Rio Tinto, Panguna stakeholders to address mine legacy impacts at roundtable
The Panguna Mine Legacy Impact Assessment is expected to be published later this month.
Latin America remained the most popular exploration destination, attracting 25% of global explorations spending in 2011, said to the Halifax-based Metals Economics Group’s World Exploration Trends report released on Sunday.
Issued at the opening to PDAC’s convention in Toronto, Canada, the global industry’s largest annual event, “World Explorations Trends 2012” shows that Latin America continues to attract large spending in mining exploration, a position it has held since 1994.
Mexico is the region’s most popular country, receiving 6% of global spending, followed by Chile (5%), Peru (4%), Brazil (3%), and Argentina and Colombia (2% each).
As a result of strong growth in gold exploration in Colombia, Guyana, Brazil and Mexico, the share of allocations targeting gold in Latin America increased in 2011, while base metals slipped to its smallest share in more than a decade, says the report.
Globally, nonferrous exploration spending jumped 50% to a record US$18.2bn in 2011 from US$12.1bn in the prior year due to the continued strength of metals prices.
“Despite periods of weakness and volatility, metals prices – the primary driver of exploration spending – have improved significantly since bottoming in early 2009, and have remained well above their long-term trends through 2010-11,” the report said.
“Almost all companies have responded by increasing their exploration budgets over the past two years. As a result, the industry’s aggregate exploration total jumped 44% in 2010 and a further 50% in 2011, more than doubling from 2009’s recent low of US$8.4bn to the new all-time high of US$18.2bn in 2011,” MEG said.
Growing risk-takers
Whilst most geographies benefited from the sharp increase in exploration spending, miners appeared to have a much bigger risk appetite in 2011, as expenditure in countries generally viewed as risky jurisdictions rose to 23% of aggregate spending from 15% in 2010.
Over the last two years as metal prices have improved, a number of emerging economies, as well as some established mining jurisdictions such as Australia and Chile, have looked to raise taxes and royalties. That has increased mining costs and put the viability of some projects into question.
“The potential reward of working in higher-risk areas often increases the industry’s appetite for risk during periods of increased exploration spending, but exploration in high-risk countries, particularly early-stage work, is usually the first to be cut when risk levels or uncertainty increase,” says the report.
MEG’s exploration estimate is based on information collected from approximately 3,500 mining and exploration companies worldwide, of which more than 2,400 had exploration budgets reported in the group’s Corporate Exploration Strategies study.
“The companies (each budgeting at least US$100,000) together allocated US$17.25bn for nonferrous exploration, which we estimate covers about 95% of worldwide commercially oriented nonferrous exploration spending. Adding our estimates of budgets that we could not obtain, the 2011 worldwide exploration total reached US$18.2bn.”
