Mineral exploration continues to surge amid a rush to find replacement sources of traditional metals and new reserves of critical minerals linked to decarbonisation.
Consultants BDO in its latest report on the health of Australian-listed explorers said the sector showed no signs of slowing, with battery mineral companies driving an uptick in investment and financing.
The report highlighted that governments, corporations, and investors were placing greater emphasis on the energy transition away from emitting fossil fuels.
BDO said it expected that the growth in exploration activity would continue in light of continual strong cash balances and the higher number of listed exploration companies but noted that this growth may continue to be constrained by the availability of resources, travel restrictions and a shortage of skilled labour.
It said that in the September quarter of 2021, exploration spending of ASX listed explorers hit $877 million, a 32 per cent increase from what was already a seven-year high in the June 2021 quarter.
While some analysts have declared an age of the junior explorer, IMDEX chief executive officer Paul House says that junior, intermediate and larger clients are well funded and increasing exploration budgets.
The leading global mining-tech company, with operations in 70 per cent of major international mining regions, recently released its snapshot of mineral exploration drill rig utilisation, which showed strong growth in major mining regions internationally.
The figures, of surface and underground coring and RC rigs, showed the fleet was close to capacity in Australia and New Zealand at 81 per cent, up from 72 per cent in April 2021.
European rig use in October was 50 per cent, up from 39 per cent, South America 48 per cent (39 per cent), Africa 57 per cent (54 per cent), Canada 65 per cent (46 per cent), Mexico and Central America 48 per cent (44 per cent).
The USA, at 64 per cent, was down from 72 per cent but North America as a whole was up from 49 per cent to 59 per cent utilisation.
Mr House said delivery times for new rigs had increased, and the sector was facing skilled labour shortages and mobility restrictions — but these were short-term constraints.
“Strong commodity prices driven by the positive outlook for a global recovery and increasing demand due to diminishing reserves were driving increased exploration in all major mining regions,” Mr House said.
“Demand for critical metals is expected to increase at a faster pace due to decarbonisation demands.
“We believe the industry is willing to invest and spend but may not be able to move as fast as it would like.
“The industry drivers of depleted reserves, strong commodity pricing and the trend towards decarbonisation is driving substantially increased exploration budgets.
“However, delivery against these targets will require time and investment in labour, drilling rigs, and other supply chain pressures that are a current constraint.”
Latest Australian Bureau of Statistics figures, for the September 2021 quarter, showed total mineral exploration expenditure grew 7.7 per cent, $A70.4-million, to $A982.4-million.
Spending on new deposits increased 11.5 per cent ($35.6m) to $346.1m, while spending on exists deposits increased 5.8 per cent ($34.8m) to $636.3m.
IMDEX General Manager Product Development Mark Gabbitus said while constraints continued, it was imperative that exploration companies worked efficiently to determine likely positive prospects when determining drilling campaigns
Just as there was a need for precision mining, there is also a need for precision exploration, he said.
“Availability of reliable, real-time data allows drilling companies to make informed decisions about where to drill next,” Mr Gabbitus said.
“Knowing your latest program has not delivered is just as important as returning a positive target; knowing one could lead to changes that deliver the other.”
IMDEX has a suite of downhole sensors covering location, texture chemistry and mineralogy of the rock along with and analysis products linked to cloud-connected IMDEX HUB-IQTM including IMDEX ioGASTM., aiSIRIS and MinePortal.
Together these deliver to customers a holistic rock knowledge engine creating the information to support near real time decision making.
In its half-year results released in February, IMDEX said 106 million metres were surveyed in IMDEXHUB-IQ™, a 31 per cent increase on the previous year, reflecting the increased demand for cloud-connected technology to improve efficiencies.
“Resource companies and drilling contractors are increasingly embracing innovation and new technologies to improve safety, enable remote working and achieve greater productivity,” Mr House said.