Miners' Spending on Hunt for Copper, EV Metals Hits $10 Billion

(Bloomberg) -- Exploration spending in the mining sector rose for a second year to near $10 billion as the industry makes a cautious shift to growth and prepares for forecast booming demand for copper and metals used in electric vehicle batteries, according to S&P Global Market Intelligence.

  • Budgets jumped about 19 percent, outpacing last year’s gain, which had been the first for the industry - excluding some commodities such as iron ore and aluminum - since 2012, a S&P Global survey of more than 3,000 companies found.
Miners' Spending on Hunt for Copper, EV Metals Hits $10 Billion

Key Insights

  • The value of exploration for cobalt and lithium, used in rechargeable batteries for EVs, jumped 82 percent in 2018, though spending remains a fraction of the amount deployed on gold or base metals.
  • The number of companies and entities working on projects in 2018 rebounded to about 1,651 -- the first rise in active exploration companies in six years. Even so, the number is about a third less than in 2012. Equity market funding for explorers also remains constrained.
  • Higher metals prices and improved margins since 2016 have spurred producers to expand exploration work, according to Mark Ferguson, S&P Global’s associate director of metals and mining research.

Read More

  • Spending on exploration and projects is a safer bet than major deals for miners as the sector pivots to growth, according to Aberdeen Standard Investments.
  • Industry observers are poring over satellite images for clues about a Rio Tinto Group project to find copper in a remote patch of Western Australia. Rio is studying interesting targets and keeping deliberately silent about the results, according to CEO Jean-Sebastien Jacques. “I don’t want my peers to know what I’m doing.” he said in August.

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