Global mining exploration in crisis, but not hopeless – report – by Megan Van Wyngaardt (MiningWeekly.com – June 30, 2015)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Global mineral exploration is in crisis, but mining companies can turn their exploration performance around.

“Finding orebodies is not all about luck and success is not unpredictable. And while some companies struggle to replace depleted reserves, those that act in a countercyclical way – that build world-class exploration capabilities – will be rewarded with disproportionate returns,” said The Boston Consulting Group (BCG) partner Alexander Koch, coauthor of a new report by the management consulting firm, titled ‘Tackling the Crisis in Mineral Exploration’.

The report, which was released on Monday, noted that from 2010 to 2013, the yearly number of discoveries, excluding bulk commodities, declined by more than half, even after adjusting for discoveries yet to be drilled out.

The report highlighted that the sharp decline in discoveries occurred despite a period of significant increases in exploration spending, with “giant” discoveries dropping to only one or two a year.

At the height of the recent resources boom, average yearly exploration expenditure grew by almost 40% to record levels. Koch noted that the crisis in mineral exploration had “flown under the radar” for much of the mining industry.

“Since the end of the resources boom, most mining companies have now shifted their focus to productivity and cut back sharply on exploration spending, which has exacerbated the depletion of resources and reserves.”

Cyclical increases in drilling costs and the depletion of easy pickings only partly explained the discovery drought.

To shed light on the more fundamental reasons for the exploration crisis, BCG recently worked with six of the world’s most “illustrious mineral-exploration legends” – the individuals responsible for such historic finds as Minera Escondida, in Chile, Oyu Tolgoi, in Mongolia, and Olympic Dam and Cadia, in Australia.

For the rest of this article, click here: http://www.miningweekly.com/article/global-mining-exploration-in-crisis-but-not-hopeless-report-2015-06-30

Comments are closed.