mix of strong price growth and exploration success has made gold become the largest commodity in mineral exploration expenditure.
“The outlook for prices and exploration activity is heavily tied to the global economic recovery from the coronavirus pandemic,” Fearnley said.
“While the continued rollout of vaccination programs is expected to see gold prices moderate, there is a risk that the Delta variant slows the recovery, which will drive a pickup in gold prices, and therefore exploration activity.”
Iron ore exploration has also risen by 53 per cent year over year to $151 million, off the back of record high prices.
“Exploration activity is expected to fall over the medium term, however, as the restarting of the previously closed Vale mines sees Brazilian supply normalise,” Fearnley said.
“Copper exploration increased 44 per cent year over year to $120 million. We expect exploration activity to remain elevated over the coming years supported by strong global demand and prices.”
Following Australia’s ongoing trade tensions with China, coal exploration declined 37 per cent to $55 million as local exporters redirect their coal to other markets in Asia including Japan and India.