The world’s largest mining corporations have significantly reduced exploration spending over the past two years due to inflation, higher interest rates, and declining commodity prices. This downturn follows a surge in investments earlier this decade, particularly in the search for metals essential to the global energy transition, such as copper and lithium.
According to data from S&P Capital IQ, total exploration spending declined by 6% to $12.5 billion in 2024, marking the second consecutive year of reductions after a post-pandemic increase. However, lithium exploration investment has continued to rise every year since 2020, soaring 360% to $1.1 billion in 2024 compared to four years prior. Copper exploration spending has also grown by 50% in the same period, with a slight dip to $3.2 billion in 2024 from the previous year.
Despite expectations of increased demand for battery and base metals in the coming decade, the current market is experiencing a lithium supply glut, which has led to plummeting prices. S&P Global Commodity Insights’ Kevin Murphy described last year’s exploration spending as “far worse” than during the commodities boom over a decade ago. He attributed this caution among major mining firms to inflationary pressures, tighter monetary policies, and weak commodity markets.
Gold remains the primary focus of exploration investments, receiving $5.6 billion last year—over 40% of total spending. However, the combined investment in copper, lithium, and nickel has grown to nearly 40% of the total in 2024, up from 27% in 2020. Exploration budgets include funds allocated for grassroots mineral searches, feasibility studies, and the expansion of existing mining operations.
Duncan Wanblad, CEO of Anglo American, told the Financial Times in February that his company was prioritizing copper exploration. “The world has really underinvested in exploration for a very long time,” he noted. Anglo American, a FTSE 100 company, is currently restructuring its portfolio to focus on copper and iron ore.
BloombergNEF’s Kwasi Ampofo pointed out that exploration investments often follow a “herd mentality,” with copper being the current priority for investors. However, much of last year’s spending targeted known mineral sites rather than greenfield exploration—searching for untapped resources in undeveloped areas. Ciara Talbot, head of exploration at Vale Base Metals, emphasized the long-term challenge of relying solely on existing mines. “At some point, that has to change—there’s only so much you can explore at existing sites.”
Mining costs have risen due to declining ore grades and inflation, making acquisitions more attractive than fresh exploration efforts. Murphy from S&P noted that mergers and acquisitions often result in reduced combined exploration budgets as companies reprioritize their investments.
Despite the decline in exploration investment, major mining players such as Rio Tinto, Newmont, and Barrick Gold continue to allocate significant funds to precious and base metal exploration. However, the industry-wide trend signals a shift in strategy, favoring consolidation and efficiency over high-risk greenfield projects. The global mining sector faces a delicate balance between meeting future demand for essential minerals and navigating economic pressures that constrain investment in exploration.
