• 277 days Will The ECB Continue To Hike Rates?
  • 278 days Forbes: Aramco Remains Largest Company In The Middle East
  • 279 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 679 days Could Crypto Overtake Traditional Investment?
  • 684 days Americans Still Quitting Jobs At Record Pace
  • 686 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 689 days Is The Dollar Too Strong?
  • 689 days Big Tech Disappoints Investors on Earnings Calls
  • 690 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 692 days China Is Quietly Trying To Distance Itself From Russia
  • 692 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 696 days Crypto Investors Won Big In 2021
  • 696 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 697 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 699 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 700 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 703 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 704 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 704 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 706 days Are NFTs About To Take Over Gaming?
Is A Global Currency Necessary?

Is A Global Currency Necessary?

Investors at all levels, spurred…

Lunar Mining May Commence As Early As 2025

Lunar Mining May Commence As Early As 2025

Plans to start mining the Moon as…

The Lumber Bubble Is Bursting

The Lumber Bubble Is Bursting

Lumber prices have skyrocketed in…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Other

Mining Exploration To Drop By Nearly 30% Despite Gold Boom

Mining

The rally in the gold price will not be enough to prevent 2020 turning into the worst year in 15 for global exploration spending.

According to a new report by S&P Global Market Intelligence, outlays for exploration across the industry are set to drop from $9.3 billion in 2019 to $6.6 billion this year.

Despite a gold price approaching seven-year highs above $1,700 an ounce, money spent on drilling for the precious metal this year is likely to shrink by more than $800 million, compared to 2019.

Chris Galbraith, mining and metals analyst at S&P Global, says the vast majority of gold exploration is carried out by juniors and that sector remains under pressure.

According to S&P Global data, junior mining companies managed to raise $781 million during the first quarter, much of it in debt form, an almost 50% drop from the $1.54 billion in financings racked up in the final quarter of 2019.

Global gold production declined last year for the first time in a decade, but before the outbreak S&P Global was expecting around 2m in additional ounces to be poured this year for a total just shy of 108m ounces.

Due to the impact of covid-19 the researcher now expects another down year for gold production with mine shutdowns resulting in almost 2.7m fewer ounces expected for the year.

Latin America and South Africa would be responsible for the bulk of the losses, although Russia appears to be in the early phase of the virus spread and its operational impact.

Gold production is likely to return to positive growth next year.

Gold for delivery in June was last trading at $1,725 per ounce in New York, up more than $200 per ounce since the start of the year.

CHART: Mining exploration spending to drop 29% this year
S&P Global Market Intelligence. State of the Market: Mining Q1-2020

Copper market flashing orange

Copper budgets are also being slashed and are forecast to fall by $935 million.

Galbraith points out that the copper price is still too subdued to incentivize exploration programs by juniors while large companies are in capital preservation mode.

Mined copper production this year is expected to fall by 135,000 tonnes to 19.6m tonnes, and refined output by 75,000 tonnes due to falling concentrate supply, lower treatment charges and covid-19 related cutbacks.

The market is nevertheless expected to hit 182,000 surplus for 2020 according to S&P Global, up from previous estimates of a 72,000 tonne oversupply.

Despite the impact of covid-19, the company maintained its average copper price forecast of $5,700 a tonne ($2.59 a pound) for 2020, rising to $6,233 next year and $6,425 in 2022.

Copper was last trading at $2.43 per pound ($5,355 per tonne) on the Comex market in New York, down for the day but still up more than 20% from lows hit mid-March.

By Mining.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment