Spending on exploration in global minerals powerhouse Australia rose in the December quarter to its highest in over seven years as prospectors stepped up their activity to meet strengthening global demand.
Mounting talk that the commodities complex is entering a new supercycle is spurring miners to seek new deposits of the minerals that will drive the clean energy transition. Australia already has the second-biggest copper resources in the world and holds more than a quarter of the world’s nickel. It’s also the biggest exporter of lithium, a key component in the battery technology that is driving the switch to electric vehicles.
Miners spent A$718.4 million ($559 million) on minerals exploration in the three months to Dec. 31, up 2.5% on the prior quarter and the highest since the March quarter of 2013, according to the Australian Bureau of Statistics. Base metals saw the strongest rise in spending, up 13% on the prior quarter. Iron ore held steady, while coal saw a 26% decline.
Banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. have been touting the prospects for a supercycle as huge stimulus spending — driven by governments looking to accelerate the post-pandemic economic recovery — boosts demand for raw materials. A lack of investment in minerals exploration in recent years was adding to a constructive outlook for the sector, BHP Group Chief Executive Officer Mike Henry said at its first-half results last month.
The Australian government has been keen to encourage more exploration activity, although the prospect of tougher heritage protection laws could lead to longer lead times for commercializing new resources. A draft bill in the mining state of Western Australia looks to give local indigenous landowners more influence, while a national inquiry is also ongoing into the events at Juukan Gorge last year — where blasts by Rio Tinto Group damaged ancient rock shelters.
(By James Thornhill)