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EXPLORER
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We find ourselves in a strange place in this mining cycle.
Exploration expenditure has scarcely been higher, with the June quarter recording a staggering $1.069B in mineral exploration expenditure across Australia, second only to the September 2022 high of $1.099B.
There has been a substantial lift in exploration expenditure for critical minerals, particularly lithium, nickel and copper, which reflects the changing ambitions of many mineral exploration companies, and the anticipated demand growth for these minerals.
This endeavour has delivered considerable discovery and exploration success across the country.
At the same time, exploration investment has been extremely soft for the last 12 months and is now expected to last into the new year. While this takes some time to flow through, exploration companies are starting to slow their exploration expenditure, and conserve cash reserves.
Gold equities continue to go unrewarded, despite a healthy gold price.
International concerns around a global recession appear to have eased, with the United States exceeding expectations. However, a global slowdown is taking place, and affecting commodity prices, as is lower demand on the back of continuing weakness in China’s construction and property sector. All the while, the war in Ukraine shows no signs of ending.
And while inflation may have peaked, high prices are still taking a toll. On the mining side, commodity prices have softened, but companies appear to be better managing these cost pressures.
Many member companies are still advancing projects and heading into their ‘development window’ and potential final investment decision, after 3-4 years of progressing their projects.
And as more companies enter development and construction, new pressures will arise, especially in the already constrained skills and labour market. New recruitment campaigns, offering industry leading wages are further increasing the tension.
None of these events offer clarity for the road ahead, and most are far beyond our control. As always our industry continues to push forward and make the best of challenging circumstances, optimistic that our best efforts will ultimately be rewarded.
Yours sincerely
WARREN PEARCE
Chief Executive Officer
We find ourselves in a strange place in this mining cycle.
Exploration expenditure has scarcely been higher, with the June quarter recording a staggering $1.069B in mineral exploration expenditure across Australia, second only to the September 2022 high of $1.099B.
There has been a substantial lift in exploration expenditure for critical minerals, particularly lithium, nickel and copper, which reflects the changing ambitions of many mineral exploration companies, and the anticipated demand growth for these minerals.
This endeavour has delivered considerable discovery and exploration success across the country.
At the same time, exploration investment has been extremely soft for the last 12 months and is now expected to last into the new year. While this takes some time to flow through, exploration companies are starting to slow their exploration expenditure, and conserve cash reserves.
Gold equities continue to go unrewarded, despite a healthy gold price.
International concerns around a global recession appear to have eased, with the United States exceeding expectations. However, a global slowdown is taking place, and affecting commodity prices, as is lower demand on the back of continuing weakness in China’s construction and property sector. All the while, the war in Ukraine shows no signs of ending.
And while inflation may have peaked, high prices are still taking a toll. On the mining side, commodity prices have softened, but companies appear to be better managing these cost pressures.
Many member companies are still advancing projects and heading into their ‘development window’ and potential final investment decision, after 3-4 years of progressing their projects.
And as more companies enter development and construction, new pressures will arise, especially in the already constrained skills and labour market. New recruitment campaigns, offering industry leading wages are further increasing the tension.
None of these events offer clarity for the road ahead, and most are far beyond our control. As always our industry continues to push forward and make the best of challenging circumstances, optimistic that our best efforts will ultimately be rewarded.
Yours sincerely
WARREN PEARCE
Chief Executive Officer
