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A return to growth in mining exploration

Posted by: Lucy Donald
21/03/18

Global exploration budgets increase 

In a recent study from S&P Global Market Intelligence, global spending on exploration in non-ferrous metals rose to an estimated US$8.4 billion in 2017, compared with US$7.3 billion in 2016, representing the first annual increase in exploration budgets following five years of declining investment in this area. Growth appears to be driven by stability in the metals commodity market, in particular by a robust gold sector. Activity in the gold market began to increase in mid-2016 and, according to an article on Bullionvault.com, gold currently accounts for over half of all non-ferrous metals exploration budgets worldwide, with total gold exploration spending rising by 22 per cent in 2017 to just over US$4 billion. 

A return to sector confidence 

Global economic growth and the strong price performance of many metals through the second half of 2016 and into 2017 has underpinned increased spending on exploration. Growth is set to continue with projections currently putting the industry’s overall exploration spend on a gentle near-term growth curve, with MINEX anticipating an industry-wide exploration budget of more than $18bn by 2025.

A new age of exploration

Even with the encouraging commodity price performance over the last 18 months, the mining industry continues to keep a tight control on costs and is still placing an emphasis on the mitigation of risk. Furthermore, many organisations are concentrating exploration efforts at or near existing mines. According to a recent CES report, 37 per cent of the global exploration budget is now composed of ‘mine site’ exploration. The share of ‘mine site’ exploration is now higher than late-stage (36 per cent) and ‘blind’ grassroots projects (27 per cent) for the first time since the CES was launched in 1989. As an example, Canadian gold mining company Golden Star Resources, which has two operations in Ghana, concentrated its entire exploration focus for 2017 on expanding existing projects rather than searching for new ones.

Despite the positive signals and growing confidence in the industry, tier 1 discoveries (worth more than US$1 billion) are rare in the 21st century. A run of major, high-profile ‘mega projects’ such as the Oyu Tolgoi project in Mongolia may be what’s needed to further boost confidence. However, in the absence of these ‘mega projects’, a slow and steady expansion looks likely to be the preferred way to proceed by the mining sector.

 

Investing in people
With growth slowly returning to the industry, and positivity returning from investors, career opportunities in exploration are set to follow suit. The specialist mining division at WRS has begun to see an increase in exploration related roles for geologists with a broad range of organisations to suit each individuals needs including location, compensation and benefits.
25 per cent of WRS Mining’s 2018 quarter one placements were geology roles and 20 per cent of our current vacancies are within the geology space. We have not seen comparable performance in figures within the WRS’s Mining team since the beginning of the upturn in 2010/2011. This is very reassuring for the industry and could indicate that we are witnessing the start of a period of growth, with the WRS Mining team standing at 130 per cent of a challenging quarter 1 target, and achieving a 60 per cent increase compared to quarter one in 2017.
 
There is however, a significant skills gap within the market, especially in disciplines such as geology, where a number of high calibre exploration experts left the industry following redundancies. Fortunately, WRS Mining took a long-term approach and used the downturn as an opportunity to invest time into talent mapping and staying in touch with top mining professionals in the sector, in anticipation for the next upturn and a return to industry growth. 
 
If you would like to talk to a member of the WRS Mining team, call +44 (0) 161 926 2525 or email info@worldwide-rs.com

 

 

 

Recent Comments
Can i please send you my CV?
Richmond Ampiaw, 21 March 2018
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