World Nonferrous Exploration Surges in 2005

Capital expenditure for mineral exploration increases worldwide when the metals ingot market surged in 2005 after long slump. The expenditure increased by 34% to US$ 5.1 billion in 2005 from 2004, according to research institutes and other sources. The level is near the estimated record of US$ 5.2 billion in 1997 and the exploration could renew the record in 2006.The exploration surged in 2005, according to report on nonferrous metal exploration by Mr. Nobuyasu Nishikawa, who is the metal mineral researcher of Japan Oil, Gas and Metals National Corporation (JOGMEC), based on report by Metals Economics Group of Canada. The exploration expenditure accelerated to increase in 2005 after it jumped from the bottom in 2002 when base metal prices surged since late 2003 due to recovering gold price since late 2001after the exploration was very low level between late 1990s and early 2000s. Junior mineral firms, which generate the financial resources of exploration from the market, increased the expenditure by 57% to record US$ 2.33 billion in 2005 from 2004. The budget is much higher than that of mineral majors with more than US$ 500 million of annual sales of nonferrous metals. The junior firms increased the expenditure since 2003 due to higher metal prices after exploration slump due to limited availability of finance since false report scandal on Indonesian gold mine in 1997. The junior miners lifted the world exploration activity. The gold exploration represented around 50% of the total expenditure in 2005. The 31% higher expenditure for gold in 2005 from 2004 lifted the total expenditure. Base metal exploration also increased by 54% under the surging prices. The copper exploration increased by 43% and nickel exploration increased by 65%. The exploration of zinc, which was slump in a couple of years, increased by 90% though the expenditure was still as low as 2001. The relative lower zinc exploration could limit the supply expansion under the very tight condition of ore supply.