(Originally published in Mining Engineering, v. 56, no. 5, May 2004, p. 25-37.)
The worldwide budget for nonfuel mineral exploration was expected to increase by 27 percent in 2003 from the 2002 budget, according to the Metals Economics Group (MEG1) of Halifax, Nova Scotia. The increase comes after 5 years of declining spending for mineral exploration. For the first time in several years, all regional exploration budget estimates for 2003 as defined by MEG would increase from similar 2002 estimates. However, MEG included 193 more companies in their 2003 survey than they did in 2002. As with previous MEG survey reports, estimates reflect anticipated expenditures rather than actual dollars spent. Caution, therefore, must be taken when comparing 2002 and 2003 estimates or evaluating the magnitude of regional changes from year to year. Although sample variations and currency exchange rates may influence year-to-year variations of MEG data, it is likely that the general climate of improved metal prices in 2003 encouraged companies that had previously left the mineral exploration sector or reduced their exploration activity to once again focus on minerals exploration or increase exploration activity and budgets.
For the fourth consecutive year, the worldwide budget for gold exploration in 2003 remained below 50 percent of the budget total, but was 34.5 percent higher than the reported 2002 budget reported by MEG. The 2003 worldwide exploration budget estimates for diamond increased by 36 percent to US$320 million from the 2002 budget of about US$234 million. The 2003 exploration budget for nickel increased 29 percent and the budget for platinum-group metal exploration increased 26 percent from 2002 levels.
Based on the MEG reported exploration budget summaries and Engineering & Mining Journal’s annual project investment survey, the top three geographic areas for exploration in 2003, in decreasing budget order, were in Latin America, Canada, and Africa. MEG “regions” reflect a mixture of individual countries, continents, and other groupings, but they are reported consistently on an annual basis and provide a means of indicating the flow of budgeted exploration expenditures from year to year2. Regional allocations based on data from companies canvassed by MEG for 2003 were: Latin America, US$518 million; Canada, US$471 million; Africa, US$374 million; Australia, US$339 million; the United States, US$153 million; the Pacific region, US$93 million; and the rest of the world, US$244 million. Figure 1 shows the worldwide exploration budgets planned for 2003 by region, based on MEG data.
This summary of international nonfuel mineral exploration activities for 2003 draws upon available data from literature and industry and U.S. Geological Survey (USGS) specialists. This report provides data on exploration budgets by region and commodity, identifies significant mineral discoveries and exploration target areas, discusses government programs affecting the mineral exploration industry, and presents inferences and analysis of the mineral industry’s direction based upon these data.
Two types of information are reported and analyzed in this annual review of international exploration for 2003: 1) budgetary statistics provided by MEG and 2) information on regional and site-specific exploration activities in 2003 compiled by the USGS. The MEG information summarizes planned company budgets for exploration activities in 2003 worldwide, primarily for precious and base metals. MEG includes information on additional mineral commodities where it is available. MEG estimates that their post-1999 surveys cover 90 percent of world nonfuel mineral exploration budgets. The MEG survey statistics were changed in 1999 to include companies with exploration budgets between US$100,000 and US$2.9 million, as well as those companies included in prior studies whose anticipated budgets were above US$2.9 million. The 2003 survey did not include budget estimates for those companies who chose not to participate in the MEG study, for private companies that do not publish figures, and not for government-funded exploration activities.
USGS site compilations described here include nonfuel minerals, with an emphasis on precious metals (gold, platinum-group metals, and silver) and base metals (copper, lead, nickel, and zinc) and diamond. Mineral exploration generally focuses on commodities that are more sensitive to supply disruption (platinum-group metals, tin) or have a high value per unit weight (gold). Analyses are based on information provided by USGS mineral commodity and country specialists, and by other USGS scientists, as well as industry contacts and trade journals.
Care should be taken when performing temporal interpretations of the MEG exploration data, such as trend analyses, because the sample of mining companies surveyed by MEG varies with time, companies included in the survey change on a year-to-year basis, and fluctuation of currency exchange rates affect the relative value of budget estimates from year to year. Post-1999 data reported in this summary differ from prior-year data in that a larger number of companies were included in the more recent survey results. The significant amount of corporate restructuring that occurred during the period 1997–2002 also affected statistical compilations.